Document:

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                              ACE SECURITIES CORP.
                                    Depositor

                             WELLS FARGO BANK, N.A.
                                   a Servicer

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

                       HSBC BANK USA, NATIONAL ASSOCIATION
                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                          Dated as of November 1, 2005

          ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE7
                     Asset Backed Pass-Through Certificates

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<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

<S>               <C>
ARTICLE I         DEFINITIONS..................................................................................
   SECTION 1.01.           Defined Terms.......................................................................
   SECTION 1.02.           Allocation of Certain Interest Shortfalls...........................................

ARTICLE II        CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..............................
   SECTION 2.01.           Conveyance of the Mortgage Loans....................................................
   SECTION 2.02.           Acceptance of REMIC I by Trustee....................................................
   SECTION 2.03.           Repurchase or Substitution of Mortgage Loans........................................
   SECTION 2.04.           Representations and Warranties of the Master Servicer...............................
   SECTION 2.05.           Representations, Warranties and Covenants of each Servicer..........................
   SECTION 2.06.           Issuance of the REMIC I Regular Interests and the Class R-I Interest................
   SECTION 2.07.           Conveyance of the REMIC I Regular Interests; Acceptance of REMIC II and REMIC
                           III by the Trustee..................................................................
   SECTION 2.08.           Issuance of Residual Certificates...................................................
   SECTION 2.09.           Establishment of the Trust..........................................................

ARTICLE III       ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS.................................
   SECTION 3.01.           The Servicers to Act as Servicers...................................................
   SECTION 3.02.           Sub-Servicing Agreements Between a Servicer and Sub-Servicers.......................
   SECTION 3.03.           Successor Sub-Servicers.............................................................
   SECTION 3.04.           No Contractual Relationship Between Sub-Servicer, Trustee or the
                           Certificateholders..................................................................
   SECTION 3.05.           Assumption or Termination of Sub-Servicing Agreement by Successor Servicer..........
   SECTION 3.06.           Collection of Certain Mortgage Loan Payments........................................
   SECTION 3.07.           Collection of Taxes, Assessments and Similar Items; Servicing Accounts..............
   SECTION 3.08.           Collection Accounts and Distribution Account........................................
   SECTION 3.09.           Withdrawals from the Collection Accounts and Distribution Account...................
   SECTION 3.10.           Investment of Funds in the Investment Accounts......................................
   SECTION 3.11.           Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage and
                           Primary Mortgage Insurance..........................................................
   SECTION 3.12.           Enforcement of Due-on-Sale Clauses; Assumption Agreements...........................
   SECTION 3.13.           Realization Upon Defaulted Mortgage Loans...........................................
   SECTION 3.14.           Trustee to Cooperate; Release of Mortgage Files.....................................
   SECTION 3.15.           Servicing Compensation..............................................................
   SECTION 3.16.           Collection Account Statements.......................................................
   SECTION 3.17.           Statement as to Compliance..........................................................
   SECTION 3.18.           Independent Public Accountants' Servicing Report....................................
   SECTION 3.19.           Annual Certification................................................................
   SECTION 3.20.           Access to Certain Documentation.....................................................
   SECTION 3.21.           Title, Management and Disposition of REO Property...................................
   SECTION 3.22.           Obligations of the Servicers in Respect of Prepayment Interest Shortfalls;
                           Relief Act Interest Shortfalls......................................................
   SECTION 3.23.           Obligations of the Servicers in Respect of Mortgage Rates and Monthly Payments......
   SECTION 3.24.           Reserve Fund........................................................................
   SECTION 3.25.           Advance Facility....................................................................
   SECTION 3.26.           The Servicers Indemnification.......................................................

ARTICLE IV        ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER.............
   SECTION 4.01.           Master Servicer.....................................................................
   SECTION 4.02.           REMIC-Related Covenants.............................................................
   SECTION 4.03.           Monitoring of Servicers.............................................................
   SECTION 4.04.           Fidelity Bond.......................................................................
   SECTION 4.05.           Power to Act; Procedures............................................................
   SECTION 4.06.           Due-on-Sale Clauses; Assumption Agreements..........................................
   SECTION 4.07.           Documents, Records and Funds in Possession of Master Servicer To Be Held for
                           Trustee.............................................................................
   SECTION 4.08.           Standard Hazard Insurance and Flood Insurance Policies..............................
   SECTION 4.09.           Presentment of Claims and Collection of Proceeds....................................
   SECTION 4.10.           Maintenance of Primary Mortgage Insurance Policies..................................
   SECTION 4.11.           Trustee to Retain Possession of Certain Insurance Policies and Documents............
   SECTION 4.12.           Reserved............................................................................
   SECTION 4.13.           Compensation for the Master Servicer................................................
   SECTION 4.14.           REO Property........................................................................
   SECTION 4.15.           Annual Officer's Certificate as to Compliance.......................................
   SECTION 4.16.           Annual Independent Accountant's Servicing Report....................................
   SECTION 4.17.           Reserved............................................................................
   SECTION 4.18.           Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls......
   SECTION 4.19.           Prepayment Penalty Verification.....................................................

ARTICLE V         PAYMENTS TO CERTIFICATEHOLDERS...............................................................
   SECTION 5.01.           Distributions.......................................................................
   SECTION 5.02.           Statements to Certificateholders....................................................
   SECTION 5.03.           Servicer Reports; P&I Advances......................................................
   SECTION 5.04.           Allocation of Realized Losses.......................................................
   SECTION 5.05.           Compliance with Withholding Requirements............................................
   SECTION 5.06.           Reports Filed with Securities and Exchange Commission...............................
   SECTION 5.07.           Supplemental Interest Trust.........................................................
   SECTION 5.08.           Tax Treatment of Swap Payments and Swap Termination Payments........................

ARTICLE VI        THE CERTIFICATES.............................................................................
   SECTION 6.01.           The Certificates....................................................................
   SECTION 6.02.           Registration of Transfer and Exchange of Certificates...............................
   SECTION 6.03.           Mutilated, Destroyed, Lost or Stolen Certificates...................................
   SECTION 6.04.           Persons Deemed Owners...............................................................
   SECTION 6.05.           Certain Available Information.......................................................

ARTICLE VII       THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER.........................................
   SECTION 7.01.           Liability of the Depositor, the Servicers and the Master Servicer...................
   SECTION 7.02.           Merger or Consolidation of the Depositor, the Servicers or the Master Servicer......
   SECTION 7.03.           Limitation on Liability of the Depositor, the Servicers, the Master Servicer and
                           Others..............................................................................
   SECTION 7.04.           Limitation on Resignation of the Servicers..........................................
   SECTION 7.05.           Limitation on Resignation of the Master Servicer....................................
   SECTION 7.06.           Assignment of Master Servicing......................................................
   SECTION 7.07.           Rights of the Depositor in Respect of the Servicers and the Master Servicer.........
   SECTION 7.08.           Duties of the Credit Risk Manager...................................................
   SECTION 7.09.           Limitation Upon Liability of the Credit Risk Manager................................
   SECTION 7.10.           Removal of the Credit Risk Manager..................................................

ARTICLE VIII      DEFAULT  198
   SECTION 8.01.           Servicer Events of Default..........................................................
   SECTION 8.02.           Master Servicer or Trustee to Act; Appointment of Successor.........................
   SECTION 8.03.           Notification to Certificateholders..................................................
   SECTION 8.04.           Waiver of Events of Default.........................................................

ARTICLE IX        CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR......................................
   SECTION 9.01.           Duties of Trustee and Securities Administrator......................................
   SECTION 9.02.           Certain Matters Affecting Trustee and Securities Administrator......................
   SECTION 9.03.           Trustee and Securities Administrator not Liable for Certificates or Mortgage
                           Loans...............................................................................
   SECTION 9.04.           Trustee and Securities Administrator May Own Certificates...........................
   SECTION 9.05.           Fees and Expenses of Trustee and Securities Administrator...........................
   SECTION 9.06.           Eligibility Requirements for Trustee and Securities Administrator...................
   SECTION 9.07.           Resignation and Removal of Trustee and Securities Administrator.....................
   SECTION 9.08.           Successor Trustee or Securities Administrator.......................................
   SECTION 9.09.           Merger or Consolidation of Trustee or Securities Administrator......................
   SECTION 9.10.           Appointment of Co-Trustee or Separate Trustee.......................................
   SECTION 9.11.           Appointment of Office or Agency.....................................................
   SECTION 9.12.           Representations and Warranties......................................................

ARTICLE X         TERMINATION..................................................................................
   SECTION 10.01.          Termination Upon Repurchase or Liquidation of All Mortgage Loans....................
   SECTION 10.02.          Additional Termination Requirements.................................................

ARTICLE XI        REMIC PROVISIONS.............................................................................
   SECTION 11.01.          REMIC Administration................................................................
   SECTION 11.02.          Prohibited Transactions and Activities..............................................
   SECTION 11.03.          Indemnification.....................................................................

ARTICLE XII       MISCELLANEOUS PROVISIONS.....................................................................
   SECTION 12.01.          Amendment...........................................................................
   SECTION 12.02.          Recordation of Agreement; Counterparts..............................................
   SECTION 12.03.          Limitation on Rights of Certificateholders..........................................
   SECTION 12.04.          Governing Law.......................................................................
   SECTION 12.05.          Notices.............................................................................
   SECTION 12.06.          Severability of Provisions..........................................................
   SECTION 12.07.          Notice to Rating Agencies...........................................................
   SECTION 12.08.          Article and Section References......................................................
   SECTION 12.09.          Grant of Security Interest..........................................................
   SECTION 12.10.          Survival of Indemnification.........................................................

EXHIBITS

Exhibit A-1       Form of Class A Certificate
Exhibit A-2       Form of Class M Certificate
Exhibit A-3       Form of Class CE Certificate
Exhibit A-4       Form of Class P Certificate
Exhibit A-5       Form of Class R Certificate
Exhibit B-1       Form of Transferor Representation Letter and Form of Transferee Representation Letter in
                  Connection with Transfer of the Class P Certificates, Class CE Certificates and Residual
                  Certificates Pursuant to Rule 144A Under the Securities Act
Exhibit B-2       Form of Transferor Representation Letter and Form of Transferee Representation Letter in
                  Connection with Transfer of the Class P Certificates, Class CE Certificates and Residual
                  Certificates Pursuant to Rule 501(a) Under the Securities Act
Exhibit B-3       Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in Connection with
                  Transfer of Residual Certificates
Exhibit C         Form of Servicer Certification
Exhibit D         Form of Power of Attorney
Schedule 1        Mortgage Loan Schedule
Schedule 2        Prepayment Charge Schedule
Schedule 3        Reserved
Schedule 4        Standard File Layout - Delinquency Reporting
Schedule 5        Standard File Layout - Scheduled/Scheduled
Schedule 6        Data Requirements of Servicing Advances Incurred Prior to Cut-off Date
Schedule 7        Standard File Layout - Simple Interest Mortgage Loans
</TABLE>

<PAGE>

         This Pooling and Servicing Agreement, is dated and effective as of
November 1, 2005, among ACE SECURITIES CORP., as Depositor, WELLS FARGO BANK,
N.A., as a Servicer, WELLS FARGO BANK, N.A., Master Servicer and Securities
Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

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

                                     REMIC I

         As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the Mortgage Loans and certain other related assets
subject to this Agreement (other than the Reserve Fund and, for the avoidance of
doubt, the Supplemental Interest Trust and the Swap Agreement) as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I". The Class R-I Interest will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein). The following table irrevocably sets forth the designation, the REMIC I
Remittance Rate, the initial Uncertificated Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests (as defined herein).
None of the REMIC I Regular Interests will be certificated.

<PAGE>

                      REMIC I              INITIAL           LATEST POSSIBLE
     DESIGNATIO   REMITTANCE RATE   UNCERTIFICATED BALANCE   MATURITY DATE(1)
---------------   ---------------   ----------------------   ------------------
  A-I               Variable(2)      $           42.04        November 25, 2035
 I-1-A              Variable(2)      $    4,735,346.21        November 25, 2035
 I-1-B              Variable(2)      $    4,735,346.21        November 25, 2035
 I-2-A              Variable(2)      $    5,735,991.09        November 25, 2035
 I-2-B              Variable(2)      $    5,735,991.09        November 25, 2035
 I-3-A              Variable(2)      $    6,725,530.52        November 25, 2035
 I-3-B              Variable(2)      $    6,725,530.52        November 25, 2035
 I-4-A              Variable(2)      $    7,696,214.32        November 25, 2035
 I-4-B              Variable(2)      $    7,696,214.32        November 25, 2035
 I-5-A              Variable(2)      $    8,640,043.89        November 25, 2035
 I-5-B              Variable(2)      $    8,640,043.89        November 25, 2035
 I-6-A              Variable(2)      $    9,548,932.09        November 25, 2035
 I-6-B              Variable(2)      $    9,548,932.09        November 25, 2035
 I-7-A              Variable(2)      $   10,414,799.34        November 25, 2035
 I-7-B              Variable(2)      $   10,414,799.34        November 25, 2035
 I-8-A              Variable(2)      $   11,229,145.22        November 25, 2035
 I-8-B              Variable(2)      $   11,229,145.22        November 25, 2035
 I-9-A              Variable(2)      $   11,981,078.71        November 25, 2035
 I-9-B              Variable(2)      $   11,981,078.71        November 25, 2035
 I-10-A             Variable(2)      $   12,505,464.81        November 25, 2035
 I-10-B             Variable(2)      $   12,505,464.81        November 25, 2035
 I-11-A             Variable(2)      $   11,983,726.31        November 25, 2035
 I-11-B             Variable(2)      $   11,983,726.31        November 25, 2035
 I-12-A             Variable(2)      $   11,483,707.34        November 25, 2035
 I-12-B             Variable(2)      $   11,483,707.34        November 25, 2035
 I-13-A             Variable(2)      $   11,004,599.77        November 25, 2035
 I-13-B             Variable(2)      $   11,004,599.77        November 25, 2035
 I-14-A             Variable(2)      $   10,545,526.89        November 25, 2035
 I-14-B             Variable(2)      $   10,545,526.89        November 25, 2035
 I-15-A             Variable(2)      $   10,105,649.72        November 25, 2035
 I-15-B             Variable(2)      $   10,105,649.72        November 25, 2035
 I-16-A             Variable(2)      $    9,684,163.70        November 25, 2035
 I-16-B             Variable(2)      $    9,684,163.70        November 25, 2035
 I-17-A             Variable(2)      $    9,280,276.44        November 25, 2035
 I-17-B             Variable(2)      $    9,280,276.44        November 25, 2035
 I-18-A             Variable(2)      $    8,893,295.00        November 25, 2035
 I-18-B             Variable(2)      $    8,893,295.00        November 25, 2035
 I-19-A             Variable(2)      $    8,532,650.86        November 25, 2035
 I-19-B             Variable(2)      $    8,532,650.86        November 25, 2035
 I-20-A             Variable(2)      $    8,241,777.01        November 25, 2035
 I-20-B             Variable(2)      $    8,241,777.01        November 25, 2035
 I-21-A             Variable(2)      $   10,676,921.79        November 25, 2035
 I-21-B             Variable(2)      $   10,676,921.79        November 25, 2035
 I-22-A             Variable(2)      $   26,862,664.08        November 25, 2035
 I-22-B             Variable(2)      $   26,862,664.08        November 25, 2035
 I-23-A             Variable(2)      $   22,292,564.05        November 25, 2035
 I-23-B             Variable(2)      $   22,292,564.05        November 25, 2035
 I-24-A             Variable(2)      $   86,305,093.06        November 25, 2035
 I-24-B             Variable(2)      $   86,305,093.06        November 25, 2035
 I-25-A             Variable(2)      $    2,864,777.94        November 25, 2035
 I-25-B             Variable(2)      $    2,864,777.94        November 25, 2035
 I-26-A             Variable(2)      $    1,567,270.64        November 25, 2035
 I-26-B             Variable(2)      $    1,567,270.64        November 25, 2035
 I-27-A             Variable(2)      $    1,502,078.06        November 25, 2035
 I-27-B             Variable(2)      $    1,502,078.06        November 25, 2035
 I-28-A             Variable(2)      $    1,440,680.23        November 25, 2035
 I-28-B             Variable(2)      $    1,440,680.23        November 25, 2035
 I-29-A             Variable(2)      $    1,381,855.31        November 25, 2035
 I-29-B             Variable(2)      $    1,381,855.31        November 25, 2035
 I-30-A             Variable(2)      $    1,325,492.52        November 25, 2035
 I-30-B             Variable(2)      $    1,325,492.52        November 25, 2035
 I-31-A             Variable(2)      $    1,271,486.36        November 25, 2035
 I-31-B             Variable(2)      $    1,271,486.36        November 25, 2035
 I-32-A             Variable(2)      $    1,219,734.21        November 25, 2035
 I-32-B             Variable(2)      $    1,219,734.21        November 25, 2035
 I-33-A             Variable(2)      $    1,170,164.97        November 25, 2035
 I-33-B             Variable(2)      $    1,170,164.97        November 25, 2035
 I-34-A             Variable(2)      $    1,123,541.03        November 25, 2035
 I-34-B             Variable(2)      $    1,123,541.03        November 25, 2035
 I-35-A             Variable(2)      $    1,077,323.46        November 25, 2035
 I-35-B             Variable(2)      $    1,077,323.46        November 25, 2035
 I-36-A             Variable(2)      $    7,428,413.80        November 25, 2035
 I-36-B             Variable(2)      $    7,428,413.80        November 25, 2035
 I-37-A             Variable(2)      $      677,223.61        November 25, 2035
 I-37-B             Variable(2)      $      677,223.61        November 25, 2035
 I-38-A             Variable(2)      $      652,546.40        November 25, 2035
 I-38-B             Variable(2)      $      652,546.40        November 25, 2035
 I-39-A             Variable(2)      $      628,774.67        November 25, 2035
 I-39-B             Variable(2)      $      628,774.67        November 25, 2035
 I-40-A             Variable(2)      $      605,875.25        November 25, 2035
 I-40-B             Variable(2)      $      605,875.25        November 25, 2035
 I-41-A             Variable(2)      $      583,815.44        November 25, 2035
 I-41-B             Variable(2)      $      583,815.44        November 25, 2035
 I-42-A             Variable(2)      $      562,564.16        November 25, 2035
 I-42-B             Variable(2)      $      562,564.16        November 25, 2035
 I-43-A             Variable(2)      $      542,091.86        November 25, 2035
 I-43-B             Variable(2)      $      542,091.86        November 25, 2035
 I-44-A             Variable(2)      $      522,369.14        November 25, 2035
 I-44-B             Variable(2)      $      522,369.14        November 25, 2035
 I-45-A             Variable(2)      $      503,368.54        November 25, 2035
 I-45-B             Variable(2)      $      503,368.54        November 25, 2035
 I-46-A             Variable(2)      $   13,371,104.85        November 25, 2035
 I-46-B             Variable(2)      $   13,371,104.85        November 25, 2035
  A-II              Variable(2)      $            1141        November 25, 2035
 II-1-A             Variable(2)      $    1,284,685.51        November 25, 2035
 II-1-B             Variable(2)      $    1,284,685.51        November 25, 2035
 II-2-A             Variable(2)      $    1,556,157.52        November 25, 2035
 II-2-B             Variable(2)      $    1,556,157.52        November 25, 2035
 II-3-A             Variable(2)      $    1,824,616.66        November 25, 2035
 II-3-B             Variable(2)      $    1,824,616.66        November 25, 2035
 II-4-A             Variable(2)      $    2,087,960.32        November 25, 2035
 II-4-B             Variable(2)      $    2,087,960.32        November 25, 2035
 II-5-A             Variable(2)      $    2,344,018.51        November 25, 2035
 II-5-B             Variable(2)      $    2,344,018.51        November 25, 2035
 II-6-A             Variable(2)      $    2,590,597.21        November 25, 2035
 II-6-B             Variable(2)      $    2,590,597.21        November 25, 2035
 II-7-A             Variable(2)      $    2,825,504.45        November 25, 2035
 II-7-B             Variable(2)      $    2,825,504.45        November 25, 2035
 II-8-A             Variable(2)      $    3,046,434.09        November 25, 2035
 II-8-B             Variable(2)      $    3,046,434.09        November 25, 2035
 II-9-A             Variable(2)      $    3,250,431.43        November 25, 2035
 II-9-B             Variable(2)      $    3,250,431.43        November 25, 2035
II-10-A             Variable(2)      $    3,392,695.84        November 25, 2035
II-10-B             Variable(2)      $    3,392,695.84        November 25, 2035
II-11-A             Variable(2)      $    3,251,149.72        November 25, 2035
II-11-B             Variable(2)      $    3,251,149.72        November 25, 2035
II-12-A             Variable(2)      $    3,115,496.04        November 25, 2035
II-12-B             Variable(2)      $    3,115,496.04        November 25, 2035
II-13-A             Variable(2)      $    2,985,515.57        November 25, 2035
II-13-B             Variable(2)      $    2,985,515.57        November 25, 2035
II-14-A             Variable(2)      $    2,860,970.45        November 25, 2035
II-14-B             Variable(2)      $    2,860,970.45        November 25, 2035
II-15-A             Variable(2)      $    2,741,633.06        November 25, 2035
II-15-B             Variable(2)      $    2,741,633.06        November 25, 2035
II-16-A             Variable(2)      $    2,627,285.14        November 25, 2035
II-16-B             Variable(2)      $    2,627,285.14        November 25, 2035
II-17-A             Variable(2)      $    2,517,711.72        November 25, 2035
II-17-B             Variable(2)      $    2,517,711.72        November 25, 2035
II-18-A             Variable(2)      $    2,412,724.79        November 25, 2035
II-18-B             Variable(2)      $    2,412,724.79        November 25, 2035
II-19-A             Variable(2)      $    2,314,883.10        November 25, 2035
II-19-B             Variable(2)      $    2,314,883.10        November 25, 2035
II-20-A             Variable(2)      $    2,235,969.88        November 25, 2035
II-20-B             Variable(2)      $    2,235,969.88        November 25, 2035
II-21-A             Variable(2)      $    2,896,617.50        November 25, 2035
II-21-B             Variable(2)      $    2,896,617.50        November 25, 2035
II-22-A             Variable(2)      $    7,287,761.80        November 25, 2035
II-22-B             Variable(2)      $    7,287,761.80        November 25, 2035
II-23-A             Variable(2)      $    6,047,907.10        November 25, 2035
II-23-B             Variable(2)      $    6,047,907.10        November 25, 2035
II-24-A             Variable(2)      $   23,414,318.05        November 25, 2035
II-24-B             Variable(2)      $   23,414,318.05        November 25, 2035
II-25-A             Variable(2)      $      777,205.83        November 25, 2035
II-25-B             Variable(2)      $      777,205.83        November 25, 2035
II-26-A             Variable(2)      $      425,195.92        November 25, 2035
II-26-B             Variable(2)      $      425,195.92        November 25, 2035
II-27-A             Variable(2)      $      407,509.36        November 25, 2035
II-27-B             Variable(2)      $      407,509.36        November 25, 2035
II-28-A             Variable(2)      $      390,852.31        November 25, 2035
II-28-B             Variable(2)      $      390,852.31        November 25, 2035
II-29-A             Variable(2)      $      374,893.28        November 25, 2035
II-29-B             Variable(2)      $      374,893.28        November 25, 2035
II-30-A             Variable(2)      $      359,602.23        November 25, 2035
II-30-B             Variable(2)      $      359,602.23        November 25, 2035
II-31-A             Variable(2)      $      344,950.51        November 25, 2035
II-31-B             Variable(2)      $      344,950.51        November 25, 2035
II-32-A             Variable(2)      $      330,910.31        November 25, 2035
II-32-B             Variable(2)      $      330,910.31        November 25, 2035
II-33-A             Variable(2)      $      317,462.32        November 25, 2035
II-33-B             Variable(2)      $      317,462.32        November 25, 2035
II-34-A             Variable(2)      $      304,813.38        November 25, 2035
II-34-B             Variable(2)      $      304,813.38        November 25, 2035
II-35-A             Variable(2)      $      292,274.69        November 25, 2035
II-35-B             Variable(2)      $      292,274.69        November 25, 2035
II-36-A             Variable(2)      $    2,015,306.83        November 25, 2035
II-36-B             Variable(2)      $    2,015,306.83        November 25, 2035
II-37-A             Variable(2)      $      183,728.77        November 25, 2035
II-37-B             Variable(2)      $      183,728.77        November 25, 2035
II-38-A             Variable(2)      $      177,033.92        November 25, 2035
II-38-B             Variable(2)      $      177,033.92        November 25, 2035
II-39-A             Variable(2)      $      170,584.72        November 25, 2035
II-39-B             Variable(2)      $      170,584.72        November 25, 2035
II-40-A             Variable(2)      $      164,372.18        November 25, 2035
II-40-B             Variable(2)      $      164,372.18        November 25, 2035
II-41-A             Variable(2)      $      158,387.41        November 25, 2035
II-41-B             Variable(2)      $      158,387.41        November 25, 2035
II-42-A             Variable(2)      $      152,622.00        November 25, 2035
II-42-B             Variable(2)      $      152,622.00        November 25, 2035
II-43-A             Variable(2)      $      147,067.93        November 25, 2035
II-43-B             Variable(2)      $      147,067.93        November 25, 2035
II-44-A             Variable(2)      $      141,717.21        November 25, 2035
II-44-B             Variable(2)      $      141,717.21        November 25, 2035
II-45-A             Variable(2)      $      136,562.40        November 25, 2035
II-45-B             Variable(2)      $      136,562.40        November 25, 2035
II-46-A             Variable(2)      $    3,627,541.44        November 25, 2035
II-46-B             Variable(2)      $    3,627,541.44        November 25, 2035
 A-III              Variable(2)      $           46.75        November 25, 2035
III-1-A             Variable(2)      $    5,265,683.78        November 25, 2035
III-1-B             Variable(2)      $    5,265,683.78        November 25, 2035
III-2-A             Variable(2)      $    6,378,396.39        November 25, 2035
III-2-B             Variable(2)      $    6,378,396.39        November 25, 2035
III-3-A             Variable(2)      $    7,478,759.82        November 25, 2035
III-3-B             Variable(2)      $    7,478,759.82        November 25, 2035
III-4-A             Variable(2)      $    8,558,155.85        November 25, 2035
III-4-B             Variable(2)      $    8,558,155.85        November 25, 2035
III-5-A             Variable(2)      $    9,607,690.10        November 25, 2035
III-5-B             Variable(2)      $    9,607,690.10        November 25, 2035
III-6-A             Variable(2)      $   10,618,369.71        November 25, 2035
III-6-B             Variable(2)      $   10,618,369.71        November 25, 2035
III-7-A             Variable(2)      $   11,581,210.21        November 25, 2035
III-7-B             Variable(2)      $   11,581,210.21        November 25, 2035
III-8-A             Variable(2)      $   12,486,759.19        November 25, 2035
III-8-B             Variable(2)      $   12,486,759.19        November 25, 2035
III-9-A             Variable(2)      $   13,322,905.86        November 25, 2035
III-9-B             Variable(2)      $   13,322,905.86        November 25, 2035
III-10-A            Variable(2)      $   13,906,020.85        November 25, 2035
III-10-B            Variable(2)      $   13,906,020.85        November 25, 2035
III-11-A            Variable(2)      $   13,325,849.97        November 25, 2035
III-11-B            Variable(2)      $   13,325,849.97        November 25, 2035
III-12-A            Variable(2)      $   12,769,831.12        November 25, 2035
III-12-B            Variable(2)      $   12,769,831.12        November 25, 2035
III-13-A            Variable(2)      $   12,237,065.65        November 25, 2035
III-13-B            Variable(2)      $   12,237,065.65        November 25, 2035
III-14-A            Variable(2)      $   11,726,578.66        November 25, 2035
III-14-B            Variable(2)      $   11,726,578.66        November 25, 2035
III-15-A            Variable(2)      $   11,237,437.22        November 25, 2035
III-15-B            Variable(2)      $   11,237,437.22        November 25, 2035
III-16-A            Variable(2)      $   10,768,746.65        November 25, 2035
III-16-B            Variable(2)      $   10,768,746.65        November 25, 2035
III-17-A            Variable(2)      $   10,319,625.84        November 25, 2035
III-17-B            Variable(2)      $   10,319,625.84        November 25, 2035
III-18-A            Variable(2)      $    9,889,304.21        November 25, 2035
III-18-B            Variable(2)      $    9,889,304.21        November 25, 2035
III-19-A            Variable(2)      $    9,488,269.54        November 25, 2035
III-19-B            Variable(2)      $    9,488,269.54        November 25, 2035
III-20-A            Variable(2)      $    9,164,819.12        November 25, 2035
III-20-B            Variable(2)      $    9,164,819.12        November 25, 2035
III-21-A            Variable(2)      $   11,872,689.21        November 25, 2035
III-21-B            Variable(2)      $   11,872,689.21        November 25, 2035
III-22-A            Variable(2)      $   29,871,162.12        November 25, 2035
III-22-B            Variable(2)      $   29,871,162.12        November 25, 2035
III-23-A            Variable(2)      $   24,789,231.36        November 25, 2035
III-23-B            Variable(2)      $   24,789,231.36        November 25, 2035
III-24-A            Variable(2)      $   95,970,876.89        November 25, 2035
III-24-B            Variable(2)      $   95,970,876.89        November 25, 2035
III-25-A            Variable(2)      $    3,185,620.23        November 25, 2035
III-25-B            Variable(2)      $    3,185,620.23        November 25, 2035
III-26-A            Variable(2)      $    1,742,797.94        November 25, 2035
III-26-B            Variable(2)      $    1,742,797.94        November 25, 2035
III-27-A            Variable(2)      $    1,670,304.08        November 25, 2035
III-27-B            Variable(2)      $    1,670,304.08        November 25, 2035
III-28-A            Variable(2)      $    1,602,029.96        November 25, 2035
III-28-B            Variable(2)      $    1,602,029.96        November 25, 2035
II-29-A             Variable(2)      $    1,536,616.91        November 25, 2035
III-29-B            Variable(2)      $    1,536,616.91        November 25, 2035
III-30-A            Variable(2)      $    1,473,941.75        November 25, 2035
III-30-B            Variable(2)      $    1,473,941.75        November 25, 2035
III-31-A            Variable(2)      $    1,413,887.13        November 25, 2035
III-31-B            Variable(2)      $    1,413,887.13        November 25, 2035
III-32-A            Variable(2)      $    1,356,338.98        November 25, 2035
III-32-B            Variable(2)      $    1,356,338.98        November 25, 2035
III-33-A            Variable(2)      $    1,301,218.21        November 25, 2035
III-33-B            Variable(2)      $    1,301,218.21        November 25, 2035
III-34-A            Variable(2)      $    1,249,372.59        November 25, 2035
III-34-B            Variable(2)      $    1,249,372.59        November 25, 2035
III-35-A            Variable(2)      $    1,197,978.86        November 25, 2035
III-35-B            Variable(2)      $    1,197,978.86        November 25, 2035
III-36-A            Variable(2)      $    8,260,362.87        November 25, 2035
III-36-B            Variable(2)      $    8,260,362.87        November 25, 2035
III-37-A            Variable(2)      $      753,069.62        November 25, 2035
III-37-B            Variable(2)      $      753,069.62        November 25, 2035
III-38-A            Variable(2)      $      725,628.68        November 25, 2035
III-38-B            Variable(2)      $      725,628.68        November 25, 2035
III-39-A            Variable(2)      $      699,194.61        November 25, 2035
III-39-B            Variable(2)      $      699,194.61        November 25, 2035
III-40-A            Variable(2)      $      673,730.57        November 25, 2035
III-40-B            Variable(2)      $      673,730.57        November 25, 2035
III-41-A            Variable(2)      $      649,200.15        November 25, 2035
III-41-B            Variable(2)      $      649,200.15        November 25, 2035
III-42-A            Variable(2)      $      625,568.83        November 25, 2035
III-42-B            Variable(2)      $      625,568.83        November 25, 2035
III-43-A            Variable(2)      $      602,803.72        November 25, 2035
III-43-B            Variable(2)      $      602,803.72        November 25, 2035
III-44-A            Variable(2)      $      580,872.15        November 25, 2035
III-44-B            Variable(2)      $      580,872.15        November 25, 2035
III-45-A            Variable(2)      $      559,743.56        November 25, 2035
III-45-B            Variable(2)      $      559,743.56        November 25, 2035
III-46-A            Variable(2)      $   14,868,608.70        November 25, 2035
III-46-B            Variable(2)      $   14,868,608.70        November 25, 2035
   P                Variable(2)      $          100.00        November 25, 2035

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

                                    REMIC II

         As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC I Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC II." The Class R-II Interest will evidence the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions. The following table
irrevocably sets forth the designation, the REMIC II Remittance Rate, the
initial aggregate Uncertificated Balance and, 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.

                   REMIC II             INITIAL          LATEST POSSIBLE
                  REMITTANCE     UNCERTIFICATED BALANCE  MATURITY DATE (1)
DESIGNATION          RATE
-----------       -----------    ----------------------  -----------------
  AA              Variable(2)      $   880,829,570.91    November 25, 2035
 A-1A             Variable(2)      $     2,860,515.00    November 25, 2035
A-1B1             Variable(2)      $       620,840.00    November 25, 2035
A-1B2             Variable(2)      $       155,210.00    November 25, 2035
 A-2A             Variable(2)      $     1,570,465.00    November 25, 2035
 A-2B             Variable(2)      $       728,510.00    November 25, 2035
 A-2C             Variable(2)      $       485,025.00    November 25, 2035
 A-2D             Variable(2)      $       396,880.00    November 25, 2035
 M-1              Variable(2)      $       346,040.00    November 25, 2035
 M-2              Variable(2)      $       314,580.00    November 25, 2035
 M-3              Variable(2)      $       224,700.00    November 25, 2035
 M-4              Variable(2)      $       161,785.00    November 25, 2035
 M-5              Variable(2)      $       152,795.00    November 25, 2035
 M-6              Variable(2)      $       134,820.00    November 25, 2035
 M-7              Variable(2)      $       143,810.00    November 25, 2035
 M-8              Variable(2)      $       107,855.00    November 25, 2035
 M-9              Variable(2)      $        98,870.00    November 25, 2035
 M-10             Variable(2)      $        94,375.00    November 25, 2035
 M-11             Variable(2)      $        89,880.00    November 25, 2035
  ZZ              Variable(2)      $     9,289,158.69    November 25, 2035
  P               Variable(2)      $           100.00    November 25, 2035
  IO              Variable(2)                   (3)      November 25, 2035
IA-SUB            Variable(2)      $        18,215.25    November 25, 2035
IA-GRP            Variable(2)      $        75,425.55    November 25, 2035
IB-SUB            Variable(2)      $         4,941.73    November 25, 2035
IB-GRP            Variable(2)      $        20,462.73    November 25, 2035
II-SUB            Variable(2)      $        20,255.27    November 25, 2035
II-GRP            Variable(2)      $        83,872.87    November 25, 2035
  XX              Variable(2)      $   898,582,511.21    November 25, 2035

---------------------------
(1)      For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date immediately following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each REMIC II
         Regular Interest.
(2)      Calculated in accordance with the definition of "REMIC II Remittance
         Rate" herein.
(3)      REMIC II Regular Interest IO will not have an Uncertificated Balance,
         but will accrue interest on its Uncertificated Notional Amount.

                                    REMIC III

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

<TABLE>
<CAPTION>
                                                   INITIAL AGGREGATE
                                                 CERTIFICATE PRINCIPAL  LATEST POSSIBLE
   DESIGNATION                PASS-THROUGH RATE         BALANCE         MATURITY DATE (1)
----------------------------- -----------------  ---------------------  -----------------
<S>                           <C>                <C>                    <C>
Class A-1A                       Variable(2)        $572,103,000.00     November 25, 2035
Class A-1B1                      Variable(2)        $124,168,000.00     November 25, 2035
Class A-1B2                      Variable(2)        $ 31,042,000.00     November 25, 2035
Class A-2A                       Variable(2)        $314,093,000.00     November 25, 2035
Class A-2B                       Variable(2)        $145,702,000.00     November 25, 2035
Class A-2C                       Variable(2)        $ 97,005,000.00     November 25, 2035
Class A-2D                       Variable(2)        $ 79,376,000.00     November 25, 2035
 Class M-1                       Variable(2)        $ 69,208,000.00     November 25, 2035
 Class M-2                       Variable(2)        $ 62,916,000.00     November 25, 2035
 Class M-3                       Variable(2)        $ 44,940,000.00     November 25, 2035
 Class M-4                       Variable(2)        $ 32,357,000.00     November 25, 2035
 Class M-5                       Variable(2)        $ 30,559,000.00     November 25, 2035
 Class M-6                       Variable(2)        $ 26,964,000.00     November 25, 2035
 Class M-7                       Variable(2)        $ 28,762,000.00     November 25, 2035
 Class M-8                       Variable(2)        $ 21,571,000.00     November 25, 2035
 Class M-9                       Variable(2)        $ 19,774,000.00     November 25, 2035
Class M-10                       Variable(2)        $ 18,875,000.00     November 25, 2035
Class M-11                       Variable(2)        $ 17,976,000.00     November 25, 2035
  Class P                        N/A(3)                      100.00     November 25, 2035
 Class CE                        N/A(4)             $ 60,220,369.20     November 25, 2035
REMIC III Regular Interest IO    N/A(5)               (5)               November 25, 2035
</TABLE>

----------------
(1)   For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
      the Distribution Date immediately following the maturity date for the
      Mortgage Loan with the latest maturity date has been designated as the
      "latest possible maturity date" for each Class of Certificates.
(2)   Calculated in accordance with the definition of "Pass-Through Rate"
      herein. (3) The Class P Certificates will not accrue interest.
(4)   The Class CE Certificates will accrue interest at its variable
      Pass-Through Rate on a Notional Amount outstanding from time to time which
      shall equal the Uncertificated Balance of the REMIC II Regular Interests
      (other than REMIC II Regular Interest P). The Class CE Certificates will
      not accrue interest on their Certificate Principal Balance.
(5)   The REMIC III Regular Interest IO will not have a Pass-Through Rate or a
      Certificate Principal Balance, but will be entitled to 100% of amounts
      distributed on REMIC II Regular Interest IO.

         The Mortgage Loans had an aggregate Scheduled Principal Balance as of
the Cut-off Date, after deducting all Monthly Payments due on or before the
Cut-off Date, of 1,797,611,469.20. As of the Cut-off Date, the Group IA Mortgage
Loans had an aggregate Scheduled Principal Balance equal to 754,255,471.43, the
Group IB Mortgage Loans had an aggregate Scheduled Principal Balance equal to
204,627,292.22 and the Group II Mortgage Loans had an aggregate Scheduled
Principal Balance equal to 838,728,705.55.

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

<PAGE>

                                   ARTICLE I

                                   DEFINITIONS

         SECTION 1.01. Defined Terms.

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

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

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

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

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

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

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

         "Administration Fees: The sum of (i) the Servicing Fees, (ii) the
Master Servicing Fee, (iii) the Credit Risk Management Fee and (iv) any fees
payable in connection with any lender paid mortgage insurance policies.

         "Administration Fee Rate": The sum of (i) the Servicing Fee Rate, (ii)
the Master Servicer Fee Rate, (iii) the Credit Risk Management Fee Rate and (iv)
the rate at which any fee payable in connection with any lender paid mortgage
insurance policies.

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

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

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

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

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

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

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

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

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

         "Assignment Agreement": The Assignment, Assumption and Recognition
Agreement, dated as of November 28, 2005, by and among the Seller, the Depositor
and Countrywide evidencing the assignment of the Servicing Agreement to the
extent of the servicing of the Countrywide Mortgage Loans, to the Depositor.

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

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

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

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

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

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

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

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

         "Certificate": Any one of ACE Securities Corp., Asset Backed
Pass-Through Certificates, Series 2005-HE7, Class A-1A, Class A-1B1, Class
A-1B2, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9,
Class M-10, Class M-11, Class P, Class CE and Class R Certificates issued under
this Agreement.

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

         "CERTIFICATE MARGIN": With respect to the Class A-1A Certificates and,
for purposes of the definition of "Marker Rate", REMIC II Regular Interest A-1A,
0.24% in the case of each Distribution Date through and including the Optional
Termination Date and 0.48% in the case of each Distribution Date thereafter.

         With respect to the Class A-1B1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-1B1, 0.25% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.50% in the case of each Distribution Date thereafter.

         With respect to the Class A-1B2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-1B2, 0.30% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.60% in the case of each Distribution Date thereafter.

         With respect to the Class A-2A Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-2A, 0.10% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.20% in the case of each Distribution Date thereafter.

         With respect to the Class A-2B Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-2B, 0.18% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.36% in the case of each Distribution Date thereafter.

         With respect to the Class A-2C Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-2C, 0.25% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.50% in the case of each Distribution Date thereafter.

         With respect to the Class A-2D Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-2D, 0.33% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.66% in the case of each Distribution Date thereafter.

         With respect to the Class M-1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-1, 0.44% in the case of
each Distribution Date through and including the Optional Termination Date and
0.66% in the case of each Distribution Date thereafter.

         With respect to the Class M-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-2, 0.46% in the case of
each Distribution Date through and including the Optional Termination Date and
0.69% in the case of each Distribution Date thereafter.

         With respect to the Class M-3 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-3, 0.48% in the case of
each Distribution Date through and including the Optional Termination Date and
0.72% in the case of each Distribution Date thereafter. With respect to the
Class M-4 Certificates and, for purposes of the definition of "Marker Rate",
REMIC II Regular Interest M-4, 0.62% in the case of each Distribution Date
through and including the Optional Termination Date and 0.93% in the case of
each Distribution Date thereafter.

         With respect to the Class M-5 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-5, 0.70% in the case of
each Distribution Date through and including the Optional Termination Date and
1.05% in the case of each Distribution Date thereafter.

         With respect to the Class M-6 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-6, 0.80% in the case of
each Distribution Date through and including the Optional Termination Date and
1.20% in the case of each Distribution Date thereafter.

         With respect to the Class M-7 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-7, 1.60% in the case of
each Distribution Date through and including the Optional Termination Date and
2.10% in the case of each Distribution Date thereafter.

         With respect to the Class M-8 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-8, 1.70% in the case of
each Distribution Date through and including the Optional Termination Date and
2.20% in the case of each Distribution Date thereafter.

         With respect to the Class M-9 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-9, 2.50% in the case of
each Distribution Date through and including the Optional Termination Date and
3.00% in the case of each Distribution Date thereafter.

         With respect to the Class M-10 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-10, 2.50% in the case
of each Distribution Date through and including the Optional Termination Date
and 3.00% in the case of each Distribution Date thereafter.

         With respect to the Class M-11 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-11, 2.50% in the case
of each Distribution Date through and including the Optional Termination Date
and 3.00% in the case of each Distribution Date thereafter.

         "Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or a Non-United States Person shall not be a Holder of a Residual
Certificate for any purposes hereof, and solely for the purposes of giving any
consent pursuant to this Agreement, any Certificate registered in the name of or
beneficially owned by the Depositor, the Seller, a Servicer, the Master
Servicer, the Securities Administrator, the Trustee or any Affiliate thereof
shall be deemed not to be outstanding and the Voting Rights to which it is
entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 12.01 of this Agreement. The
Trustee and the Securities Administrator may conclusively rely upon a
certificate of the Depositor, the Seller, the Master Servicer, the Securities
Administrator or a Servicer in determining whether a Certificate is held by an
Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee and the
Securities Administrator shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.

         "Certificate Owner": With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate as reflected on the books
of the Depository or on the books of a Depository Participant or on the books of
an indirect participating brokerage firm for which a Depository Participant acts
as agent.

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

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

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

         "Class A Certificate": Any Class A-1A, Class A-1B1, Class A-1B2, Class
A-2A, Class A-2B, Class A-2C or Class A-2D Certificate.

         "Class A Principal Distribution Amount": The Class A Principal
Distribution Amount is an amount equal to the sum of: (i) the Class A-1A
Principal Distribution Amount, (ii) the Class A-1B Principal Distribution Amount
and (iii) the Class A-2 Principal Distribution Amount.

         "Class A-1A Allocation Percentage": With respect to any Distribution
Date is the percentage equivalent of a fraction, the numerator of which is (x)
the Group IA Principal Remittance Amount for such Distribution Date and the
denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

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

         "Class A-1A Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A-1A Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 51.70% and (ii) the aggregate Stated Principal
Balance of the Group IA Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Group IA Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Group IA Mortgage Loans as of the Cut-off Date.

         "Class A-1B Allocation Percentage": With respect to any Distribution
Date is the percentage equivalent of a fraction, the numerator of which is (x)
the Group IB Principal Remittance Amount for such Distribution Date and the
denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

         "Class A-1B Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-1B1 Certificates and Class A-1B2 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 51.70%
and (ii) the aggregate Stated Principal Balance of the Group IB Mortgage Loans
as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group
IB Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) minus the product of (i) 0.50%
and (ii) the aggregate principal balance of the Group IB Mortgage Loans as of
the Cut-off Date.

         "Class A-1B1 Certificate": Any one of the Class A-1B1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-1 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

         "Class A-1B2 Certificate": Any one of the Class A-1B2 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-1 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

         "Class A-2 Allocation Percentage": With respect to any Distribution
Date is the percentage equivalent of a fraction, the numerator of which is (x)
the Group II Principal Remittance Amount for such Distribution Date and the
denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

         "Class A-2 Certificate": Any Class A-2A, Class A-2B, Class A-2C or
Class A-2D Certificate.

         "Class A-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-2A, Class A-2B, Class A-2C and Class A-2D Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 51.70% and (ii) the aggregate Stated Principal Balance of the
Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group II Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced and
unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

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

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

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

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

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

         "Class IO Distribution Amount": As defined in Section 5.07(e) hereof.
For purposes of clarity, the Class IO Distribution Amount for any Distribution
Date shall equal the amount payable to the Supplemental Interest Trust on such
Distribution Date in excess of the amount payable on the Class IO Interest on
such Distribution Date, all as further provided in Section 5.07(e) hereof.

         "Class IO Interest": An uncertificated interest in the Trust Fund held
by the Trustee, evidencing a REMIC Regular Interest in REMIC III for purposes of
the REMIC Provisions.

         "Class M Certificates": The Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11
Certificates.

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

         "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date)
and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 59.40% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

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

         "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 66.40% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

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

         "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 71.40% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

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

         "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 75.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

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

         "Class M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (vi) the Certificate Principal Balance of
the Class M-5 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 78.40% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

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

         "Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date) and (vii) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 81.40% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

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

         "Class M-7 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 84.60% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

         "Class M-8 Certificate": Any one of the Class M-8 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC III for purposes of the REMIC Provisions.

         "Class M-8 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date) and (ix) the Certificate Principal Balance of
the Class M-8 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 87.00% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

         "Class M-9 Certificate": Any one of the Class M-9 Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC III for purposes of the REMIC Provisions.

         "Class M-9 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date). (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date) and (x) the Certificate
Principal Balance of the Class M-9 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 89.20% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

         "Class M-10 Certificate": Any one of the Class M-10 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

         "Class M-10 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date). (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date) and (xi) the Certificate Principal Balance of the Class M-10 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 91.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

         "Class M-11 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates
(after taking into account the payment of the Class M-10 Principal Distribution
Amount on such Distribution Date) and (xii) the Certificate Principal Balance of
the Class M-11 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 93.30% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

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

         "Class R Certificates": Any one of the Class R Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-5, and evidencing the
Class R-I Interest, the Class R-II Interest and the Class R-III Interest.

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

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

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

         "Closing Date": November 28, 2005.

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

         "Collection Account": The separate account or accounts created and
maintained, or caused to be created and maintained, by Wells Fargo pursuant to
Section 3.08(a) of this Agreement, which shall be entitled "Wells Fargo Bank,
National Association, as a Servicer for HSBC Bank USA, National Association as
Trustee, in trust for the registered Holders of ACE Securities Corp., Home
Equity Loan Trust, Series 2005-HE7, Asset Backed Pass-Through Certificates",
respectively. The Collection Accounts must be Eligible Accounts.

         "Commission": The Securities and Exchange Commission.

         "Corporate Trust Office": The principal corporate trust office of the
Trustee or the Securities Administrator, as the case may be, at which, at any
particular time, its corporate trust business in connection with this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at (i) with respect to the Trustee, HSBC Bank USA,
National Association, 452 Fifth Avenue, New York, New York 10018, Attention: ACE
Securities Corp., 2005-HE7, or at such other address as the Trustee may
designate from time to time by notice to the Certificateholders, the Depositor,
the Master Servicer, the Securities Administrator and the Servicer and (ii) with
respect to the Securities Administrator, (A) for purposes of Certificate
transfers and surrender, Wells Fargo Bank, National Association, Sixth Street
and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
(ACE 2005-HE7), and (B) for all other purposes, Wells Fargo Bank, National
Association, P.O. Box 98, Columbia, Maryland 21046, Attention: Corporate Trust
(ACE 2005-HE7) (or for overnight deliveries, at 9062 Old Annapolis Road,
Columbia, Maryland 21045, Attention: Corporate Trust (ACE 2005-HE7)), or at such
other address as the Securities Administrator may designate from time to time by
notice to the Certificateholders, the Depositor, the Master Servicer, the
Servicer and the Trustee.

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

                    REMIC II Regular Interest         Class
                    -------------------------         -----
                    REMIC II Regular Interest A-1A    A-1A
                    REMIC II Regular Interest A-1B1   A-1B1
                    REMIC II Regular Interest A-1B2   A-1B2
                    REMIC II Regular Interest A-2A    A-2A
                    REMIC II Regular Interest A-2B    A-2B
                    REMIC II Regular Interest A-2C    A-2C
                    REMIC II Regular Interest A-2D    A-2D
                    REMIC II Regular Interest M-1     M-1
                    REMIC II Regular Interest M-2     M-2
                    REMIC II Regular Interest M-3     M-3
                    REMIC II Regular Interest M-4     M-4
                    REMIC II Regular Interest M-5     M-5
                    REMIC II Regular Interest M-6     M-6
                    REMIC II Regular Interest M-7     M-7
                    REMIC II Regular Interest M-8     M-8
                    REMIC II Regular Interest M-9     M-9
                    REMIC II Regular Interest M-10    M-10
                    REMIC II Regular Interest M-11    M-11
                    REMIC II Regular Interest P       P

         "Countrywide": Countrywide Home Loans Servicing LP or any successor
thereto.

         "Countrywide Mortgage Loans": Those Mortgage Loans serviced by
Countrywide pursuant to the terms of the Servicing Agreement as specified on the
Mortgage Loan Schedule.

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

         "Credit Risk Management Agreements": The agreements between the Credit
Risk Manager and each Servicer and/or Master Servicer, each regarding the loss
mitigation and advisory services to be provided by the Credit Risk Manager.

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

         "Credit Risk Management Fee Rate": 0.013% per annum.

         "Credit Risk Manager": Claxton Fixed Income Services Inc. (formerly
known as The Murrayhill Company), a Colorado corporation, and its successors and
assigns.

         "Custodial Account": The separate account or accounts maintained by
Countrywide pursuant to the Servicing Agreement.

         "Custodial Agreement": Either of the DBNT Custodial Agreement or the
Wells Fargo Custodial Agreement, or any other custodial agreement entered into
after the date hereof with respect to any Mortgage Loan subject to this
Agreement.

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

         "Cut-off Date": With respect to each Mortgage Loan, November 1, 2005.
With respect to all Qualified Substitute Mortgage Loans, their respective dates
of substitution. References herein to the "Cut-off Date," when used with respect
to more than one Mortgage Loan, shall be to the respective Cut-off Dates for
such Mortgage Loans.

         "DBNT": Deutsche Bank National Trust Company, a national banking
association, or its successor in interest.

         "DBNT Custodial Agreement": The Custodial Agreement dated as of
November 1, 2005, among the Trustee, DBNT and the Servicers, as may be amended
or supplemented from time to time.

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

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

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

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

         "Delinquency Percentage": As of the last day of the related Due Period,
the percentage equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of all Mortgage Loans that, as of the last day of the
previous calendar month, are sixty (60) or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month.

         "Depositor": ACE Securities Corp., a Delaware corporation, or its
successor in interest.

         "Depository": The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry Certificates, is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act.

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

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

         "Determination Date": With respect to each Distribution Date and (i)
Wells Fargo, the Business Day immediately preceding the related Servicer
Remittance Date and (ii) Countrywide, the date specified in the Servicing
Agreement. The Determination Date for purposes of Article X hereof shall mean
the 15th day of the month or, if such 15th day is not a Business Day, the first
Business Day following such 15th day.

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

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

         "Distribution Account": The separate trust account or accounts created
and maintained by the Securities Administrator pursuant to Section 3.08(b) of
this Agreement in the name of the Securities Administrator for the benefit of
the Certificateholders and designated "Wells Fargo Bank, National Association,
in trust for registered holders of ACE Securities Corp. Home Equity Loan Trust,
Series 2005-HE7". Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.
The Distribution Account must be an Eligible Account.

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

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

         "Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.

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

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

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

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

         "Exchange Act": The Securities Exchange Act of 1934, as amended.

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

         "Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (i) the Net Monthly Excess Cashflow for such Distribution
Date and (ii) the Overcollateralization Increase Amount for such Distribution
Date.

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

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

         "Final Maturity Date": The Distribution Date occurring in November
2035.

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

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

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

         "Group IA Allocation Percentage": The aggregate principal balance of
the Group IA Mortgage Loans divided by the sum of the aggregate principal
balance of the Group IA Mortgage Loans, Group IB Mortgage Loans and Group II
Mortgage Loans.

         "Group IA Interest Remittance Amount": With respect to any Distribution
Date is that portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Group IA Mortgage
Loans (other than any Simple Interest Excess, if applicable, and net of the
Administration Fees and any Prepayment Charges and after taking into account
amounts payable or reimbursable to the Trustee, the Custodians, the Securities
Administrator, the Credit Risk Manager, the Master Servicer or the Servicers
pursuant to this Agreement or the Custodial Agreements), plus any amounts
withdrawn from the Simple Interest Excess Sub-Account.

         "Group IA Mortgage Loans": Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group IA Mortgage Loans.

         "Group IA Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group IA Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group IA Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01 of this Agreement; (iii) the principal portion of all other unscheduled
collections, including Insurance Proceeds, Liquidation Proceeds and all
Principal Prepayments in full and in part, received during the related
Prepayment Period, to the extent applied as recoveries of principal on the Group
IA Mortgage Loans, net in each case of payments or reimbursements to the
Trustee, the Custodians, the Master Servicer, the Securities Administrator or
the Servicers and (iv) the Class A-1A Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Class A-1A Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date.

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

         "Group IB Allocation Percentage": The aggregate principal balance of
the Group IB Mortgage Loans divided by the sum of the aggregate principal
balance of the Group IA Mortgage Loans, Group IB Mortgage Loans and Group II
Mortgage Loans.

         "Group IB Interest Remittance Amount": With respect to any Distribution
Date is that portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Group IB Mortgage
Loans (other than any Simple Interest Excess, if applicable, and net of the
Administration Fees and any Prepayment Charges and after taking into account
amounts payable or reimbursable to the Trustee, the Custodians, the Securities
Administrator, the Master Servicer or the Servicers pursuant to this Agreement
or the Custodial Agreements), plus any amounts withdrawn from the Simple
Interest Excess Sub-Account.

         "Group IB Mortgage Loans": Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group IB Mortgage Loans.

         "Group IB Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group IB Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group IB Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01 of this Agreement; (iii) the principal portion of all other unscheduled
collections, including Insurance Proceeds, Liquidation Proceeds and all
Principal Prepayments in full and in part, received during the related
Prepayment Period, to the extent applied as recoveries of principal on the Group
IB Mortgage Loans, net in each case of payments or reimbursements to the
Trustee, the Custodians, the Master Servicer, the Securities Administrator or
the Servicers and (iv) the Class A-1B Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Class A-1B Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date.

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

         "Group II Allocation Percentage": The aggregate principal balance of
the Group II Mortgage Loans divided by the sum of the aggregate principal
balance of the Group IA Mortgage Loans, Group IB Mortgage Loans and Group II
Mortgage Loans.

         "Group II Interest Remittance Amount": With respect to any Distribution
Date is that portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Group II Mortgage
Loans (other than any Simple Interest Excess, if applicable, and net of the
Administration Fees and any Prepayment Charges and after taking into account
amounts payable or reimbursable to the Trustee, the Custodians, the Securities
Administrator, the Credit Risk Manager, the Master Servicer or the Servicers
pursuant to this Agreement or the Custodial Agreements), plus any amounts
withdrawn from the Simple Interest Excess Sub-Account.

         "Group II Mortgage Loans": Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.

         "Group II Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments on the Group II Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group II Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01 of this Agreement; (iii) the principal portion of all other unscheduled
collections, including Insurance Proceeds, Liquidation Proceeds and all
Principal Prepayments in full and in part, received during the related
Prepayment Period, to the extent applied as recoveries of principal on the Group
II Mortgage Loans, net in each case of payments or reimbursements to the
Trustee, the Custodians, the Master Servicer, the Securities Administrator or
the Servicers and (iv) the Class A-2 Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Class A-2 Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date.

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

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

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

         "Index": As of any Adjustment Date, the index applicable to the
determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan will
generally be the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in THE WALL STREET
JOURNAL and as most recently available either (a) as of the first Business Day
forty-five (45) days prior to such Adjustment Date or (b) as of the first
Business Day of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note.

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

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

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

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

         "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, REMIC I Regular Interests and REMIC II
Regular Interests (other than REMIC I Regular Interest P and REMIC II Regular
Interest P) and any Interest Accrual Period therefor, the second London Business
Day preceding the commencement of such Interest Accrual Period.

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

         "Interest Remittance Amount": With respect to any Distribution Date,
the sum of: (i) the Group IA Interest Remittance Amount, (ii) the Group IB
Interest Remittance Amount and (iii) the Group II Interest Remittance Amount.

         "Last Scheduled Distribution Date": The Distribution Date in November
2035, which is the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest maturity date.

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

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

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

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

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

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

         "Marker Rate": With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the REMIC II Remittance Rate for each of REMIC II Regular Interest A-1A,
REMIC II Regular Interest A-1B1, REMIC II Regular Interest A-1B2, REMIC II
Regular Interest A-2A, REMIC II Regular Interest A-2B, REMIC II Regular Interest
A-2C, REMIC II Regular Interest A-2D, REMIC II Regular Interest M-1, REMIC II
Regular Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest
M-4, REMIC II Regular Interest M-5, REMIC II Regular Interest M-6, REMIC II
Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular Interest
M-9, REMIC II Regular Interest M-10, REMIC II Regular Interest M-11, and REMIC
II Regular Interest ZZ, with the rate on each such REMIC II Regular Interest
(other than REMIC II Regular Interest ZZ) subject to a cap equal to the lesser
of (i) the related One-Month LIBOR Pass-Through Rate and (ii) the related Net
WAC Pass-Through Rate for the corresponding Certificate for the purpose of this
calculation for such Distribution Date and with the rate on REMIC II Regular
Interest ZZ subject to a cap of zero for the purpose of this calculation;
provided however, each such cap for each REMIC II Regular Interest shall be
multiplied by a fraction the numerator of which is the actual number of days in
the related Interest Accrual Period and the denominator of which is 30.

         "Master Servicer": As of the Closing Date, Wells Fargo Bank, National
Association and thereafter, its respective successors in interest who meet the
qualifications of this Agreement. The Master Servicer and the Securities
Administrator shall at all times be the same Person or an Affiliate.

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

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

         "Master Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one twelfth of the product of the Master
Servicing Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month.

         "Master Servicing Fee Rate": 0.0015% per annum.

         "Maximum ZZ Uncertificated Interest Deferral Amount": With respect to
any Distribution Date, the excess of (i) accrued interest at the REMIC II
Remittance Rate applicable to REMIC II Regular Interest ZZ for such Distribution
Date on a balance equal to the Uncertificated Balance of REMIC II Regular
Interest ZZ minus the REMIC II Overcollateralization Amount, in each case for
such Distribution Date, over (ii) Uncertificated Interest on REMIC II Regular
Interest A-1A, REMIC II Regular Interest A-1B1, REMIC II Regular Interest A-1B2,
REMIC II Regular Interest A-2A, REMIC II Regular Interest A-2B, REMIC II Regular
Interest A-2C, REMIC II Regular Interest A-2D, REMIC II Regular Interest M-1,
REMIC II Regular Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular
Interest M-4, REMIC II Regular Interest M-5, REMIC II Regular Interest M-6,
REMIC II Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular
Interest M-9, REMIC II Regular Interest M-10 and REMIC II Regular Interest M-11
for such Distribution Date, with the rate on each such REMIC II Regular Interest
subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate for the
Corresponding Certificate for the purpose of this calculation for such
Distribution Date; provided however, each such cap for each REMIC II Regular
Interest shall be multiplied by a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is 30.

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

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

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

         "Mezzanine Certificate": Any Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificate.

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

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

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

         "Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the related Servicer pursuant to Section 3.01 of this
Agreement of pursuant to the Servicing Agreement; and (c) on the assumption that
all other amounts, if any, due under such Mortgage Loan are paid when due.

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

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

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

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

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

         "Mortgage Loan Purchase Agreement": Shall mean the Mortgage Loan
Purchase Agreement dated as of November 28, 2005, between the Depositor and the
Seller.

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

                  (i) the Mortgage Loan identifying number;

                  (ii) the Mortgagor's first and last name;

                  (iii) the street address of the Mortgaged Property including
         the state and zip code;

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

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

                  (vi) the original months to maturity;

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

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

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

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

                  (xi) the stated maturity date;

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

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

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

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

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

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

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

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

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

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

                  (xxii) the Mortgage Rate at origination;

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

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

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

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

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

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

                  (xxix) a code indicating if the Mortgage Loan is subject to a
         primary insurance policy or lender paid mortgage insurance policy and
         the name of the insurer and, if applicable, the rate payable in
         connection therewith;

                  (xxx) the Appraised Value of the Mortgaged Property;

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

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

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

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

                  (xxxv) the FICO score at origination;

                  (xxxvi) with respect to each Mortgage Loan registered on MERS,
         the MIN;

                  (xxxvii) whether such Mortgage Loan is a Simple Interest
         Mortgage Loan;

                  (xxxviii) the applicable Custodian; and

                  (xxxix) the applicable Servicer.

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

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

         "Mortgage Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate with respect to
each Adjustable Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following
the Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to
the nearest 0.125% as provided in the Mortgage Note, of the Index, as most
recently available as of a date prior to the Adjustment Date as set forth in the
related Mortgage Note, plus the related Gross Margin; provided that the Mortgage
Rate on such Adjustable Rate Mortgage Loan on any Adjustment Date shall never be
more than the lesser of (i) the sum of the Mortgage Rate in effect immediately
prior to the Adjustment Date plus the related Periodic Rate Cap, if any, and
(ii) the related Maximum Mortgage Rate, and shall never be less than the greater
of (i) the Mortgage Rate in effect immediately prior to the Adjustment Date less
the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

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

         "Mortgagor": The obligor on a Mortgage Note.

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

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

         "Net Simple Interest Excess": As of any Distribution Date, an amount
equal to the excess, if any, of the aggregate amount of Simple Interest Excess
with respect to the Mortgage Loans over the amount of Simple Interest Shortfall
with respect to the Mortgage Loans.

         "Net Simple Interest Shortfall": As of any Distribution Date, an amount
equal to the excess, if any, of the aggregate amount of Simple Interest
Shortfall with respect to the Mortgage Loans over the amount of Simple Interest
Excess with respect to the Mortgage Loans.

         "Net Swap Payment": With respect to each Distribution Date, the net
payment required to be made pursuant to the terms of the Swap Agreement by
either the Swap Provider or the Supplemental Interest Trust, which net payment
shall not take into account any Swap Termination Payment.

         "Net WAC Pass-Through Rate": With respect to the Class A-1A
Certificates and any Distribution Date, a rate per annum (adjusted for the
actual number of days elapsed in the related Interest Accrual Period) equal to a
fraction, expressed as a percentage, the numerator of which is the amount of
interest which accrued on the Group IA Mortgage Loans in the prior calendar
month minus the fees payable to the Servicers, the Master Servicer and any fee
payable in connection with any lender paid mortgage insurance policies with
respect to the Group IA Mortgage Loans for such Distribution Date and the Group
IA Allocation Percentage of any Net Swap Payment payable to the Swap Provider or
Swap Termination Payment payable to the Swap Provider which was not caused by
the occurrence of a Swap Provider Trigger Event, in each case for such
Distribution Date and the denominator of which is the aggregate principal
balance of the Group IA Mortgage Loans as of the last day of the immediately
preceding Due Period (or as of the Cut-off Date with respect to the first
Distribution Date), after giving effect to Principal Prepayments received during
the related Prepayment Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC II Remittance Rate on REMIC II Regular Interest IA-GRP, weighted on
the basis of the Uncertificated Balance of such REMIC II Regular Interest.

         With respect to the Class A-1B1 Certificates and Class A-1B2
Certificates and any Distribution Date, a rate per annum (adjusted for the
actual number of days elapsed in the related Interest Accrual Period) equal to a
fraction, expressed as a percentage, the numerator of which is the amount of
interest which accrued on the Group IB Mortgage Loans in the prior calendar
month minus the fees payable to the Servicers, the Master Servicer and any fee
payable in connection with any lender paid mortgage insurance policies with
respect to the Group IB Mortgage Loans for such Distribution Date and the Group
IB Allocation Percentage of any Net Swap Payment payable to the Swap Provider or
Swap Termination Payment payable to the Swap Provider which was not caused by
the occurrence of a Swap Provider Trigger Event, in each case for such
Distribution Date and the denominator of which is the aggregate principal
balance of the Group IB Mortgage Loans as of the last day of the immediately
preceding Due Period (or as of the Cut-off Date with respect to the first
Distribution Date), after giving effect to Principal Prepayments received during
the related Prepayment Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC II Remittance Rate on REMIC II Regular Interest IB-GRP, weighted on
the basis of the Uncertificated Balance of such REMIC II Regular Interest.

         With respect to the Class A-2 Certificates and any Distribution Date, a
rate per annum (adjusted for the actual number of days elapsed in the related
Interest Accrual Period) equal to a fraction, expressed as a percentage, the
numerator of which is the amount of interest which accrued on the Group II
Mortgage Loans in the prior calendar month minus the fees payable to the
Servicers, the Master Servicer and any fee payable in connection with any lender
paid mortgage insurance policies with respect to the Group II Mortgage Loans for
such Distribution Date and the Group II Allocation Percentage of any Net Swap
Payment payable to the Swap Provider or Swap Termination Payment payable to the
Swap Provider which was not caused by the occurrence of a Swap Provider Trigger
Event, in each case for such Distribution Date and the denominator of which is
the aggregate principal balance of the Group II Mortgage Loans as of the last
day of the immediately preceding Due Period (or as of the Cut-off Date with
respect to the first Distribution Date), after giving effect to Principal
Prepayments received during the related Prepayment Period. For federal income
tax purposes, the economic equivalent of such rate shall be expressed as the
weighted average of (adjusted for the actual number of days elapsed in the
related Interest Accrual Period) the REMIC II Remittance Rate on REMIC II
Regular Interest II-GRP, weighted on the basis of the Uncertificated Balance of
such REMIC II Regular Interest.

         With respect to the Mezzanine Certificates and any Distribution Date a
rate per annum equal to (x) the weighted average (weighted in proportion to the
results of subtracting from the Scheduled Principal Balance of each loan group,
the Certificate Principal Balance of the related Class A Certificates) of (i)
the Net WAC Pass-Through Rate for the Class A-1A Certificates, (ii) the Net WAC
Pass-Through Rate for the Class A-1B1 Certificates and Class A-2B2 Certificates
and (iii) the Net WAC Pass-Through Rate for the Class A-2 Certificates. For
federal income tax purposes, the economic equivalent of such rate shall be
expressed as the weighted average of (adjusted for the actual number of days
elapsed in the related Interest Accrual Period) the REMIC II Remittance Rates on
(a) REMIC II Regular Interest IA-SUB, subject to a cap and a floor equal to the
REMIC II Remittance Rate on REMIC II Regular Interest IA-GRP, (b) REMIC II
Regular Interest IB-SUB, subject to a cap and a floor equal to the REMIC II
Remittance Rate on REMIC II Regular Interest IB-GRP and (c) REMIC II Regular
Interest II-SUB, subject to a cap and a floor equal to the REMIC II Remittance
Rate on REMIC II Regular Interest II-GRP, weighted on the basis of the
Uncertificated Balance of each such REMIC II Regular Interest.

         "Net WAC Rate Carryover Amount": With respect to any Class A
Certificate or Mezzanine Certificate and any Distribution Date on which the
Pass-Through Rate is limited to the applicable Net WAC Pass-Through Rate, an
amount equal to the sum of (i) the excess of (x) the amount of interest such
Class would have been entitled to receive on such Distribution Date if the
applicable Net WAC Pass-Through Rate would not have been applicable to such
Class on such Distribution Date over (y) the amount of interest paid to such
Class on such Distribution Date at the applicable Net WAC Pass-Through Rate plus
(ii) the related Net WAC Rate Carryover Amount for the previous Distribution
Date not previously distributed to such Class together with interest thereon at
a rate equal to the Pass-Through Rate for such Class for the most recently ended
Interest Accrual Period without taking into account the applicable Net WAC
Pass-Through Rate.

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

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

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

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

         "Notional Amount": With respect to the Class CE Certificates and any
Distribution Date, the Uncertificated Balance of the REMIC II Regular Interests
(other than REMIC II Regular Interest P) for such Distribution Date. As of the
Closing Date, the Notional Amount of the Class CE Certificates is equal to
60,220,369.

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

         "Officer's Certificate": With respect to any Person, a certificate
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President or a vice president (however denominated), or by the Treasurer, the
Secretary, or one of the assistant treasurers or assistant secretaries of such
Person (or, in the case of a Person that is not a corporation, signed by a
person or persons having like responsibilities.

         "One-Month LIBOR": With respect to the Class A Certificates, the
Mezzanine Certificates, REMIC II Regular Interests (other than REMIC II Regular
Interest P) and any Interest Accrual Period therefor, the rate determined by the
Securities Administrator on the related Interest Determination Date on the basis
of the offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Securities
Administrator will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If on such Interest Determination
Date, two or more Reference Banks provide such offered quotations, One-Month
LIBOR for the related Interest Accrual Period shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the nearest whole
multiple of 1/16). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Securities Administrator shall select an alternative comparable index
(over which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party. The establishment of
One-Month LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculation of the One-Month LIBOR Pass-Through Rates
for the relevant Interest Accrual Period, shall, in the absence of manifest
error, be final and binding.

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

         With respect to the Class A-1B1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-1B1, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

         With respect to the Class A-1B2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest A-1B2, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

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

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

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

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

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

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

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

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

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

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

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

         With respect to the Class M-8 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-8, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

         With respect to the Class M-9 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-9, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

         With respect to the Class M-10 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-10, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

         With respect to the Class M-11 Certificates and, for purposes of the
definition of "Marker Rate", REMIC II Regular Interest M-11, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

         "Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, the related Servicer, the
Securities Administrator or the Master Servicer, acceptable to the Trustee,
except that any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion
of Independent counsel; provided however, any Opinion of Counsel provided by a
Servicer pursuant to clause (b) above with respect to the continued eligibility
of modified Mortgage Loans may be provided by internal counsel, provided that,
the delivery of such Opinion of Counsel shall not release the Servicer from any
of its obligations hereunder and the Servicer shall be responsible for such
contemplated actions or inaction, as the case may be, to the extent it conflicts
with the terms of this Agreement.

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

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

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

         "Overcollateralization Reduction Amount": With respect to any
Distribution Date, the lesser of (i) the amount by which the
Overcollateralization Amount exceeds the Required Overcollateralization Amount
and (ii) the Principal Remittance Amount; provided however that on any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Reduction Amount shall equal zero.

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

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

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

         With respect to the Class CE Certificates and any Distribution Date, a
rate per annum equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (i) through
(xxi) below, and the denominator of which is the aggregate Uncertificated
Balances of REMIC II Regular Interest AA, REMIC II Regular Interest A-1A, REMIC
II Regular Interest A-1B1, REMIC II Regular Interest A-1B2, REMIC II Regular
Interest A-2A, REMIC II Regular Interest A-2B, REMIC II Regular Interest A-2C,
REMIC II Regular Interest A-2D, REMIC II Regular Interest M-1, REMIC II Regular
Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest M-4,
REMIC II Regular Interest M-5, REMIC II Regular Interest M-6, REMIC II Regular
Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular Interest M-9,
REMIC II Regular Interest M-10, REMIC II Regular Interest M-11 and REMIC II
Regular Interest ZZ. For purposes of calculating the Pass-Through Rate for the
Class CE Certificates, the numerator is equal to the sum of the following
components:

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

                  (ii) the REMIC II Remittance Rate for REMIC II Regular
         Interest A-1A minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest A-1A;

                  (iii) the REMIC II Remittance Rate for REMIC II Regular
         Interest A-1B1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest A-1B1;

                  (iv) the REMIC II Remittance Rate for REMIC II Regular
         Interest A-1B2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest A-1B2;

                  (v) the REMIC II Remittance Rate for REMIC II Regular Interest
         A-2A minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest A-2A;

                  (vi) the REMIC II Remittance Rate for REMIC II Regular
         Interest A-2B minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest A-2B;

                  (vii) the REMIC II Remittance Rate for REMIC II Regular
         Interest A-2C minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest A-2C;

                  (viii) the REMIC II Remittance Rate for REMIC II Regular
         Interest A-2D minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest A-2D;

                  (ix) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-1;

                  (x) the REMIC II Remittance Rate for REMIC II Regular Interest
         M-2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-2;

                  (xi) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-3;

                  (xii) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-4 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-4;

                  (xiii) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-5 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-5;

                  (xiv) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-6 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-6;

                  (xv) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-7 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-7;

                  (xvi) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-8 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-8;

                  (xvii) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-9 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-9;

                  (xviii) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-10 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-10;

                  (xix) the REMIC II Remittance Rate for REMIC II Regular
         Interest M-11 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest M-11;

                  (xx) the REMIC II Remittance Rate for REMIC II Regular
         Interest ZZ minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC II Regular Interest ZZ; and

                  (xxi) 100% of the interest on REMIC II Regular Interest P.

         With respect to REMIC III Regular Interest IO, REMIC III Regular
Interest IO shall not have a Pass-Through Rate, but current interest for REMIC
III Regular Interest IO and each Distribution Date shall be an amount equal to
100% of the amounts distributable to REMIC II Regular Interest IO for such
Distribution Date.

         "Percentage Interest": With respect to any Class of Certificates (other
than the Residual Certificates), the undivided percentage ownership in such
Class evidenced by such Certificate, expressed as a percentage, the numerator of
which is the initial Certificate Principal Balance represented by such
Certificate and the denominator of which is the aggregate initial Certificate
Principal Balance or Notional Amount of all of the Certificates of such Class.
The Class A Certificates and the Mezzanine Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of 25,000 and integral multiples of 1.00 in excess thereof.
The Class P Certificates are issuable only in Percentage Interests corresponding
to initial Certificate Principal Balances of 20 and integral multiples thereof.
The Class CE Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Notional Balances of 10,000 and integral
multiples of 1.00 in excess thereof; provided, however, that a single
Certificate of each such Class of Certificates may be issued having a Percentage
Interest corresponding to the remainder of the aggregate initial Notional
Balance of such Class or to an otherwise authorized denomination for such Class
plus such remainder. With respect to any Residual Certificate, the undivided
percentage ownership in such Class evidenced by such Certificate, as set forth
on the face of such Certificate. The Residual Certificates are issuable in
Percentage Interests of 20% and integral multiples of 5% in excess thereof.

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

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

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

                  (ii) (A) demand and time deposits in, certificates of deposit
         of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) incorporated
         under the laws of the United States of America or any state thereof and
         subject to supervision and examination by federal and/or state
         authorities, so long as, at the time of such investment or contractual
         commitment providing for such investment, such depository institution
         or trust company (or, if the only Rating Agency is S&P, in the case of
         the principal depository institution in a depository institution
         holding company, debt obligations of the depository institution holding
         company) or its ultimate parent has a short-term uninsured debt rating
         in the highest available rating category of Moody's and S&P and
         provided that each such investment has an original maturity of no more
         than 365 days; and provided further that, if the only Rating Agency is
         S&P and if the depository or trust company is a principal subsidiary of
         a bank holding company and the debt obligations of such subsidiary are
         not separately rated, the applicable rating shall be that of the bank
         holding company; and, provided further that, if the original maturity
         of such short-term obligations of a domestic branch of a foreign
         depository institution or trust company shall exceed 30 days, the
         short-term rating of such institution shall be A-1+ in the case of S&P
         if S&P is the Rating Agency; and (B) any other demand or time deposit
         or deposit which is fully insured by the FDIC;

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

                  (iv) securities bearing interest or sold at a discount that
         are issued by any corporation incorporated under the laws of the United
         States of America or any state thereof and that are rated by each
         Rating Agency that rates such securities in its highest long-term
         unsecured rating categories at the time of such investment or
         contractual commitment providing for such investment;

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

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

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

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

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

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

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

         "Prepayment Assumption": A prepayment rate for (a) the Adjustable Rate
Mortgage Loans of 100% PPC, which represents (i) a per annum prepayment rate of
5% of the then outstanding principal balance of the Adjustable Rate Mortgage
Loans in the first month of the life of the Adjustable Rate Mortgage Loans, (ii)
an additional 2% per annum in each month thereafter through the eleventh month,
(iii) building to a constant prepayment rate of 27% per annum beginning in the
twelfth month and remaining constant until the twenty-third month, (iv)
increasing to and remaining constant at a prepayment rate of 60% per annum
beginning in the twenty-fourth month until the twenty-seventh month and (v)
decreasing and remaining constant at a prepayment rate of 30% per annum from the
twenty-eighth month and thereafter and (b) the fixed-rate Mortgage Loans of 100%
PPC, which represents (i) a per annum prepayment rate of 4% of the then
outstanding principal balance of the fixed rate Mortgage Loans in the first
month of the life of such Mortgage Loans, (ii) an additional 1.72727% per annum
in each month thereafter through the eleventh month and (iii) a constant
prepayment rate of 23% per annum beginning in the twelfth month and in each
month thereafter during the life of the fixed rate Mortgage Loans; provided,
however, the prepayment rate will not exceed 85% per annum in any period for any
percentage of PPC. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes.

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

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

                  (i) the Mortgage Loan identifying number;

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

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

                  (iv) the term of the related Prepayment Charge;

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

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

         "Prepayment Interest Excess": With respect to each Wells Fargo Mortgage
Loan that was the subject of a Principal Prepayment in full during the portion
of the related Prepayment Period occurring between the first day of the calendar
month in which such Distribution Date occurs and the 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 in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor. Wells Fargo may withdraw such Prepayment Interest Excess from the
related Collection Account in accordance with Section 3.09(a)(x) of this
Agreement. The entitlement of Countrywide, if any, with respect to Prepayment
Interest Excess is set forth in the Servicing Agreement.

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

         "Prepayment Period": With respect to the Wells Fargo Mortgage Loans and
any Distribution Date, the calendar month preceding the month in which the
related Distribution Date occurs with respect to prepayments in part, and the
period beginning on the fourteenth (14th) day of the month preceding the related
Distribution Date (or, the period commencing on the Cut-off Date, in connection
with the first Prepayment Period) and ending on the thirteenth (13th) day of the
month in which such Distribution Date occurs with respect to prepayments in
full. With respect to the Countrywide Mortgage Loans, the period specified in
the Servicing Agreement.

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

         "Principal Distribution Amount": With respect to any Distribution Date
is the sum of the Group IA Principal Distribution Amount, the Group IB Principal
Distribution Amount and the Group II Principal Distribution Amount.

         "Principal Remittance Amount": With respect to any Distribution Date is
the sum of the Group IA Principal Remittance Amount, the Group IB Principal
Remittance Amount and the Group II Principal Remittance Amount.

         "Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, Section 3.13(c) or
Section 10.01 of this Agreement, and as confirmed by a certification of a
Servicing Officer of the related Servicer to the Trustee, an amount equal to the
sum of (i) 100% of the Stated Principal Balance thereof as of the date of
purchase (or such other price as provided in Section 10.01 of this Agreement),
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated
Principal Balance at the applicable Net Mortgage Rate in effect from time to
time from the Due Date as to which interest was last covered by a payment by the
Mortgagor or a P&I Advance by the related Servicer, which payment or P&I Advance
had as of the date of purchase been distributed pursuant to Section 5.01 of this
Agreement, through the end of the calendar month in which the purchase is to be
effected and (y) an REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Net Mortgage Rate in effect from time to
time from the Due Date as to which interest was last covered by a payment by the
Mortgagor or a P&I Advance by the related Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
5.01 of this Agreement, (iii) any unreimbursed Servicing Advances and P&I
Advances (including Nonrecoverable P&I Advances and Nonrecoverable Servicing
Advances) and any unpaid Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the related Collection
Account pursuant to Section 3.09(a)(ix) and Section 3.13(b) of this Agreement
and the Custodial Account pursuant to corresponding sections of the Servicing
Agreement and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03 of this Agreement, expenses reasonably incurred or to
be incurred by the related Servicer or the Trustee in respect of the breach or
defect giving rise to the purchase obligation and any costs and damages incurred
by the Trust Fund and the Trustee in connection with any violation by any such
Mortgage Loan of any predatory or abusive lending law.

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

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

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

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

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

         With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the related Collection Account or the
Custodial Account in respect of the related Mortgage Loan pursuant to Section
3.09(a)(ix) and Section 3.13(b) of this Agreement or pursuant to corresponding
sections of the Servicing Agreement, as applicable, minus (v) the aggregate of
all P&I Advances and Servicing Advances (in the case of Servicing Advances,
without duplication of amounts netted out of the rental income, Insurance
Proceeds and Liquidation Proceeds described in clause (vi) below) made by the
related Servicer in respect of such REO Property or the related Mortgage Loan
for which the related Servicer has been or, in connection with such Final
Recovery Determination, will be reimbursed pursuant to Section 3.21 of this
Agreement or pursuant to the Servicing Agreement out of rental income, Insurance
Proceeds and Liquidation Proceeds received in respect of such REO Property,
minus (vi) the total of all net rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property that has been, or
in connection with such Final Recovery Determination, will be transferred to the
Distribution Account pursuant to Section 3.21 of this Agreement or pursuant to
the Servicing Agreement.

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

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

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

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

         "Reference Banks": Barclays Bank PLC, The Tokyo Mitsubishi Bank and
National Westminster Bank PLC and their successors in interest; provided,
however, that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Securities Administrator
which are engaged in transactions in Eurodollar deposits in the International
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Depositor
or any Affiliate thereof and (iii) which have been designated as such by the
Securities Administrator.

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

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

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

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

         "Relief Act Interest Shortfall": With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Relief Act.

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

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

         "REMIC I Group IA Regular Interests": REMIC I Regular Interest A-I and
REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-46-B as
designated in the Preliminary Statement hereto.

         "REMIC I Group IB Regular Interests": REMIC I Regular Interest A-II and
REMIC I Regular Interest II-1-A through REMIC I Regular Interest II-46-B as
designated in the Preliminary Statement hereto.

         "REMIC I Group II Regular Interests": REMIC I Regular Interest A-III
and REMIC I Regular Interest III-1-A through REMIC I Regular Interest III-46-B
as designated in the Preliminary Statement hereto.

         "REMIC I Regular Interest": Any of the 280 separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC I Remittance Rate": With respect to REMIC I Regular Interest
A-I, a per annum rate equal to the weighted average of the Net Mortgage Rates of
the Group IA Mortgage Loans. With respect to each REMIC I Group IA Regular
Interest ending with the designation "A", a per annum rate equal to the weighted
average of the Net Mortgage Rates of the Group IA Mortgage Loans multiplied by
2, subject to a maximum rate of 9.55%. With respect to each REMIC I Group IA
Regular Interest ending with the designation "B", the greater of (x) a per annum
rate equal to the excess, if any, of (i) 2 multiplied by the weighted average of
the Net Mortgage Rates of the Group IA Mortgage Loans over (ii) 9.55% and (y)
0.00%. With respect to REMIC I Regular Interest A-II, a per annum rate equal to
the weighted average of the Net Mortgage Rates of the Group IB Mortgage Loans.
With respect to each REMIC I Group IB Regular Interest ending with the
designation "A", a per annum rate equal to the weighted average of the Net
Mortgage Rates of the Group IB Mortgage Loans multiplied by 2, subject to a
maximum rate of 9.55%. With respect to each REMIC I Group IB Regular Interest
ending with the designation "B", the greater of (x) a per annum rate equal to
the excess, if any, of (i) 2 multiplied by the weighted average of the Net
Mortgage Rates of the Group IB Mortgage Loans over (ii) 9.55% and (y) 0.00%.
With respect to REMIC I Regular Interest A-III, a per annum rate equal to the
weighted average of the Net Mortgage Rates of the Group II Mortgage Loans. With
respect to each REMIC I Group II Regular Interest ending with the designation
"A", a per annum rate equal to the weighted average of the Net Mortgage Rates of
the Group II Mortgage Loans multiplied by 2, subject to a maximum rate of 9.55%.
With respect to each REMIC I Group II Regular Interest ending with the
designation "B", the greater of (x) a per annum rate equal to the excess, if
any, of (i) 2 multiplied by the weighted average of the Net Mortgage Rates of
the Group II Mortgage Loans over (ii) 9.55% and (y) 0.00%. With respect to REMIC
I Regular Interest P, 0.00%.

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

         "REMIC II Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC II Remittance Rate for REMIC II Regular Interest
AA minus the Marker Rate, divided by (b) 12.

         "REMIC II Marker Allocation Percentage": 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC II
Regular Interest AA, REMIC II Regular Interest A-1A, REMIC II Regular Interest
A-1B1, REMIC II Regular Interest A-1B2, REMIC II Regular Interest A-2A, REMIC II
Regular Interest A-2B, REMIC II Regular Interest A-2C, REMIC II Regular Interest
A-2D, REMIC II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II
Regular Interest M-3, REMIC II Regular Interest M-4, REMIC II Regular Interest
M-5, REMIC II Regular Interest M-6, REMIC II Regular Interest M-8, REMIC II
Regular Interest M-9, REMIC II Regular Interest M-10, REMIC II Regular Interest
M-11, REMIC II Regular Interest M-11, REMIC II Regular Interest ZZ and REMIC II
Regular Interest P.

         "REMIC II Overcollateralization Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Balances of the REMIC
II Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC II Regular Interest A-1A, REMIC II Regular Interest A-1B1, REMIC II
Regular Interest A-1B2, REMIC II Regular Interest A-2A, REMIC II Regular
Interest A-2B, REMIC II Regular Interest A-2C, REMIC II Regular Interest A-2D,
REMIC II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular
Interest M-3, REMIC II Regular Interest M-4, REMIC II Regular Interest M-5,
REMIC II Regular Interest M-6, REMIC II Regular Interest M-7, REMIC II Regular
Interest M-8, REMIC II Regular Interest M-9, REMIC II Regular Interest M-10,
REMIC II Regular Interest M-11 and REMIC II Regular Interest P, in each case as
of such date of determination.

         "REMIC II Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC II Regular Interest A-1A,
REMIC II Regular Interest A-1B1, REMIC II Regular Interest A-1B2, REMIC II
Regular Interest A-2A, REMIC II Regular Interest A-2B, REMIC II Regular Interest
A-2C, REMIC II Regular Interest A-2D, REMIC II Regular Interest M-1, REMIC II
Regular Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest
M-4, REMIC II Regular Interest M-5, REMIC II Regular Interest M-6, REMIC II
Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular Interest
M-9, REMIC II Regular Interest M-10, REMIC II Regular Interest M-11 and the
denominator of which is the aggregate of the Uncertificated Balances of REMIC II
Regular Interest A-1A, REMIC II Regular Interest A-1B1, REMIC II Regular
Interest A-1B2, REMIC II Regular Interest A-2A, REMIC II Regular Interest A-2B,
REMIC II Regular Interest A-2C, REMIC II Regular Interest A-2D, REMIC II Regular
Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular Interest M-3,
REMIC II Regular Interest M-4, REMIC II Regular Interest M-5, REMIC II Regular
Interest M-6, REMIC II Regular Interest M-7, REMIC II Regular Interest M-8,
REMIC II Regular Interest M-9, REMIC II Regular Interest M-10, REMIC II Regular
Interest M-11 and REMIC II Regular Interest ZZ.

         "REMIC II Regular Interest": Any of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
"regular interest" in REMIC II. Each REMIC II Regular Interest shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto. The designations for
the respective REMIC II Regular Interests are set forth in the Preliminary
Statement hereto.

         "REMIC II Regular Interest AA": 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 AA shall accrue interest
at the related REMIC II Remittance Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest A-1A": 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-1A shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest A-1B1": 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-1B1 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest A-1B2": 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-1B2 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest A-2A": 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-2A shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest A-2B": 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-2B shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest A-2C": 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-2C shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest A-2D": 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-2D shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest IO": 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 IO shall accrue interest
at the related REMIC II Remittance Rate in effect from time to time and shall
not be entitled to distributions of principal.

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

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

         "REMIC II Regular Interest M-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 M-3 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-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 M-4 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-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 M-5 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-6": 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-6 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-7": 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-7 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-8": 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-8 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-9": 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-9 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-10": 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-10 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest M-11": 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-11 shall accrue
interest at the related REMIC II Remittance Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

         "REMIC 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 shall accrue interest
at the related REMIC II Remittance Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest XX": 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 XX shall accrue interest
at the related REMIC II Remittance Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest ZZ": 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 ZZ shall accrue interest
at the related REMIC II Remittance Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Balance as
set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest IA-SUB": 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 IA-SUB
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest IA-GRP": 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 IA-GRP
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest IB-SUB": 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 IB-SUB
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest IB-GRP": 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 IB-GRP
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest II-SUB": 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 II-SUB
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Regular Interest II-GRP": 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 II-GRP
shall accrue interest at the related REMIC II Remittance Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

         "REMIC II Remittance Rate": With respect to REMIC II Regular Interest
AA, REMIC II Regular Interest A-1A, REMIC II Regular Interest A-1B1, REMIC II
Regular Interest A-1B2, REMIC II Regular Interest A-2A, REMIC II Regular
Interest A-2B, REMIC II Regular Interest A-2C, REMIC II Regular Interest A-2D,
REMIC II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular
Interest M-3, REMIC II Regular Interest M-4, REMIC II Regular Interest M-5,
REMIC II Regular Interest M-6, REMIC II Regular Interest M-7, REMIC II Regular
Interest M-8, REMIC II Regular Interest M-9, REMIC II Regular Interest M-10,
REMIC II Regular Interest M-11, REMIC II Regular Interest ZZ, REMIC II Regular
Interest IA-SUB, REMIC II Regular Interest IB-SUB, REMIC II Regular Interest
II-SUB and REMIC II Regular Interest XX, a per annum rate (but not less than
zero) equal to the weighted average of: (w) with respect to REMIC I Regular
Interest A-I, REMIC I Regular Interest A-II and REMIC I Regular Interest A-III,
the REMIC I Remittance Rate for each such REMIC I Regular Interest for each such
Distribution Date, (x) with respect to each REMIC I Regular Interest ending with
the designation "B", the weighted average of the REMIC I Remittance Rates for
such REMIC I Regular Interests, weighted on the basis of the Uncertificated
Balances of such REMIC I Regular Interests for each such Distribution Date and
(y) with respect to REMIC I Regular Interests ending with the designation "A",
for each Distribution Date listed below, the weighted average of the rates
listed below for each such REMIC I Regular Interest listed below, weighted on
the basis of the Uncertificated Balances of each such REMIC I Regular Interest
for each such Distribution Date:

<TABLE>
<CAPTION>
DISTRIBUTION
DATE             REMIC I REGULAR INTEREST     RATE
<S>              <C>                          <C>
1                I-1-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
2                I-2-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-2-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate
                                              REMIC I Remittance Rate
                 III-2-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate
                                              REMIC I Remittance Rate
                 I-1-A                        REMIC I Remittance Rate
                 II-1-A                       REMIC I Remittance Rate
                 III-1-A                      REMIC I Remittance Rate
3                I-3-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-3-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-3-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A and I-2-A              REMIC I Remittance Rate
                 II-1-A and II-2-A            REMIC I Remittance Rate
                 III-1-A and III-2-A          REMIC I Remittance Rate
4                I-4-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-4-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-4-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-3-A          REMIC I Remittance Rate
                 II-1-A through II-3-A        REMIC I Remittance Rate
                 III-1-A through III-3-A      REMIC I Remittance Rate
5                I-5-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-5-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-5-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-4-A          REMIC I Remittance Rate
                 II-1-A through II-4-A        REMIC I Remittance Rate
                 III-1-A through III-4-A      REMIC I Remittance Rate
6                I-6-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-6-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-6-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-5-A          REMIC I Remittance Rate
                 II-1-A through II-5-A        REMIC I Remittance Rate

                 III-1-A through III-5-A      REMIC I Remittance Rate
7                I-7-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-7-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-7-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-6-A          REMIC I Remittance Rate
                 III-1-A through III-6-A      REMIC I Remittance Rate

                 II-1-A through II-6-A        REMIC I Remittance Rate
8                I-8-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-8-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-8-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-7-A          REMIC I Remittance Rate
                 II-1-A through II-7-A        REMIC I Remittance Rate

                 III-1-A through III-7-A      REMIC I Remittance Rate
9                I-9-A through I-46-A         2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-9-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-9-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-8-A          REMIC I Remittance Rate
                 II-1-A through II-8-A        REMIC I Remittance Rate

                 III-1-A through III-8-A      REMIC I Remittance Rate
10               I-10-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-10-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-10-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-9-A          REMIC I Remittance Rate
                 II-1-A through II-9-A        REMIC I Remittance Rate

                 III-1-A through III-9-A      REMIC I Remittance Rate
11               I-11-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-11-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-11-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-10-A         REMIC I Remittance Rate
                 II-1-A through II-10-A       REMIC I Remittance Rate

                 III-1-A through III-10-A     REMIC I Remittance Rate
12               I-12-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-12-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-12-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-11-A         REMIC I Remittance Rate
                 II-1-A through II-11-A       REMIC I Remittance Rate

                 III-1-A through III-11-A     REMIC I Remittance Rate
13               I-13-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-13-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-13-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-12-A         REMIC I Remittance Rate
                 II-1-A through II-12-A       REMIC I Remittance Rate
                 III-1-A through III-12-A     REMIC I Remittance Rate
14               I-14-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-14-A through II-46-A      2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                                              2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                 III-14-A through III-46-A    REMIC I Remittance Rate
                 I-1-A through I-13-A         REMIC I Remittance Rate
                 II-1-A through II-13-A       REMIC I Remittance Rate

                 III-1-A through III-13-A     REMIC I Remittance Rate
15               I-15-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-15-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-15-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-14-A         REMIC I Remittance Rate
                 II-1-A through II-14-A       REMIC I Remittance Rate

                 III-1-A through III-14-A     REMIC I Remittance Rate
16               I-16-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-16-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-16-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-15-A         REMIC I Remittance Rate
                 II-1-A through II-15-A       REMIC I Remittance Rate

                 III-1-A through III-15-A     REMIC I Remittance Rate
17               I-17-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-17-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-17-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-16-A         REMIC I Remittance Rate
                 II-1-A through II-16-A       REMIC I Remittance Rate

                 III-1-A through III-16-A     REMIC I Remittance Rate
18               I-18-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-18-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-18-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-17-A         REMIC I Remittance Rate
                 II-1-A through II-17-A       REMIC I Remittance Rate

                 III-1-A through III-17-A     REMIC I Remittance Rate
19               I-19-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-19-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-19-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-18-A         REMIC I Remittance Rate
                 II-1-A through II-18-A       REMIC I Remittance Rate

                 III-1-A through III-18-A     REMIC I Remittance Rate
20               I-20-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-20-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-20-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-19-A         REMIC I Remittance Rate
                 II-1-A through II-19-A       REMIC I Remittance Rate

                 III-1-A through III-19-A     REMIC I Remittance Rate
21               I-21-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-21-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-21-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-20-A         REMIC I Remittance Rate
                 II-1-A through II-20-A       REMIC I Remittance Rate

                 III-1-A through III-20-A     REMIC I Remittance Rate
22               I-22-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-22-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-22-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-21-A         REMIC I Remittance Rate
                 II-1-A through II-21-A       REMIC I Remittance Rate

                 III-1-A through III-21-A     REMIC I Remittance Rate
23               I-23-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-23-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-23-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-22-A         REMIC I Remittance Rate
                 II-1-A through II-22-A       REMIC I Remittance Rate

                 III-1-A through III-22-A     REMIC I Remittance Rate
24               I-24-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-24-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-24-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-23-A         REMIC I Remittance Rate
                 II-1-A through II-23-A       REMIC I Remittance Rate

                 III-1-A through III-23-A     REMIC I Remittance Rate
25               I-25-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-25-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-25-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-24-A         REMIC I Remittance Rate
                 II-1-A through II-24-A       REMIC I Remittance Rate
                 III-1-A through III-24-A     REMIC I Remittance Rate
26               I-26-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-26-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-26-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-25-A         REMIC I Remittance Rate
                 II-1-A through II-25-A       REMIC I Remittance Rate

                 III-1-A through III-25-A     REMIC I Remittance Rate
27               I-27-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-27-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-27-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-26-A         REMIC I Remittance Rate
                 II-1-A through II-26-A       REMIC I Remittance Rate

                 III-1-A through III-26-A     REMIC I Remittance Rate
28               I-28-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-28-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-28-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-27-A         REMIC I Remittance Rate
                 II-1-A through II-27-A       REMIC I Remittance Rate

                 III-1-A through III-27-A     REMIC I Remittance Rate
29               I-29-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-29-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-29-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-28-A         REMIC I Remittance Rate
                 II-29-A through II-46-A      2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 III-29-A through III-46-A    2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
30               I-30-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-30-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-30-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-29-A         REMIC I Remittance Rate
                 II-1-A through II-29-A       REMIC I Remittance Rate

                 III-1-A through III-29-A     REMIC I Remittance Rate
31               I-31-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-31-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-31-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-30-A         REMIC I Remittance Rate
                 II-1-A through II-30-A       REMIC I Remittance Rate
                 III-1-A through III-30-A     REMIC I Remittance Rate
32               I-32-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-32-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-32-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-31-A         REMIC I Remittance Rate
                 II-1-A through II-31-A       REMIC I Remittance Rate

                 III-1-A through III-31-A     REMIC I Remittance Rate
33               I-33-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-33-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-33-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-32-A         REMIC I Remittance Rate
                 II-1-A through II-32-A       REMIC I Remittance Rate

                 III-1-A through III-32-A     REMIC I Remittance Rate
34               I-34-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-34-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-34-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-33-A         REMIC I Remittance Rate
                 II-1-A through II-33-A       REMIC I Remittance Rate

                 III-1-A through III-33-A     REMIC I Remittance Rate
35               I-35-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-35-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-35-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-34-A         REMIC I Remittance Rate
                 II-1-A through II-34-A       REMIC I Remittance Rate
                 III-1-A through III-34-A     REMIC I Remittance Rate
36               I-36-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-36-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-36-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-35-A         REMIC I Remittance Rate
                 II-1-A through II-35-A       REMIC I Remittance Rate
                 III-1-A through III-35-A     REMIC I Remittance Rate
37               I-37-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-37-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-37-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-36-A         REMIC I Remittance Rate
                 II-1-A through II-36-A       REMIC I Remittance Rate

                 III-1-A through III-36-A     REMIC I Remittance Rate
38               I-38-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-38-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-38-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-37-A         REMIC I Remittance Rate
                 II-1-A through II-37-A       REMIC I Remittance Rate

                 III-1-A through III-37-A     REMIC I Remittance Rate
39               I-39-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-39-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-39-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-38-A         REMIC I Remittance Rate
                 II-1-A through II-38-A       REMIC I Remittance Rate

                 III-1-A through III-38-A     REMIC I Remittance Rate
40               I-40-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-40-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-40-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-39-A         REMIC I Remittance Rate
                 II-1-A through II-39-A       REMIC I Remittance Rate

                 III-1-A through III-39-A     REMIC I Remittance Rate
41               I-41-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-41-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-41-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-40-A         REMIC I Remittance Rate
                 II-1-A through II-40-A       REMIC I Remittance Rate

                 III-1-A through III-40-A     REMIC I Remittance Rate
42               I-42-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-42-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-42-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-41-A         REMIC I Remittance Rate
                 II-1-A through II-41-A       REMIC I Remittance Rate

                 III-1-A through III-41-A     REMIC I Remittance Rate
43               I-43-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-43-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-43-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-42-A         REMIC I Remittance Rate
                 II-1-A through II-42-A       REMIC I Remittance Rate

                 III-1-A through III-42-A     REMIC I Remittance Rate
44               I-44-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-44-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-44-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-43-A         REMIC I Remittance Rate
                 II-1-A through II-43-A       REMIC I Remittance Rate

                 III-1-A through III-43-A     REMIC I Remittance Rate
45               I-45-A through I-46-A        2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-45-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-45-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-44-A         REMIC I Remittance Rate
                 II-1-A through II-44-A       REMIC I Remittance Rate

                 III-1-A through III-44-A     REMIC I Remittance Rate
46               I-46-A                       2  multiplied  by Swap  LIBOR,  subject to a maximum  rate of
                                              REMIC I Remittance Rate
                 II-46-A                      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-46-A                     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 I-1-A through I-45-A         REMIC I Remittance Rate
                 II-1-A through II-45-A       REMIC I Remittance Rate
                 III-1-A through III-45-A     REMIC I Remittance Rate
thereafter       I-1-A through I-46-A         REMIC I Remittance Rate
                 II-1-A through II-46-A       REMIC I Remittance Rate
                 III-1-A through III-46-A     REMIC I Remittance Rate
</TABLE>

         With respect to REMIC II Regular Interest IA-GRP, a per annum rate (but
not less than zero) equal to the weighted average of: (w) with respect to REMIC
I Regular Interest A-I, the REMIC I Remittance Rate for such REMIC 1 Regular
Interest for each such Distribution Date, (x) with respect to REMIC I Group IA
Regular Interests ending with the designation "B", the weighted average of the
REMIC I Remittance Rates for such REMIC I Regular Interests, weighted on the
basis of the Uncertificated Balances of each such REMIC I Regular Interest for
each such Distribution Date and (y) with respect to REMIC I Group IA Regular
Interests ending with the designation "A", for each Distribution Date listed
below, the weighted average of the rates listed below for such REMIC I Regular
Interests listed below, weighted on the basis of the Uncertificated Balances of
each such REMIC I Regular Interest for each such Distribution Date:

<TABLE>
<CAPTION>
 DISTRIBUTION
     DATE        REMIC I REGULAR INTEREST                                         RATE
-------------    ------------------------               --------------------------------------------------------
<S>              <C>                                    <C>
       1         I-1-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate

       2         I-2-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A                                  REMIC I Remittance Rate

       3         I-3-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A and I-2-A                        REMIC I Remittance Rate

       4         I-4-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-3-A                    REMIC I Remittance Rate

       5         I-5-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-4-A                    REMIC I Remittance Rate

       6         I-6-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-5-A                    REMIC I Remittance Rate

       7         I-7-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-6-A                    REMIC I Remittance Rate

       8         I-8-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-7-A                    REMIC I Remittance Rate

       9         I-9-A through I-46-A                   2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-8-A                    REMIC I Remittance Rate

      10         I-10-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-9-A                    REMIC I Remittance Rate

      11         I-11-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-10-A                   REMIC I Remittance Rate

      12         I-12-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-11-A                   REMIC I Remittance Rate

      13         I-13-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-12-A                   REMIC I Remittance Rate

      14         I-14-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-13-A                   REMIC I Remittance Rate

      15         I-15-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-14-A                   REMIC I Remittance Rate

      16         I-16-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-15-A                   REMIC I Remittance Rate

      17         I-17-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-16-A                   REMIC I Remittance Rate

      18         I-18-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-17-A                   REMIC I Remittance Rate

      19         I-19-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-18-A                   REMIC I Remittance Rate

      20         I-20-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-19-A                   REMIC I Remittance Rate

      21         I-21-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-20-A                   REMIC I Remittance Rate

      22         I-22-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-21-A                   REMIC I Remittance Rate

      23         I-23-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-22-A                   REMIC I Remittance Rate

      24         I-24-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-23-A                   REMIC I Remittance Rate

      25         I-25-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-24-A                   REMIC I Remittance Rate

      26         I-26-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-25-A                   REMIC I Remittance Rate

      27         I-27-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-26-A                   REMIC I Remittance Rate

      28         I-28-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-27-A                   REMIC I Remittance Rate

      29         I-29-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-28-A                   REMIC I Remittance Rate

      30         I-30-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-29-A                   REMIC I Remittance Rate

      31         I-31-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-30-A                   REMIC I Remittance Rate

      32         I-32-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-31-A                   REMIC I Remittance Rate

      33         I-33-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-32-A                   REMIC I Remittance Rate

      34         I-34-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-33-A                   REMIC I Remittance Rate

      35         I-35-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-34-A                   REMIC I Remittance Rate

      36         I-36-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-35-A                   REMIC I Remittance Rate

      37         I-37-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-36-A                   REMIC I Remittance Rate

      38         I-38-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-37-A                   REMIC I Remittance Rate

      39         I-39-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-38-A                   REMIC I Remittance Rate

      40         I-40-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-39-A                   REMIC I Remittance Rate

      41         I-41-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-40-A                   REMIC I Remittance Rate

      42         I-42-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-41-A                   REMIC I Remittance Rate

      43         I-43-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-42-A                   REMIC I Remittance Rate

      44         I-44-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-43-A                   REMIC I Remittance Rate

      45         I-45-A through I-46-A                  2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-44-A                   REMIC I Remittance Rate

      46         I-46-A                                 2 multiplied by Swap LIBOR, subject to a maximum rate of
                                                        REMIC I Remittance Rate
                 I-1-A through I-45-A                   REMIC I Remittance Rate

  thereafter     I-1-A through I-46-A                   REMIC I Remittance Rate
</TABLE>

         With respect to REMIC II Regular Interest IB-GRP, a per annum rate (but
not less than zero) equal to the weighted average of: (w) with respect to REMIC
I Regular Interest A-II, the REMIC I Remittance Rate for such REMIC 1 Regular
Interest for each such Distribution Date, (x) with respect to REMIC I Group IB
Regular Interests ending with the designation "B", the weighted average of the
REMIC I Remittance Rates for such REMIC I Regular Interests, weighted on the
basis of the Uncertificated Balances of each such REMIC I Regular Interest for
each such Distribution Date and (y) with respect to REMIC I Group IB Regular
Interests ending with the designation "A", for each Distribution Date listed
below, the weighted average of the rates listed below for such REMIC I Regular
Interests listed below, weighted on the basis of the Uncertificated Balances of
each such REMIC I Regular Interest for each such Distribution Date:

<TABLE>
<CAPTION>
DISTRIBUTION
    DATE         REMIC I REGULAR INTEREST                                RATE
------------     ------------------------     --------------------------------------------------------
<S>              <C>                          <C>
       1         II-1-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate

       2         II-2-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A                       REMIC I Remittance Rate

       3         II-3-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A and II-2-A            REMIC I Remittance Rate

       4         II-4-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-3-A        REMIC I Remittance Rate

       5         II-5-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-4-A        REMIC I Remittance Rate

       6         II-6-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-5-A        REMIC I Remittance Rate

       7         II-7-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-6-A        REMIC I Remittance Rate

       8         II-8-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-7-A        REMIC I Remittance Rate

       9         II-9-A through II-46-A       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-8-A        REMIC I Remittance Rate

      10         II-10-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-9-A        REMIC I Remittance Rate

      11         II-11-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-10-A       REMIC I Remittance Rate

      12         II-12-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-11-A       REMIC I Remittance Rate

      13         II-13-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-12-A       REMIC I Remittance Rate

      14         II-14-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-13-A       REMIC I Remittance Rate

      15         II-15-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-14-A       REMIC I Remittance Rate

      16         II-16-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-15-A       REMIC I Remittance Rate

      17         II-17-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-16-A       REMIC I Remittance Rate

      18         II-18-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-17-A       REMIC I Remittance Rate

      19         II-19-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-18-A       REMIC I Remittance Rate

      20         II-20-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-19-A       REMIC I Remittance Rate

      21         II-21-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-20-A       REMIC I Remittance Rate

      22         II-22-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-21-A       REMIC I Remittance Rate

      23         II-23-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-22-A       REMIC I Remittance Rate

      24         II-24-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-23-A       REMIC I Remittance Rate

      25         II-25-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-24-A       REMIC I Remittance Rate

      26         II-26-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-25-A       REMIC I Remittance Rate

      27         II-27-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-26-A       REMIC I Remittance Rate

      28         II-28-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-27-A       REMIC I Remittance Rate

      29         II-29-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-28-A       REMIC I Remittance Rate

      30         II-30-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-29-A       REMIC I Remittance Rate

      31         II-31-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-30-A       REMIC I Remittance Rate

      32         II-32-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-31-A       REMIC I Remittance Rate

      33         II-33-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-32-A       REMIC I Remittance Rate

      34         II-34-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-33-A       REMIC I Remittance Rate

      35         II-35-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-34-A       REMIC I Remittance Rate

      36         II-36-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-35-A       REMIC I Remittance Rate

      37         II-37-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-36-A       REMIC I Remittance Rate

      38         II-38-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-37-A       REMIC I Remittance Rate

      39         II-39-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-38-A       REMIC I Remittance Rate

      40         II-40-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-39-A       REMIC I Remittance Rate

      41         II-41-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-40-A       REMIC I Remittance Rate

      42         II-42-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-41-A       REMIC I Remittance Rate

      43         II-43-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-42-A       REMIC I Remittance Rate

      44         II-44-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-43-A       REMIC I Remittance Rate

      45         II-45-A through II-46-A      2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-44-A       REMIC I Remittance Rate

      46         II-46                        2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 II-1-A through II-45-A       REMIC I Remittance Rate

  thereafter     II-1-A through II-46-A       REMIC I Remittance Rate
</TABLE>

         With respect to REMIC II Regular Interest II-GRP, a per annum rate (but
not less than zero) equal to the weighted average of: (w) with respect to REMIC
I Regular Interest A-II, the REMIC I Remittance Rate for such REMIC 1 Regular
Interest for each such Distribution Date, (x) with respect to REMIC I Group II
Regular Interests ending with the designation "B", the weighted average of the
REMIC I Remittance Rates for such REMIC I Regular Interests, weighted on the
basis of the Uncertificated Balances of each such REMIC I Regular Interest for
each such Distribution Date and (y) with respect to REMIC I Group II Regular
Interests ending with the designation "A", for each Distribution Date listed
below, the weighted average of the rates listed below for such REMIC I Regular
Interests listed below, weighted on the basis of the Uncertificated Balances of
each such REMIC I Regular Interest for each such Distribution Date:

<TABLE>
<CAPTION>
DISTRIBUTION
    DATE         REMIC I REGULAR INTEREST                           RATE
------------     ------------------------     --------------------------------------------------------
<S>              <C>                          <C>
       1         III-1-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate

       2         III-2-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A                      REMIC I Remittance Rate

       3         III-3-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A and III-2-A          REMIC I Remittance Rate

       4         III-4-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-3-A      REMIC I Remittance Rate

       5         III-5-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-4-A      REMIC I Remittance Rate

       6         III-6-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-5-A      REMIC I Remittance Rate

       7         III-7-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-6-A      REMIC I Remittance Rate

       8         III-8-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-7-A      REMIC I Remittance Rate

       9         III-9-A through III-46-A     2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-8-A      REMIC I Remittance Rate

      10         III-10-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-9-A      REMIC I Remittance Rate

      11         III-11-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-10-A     REMIC I Remittance Rate

      12         III-12-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-11-A     REMIC I Remittance Rate

      13         III-13-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-12-A     REMIC I Remittance Rate

      14         III-14-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-13-A     REMIC I Remittance Rate

      15         III-15-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-14-A     REMIC I Remittance Rate

      16         III-16-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-15-A     REMIC I Remittance Rate

      17         III-17-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-16-A     REMIC I Remittance Rate

      18         III-18-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-17-A     REMIC I Remittance Rate

      19         III-19-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-18-A     REMIC I Remittance Rate

      20         III-20-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-19-A     REMIC I Remittance Rate

      21         III-21-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-20-A     REMIC I Remittance Rate

      22         III-22-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-21-A     REMIC I Remittance Rate

      23         III-23-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-22-A     REMIC I Remittance Rate

      24         III-24-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-23-A     REMIC I Remittance Rate

      25         III-25-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-24-A     REMIC I Remittance Rate

      26         III-26-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-25-A     REMIC I Remittance Rate

      27         III-27-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-26-A     REMIC I Remittance Rate

      28         III-28-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-27-A     REMIC I Remittance Rate

      29         III-29-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-28-A     REMIC I Remittance Rate

      30         III-30-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-29-A     REMIC I Remittance Rate

      31         III-31-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-30-A     REMIC I Remittance Rate

      32         III-32-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-31-A     REMIC I Remittance Rate

      33         III-33-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-32-A     REMIC I Remittance Rate

      34         III-34-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-33-A     REMIC I Remittance Rate

      35         III-35-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-34-A     REMIC I Remittance Rate

      36         III-36-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-35-A     REMIC I Remittance Rate

      37         III-37-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-36-A     REMIC I Remittance Rate

      38         III-38-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-37-A     REMIC I Remittance Rate

      39         III-39-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-38-A     REMIC I Remittance Rate

      40         III-40-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-39-A     REMIC I Remittance Rate

      41         III-41-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-40-A     REMIC I Remittance Rate

      42         III-42-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-41-A     REMIC I Remittance Rate

      43         III-43-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-42-A     REMIC I Remittance Rate

      44         III-44-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-43-A     REMIC I Remittance Rate

      45         III-45-A through III-46-A    2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-44-A     REMIC I Remittance Rate

      46         III-46                       2 multiplied by Swap LIBOR, subject to a maximum rate of
                                              REMIC I Remittance Rate
                 III-1-A through III-45-A     REMIC I Remittance Rate

  thereafter     III-1-A through III-46-A     REMIC I Remittance Rate
</TABLE>

         With respect to REMIC II Regular Interest IO, and (i) the first
Distribution Date through the 46th Distribution Date, the excess of (x) the
weighted average of the REMIC I Remittance Rates for REMIC I Regular Interests
including the designation "A", over (y) 2 multiplied by Swap LIBOR. and (ii)
thereafter, 0.00%. With respect to REMIC II Regular Interest P, 0.00%.

         "REMIC II Sub WAC Allocation Percentage": 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC II
Regular Interest IA-SUB, REMIC II Regular Interest IA-GRP, REMIC II Regular
Interest IB-SUB, REMIC II Regular Interest IB-GRP, REMIC II Regular Interest
II-SUB, REMIC II Regular Interest II-GRP and REMIC II Regular Interest XX.

         "REMIC II Subordinated Balance Ratio": The ratio among the
Uncertificated Balances of each REMIC II Regular Interest ending with the
designation "SUB,", equal to the ratio between, with respect to each such REMIC
II Regular Interest, the excess of (x) the aggregate Stated Principal Balance of
the Group IA Mortgage Loans, Group IB Mortgage Loans or Group II Mortgage Loans,
as applicable over (y) the current Certificate Principal Balance of related
Class A Certificates.

         "REMIC II Required Overcollateralization Amount": 0.50% of the Required
Overcollateralization Amount.

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

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

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

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

         "REMIC Regular Interest": Any REMIC I Regular Interest or REMIC II
Regular Interest.

         "REMIC Remittance Rate": The REMIC I Remittance Rate or the REMIC II
Remittance Rate.

         "Remittance Report": A report by Wells Fargo pursuant to Section
5.03(a) of this Agreement or by Countrywide pursuant to the Servicing Agreement.

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

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

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

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

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

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

         "Required Overcollateralization Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 3.35% and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 6.70% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (y) an
amount equal to the product of (A) 0.50% and (B) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date. Notwithstanding the foregoing,
on and after any Distribution Date following the reduction of the aggregate
Certificate Principal Balance of the Class A Certificates and Mezzanine
Certificates to zero, the Required Overcollateralization Amount shall be zero.

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

         "Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Securities Administrator determines to be
either (i) the arithmetic mean (rounded upwards if necessary to the nearest
whole multiple of 1/16%) of the one-month U.S. dollar lending rates which New
York City banks selected by the Securities Administrator, after consultation
with the Depositor, are quoting on the relevant Interest Determination Date to
the principal London offices of leading banks in the London interbank market or
(ii) in the event that the Securities Administrator can determine no such
arithmetic mean, the lowest one-month U.S. dollar lending rate which New York
City banks selected by the Securities Administrator are quoting on such Interest
Determination Date to leading European banks.

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

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

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

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

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

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

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

         "Securities Act": The Securities Act of 1933, as amended.

         "Securities Administrator": As of the Closing Date, Wells Fargo Bank,
National Association and thereafter, its respective successors in interest that
meet the qualifications of this Agreement. The Securities Administrator and the
Master Servicer shall at all times be the same Person or Affiliates.

         "Seller": DB Structured Products, Inc. or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement.

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

         "Sequential Trigger Event": A Sequential Trigger Event is in effect on
any Distribution Date if, before the 25th Distribution Date, the aggregate
amount of Realized Losses incurred since the Cut-off Date through the last day
of the related Due Period (after giving effect to scheduled payments received or
advanced on or before the related Determination Date and Principal Prepayments
received during the related Prepayment Period) divided by the sum of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
exceeds 1.40%, or if, on or after the 25th Distribution Date, a Trigger Event is
in effect.

         "Servicer": Wells Fargo or Countrywide, or any successor thereto
appointed hereunder or pursuant to the Servicing Agreement, as applicable, in
connection with the servicing and administration of the related Mortgage Loans.

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

         "Servicer Remittance Date": With respect to any Distribution Date, and
(i) Wells Fargo, the 18th day of the month in which such Distribution Date
occurs; provided that if such 18th day of a given month is not a Business Day,
the Servicer Remittance Date for such month shall be the Business Day
immediately following such 18th day and (ii) Countrywide, as set forth in the
Servicing Agreement.

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

         "Servicing Advances": The customary and reasonable "out-of-pocket"
costs and expenses incurred on or after the Cut-off Date by a Servicer in
connection with a default, delinquency or other unanticipated event by such
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including but
not limited to foreclosures, in respect of a particular Mortgage Loan, including
any expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS(R) System, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property, (iv) the performance of its obligations under Section 3.01, Section
3.07, Section 3.11, Section 3.13 and Section 3.21 of this Agreement or under the
Servicing Agreement, as applicable, and (v) obtaining any legal documentation
required to be included in the Mortgage File and/or correcting any outstanding
title issues (i.e., any lien or encumbrance on the Mortgaged Property that
prevents the effective enforcement of the intended lien position) reasonably
necessary for the related Servicer to perform its obligations under this
Agreement or under the Servicing Agreement, as applicable. Servicing Advances
also include any reasonable "out-of-pocket" cost and expenses (including legal
fees) incurred by the related Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement or under the Servicing Agreement, as applicable. The Servicers shall
not be required to make any Nonrecoverable Servicing Advances.

         "Servicing Agreement": Shall mean the Mortgage Loan Purchase and
Servicing Agreement, dated as of September 1, 2005, between the Seller and
Countrywide (as modified pursuant to the Assignment Agreement).

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

         "Servicing Fee Rate": 0.50% per annum.

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

         "Simple Interest Excess": As of any Determination Date for each Simple
Interest Qualifying Loan, the excess, if any, of (i) the portion of the Monthly
Payment received from the Mortgagor for such Mortgage Loan allocable to interest
with respect to the related Due Period, over (ii) thirty (30) days' interest on
the Scheduled Principal Balance of such Mortgage Loan at the Mortgage Rate.

         "Simple Interest Excess Sub-Account": The sub-account of the Collection
Account established by Wells Fargo pursuant to Section 3.08(b). Each Simple
Interest Excess Sub-Account shall be an Eligible Account.

         "Simple Interest Mortgage Loan": Any Mortgage Loan for which the
interest due thereon is calculated based on the actual number of days elapsed
between the date on which interest was last paid through the date on which the
most current payment is received and identified as such on the Mortgage Loan
Schedule.

         "Simple Interest Qualifying Loan": As of any Determination Date, any
Simple Interest Mortgage Loan that was neither prepaid in full during the
related Due Period, nor delinquent with respect to a payment that became due
during the related Due Period as of the close of business on the Determination
Date following such Due Period.

         "Simple Interest Shortfall": As of any Determination Date for each
Simple Interest Qualifying Loan, the excess, if any, of (i) thirty (30) days'
interest on the Scheduled Principal Balance of such Mortgage Loan at the
Mortgage Rate, over (ii) the portion of the Monthly Payment received from the
Mortgagor for such Mortgage Loan allocable to interest with respect to the
related Due Period.

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

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

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

         "Stepdown Date": The earlier to occur of (i) the later to occur of (x)
the Distribution Date occurring in December 2008 and (y) the first Distribution
Date on which the Credit Enhancement Percentage (calculated for this purpose
only after taking into account distributions of principal on the Mortgage Loans,
but prior to any distribution of the Principal Distribution Amount to the
holders of the Certificates then entitled to distributions of principal on such
Distribution Date), is greater than or equal to approximately 48.30% and (ii)
the first Distribution Date on which the aggregate Certificate Principal Balance
of the Class A Certificates has been reduced to zero.

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

         "Subsequent Recoveries": As of any Distribution Date, amounts received
during the related Prepayment Period by the related Servicer specifically
related to a defaulted Mortgage Loan or disposition of an REO Property prior to
the related Prepayment Period that resulted in a Realized Loss, after the
liquidation or disposition of such defaulted Mortgage Loan, net of any amounts
reimbursable to the Servicer related to such Mortgage Loan or REO Property.

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

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

         "Substitution Shortfall Amount": As defined in Section 2.03 of this
Agreement.

         "Supplemental Interest Trust": The corpus of a trust created pursuant
to Section 5.07 of this Agreement and designated as the "Supplemental Interest
Trust," consisting of the Swap Agreement, the Class IO Interest and the right to
receive payments in respect of the Class IO Distribution Amount. For the
avoidance of doubt, the Supplemental Interest Trust does not constitute a part
of the Trust Fund.

         "Swap Agreement": The Interest Rate Swap Agreement, dated as of
November 28, 2005, between HSBC Bank USA, National Association, as trustee on
behalf of the Supplemental Interest Trust, and the Swap Provider, which
agreement provides for Net Swap Payments and Swap Termination Payments to be
paid, as provided therein, together with any schedules, confirmations or other
agreements relating thereto. The Trustee will provide a copy of the Swap
Agreement to any Certificateholder upon request.

         "Swap LIBOR": LIBOR as determined pursuant to the Swap Agreement.

         "Swap Notional Amount": For each calculation period as defined in the
Swap Agreement, the amount set forth below:

        FROM AND INCLUDING:    TO BUT EXCLUDING:   SWAP NOTIONAL AMOUNT ():
              11/25/2005            12/25/2005               1,797,611,369
              12/25/2005             1/25/2006               1,775,039,938
              1/25/2006              2/25/2006               1,747,698,848
              2/25/2006              3/25/2006               1,715,641,034
              3/25/2006              4/25/2006               1,678,956,373
              4/25/2006              5/25/2006               1,637,772,868
              5/25/2006              6/25/2006               1,592,257,070
              6/25/2006              7/25/2006               1,542,614,042
              7/25/2006              8/25/2006               1,489,089,365
              8/25/2006              9/25/2006               1,431,980,533
              9/25/2006             10/25/2006               1,372,372,170
              10/25/2006            11/25/2006               1,315,250,718
              11/25/2006            12/25/2006               1,260,512,649
              12/25/2006             1/25/2007               1,208,058,287
              1/25/2007              2/25/2007               1,157,792,135
              2/25/2007              3/25/2007               1,109,622,695
              3/25/2007              4/25/2007               1,063,462,304
              4/25/2007              5/25/2007               1,019,227,076
              5/25/2007              6/25/2007                 976,836,428
              6/25/2007              7/25/2007                 936,164,821
              7/25/2007              8/25/2007                 896,879,689
              8/25/2007              9/25/2007                 845,987,232
              9/25/2007             10/25/2007                 717,944,056
              10/25/2007            11/25/2007                 611,684,651
              11/25/2007            12/25/2007                 200,304,075
              12/25/2007             1/25/2008                 186,648,867
              1/25/2008              2/25/2008                 179,178,338
              2/25/2008              3/25/2008                 172,018,555
              3/25/2008              4/25/2008                 165,151,430
              4/25/2008              5/25/2008                 158,564,699
              5/25/2008              6/25/2008                 152,246,626
              6/25/2008              7/25/2008                 146,185,978
              7/25/2008              8/25/2008                 140,372,011
              8/25/2008              9/25/2008                 134,794,320
              9/25/2008             10/25/2008                 129,438,866
              10/25/2008            11/25/2008                 124,303,712
              11/25/2008            12/25/2008                  88,895,545
              12/25/2008             1/25/2009                  85,667,501
              1/25/2009              2/25/2009                  82,557,083
              2/25/2009              3/25/2009                  79,559,975
              3/25/2009              4/25/2009                  76,672,019
              4/25/2009              5/25/2009                  73,889,213
              5/25/2009              6/25/2009                  71,207,703
              6/25/2009              7/25/2009                  68,623,776
              7/25/2009              8/25/2009                  66,133,859
              8/25/2009              9/25/2009                  63,734,510

         "Swap Provider": The swap provider under the Swap Agreement either (a)
entitled to receive payments from the Supplemental Interest Trust or (b)
required to make payments to the Supplemental Interest Trust, in either case
pursuant to the terms of the Swap Agreement, and any successor in interest or
assign. Initially, the Swap Provider shall be Deutsche Bank AG New York Branch.

         "Swap Provider Trigger Event": A Swap Provider Trigger Event shall have
occurred if any of the following has occurred: (i) an Event of Default under the
Swap Agreement with respect to which the Swap Provider is a Defaulting Party (as
defined in the Swap Agreement), (ii) a Termination Event under the Swap
Agreement with respect to which the Swap Provider is the sole Affected Party (as
defined in the Swap Agreement) or (iii) an Additional Termination Event under
the Swap Agreement with respect to which the Swap Provider is the sole Affected
Party.

         "Swap Termination Payment": Upon the designation of an "Early
Termination Date" as defined in the Swap Agreement, the payment to be made by
the Supplemental Interest Trust to the Swap Provider, or by the Swap Provider to
the Supplemental Interest Trust, as applicable, pursuant to the terms of the
Swap Agreement.

         "Targeted Credit Enhancement Test": With respect to any Distribution
Date and (i) the Class A-1A Certificates, shall be satisfied if on such
Distribution Date the percentage obtained by dividing the Certificate Principal
Balance of the Class A-1A Certificates by the aggregate principal balance of the
Group IA Mortgage Loans is equal to or greater than 51.70%, (ii) the Class A-1B1
Certificates and Class A-1B2 Certificates, shall be satisfied if on such
Distribution Date the percentage obtained by dividing the sum of the Certificate
Principal Balances of the Class A-1B1 Certificates and Class A-1B2 Certificates
by the aggregate principal balance of the Group IB Mortgage Loans is equal to or
greater than 51.70% and (iii) the Class A-2 Certificates, shall be satisfied if
on such Distribution Date the percentage obtained by dividing the sum of the
Certificate Principal Balances of the Class A-2 Certificates by the aggregate
principal balance of the Group II Mortgage Loans is equal to or greater than
51.70%.

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

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

         "Termination Price": As defined in Section 10.01.

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

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

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

         "Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if either (x) the Delinquency Percentage exceeds 33.25% of the
Credit Enhancement Percentage with respect to such Distribution Date or (y) the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Due Period divided by the aggregate principal balance of
the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set
forth below with respect to such Distribution Date:

<TABLE>
<CAPTION>
   DISTRIBUTION DATE                       PERCENTAGE
   -----------------                       ----------
<S>                                        <C>
   December 2007 to November 2008.....     1.40% plus 1/12 of 1.70% for each month thereafter
   December 2008 to November 2009.....     3.10% plus 1/12 of 1.75% for each month thereafter
   December 2009 to November 2010.....     4.85% plus 1/12 of 1.40% for each month thereafter
   December 2010 to November 2011.....     6.25% plus 1/12 of 0.75% for each month thereafter
   December 2011 and thereafter.......     7.00%
</TABLE>

         "Trust": ACE Securities Corp., Home Equity Loan Trust, Series 2005-HE7,
the trust created hereunder.

         "Trust Fund": Collectively, all of the assets of REMIC I, REMIC II,
REMIC III and the Reserve Fund and any amounts on deposit therein and any
proceeds thereof. For avoidance of doubt, the Trust Fund does not include the
Supplemental Interest Trust.

         "Trust REMIC": REMIC I, REMIC II or REMIC III.

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

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

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

         "Uncertificated Notional Amount": With respect to REMIC II Regular
Interest IO and each Distribution Date listed below, the aggregate
Uncertificated Balance of the REMIC I Regular Interests ending with the
designation "A" listed below:

<TABLE>
<CAPTION>
DISTRIBUTION DATE                         REMIC I REGULAR INTERESTS
-----------------  --------------------------------------------------------------------------------
<S>                <C>
       1           I-1-A  through  I-46-A,  II-1-A  through  II-46-A and  III-1-A  through III-46-A
       2           I-2-A  through  I-46-A,  II-2-A  through  II-46-A and  III-2-A  through III-46-A
       3           I-3-A  through  I-46-A,  II-3-A  through  II-46-A and  III-3-A  through III-46-A
       4           I-4-A  through  I-46-A,  II-4-A  through  II-46-A and  III-4-A  through III-46-A
       5           I-5-A  through  I-46-A,  II-5-A  through  II-46-A and  III-5-A  through III-46-A
       6           I-6-A  through  I-46-A,  II-6-A  through  II-46-A and  III-6-A  through III-46-A
       7           I-7-A  through  I-46-A,  II-7-A  through  II-46-A and  III-7-A  through III-46-A
       8           I-8-A  through  I-46-A,  II-8-A  through  II-46-A and  III-8-A  through III-46-A
       9           I-9-A  through  I-46-A,  II-9-A  through  II-46-A and  III-9-A  through III-46-A
      10           I-10-A through I-46-A,  II-10-A  through  II-46-A and III-10-A  through III-46-A
      11           I-11-A through I-46-A,  II-11-A  through  II-46-A and III-11-A  through III-46-A
      12           I-12-A through I-46-A,  II-12-A  through  II-46-A and III-12-A  through III-46-A
      13           I-13-A through I-46-A,  II-13-A  through  II-46-A and III-13-A  through III-46-A
      14           I-14-A through I-46-A,  II-14-A  through  II-46-A and III-14-A  through III-46-A
      15           I-15-A through I-46-A,  II-15-A  through  II-46-A and III-15-A  through III-46-A
      16           I-16-A through I-46-A,  II-16-A  through  II-46-A and III-16-A  through III-46-A
      17           I-17-A through I-46-A,  II-17-A  through  II-46-A and III-17-A  through III-46-A
      18           I-18-A through I-46-A,  II-18-A  through  II-46-A and III-18-A  through III-46-A
      19           I-19-A through I-46-A,  II-19-A  through  II-46-A and III-19-A  through III-46-A
      20           I-20-A through I-46-A,  II-20-A  through  II-46-A and III-20-A  through III-46-A
      21           I-21-A through I-46-A,  II-21-A  through  II-46-A and III-21-A  through III-46-A
      22           I-22-A through I-46-A,  II-22-A  through  II-46-A and III-22-A  through III-46-A
      23           I-23-A through I-46-A,  II-23-A  through  II-46-A and III-23-A  through III-46-A
      24           I-24-A through I-46-A,  II-24-A  through  II-46-A and III-24-A  through III-46-A
      25           I-25-A through I-46-A,  II-25-A  through  II-46-A and III-25-A  through III-46-A
      26           I-26-A through I-46-A,  II-26-A  through  II-46-A and III-26-A  through III-46-A
      27           I-27-A through I-46-A,  II-27-A  through  II-46-A and III-27-A  through III-46-A
      28           I-28-A through I-46-A,  II-28-A  through  II-46-A and III-28-A  through III-46-A
      29           I-29-A through I-46-A,  II-29-A  through  II-46-A and III-29-A  through III-46-A
      30           I-30-A through I-46-A,  II-30-A  through  II-46-A and III-30-A  through III-46-A
      31           I-31-A through I-46-A,  II-31-A  through  II-46-A and III-31-A  through III-46-A
      32           I-32-A through I-46-A,  II-32-A  through  II-46-A and III-32-A  through III-46-A
      33           I-33-A through I-46-A,  II-33-A  through  II-46-A and III-33-A  through III-46-A
      34           I-34-A through I-46-A,  II-34-A  through  II-46-A and III-34-A  through III-46-A
      35           I-35-A through I-46-A,  II-35-A  through  II-46-A and III-35-A  through III-46-A
      36           I-36-A through I-46-A,  II-36-A  through  II-46-A and III-36-A  through III-46-A
      37           I-37-A through I-46-A,  II-37-A  through  II-46-A and III-37-A  through III-46-A
      38           I-38-A through I-46-A,  II-38-A  through  II-46-A and III-38-A  through III-46-A
      39           I-39-A through I-46-A,  II-39-A  through  II-46-A and III-39-A  through III-46-A
      40           I-40-A through I-46-A,  II-40-A  through  II-46-A and III-40-A  through III-46-A
      41           I-41-A through I-46-A,  II-41-A  through  II-46-A and III-41-A  through III-46-A
      42           I-42-A through I-46-A,  II-42-A  through  II-46-A and III-42-A  through III-46-A
      43           I-43-A through I-46-A,  II-43-A  through  II-46-A and III-43-A  through III-46-A
      44           I-44-A through I-46-A,  II-44-A  through  II-46-A and III-44-A  through III-46-A
      45           I-45-A through I-46-A,  II-45-A  through  II-46-A and III-45-A  through III-46-A
      46           I-46-A, II-46-A and III-46-A
   thereafter      0.00
</TABLE>

         With respect to the REMIC III Regular Interest IO and any Distribution
Date, an amount equal to the Uncertificated Notional Amount of the REMIC II
Regular Interest IO. With respect to the Class IO Interest and any Distribution
Date, an amount equal to the Uncertificated Notional Amount of the REMIC III
Regular Interest IO.

         "Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.11 of
this Agreement.

         "United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof (except, in the
case of a partnership, to the extent provided in regulations) provided that, for
purposes solely of the restrictions on the transfer of any Class R Certificate,
no partnership or other entity treated as a partnership for United States
federal income tax purposes shall be treated as a United States Person unless
all persons that own an interest in such partnership either directly or through
any entity that is not a corporation for United States federal income tax
purposes are required to be United States Persons, or an estate whose income is
subject to United States federal income tax regardless of its source, or a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, a trust which was in
existence on August 20, 1996 (other than a trust treated as owned by the grantor
under subpart E of part I of subchapter J of chapter I of the Code), and which
was treated as a United States person on August 20, 1996 may elect to continue
to be treated as a United States person notwithstanding the previous sentence.
The term "United States" shall have the meaning set forth in Section 7701 of the
Code.

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

         "Verification Report": As defined in Section 4.19.

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

         "Wells Fargo": Either (i) Wells Fargo Bank, National Association in its
capacity as a Servicer or any successor thereto appointed hereunder in
connection with the servicing and administration of the Wells Fargo Mortgage
Loans or (ii) Wells Fargo Bank, National Association in its capacity as a
Custodian under the Wells Fargo Custodial Agreement or any successor thereto.

         "Wells Fargo Custodial Agreement": The Custodial Agreement dated as of
November 1, 2005, among the Trustee, Wells Fargo and the Servicers, as may be
amended or supplemented from time to time.

         "Wells Fargo Mortgage Loans": The Mortgage Loans being serviced by
Wells Fargo pursuant to the terms of this Agreement as specified on the Mortgage
Loan Schedule.

         SECTION 1.02. Allocation of Certain Interest Shortfalls.

         For purposes of calculating the amount of Accrued Certificate Interest
and the amount of the Interest Distribution Amount for the Class A Certificates,
the Mezzanine Certificates and the Class CE Certificates for any Distribution
Date, (1) the aggregate amount of any Prepayment Interest Shortfalls (to the
extent not covered by payments by the related Servicer pursuant to Section 3.22
of this Agreement or the Servicing Agreement, or by the Master Servicer pursuant
to Section 4.18 of this Agreement) and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, to the Class CE Certificates, second, to the Class M-11
Certificates, third, to the Class M-10 Certificates, fourth, to the Class M-9
Certificates, fifth, to the Class M-8 Certificates, sixth, to the Class M-7
Certificates, seventh, to the Class M-6 Certificates, eighth, to the Class M-5
Certificates, ninth, to the Class M-4 Certificates, tenth, to the Class M-3
Certificates, eleventh, to the Class M-2 Certificates, twelfth, to the Class M-1
Certificates and thirteenth, to the Class A Certificates, on a PRO RATA basis,
in each case based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount, as applicable, of each such Certificate and (2) the
aggregate amount of any Realized Losses allocated to the Mezzanine Certificates
and Net WAC Rate Carryover Amounts paid to the Class A Certificates and the
Mezzanine Certificates incurred for any Distribution Date shall be allocated to
the Class CE Certificates on a PRO RATA basis based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance or Notional Amount thereof, as
applicable.

         For purposes of calculating the amount of Uncertificated Interest for
the REMIC I Group IA Regular Interests for any Distribution Date, the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the related Servicer pursuant to Section 3.22 of this Agreement or
pursuant to the Servicing Agreement, as applicable, or the Master Servicer
pursuant to Section 4.18 of this Agreement) and any Relief Act Interest
Shortfalls incurred in respect of Group IA Mortgage Loans shall be allocated
first, to REMIC I Regular Interest A-I and to the REMIC I Group IA Regular
Interests ending with the designation "B", PRO RATA based on, and to the extent
of, one month's interest at the then applicable respective REMIC I Remittance
Rates on the respective Uncertificated Principal Balances of each such REMIC I
Regular Interest, and then, to REMIC I Group IA Regular Interests ending with
the designation "A", pro rata based on, and to the extent of, one month's
interest at the then applicable respective REMIC I Remittance Rates on the
respective Uncertificated Balances of each such REMIC I Regular Interest.

         For purposes of calculating the amount of Uncertificated Interest for
the REMIC I Group IB Regular Interests for any Distribution Date, the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the related Servicer pursuant to Section 3.22 of this Agreement or
pursuant to the Servicing Agreement, as applicable, or the Master Servicer
pursuant to Section 4.18 of this Agreement) and any Relief Act Interest
Shortfalls incurred in respect of Group IB Mortgage Loans shall be allocated
first, to REMIC I Regular Interest A-II and to the REMIC I Group IB Regular
Interests ending with the designation "B", PRO RATA based on, and to the extent
of, one month's interest at the then applicable respective REMIC I Remittance
Rates on the respective Uncertificated Principal Balances of each such REMIC I
Regular Interest , and then, to REMIC I Group IB Regular Interests ending with
the designation "A", pro rata based on, and to the extent of, one month's
interest at the then applicable respective REMIC I Remittance Rates on the
respective Uncertificated Balances of each such REMIC I Regular Interest.

         For purposes of calculating the amount of Uncertificated Interest for
the REMIC I Group II Regular Interests for any Distribution Date, the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the related Servicer pursuant to Section 3.22 of this Agreement or
pursuant to the Servicing Agreement, as applicable, or the Master Servicer
pursuant to Section 4.18 of this Agreement) and any Relief Act Interest
Shortfalls incurred in respect of Group II Mortgage Loans shall be allocated
first, to REMIC I Regular Interest A-III and to the REMIC I Group II Regular
Interests ending with the designation "B", PRO RATA based on, and to the extent
of, one month's interest at the then applicable respective REMIC I Remittance
Rates on the respective Uncertificated Principal Balances of each such REMIC I
Regular Interest, and then, to REMIC I Group II Regular Interests ending with
the designation "A", pro rata based on, and to the extent of, one month's
interest at the then applicable respective REMIC I Remittance Rates on the
respective Uncertificated Balances of each such REMIC I Regular Interest.

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

                  (A) The REMIC II Marker Allocation Percentage of the aggregate
         amount of any Prepayment Interest Shortfalls (to the extent not covered
         by payments by the related Servicer pursuant to Section 3.22 of this
         Agreement or pursuant to the Servicing Agreement, as applicable, or the
         Master Servicer pursuant to Section 4.18 of this Agreement) and the
         REMIC II Marker Allocation Percentage of any Relief Act Interest
         Shortfalls incurred in respect of the Mortgage Loans for any
         Distribution Date shall be allocated among REMIC II Regular Interest
         AA, REMIC II Regular Interest A-1A, REMIC II Regular Interest A-1B1,
         REMIC II Regular Interest A-1B2, REMIC II Regular Interest A-2A, REMIC
         II Regular Interest A-2B, REMIC II Regular Interest A-2C, REMIC II
         Regular Interest A-2D, REMIC II Regular Interest M-1, REMIC II Regular
         Interest M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest
         M-4, REMIC II Regular Interest M-5, REMIC II Regular Interest M-6,
         REMIC II Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II
         Regular Interest M-9, REMIC II Regular Interest M-10, REMIC II Regular
         Interest M-11 and REMIC II Regular Interest ZZ PRO RATA based on, and
         to the extent of, one month's interest at the then applicable
         respective REMIC II Remittance Rate on the respective Uncertificated
         Balance of each such REMIC II Regular Interest; and

                  (B) The REMIC II Sub WAC Allocation Percentage of the
         aggregate amount of any Prepayment Interest Shortfalls (to the extent
         not covered by payments by the related Servicer pursuant to Section
         3.22 of this Agreement or pursuant to the Servicing Agreement, as
         applicable, or by the Master Servicer pursuant to Section 4.18 of this
         Agreement) and the REMIC II Sub WAC Allocation Percentage of any Relief
         Act Interest Shortfalls incurred in respect of the Mortgage Loans for
         any Distribution Date shall be allocated first, to Uncertificated
         Interest payable to REMIC II Regular Interest IA-SUB, REMIC II Regular
         Interest IA-GRP, REMIC II Regular Interest IB-SUB, REMIC II Regular
         Interest IB-GRP, REMIC II Regular Interest II-SUB, REMIC II Regular
         Interest II-GRP and REMIC II Regular Interest XX, PRO RATA based on,
         and to the extent of, one month's interest at the then applicable
         respective REMIC II Remittance Rate on the respective Uncertificated
         Balance of each such REMIC II Regular Interest.

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         SECTION 2.01. Conveyance of the Mortgage Loans.

         The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, without recourse, for the benefit of the
Certificateholders, all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in and
to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement and the Assignment
Agreement (including, without limitation the right to enforce the obligations of
the other parties thereto thereunder), the right to any Net Swap Payment and any
Swap Termination Payment made by the Swap Provider and all other assets included
or to be included in REMIC I. Such assignment includes all interest and
principal received by the Depositor and the Servicers on or with respect to the
Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee and each Servicer an executed copy of the Mortgage Loan Purchase
Agreement.

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

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

         The Depositor shall deliver or cause the related originator to deliver
to the related Servicer copies of all trailing documents required to be included
in the related Mortgage File at the same time the originals or certified copies
thereof are delivered to the Trustee or Custodians, such documents including the
mortgagee policy of title insurance and any Mortgage Loan Documents upon return
from the recording office. The Servicers shall not be responsible for any
custodian fees or other costs incurred in obtaining such documents and the
Depositor shall cause the Servicers to be reimbursed for any such costs the
Servicers may incur in connection with performing their obligations under this
Agreement or under the Servicing Agreement, as applicable.

         The Mortgage Loans permitted by the terms of this Agreement to be
included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and warranties, a representation and warranty of the
Seller that no Mortgage Loan is a "High-Cost Home Loan" as defined in the New
Jersey Home Ownership Act effective November 27, 2003, as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004, as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Ann. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices Act,
effective January 1, 2005 (Ind. Code Ann. Sections 24-9-1 through 24-9-9)) and
(ii) Qualified Substitute Mortgage Loans (which, by definition as set forth
herein and referred to in the Mortgage Loan Purchase Agreement, are required to
conform to, among other representations and warranties, the representation and
warranty of the Seller that no Qualified Substitute Mortgage Loan is a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 or as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, as defined in the Massachusetts Predatory Home Loan
Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch. 183C) or as
defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind.
Code Ann. Sections 24-9-1 through 24-9-9). The Depositor and the Trustee on
behalf of the Trust understand and agree that it is not intended that any
mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003, as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004, as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 (Mass. Ann. Laws Ch. 183C) or as defined in the Indiana Home
Loan Practices Act, effective January 1, 2005 (Ind. Code Ann. Sections 24-9-1
through 24-9-9).

         SECTION 2.02. Acceptance of REMIC I by Trustee.

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

         SECTION 2.03. Repurchase or Substitution of Mortgage Loans.

         (a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of a breach
by the Seller of any representation, warranty or covenant under the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan that materially and
adversely affects the value of such Mortgage Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify the Seller and the related
Servicer of such defect, missing document or breach and request that the Seller
deliver such missing document, cure such defect or breach within sixty (60) days
from the date the Seller was notified of such missing document, defect or
breach, and if the Seller does not deliver such missing document or cure such
defect or breach in all material respects during such period, the Trustee shall
enforce the obligations of the Seller under the Mortgage Loan Purchase Agreement
to repurchase such Mortgage Loan from REMIC I at the Purchase Price within
ninety (90) days after the date on which the Seller was notified of such missing
document, defect or breach, if and to the extent that the Seller is obligated to
do so under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be remitted to the related Servicer for deposit
in the related Collection Account or Custodial Account, as applicable, the
related and the Trustee, upon receipt of written certification from such
Servicer of such deposit, shall release or cause the applicable Custodian (upon
receipt of a request for release in the form attached to the respective
Custodial Agreement) to release to the Seller the related Mortgage File and the
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, representation or warranty, as the Seller shall
furnish to it and as shall be necessary to vest in the Seller any Mortgage Loan
released pursuant hereto, and the Trustee shall not have any further
responsibility with regard to such Mortgage File. In lieu of repurchasing any
such Mortgage Loan as provided above, if so provided in the Mortgage Loan
Purchase Agreement, the Seller may cause such Mortgage Loan to be removed from
REMIC I (in which case it shall become a Deleted Mortgage Loan) and substitute
one or more Qualified Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(b) of this Agreement. It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee and the Certificateholders.
Notwithstanding anything to the contrary contained herein, any breach of a
representation or warranty contained in clauses (xxxiv), (xxxviii), (xxxix),
(xl), (xli), (xlvi), (xlvii) and/or (lvi) of Section 6 of the Mortgage Loan
Purchase Agreement shall be automatically deemed to affect materially and
adversely the interests of the Certificateholders.

         In addition, promptly upon the earlier of discovery by a Servicer or
receipt of notice by a Servicer of the breach of the representation or covenant
of the Seller set forth in Section 5(xii) of the Mortgage Loan Purchase
Agreement which materially and adversely affects the interests of the Holders of
the Class P Certificates in any Prepayment Charge, such Servicer shall promptly
notify the Seller and the Trustee of such breach. The Trustee shall enforce the
obligations of the Seller under the Mortgage Loan Purchase Agreement to remedy
such breach to the extent and in the manner set forth in the Mortgage Loan
Purchase Agreement.

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

         As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected
by the Seller delivering to the Trustee or the applicable Custodian on behalf of
the Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2 of the Custodial Agreement, as applicable, together with an Officers'
Certificate providing that each such Qualified Substitute Mortgage Loan
satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
applicable Custodian on behalf of the Trustee shall acknowledge receipt of such
Qualified Substitute Mortgage Loan or Loans and, within ten (10) Business Days
thereafter, review such documents and deliver to the Depositor, the Trustee and
the related Servicer, with respect to such Qualified Substitute Mortgage Loan or
Loans, an initial certification pursuant to the Custodial Agreement, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the applicable Custodian on behalf of the Trustee shall deliver to
the Depositor, the Trustee and the related Servicer a final certification
pursuant to the Custodial Agreement with respect to such Qualified Substitute
Mortgage Loan or Loans, with any applicable exceptions noted thereon. Monthly
Payments due with respect to Qualified Substitute Mortgage Loans in the month of
substitution are not part of REMIC I and will be retained by the Seller. For the
month of substitution, distributions to Certificateholders will reflect the
Monthly Payment due on such Deleted Mortgage Loan on or before the Due Date in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Mortgage Loan. The
Depositor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee and the related Servicer. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall constitute part of the Trust
Fund and shall be subject in all respects to the terms of this Agreement and the
Mortgage Loan Purchase Agreement, including all applicable representations and
warranties thereof included herein or in the Mortgage Loan Purchase Agreement.

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

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

         (c) Upon discovery by the Depositor, the Seller, a Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two (2) Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or substitute one
or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan
within ninety (90) days of the earlier of discovery or receipt of such notice
with respect to such affected Mortgage Loan. Such repurchase or substitution
shall be made by (i) the Seller if the affected Mortgage Loan's status as a
non-qualified mortgage is or results from a breach of any representation,
warranty or covenant made by the Seller under the Mortgage Loan Purchase
Agreement or (ii) the Depositor, if the affected Mortgage Loan's status as a
non-qualified mortgage does not result from a breach of a representation or
warranty. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a) of this Agreement. The Trustee shall reconvey to
the Seller the Mortgage Loan to be released pursuant hereto in the same manner,
and on the same terms and conditions, as it would a Mortgage Loan repurchased
for breach of a representation or warranty.

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

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

         SECTION 2.04. Representations and Warranties of the Master Servicer.

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

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

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

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the consummation by the Master Servicer of any other
         of the transactions herein contemplated, and the fulfillment of or
         compliance with the terms hereof are in the ordinary course of business
         of the Master Servicer and will not (A) result in a breach of any term
         or provision of the charter and by-laws of the Master Servicer or (B)
         conflict with, result in a breach, violation or acceleration of, or
         result in a default under, the terms of any other material agreement or
         instrument to which the Master Servicer is a party or by which it may
         be bound, or any statute, order or regulation applicable to the Master
         Servicer of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over the Master Servicer; and the
         Master Servicer is not a party to, bound by, or in breach or violation
         of any indenture or other agreement or instrument, or subject to or in
         violation of any statute, order or regulation of any court, regulatory
         body, administrative agency or governmental body having jurisdiction
         over it, which materially and adversely affects or, to the Master
         Servicer's knowledge, would in the future materially and adversely
         affect, (x) the ability of the Master Servicer to perform its
         obligations under this Agreement or (y) the business, operations,
         financial condition, properties or assets of the Master Servicer taken
         as a whole;

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

                  (v) No litigation is pending against the Master Servicer that
         would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Master Servicer
         to perform any of its other obligations hereunder in accordance with
         the terms hereof;

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

                  (vii) No consent, approval, authorization or order of any
         court or governmental agency or body is required for the execution,
         delivery and performance by the Master Servicer of, or compliance by
         the Master Servicer with, this Agreement or the consummation by it of
         the transactions contemplated by this Agreement, except for such
         consents, approvals, authorizations or orders, if any, that have been
         obtained prior to the Closing Date.

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive the resignation or
termination of the parties hereto and the termination of this Agreement and
shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.

         SECTION 2.05. Representations, Warranties and Covenants of Wells Fargo.

         (a) Wells Fargo in its capacity as Servicer of the Wells Fargo Mortgage
Loans hereby represents, warrants and covenants to the Master Servicer, the
Securities Administrator, the Depositor and the Trustee, for the benefit of each
of such Persons and the Certificateholders that as of the Closing Date or as of
such date specifically provided herein:

                  (i) Wells Fargo 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
         Wells Fargo in any state in which a Mortgaged Property related to a
         Wells Fargo 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 Wells Fargo
         Mortgage Loan and to service the Wells Fargo Mortgage Loans in
         accordance with the terms of this Agreement;

                  (ii) Wells Fargo has the full power and authority to conduct
         its business as presently conducted by it and to execute, deliver and
         perform, and to enter into and consummate, all transactions
         contemplated by this Agreement. Wells Fargo has duly authorized the
         execution, delivery and performance of this Agreement, has duly
         executed and delivered this Agreement, and this Agreement, assuming due
         authorization, execution and delivery by the other parties hereto,
         constitutes a legal, valid and binding obligation of Wells Fargo,
         enforceable against it in accordance with its terms, except as the
         enforceability thereof may be limited by insolvency, liquidation,
         conservatorship and other similar laws administered by the FDIC
         affecting the enforcement of contract obligations of insured banks;

                  (iii) The execution and delivery of this Agreement by Wells
         Fargo, the servicing of the Wells Fargo Mortgage Loans by Wells Fargo
         hereunder, the consummation by Wells Fargo of any other of the
         transactions herein contemplated, and the fulfillment of or compliance
         with the terms hereof are in the ordinary course of business of Wells
         Fargo and will not (A) result in a breach of any term or provision of
         the charter or by-laws of Wells Fargo or (B) conflict with, result in a
         breach, violation or acceleration of, or result in a default under, the
         terms of any other material agreement or instrument to which Wells
         Fargo is a party or by which it may be bound, or any statute, order or
         regulation applicable to Wells Fargo of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over
         Wells Fargo; and Wells Fargo is not a party to, bound by, or in breach
         or violation of any indenture or other agreement or instrument, or
         subject to or in violation of any statute, order or regulation of any
         court, regulatory body, administrative agency or governmental body
         having jurisdiction over it, which materially and adversely affects or,
         to Wells Fargo's knowledge, would in the future materially and
         adversely affect, (x) the ability of Wells Fargo to perform its
         obligations as Servicer of the Wells Fargo Mortgage Loans under this
         Agreement, (y) the business, operations, financial condition,
         properties or assets of Wells Fargo taken as a whole or (z) the
         legality, validity or enforceability of this Agreement;

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

                  (v) No litigation is pending against Wells Fargo that would
         materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of Wells Fargo to
         service the Wells Fargo Mortgage Loans or to perform any of its other
         obligations hereunder in accordance with the terms hereof;

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

                  (vii) No consent, approval, authorization or order of any
         court or governmental agency or body is required for the execution,
         delivery and performance by Wells Fargo of, or compliance by Wells
         Fargo with, this Agreement or the consummation by it of the
         transactions contemplated by this Agreement, except for such consents,
         approvals, authorizations or orders, if any, that have been obtained
         prior to the Closing Date;

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

                  (ix) Wells Fargo is a member of MERS in good standing, and
         will comply in all material respects with the rules and procedures of
         MERS in connection with the servicing of the Wells Fargo Mortgage Loans
         that are registered with MERS; and

                  (x) Wells Fargo will not waive any Prepayment Charge other
         than in accordance with the standard set forth in Section 3.01.

         (b) [Reserved]

         (c) It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive the resignation or
termination of the parties hereto, the termination of this Agreement and the
delivery of the Mortgage Files to the Custodians and shall inure to the benefit
of the Trustee, the Master Servicer, the Securities Administrator, the Depositor
and the Certificateholders. Upon discovery by any such Person or the related
Servicer of a breach of any of the foregoing representations, warranties and
covenants which materially and adversely affects the value of any Mortgage Loan,
Prepayment Charge or the interests therein of the Certificateholders, the party
discovering such breach shall give prompt written notice (but in no event later
than two (2) Business Days following such discovery) to the Trustee. Subject to
Section 8.01, unless such breach shall not be susceptible of cure within ninety
(90) days, the obligation of the related Servicer set forth in Section 2.03(e)
to cure breaches shall constitute the sole remedy against the related Servicer
available to the Certificateholders, the Depositor or the Trustee on behalf of
the Certificateholders respecting a breach of the representations, warranties
and covenants contained in this Section 2.05.

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

         The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to the applicable Custodian on its behalf of the Mortgage Loan
Documents, subject to the provisions of Section 2.01 and Section 2.02 hereof and
Section 2 of the respective Custodial Agreement, together with the assignment to
it of all other assets included in REMIC I, the receipt of which is hereby
acknowledged. The interests evidenced by the Class R-I Interest, together with
the REMIC I Regular Interests, constitute the entire beneficial ownership
interest in REMIC I. The rights of the Holders of the Class R-I Interest and
REMIC I (as holder of the REMIC I Regular Interests) to receive distributions
from the proceeds of REMIC I in respect of the Class R-I Interest and the REMIC
I Regular Interests, respectively, and all ownership interests evidenced or
constituted by the Class R-I Interest and the REMIC I Regular Interests, shall
be as set forth in this Agreement.

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

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

         SECTION 2.08. Issuance of the Residual Certificates.

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

         SECTION 2.09. Establishment of the Trust.

         The Depositor does hereby establish, pursuant to the further provisions
of this Agreement and the laws of the State of New York, an express trust to be
known, for convenience, as "ACE Securities Corp., Home Equity Loan Trust, Series
2005-HE7" and does hereby appoint HSBC Bank USA, National Association as Trustee
in accordance with the provisions of this Agreement.

<PAGE>

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                   OF THE WELLS FARGO MORTGAGE LOANS; ACCOUNTS

         SECTION 3.01. Wells Fargo to Act as Servicer.

         The obligations of Wells Fargo hereunder to service and administer the
Mortgage Loans shall be limited to the Wells Fargo Mortgage Loans, and with
respect to the duties and obligations of Wells Fargo, references herein to the
related Mortgage Loans shall be limited to the Wells Fargo Mortgage Loans (and
the related proceeds and related REO Properties). In addition, from and after
the Closing Date, the Countrywide Mortgage Loans will be serviced and
administered by Countrywide pursuant to the Servicing Agreement, and Wells Fargo
will have no responsibility to service or administer such Mortgage Loans or have
any other obligation with respect to such Mortgage Loans (including reporting or
remitting funds to the Master Servicer). Except as otherwise expressly stated
herein, references in this Article III to "Servicer" shall refer to Wells Fargo,
and any successor thereto as a Servicer.

         On and after the Closing Date, Wells Fargo shall service and administer
the Wells Fargo Mortgage Loans on behalf of the Trust Fund and in the best
interests of and for the benefit of the Certificateholders (as determined by
Wells Fargo in its reasonable judgment) in accordance with the terms of this
Agreement and the respective Mortgage Loans and all applicable law and
regulations and, to the extent consistent with such terms, in the same manner in
which it services and administers similar mortgage loans for its own portfolio,
giving due consideration to customary and usual standards of practice of prudent
mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:

                  (i) any relationship that Wells Fargo or any of its Affiliates
         may have with the related Mortgagor;

                  (ii) the ownership of any Certificate by Wells Fargo or any of
         its Affiliates;

                  (iii) Wells Fargo's obligation to make P&I Advances or
         Servicing Advances; or

                  (iv) Wells Fargo's right to receive compensation for its
         services hereunder;

         To the extent consistent with the foregoing, Wells Fargo shall also
seek to maximize the timely and complete recovery of principal and interest on
the related Mortgage Notes and shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and such waiver is
related to a default or reasonably foreseeable default and would, in the
reasonable judgment of Wells Fargo, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan
and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is related to a default or a reasonably
foreseeable default, (ii) such Prepayment Charge is unenforceable in accordance
with applicable law or the collection of such related Prepayment Charge would
otherwise violate applicable law or (iii) the collection of such Prepayment
Charge would be considered "predatory" pursuant to written guidance published or
issued by any applicable federal, state or local regulatory authority acting in
its official capacity and having jurisdiction over such matters. If the Servicer
waives any Prepayment Charge other than pursuant to the standard set forth in
this Section 3.01, the Servicer will pay the amount of such waived Prepayment
Charge, from its own funds without any right of reimbursement, for the benefit
of the Holders of the Class P Certificates, by depositing such amount into the
Collection Account within ninety (90) days of the earlier of discovery by the
Servicer or receipt of notice by the Servicer of such breach. Furthermore,
notwithstanding any other provisions of this Agreement, any payments made by the
Servicer in respect of any waived Prepayment Charges pursuant to this paragraph
shall be deemed to be paid outside of the Trust Fund.

         Notwithstanding any provision in this Agreement to the contrary, in the
event the Prepayment Charge payable under the terms of the Mortgage Note is less
than the amount of the Prepayment Charge set forth in the Prepayment Charge
Schedule or other information provided to Wells Fargo, Wells Fargo and the
Master Servicer shall not have any liability or obligation with respect to such
difference (including any obligation to recalculate any prepayment charges), and
in addition shall not have any liability or obligation to pay the amount of any
uncollected Prepayment Charge if the failure to collect such amount is the
direct result of inaccurate or incomplete information on the Prepayment Charge
Schedule.

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

         In accordance with Accepted Servicing Practices, Wells Fargo shall make
or cause to be made Servicing Advances as necessary for the purpose of effecting
the payment of taxes and assessments on the Mortgaged Properties, which
Servicing Advances shall be reimbursable in the first instance from related
collections from the related Mortgagors pursuant to Section 3.07 of this
Agreement, and further as provided in Section 3.09 of this Agreement; provided,
however, Wells Fargo shall only make such Servicing Advance if the related
Mortgagor has not made such payment and if the failure to make such Servicing
Advance would result in the loss of the related Mortgaged Property due to a tax
sale or foreclosure as result of a tax lien. Any cost incurred by Wells Fargo in
effecting the payment of taxes and assessments on a Mortgaged Property shall
not, for the purpose of calculating the Stated Principal Balance of such
Mortgage Loan or distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. The parties to this Agreement acknowledge that
Servicing Advances shall be reimbursable pursuant to Section 3.09 of this
Agreement, and agree that no Servicing Advance shall be rejected or disallowed
by any party unless it has been shown that such Servicing Advance was not made
in accordance with the terms of this Agreement.

         Notwithstanding anything in this Agreement to the contrary, no Servicer
may make any future advances with respect to a Mortgage Loan and no Servicer
shall permit any modification with respect to any related Mortgage Loan that
would change the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or change the final
maturity date on such related Mortgage Loan (unless, as provided in Section 3.06
of this Agreement, the related Mortgagor is in default with respect to the
related Mortgage Loan or such default is, in the judgment of Wells Fargo,
reasonably foreseeable) or any modification, waiver or amendment of any term of
any related Mortgage Loan that would both (A) effect an exchange or reissuance
of such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause any Trust
REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup date" under the REMIC Provisions.

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

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

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

         The Servicer may arrange for the subservicing of any Mortgage Loan by a
Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that such
sub-servicing arrangement and the terms of the related Sub-Servicing Agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Each Sub-Servicer shall
be (i) authorized to transact business in the state or states where the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Sub-Servicer to perform its obligations
hereunder and under the Sub-Servicing Agreement and (ii) a Freddie Mac or Fannie
Mae approved mortgage servicer. Notwithstanding the provisions of any
Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer or a Sub-Servicer or reference to
actions taken through the Servicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee and the Certificateholders
for the servicing and administration of the Mortgage Loans in accordance with
the provisions of this Agreement without diminution of such obligation or
liability by virtue of such Sub-Servicing Agreements or arrangements or by
virtue of indemnification from the Sub-Servicer and to the same extent and under
the same terms and conditions as if such Servicer alone were servicing and
administering the Mortgage Loans. Every Sub-Servicing Agreement entered into by
a Servicer shall contain a provision giving the successor servicer the option to
terminate such agreement in the event a successor servicer is appointed. All
actions of each Sub-Servicer performed pursuant to the related Sub-Servicing
Agreement shall be performed as an agent of the Servicer with the same force and
effect as if performed directly by such Servicer.

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

         SECTION 3.03. Successor Sub-Servicers.

         Any Sub-Servicing Agreement shall provide that Wells Fargo shall be
entitled to terminate any Sub-Servicing Agreement and to either itself directly
service the related Mortgage Loans or enter into a Sub-Servicing Agreement with
a successor Sub-Servicer which qualifies under Section 3.02. Any Sub-Servicing
Agreement shall include the provision that such agreement may be immediately
terminated by any successor to Wells Fargo (which may be the Trustee or the
Master Servicer) without fee, in accordance with the terms of this Agreement, in
the event that Wells Fargo (or any successor to Wells Fargo) shall, for any
reason, no longer be the Servicer of the related Mortgage Loans (including
termination due to a Servicer Event of Default).

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

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

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

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

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

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

         SECTION 3.06. Collection of Certain Mortgage Loan Payments.

         Wells Fargo shall make reasonable efforts to collect all payments
called for under the terms and provisions of the related Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
Accepted Servicing Practices, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Consistent with the foregoing, Wells Fargo may in its
discretion (i) waive any late payment charge or, if applicable, penalty interest
or (ii) extend the due dates for the Monthly Payments due on a Mortgage Note
related to a Mortgage Loan for a period of not greater than 180 days; provided
that any extension pursuant to this clause shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of Wells Fargo, such default is reasonably foreseeable,
Wells Fargo, consistent with Accepted Servicing Practices may waive, modify or
vary any term of such Mortgage Loan (including modifications that change the
Mortgage Rate, forgive the payment of principal or interest or extend the final
maturity date of such Mortgage Loan), accept payment from the related Mortgagor
of an amount less than the Stated Principal Balance in final satisfaction of
such Mortgage Loan, or consent to the postponement of strict compliance with any
such term or otherwise grant indulgence to any Mortgagor if in Wells Fargo's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action).

         SECTION 3.07. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts. To the extent the terms of a Mortgage provide for Escrow
Payments, Wells Fargo shall establish and maintain one or more accounts (the
"Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of taxes, assessments,
fire, flood, and hazard insurance premiums, and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. Wells Fargo shall deposit in the Servicing
Accounts on a daily basis and in no event later than the second Business Day
after receipt, and retain therein, all Escrow Payments collected on account of
the Mortgage Loans, for the purpose of effecting the timely payment of any such
items as required under the terms of this Agreement. Withdrawals of amounts from
a Servicing Account may be made by Wells Fargo only to (i) effect timely payment
of taxes, assessments, fire, flood, and hazard insurance premiums, and
comparable items; (ii) reimburse itself out of related collections for any
Servicing Advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.11 (with respect to fire, flood and hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in the Servicing Account; or, only to the extent not required to be
paid to the related Mortgagors, to pay itself interest on balances in the
Servicing Account; or (v) clear and terminate the Servicing Account at the
termination of Wells Fargo's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement in accordance with Article X. As part of its
servicing duties, Wells Fargo shall pay to the Mortgagors interest on funds in
Servicing Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Servicing Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement therefor.
Notwithstanding the foregoing, no Servicer shall be obligated to collect Escrow
Payments if the related Mortgage Loan does not require such payments but Wells
Fargo shall nevertheless be obligated to make Servicing Advances as provided in
Section 3.01 and Section 3.11. In the event a Servicer shall deposit in the
Servicing Accounts any amount not required to be deposited therein, it may at
any time withdraw such amount from the Servicing Accounts, any provision to the
contrary notwithstanding.

         To the extent that a Mortgage does not provide for Escrow Payments,
Wells Fargo (i) shall determine whether any such payments are made by the
Mortgagor in a manner and at a time that is necessary to avoid the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien and (ii) shall ensure that all insurance required to be maintained on the
Mortgaged Property pursuant to this Agreement is maintained. If any such payment
has not been made and Wells Fargo receives notice of a tax lien with respect to
the Mortgage Loan being imposed, Wells Fargo shall, promptly and to the extent
required to avoid loss of the Mortgaged Property, advance or cause to be
advanced funds necessary to discharge such lien on the Mortgaged Property unless
Wells Fargo determines the advance to be nonrecoverable. Wells Fargo assumes
full responsibility for the payment of all such bills and shall effect payments
of all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make Servicing
Advances to effect such payments subject to its determination of recoverability.

         SECTION 3.08. Collection Account, Simple Interest Excess Sub-Account
and Distribution Account.

         (a) On behalf of the Trust Fund, Wells Fargo shall establish and
maintain one or more "Collection Accounts", held in trust for the benefit of the
Trustee and the Certificateholders. On behalf of the Trust Fund, Wells Fargo
shall deposit or cause to be deposited in the Collection Account on a daily
basis and when received or as otherwise required hereunder, the following
payments and collections received or made by it on or subsequent to the Cut-off
Date other than amounts attributable to a Due Date on or prior to the Cut-off
Date:

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

                  (ii) all payments on account of interest (net of the related
         Servicing Fee and any Prepayment Interest Excess) on each related
         Mortgage Loan;

                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
         than proceeds collected in respect of any particular REO Property) and
         all Subsequent Recoveries with respect to the related Mortgage Loans;

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

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

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

                  (vii) any Prepayment Charges collected by Wells Fargo in
         connection with the Principal Prepayment of any of the Mortgage Loans
         or amounts required to be deposited by Wells Fargo in connection with a
         breach of its obligations to collect a Prepayment Charge under Section
         3.01 of this Agreement.

         The foregoing requirements for deposit in the related Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, assumption fees or other similar fees need not be deposited by Wells
Fargo in the related Collection Account and may be retained by Wells Fargo as
additional servicing compensation. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from the related Collection Account, any
provision herein to the contrary notwithstanding.

         (b) Except as set forth below, no later than the Closing Date, each
Servicer servicing Simple Interest Mortgage Loans shall establish and maintain a
sub-account of the Collection Account titled "[Servicer's name], Simple Interest
Excess Sub-Account in trust for the Holders of ACE Securities Corp., Home Equity
Loan Trust, Series 2005-SD3, Asset Backed Pass-Through Certificates". The
related Servicer shall, on each Determination Date transfer from the Collection
Account to the Simple Interest Excess Sub-Account all Net Simple Interest
Excess, if any, pursuant to Section 3.09(a)(xi) of this Agreement, and shall
maintain a record of all such deposits. In lieu of establishing a Simple
Interest Excess Sub-Account, each Servicer may maintain any Net Simple Interest
Excess in the Collection Account and maintain a separate accounting therefor.

         The related Servicer shall withdraw amounts on deposit in the Simple
Interest Excess Sub-Account or in the related Collection Account (in respect of
any Net Simple Interest Excess) on each Determination Date for deposit to the
Distribution Account in an amount equal to the lesser of (i) the amount on
deposit therein, and (ii) the Net Simple Interest Shortfall for such
Distribution Date.

         The related Servicer shall remit to the Securities Administrator which
shall thereupon distribute to the Class CE-1 Certificateholder, based on the
information provided to it by the Servicer, the amount of any Net Simple
Interest Excess remaining in the Simple Interest Excess Sub-Account or in the
related Collection Account, as applicable, on the Distribution Date each year
occurring in December, commencing in December 2006. Such distributions shall be
deemed to be made on a first-in, first-out basis. In addition, the related
Servicer shall clear and terminate the Simple Interest Excess Sub-Account, if
any, upon the termination of this Agreement and retain any funds remaining
therein.

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

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

         (d) Funds in the Collection Accounts, in each Simple Interest Excess
Sub-Account and in the Distribution Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.10. Wells
Fargo shall give notice to the Trustee, the Securities Administrator and the
Master Servicer of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Securities Administrator shall
give notice to the Servicers and the Depositor of the location of the
Distribution Account when established and prior to any change thereof.

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

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

                  (ii) any amounts required to be deposited pursuant to Section
         3.21(d) or 3.21(f) of this Agreement in connection with any related REO
         Property;

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

                  (iv) any amounts required to be deposited pursuant to Section
         3.22 of this Agreement in connection with any Prepayment Interest
         Shortfalls.

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

         (a) Wells Fargo shall, from time to time, make withdrawals from the
related Collection Account for any of the following purposes or as described in
Section 5.03 of this Agreement:

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

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

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

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

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

                  (vi) to reimburse itself (including any successor to Wells
         Fargo) for

                  (A) any P&I Advance or Servicing Advance previously made by it
                  which Wells Fargo has determined to be a Nonrecoverable P&I
                  Advance or a Nonrecoverable Servicing Advance in accordance
                  with the provisions of Section 5.03 of this Agreement; or

                  (B) any unpaid Servicing Fees to the extent not recoverable
                  from Liquidation Proceeds, Insurance Proceeds or other amounts
                  received with respect to the related Mortgage Loan under
                  Section 3.06(a)(iii) of this Agreement;

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

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

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

                  (x) to pay to itself any Prepayment Interest Excess on the
         related Mortgage Loans to the extent not retained pursuant to Section
         3.08(a)(ii)) of this Agreement;

                  (xi) to deposit in the Simple Interest Excess Sub-Account any
         amount required to be deposited therein pursuant to Section 3.08(b) of
         this Agreement; and

                  (xii) to clear and terminate the Collection Account pursuant
         to Section 10.01 of this Agreement.

         Wells Fargo shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the related Collection Account, to the extent held by or on behalf of it,
pursuant to subclauses (ii), (iii), (v), (vi), (vii), (viii), (ix) and (x)
above.

         (b) The Securities Administrator shall, from time to time, make
withdrawals from the Distribution Account, for any of the following purposes,
without priority:

                  (i) to make distributions to Certificateholders in accordance
         with Section 5.01 of this Agreement;

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

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

                  (iv) to pay any Net Swap Payment or Swap Termination Payment
         payable to the Supplemental Interest Trust (unless the Swap Provider is
         the sole Defaulting Party or the sole Affected Party (as defined in the
         Swap Agreement)) owed to the Swap Provider;

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

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

                  (vii) to pay the Credit Risk Management Fee to the Credit Risk
         Manager; and

                  (viii) to clear and terminate the Distribution Account
         pursuant to Section 10.01 of this Agreement.

         SECTION 3.10. Investment of Funds in the Investment Accounts.

         (a) Wells Fargo may direct, by means of written directions (which may
be standing directions), any depository institution maintaining the related
Collection Account or Simple Interest Excess Sub-Account to invest the funds in
such Collection Account or Simple Interest Excess Sub-Account (for purposes of
this Section 3.10, an "Investment Account") in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the Securities Administrator is the obligor thereon, and
(ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator is
the obligor on such Permitted Investment. Amounts in the Distribution Account
may be invested in Permitted Investments as directed in writing by the Master
Servicer and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Securities Administrator is the obligor thereon, and (ii) no later than the
date on which such funds are required to be withdrawn from such account pursuant
to this Agreement, if the Securities Administrator is the obligor thereon. All
such Permitted Investments shall be held to maturity, unless payable on demand.
Any investment of funds shall be made in the name of the Trustee (in its
capacity as such) or in the name of a nominee of the Trustee. The Securities
Administrator shall be entitled to sole possession over each such investment in
the Distribution Account and, subject to subsection (b) below, the income
thereon, and any certificate or other instrument evidencing any such investment
shall be delivered directly to the Securities Administrator or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in a
Collection Account are at any time invested in a Permitted Investment payable on
demand, the party with investment discretion over such Investment Account shall:

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

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

         (b) All income and gain realized from the investment of funds deposited
in a Collection Account or Simple Interest Excess Sub-Account shall be for the
benefit of the related Servicer and shall be subject to its withdrawal in
accordance with Section 3.09. Wells Fargo shall deposit in the Collection
Account or Simple Interest Excess Sub-Account maintained by it the amount of any
loss incurred in respect of any such Permitted Investment made with funds in
such account immediately upon realization of such loss. All earnings and gain
realized from the investment of funds deposited in the Distribution Account
shall be for the benefit of the Master Servicer. The Master Servicer shall remit
from its own funds for deposit into the Distribution Account the amount of any
loss incurred on Permitted Investments in the Distribution Account.

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

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

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

         (a) The terms of each Mortgage Note require the related Mortgagor to
maintain fire, flood and hazard insurance policies. To the extent such policies
are not maintained, Wells Fargo shall cause to be maintained for each Mortgaged
Property fire and hazard insurance with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of the current principal balance of the related Mortgage
Loan and the amount necessary to compensate fully for any damage or loss to the
improvements which are a part of such property on a replacement cost basis, in
each case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. Wells Fargo shall also cause to be maintained fire and hazard insurance
on each REO Property with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the maximum insurable value of the improvements which are a part
of such property and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property. Wells Fargo will comply in
the performance of this Agreement with all reasonable rules and requirements of
each insurer under any such hazard policies. Any amounts to be collected by a
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with Accepted Servicing Practices,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the related Collection Account, subject to withdrawal
pursuant to Section 3.09, if received in respect of a Mortgage Loan, or in the
REO Account, subject to withdrawal pursuant to Section 3.21, if received in
respect of an REO Property. Any cost incurred by a Servicer in maintaining any
such insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, Wells Fargo will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).

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

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

         (c) No Servicer shall take any action that would result in noncoverage
under any applicable primary mortgage insurance policy of any loss which, but
for the actions of such Servicer would have been covered thereunder. Wells Fargo
shall use its best efforts to keep in force and effect any applicable primary
mortgage insurance policy and, to the extent that the related Mortgage Loan
requires the Mortgagor to maintain such insurance, any other primary mortgage
insurance applicable to any Mortgage Loan. Except as required by applicable law
or the related Mortgage Loan Documents, Wells Fargo 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.

         Wells Fargo agrees to present on behalf of the Trustee and the
Certificateholders claims to the applicable insurer under any primary mortgage
insurance policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any primary mortgage insurance policies
respecting defaulted Mortgage Loans. Pursuant to Section 3.08, any amounts
collected by a Servicer under any primary mortgage insurance policies shall be
deposited in the related Collection Account, subject to withdrawal pursuant to
Section 3.09. Notwithstanding any provision to the contrary, no Servicer shall
have any responsibility with respect to a primary mortgage insurance policy
unless such Servicer has been made aware of such policy, as reflected on the
Mortgage Loan Schedule or otherwise and have been provided with adequate
information to administer such policy.

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

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

         Notwithstanding the foregoing paragraph or any other provision of this
Agreement, no Servicer shall be deemed to be in default, breach or any other
violation of its obligations hereunder by reason of any assumption of a Mortgage
Loan by operation of law or by the terms of the Mortgage Note or any assumption
which Wells Fargo may be restricted by law from preventing, for any reason
whatever. For purposes of this Section 3.12, the term "assumption" is deemed to
also include a sale (of the Mortgaged Property) subject to the Mortgage that is
not accompanied by an assumption or substitution of liability agreement.

         SECTION 3.13. Realization Upon Defaulted Mortgage Loans.

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

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

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

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

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

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

         (c) Wells Fargo shall have the right to purchase from REMIC I any
defaulted Mortgage Loan serviced by it that is 90 days or more delinquent, which
such Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee, in form and substance satisfactory to such Servicer and
the Trustee prior to purchase), at a price equal to the Purchase Price. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the related Collection Account, and the Trustee, upon receipt of written
certification from Wells Fargo of such deposit, shall release or cause to be
released to Wells Fargo the related Mortgage File and the Trustee shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as Wells Fargo shall furnish and as shall
be necessary to vest in Wells Fargo title to any Mortgage Loan released pursuant
hereto.

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

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

         (a) Upon becoming aware of the payment in full of any Mortgage Loan, or
the receipt by Wells Fargo 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, Wells Fargo will promptly
furnish to the applicable Custodian, on behalf of the Trustee, two copies of a
request for release substantially in the form attached to the respective
Custodial Agreement signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the related Collection Account have been or will be so
deposited) and shall request that the applicable Custodian, on behalf of the
Trustee, deliver to Wells Fargo the related Mortgage File. Upon receipt of such
certification and request, the applicable Custodian, on behalf of the Trustee,
shall within five (5) Business Days release the related Mortgage File to Wells
Fargo and the Trustee and the applicable Custodian shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
Wells Fargo is authorized, to give, as agent for the Trustee, as the mortgagee
under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the related Collection
Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by Wells Fargo (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The applicable Custodian, on behalf of the Trustee, shall,
upon the request of Wells Fargo, and delivery to the applicable Custodian, on
behalf of the Trustee, of two copies of a request for release signed by a
Servicing Officer substantially in the form attached to the respective Custodial
Agreement (or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer), release within five
(5) Business Days the related Mortgage File held in its possession or control to
Wells Fargo. Such trust receipt shall obligate Wells Fargo to return the
Mortgage File to the applicable Custodian on behalf of the Trustee, when the
need therefor by Wells Fargo 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 applicable Custodian, on behalf of the Trustee, to Wells Fargo.

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

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

         SECTION 3.15. Servicing Compensation.

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

         Additional servicing compensation in the form of assumption fees, late
payment charges, insufficient funds charges and other miscellaneous fees (other
than Prepayment Charges) and ancillary income shall be retained by Wells Fargo
only to the extent such fees or charges are received by Wells Fargo. Wells Fargo
shall also be entitled pursuant to Section 3.09(a)(iv) to withdraw from the
related Collection Account and pursuant to Section 3.21(b) to withdraw from any
REO Account, as additional servicing compensation, interest or other income
earned on deposits therein, subject to Section 3.10. In addition, Wells Fargo
shall be entitled to retain or withdraw from the related Collection Account,
pursuant to Section 3.09(a)(x), any Prepayment Interest Excess with respect to
the Mortgage Loans serviced by it as additional servicing compensation. Wells
Fargo shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided herein.

         SECTION 3.16. Collection Account Statements.

         Upon request, not later than fifteen (15) days after each Distribution
Date, Wells Fargo shall forward to the Master Servicer and the Securities
Administrator and the Master Servicer shall forward to the Trustee and the
Depositor upon request a statement prepared by the institution at which the
related Collection Account is maintained setting forth the status of the related
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the related Collection Account of each
category of deposit specified in Section 3.08(a) and each category of withdrawal
specified in Section 3.09. Copies of such statement and any similar statements
provided by Wells Fargo shall be provided by the Securities Administrator to any
Certificateholder and to any Person identified to the Securities Administrator
as a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by Wells Fargo to the
Securities Administrator.

         SECTION 3.17. Statement as to Compliance.

         Not later than March 15th of each calendar year commencing in 2006,
Wells Fargo shall deliver to the Master Servicer (and the Master Servicer shall
provide copies to the Trustee and the Depositor upon request) an Officers'
Certificate in a form acceptable for filing with the Securities and Exchange
Commission as an exhibit to Form 10-K or other required form (upon which the
Master Servicer can conclusively rely in connection with its obligations under
Section 5.06) stating, as to each signatory thereof, that (i) a review of the
activities of such Servicer during the preceding year and of performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officer's knowledge, based on such review, such Servicer has
fulfilled all of its obligations in all material respects under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such material obligation, specifying each such default known to such officer and
the nature and status thereof. Copies of any such statement shall be provided by
the Trustee to any Certificateholder, upon request at the expense of the
requesting party, provided such statement is delivered by the Servicers to the
Trustee.

         SECTION 3.18. Independent Public Accountants' Servicing Report.

         Not later than March 15th of each calendar year commencing in 2006,
Wells Fargo, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to such Servicer a report in
a form acceptable for filing with the Securities and Exchange Commission as an
exhibit to Form 10-K or other required form stating that (i) it has obtained a
letter of representation regarding certain matters from the management of such
Servicer which includes an assertion that such Servicer has complied with
certain minimum residential mortgage loan servicing standards, identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America, with respect to the servicing of
residential mortgage loans during the most recently completed fiscal year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated and such firm has determined that Wells
Fargo has complied in all material respects, subject to such exceptions and
other qualifications that may be appropriate. Immediately upon receipt of such
report, Wells Fargo shall furnish a copy of such report to the Master Servicer,
and the Master Servicer shall furnish a copy of such report to the Trustee upon
request. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the expense of the requesting party, provided
that such statement is delivered by the Servicers to the Trustee.

         SECTION 3.19. Annual Certification.

         (a) Wells Fargo shall deliver to the Master Servicer, on or before
March 15th of each calendar year beginning in 2006 (or, if any such day is not a
Business Day, the immediately preceding Business Day) or such alternative date
reasonably specified by the Master Servicer which shall occur not later than
fifteen (15) days prior to the date any Form 10-K is required to be filed with
the Commission in connection with the transactions contemplated by this
Agreement, a certification in the form attached hereto as Exhibit C. Such
certification shall be signed by the senior officer in charge of servicing of
Wells Fargo. In addition, Wells Fargo shall provide such other information with
respect to the related Mortgage Loans and the servicing and administration
thereof within the control of such Servicer which shall be required to enable
the Master Servicer to comply with the reporting requirements of the Exchange
Act pursuant to Section 5.06 hereof.

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

         SECTION 3.20. Access to Certain Documentation.

         Each Servicer shall provide to the Office of Thrift Supervision, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificate Owner, access to the
documentation regarding the related Mortgage Loans required by applicable laws
and regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of Wells
Fargo designated by it. Nothing in this Section 3.20 shall limit the obligation
of Wells Fargo to comply with any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of such Servicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section. Nothing in this Section 3.20 shall require
any Servicer to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. No Servicer shall be
required to make copies of or ship documents to any Person unless provisions
have been made for the reimbursement of the costs thereof.

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

         (a) The deed or certificate of sale of any REO Property related to a
Mortgage Loan shall be taken in the name of the Trustee, or its nominee, on
behalf of the Trust Fund and for the benefit of the Certificateholders. Wells
Fargo, on behalf of REMIC I, shall either sell any REO Property by the close of
the third calendar year following the calendar year in which REMIC I acquires
ownership of such REO Property for purposes of Section 860(a)(8) of the Code or
request from the Internal Revenue Service, no later than sixty (60) days before
the day on which the three-year grace period would otherwise expire an extension
of the three-year grace period, unless Wells Fargo had delivered to the Trustee
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by REMIC I of such REO Property subsequent to three (3) years
after its acquisition will not result in the imposition on any Trust REMIC
created hereunder of taxes on "prohibited transactions" thereof, as defined in
Section 860F of the Code, or cause any Trust REMIC hereunder to fail to qualify
as a REMIC under Federal law at any time that any Certificates are outstanding.
Wells Fargo shall manage, conserve, protect and operate each REO Property for
the Certificateholders solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  (ix) any such contract shall require, or shall be administered
         to require, that the Independent Contractor pay all costs and expenses
         incurred in connection with the operation and management of such REO
         Property, including those listed above and remit all related revenues
         (net of such costs and expenses) to Wells Fargo as soon as practicable,
         but in no event later than thirty (30) days following the receipt
         thereof by such Independent Contractor;

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

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

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

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

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

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

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

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

         Wells Fargo shall deliver to the Securities Administrator for deposit
into the Distribution Account on the Servicer Remittance Date from its own funds
an amount equal to the lesser of (i) the aggregate amount of the Prepayment
Interest Shortfalls attributable to prepayments in full on the related Mortgage
Loans for the related Distribution Date resulting solely from voluntary
Principal Prepayments received by Wells Fargo during the related Prepayment
Period and (ii) the aggregate amount of the related Servicing Fees payable to
related Servicer on such Distribution Date with respect to the related Mortgage
Loans. No Servicer shall have the right to reimbursement for any amounts
remitted to the Securities Administrator in respect of this Section 3.22. No
Servicer shall be obligated to pay the amounts set forth in this Section 3.22
with respect to shortfalls resulting from the application of the Relief Act.
SECTION 3.23. Obligations of the Servicers in Respect of Mortgage Rates and
Monthly Payments.

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

         SECTION 3.24. Reserve Fund.

         (a) No later than the Closing Date, the Securities Administrator shall
establish and maintain a separate, segregated trust account entitled, "Reserve
Fund, Wells Fargo Bank, N.A., in trust for the registered holders of ACE
Securities Corp. Home Equity Loan Trust, Series 2005-HE7, Asset Backed
Pass-Through Certificates." On the Closing Date, the Depositor will deposit, or
cause to be deposited, into the Reserve Fund 1,000.

         (b) On each Distribution Date, the Securities Administrator shall
deposit into the Reserve Fund the amounts described in Section 5.01(c)(8)(vi),
rather than distributing such amounts to the Class CE Certificateholders, and
Section 5.01(c)(8)(vii). On each such Distribution Date, the Securities
Administrator shall hold all such amounts for the benefit of the Holders of the
Class A Certificates and the Mezzanine Certificates and will distribute such
amounts to the Holders of the Class A Certificates and the Mezzanine
Certificates, in the amounts and priorities set forth in Section 5.01(a). If no
Net WAC Rate Carryover Amounts are payable on a Distribution Date, the
Securities Administrator shall deposit, into the Reserve Fund on behalf of the
Class CE Certificateholders, from amounts otherwise distributable to the Class
CE Certificateholders, an amount such that when added to other amounts already
on deposit in the Reserve Fund, the aggregate amount on deposit therein is equal
to 1,000.

         (c) For federal and state income tax purposes, the Class CE
Certificateholders will be deemed to be the owners of the Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of 1,000) shall be treated as amounts distributed by REMIC II to the Holders of
the Class CE Certificates. Upon the termination of the Trust Fund, or the
payment in full of the Class A Certificates and the Mezzanine Certificates, all
amounts remaining on deposit in the Reserve Fund will be released by the Trust
Fund and distributed to the Class CE Certificateholders or their designees. The
Reserve Fund will be part of the Trust Fund but not part of any REMIC and any
payments to the Holders of the Class A Certificates or the Mezzanine
Certificates of Net WAC Rate Carryover Amounts will not be payments with respect
to a "regular interest" in a REMIC within the meaning of Code Section
860(G)(a)(1).

         (d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees that the Securities Administrator will deposit
into the Reserve Fund the amounts described above on each Distribution Date
rather than distributing such amounts to the Class CE Certificateholders. By
accepting a Class CE Certificate, each Class CE Certificateholder further agrees
that its agreement to such action by the Securities Administrator is given for
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by such acceptance.

         (e) At the direction of the Holders of a majority in Percentage
Interest in the Class CE Certificates, the Securities Administrator shall direct
any depository institution maintaining the Reserve Fund to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Securities Administrator or an Affiliate manages or advises such investment,
and (ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator or
an Affiliate manages or advises such investment. All income and gain earned upon
such investment shall be deposited into the Reserve Fund. In no event shall the
Securities Administrator be liable for any investments made pursuant to this
clause (e). If the Holders of a majority in Percentage Interest in the Class CE
Certificates fail to provide investment instructions, funds on deposit in the
Reserve Fund shall be held uninvested by the Securities Administrator without
liability for interest or compensation.

         (f) For federal tax return and information reporting, the right of the
Class A Certificateholders and the Mezzanine Certificateholders to receive
payments from the Reserve Fund in respect of any Net WAC Rate Carryover Amount
shall be assigned a value of 70,000 with respect to the Certificates covered by
the Swap Agreement.

         SECTION 3.25. Advance Facility.

         (a) Notwithstanding anything to the contrary contained herein, (i)
Wells Fargo is hereby authorized to enter into an advance facility ("Advance
Facility") but no more than two Advance Facilities without the prior written
consent of the Trustee, which consent shall not be unreasonably withheld, under
which (A) Wells Fargo sells, assigns or pledges to an advancing person (an
"Advance Financing Person") its rights under this Agreement to be reimbursed for
any P&I Advances or Servicing Advances and/or (B) an Advance Financing Person
agrees to finance some or all P&I Advances or Servicing Advances required to be
made by Wells Fargo pursuant to this Agreement and (ii) Wells Fargo is hereby
authorized to assign its rights to the Servicing Fee (which rights shall
terminate upon the resignation, termination or removal of Wells Fargo pursuant
to the terms of this Agreement); it being understood that neither the Trust Fund
nor any party hereto shall have a right or claim (including without limitation
any right of offset) to any amounts for reimbursement of P&I Advances or
Servicing Advances so assigned or to the portion of the Servicing Fee so
assigned. Subject to the provisions of the first sentence of this Section
3.25(a), no consent of the Depositor, Trustee, Master Servicer,
Certificateholders or any other party is required before a Servicer may enter
into an Advance Facility, but such Servicer shall provide notice to the
Depositor, Master Servicer and the Trustee of the existence of any such Advance
Facility promptly upon the consummation thereof stating (a) the identity of the
Advance Financing Person and (b) the identity of any Person ("Servicer's
Assignee") who has the right to receive amounts in reimbursement of previously
unreimbursed P&I Advances or Servicing Advances. Notwithstanding the existence
of any Advance Facility under which an advancing person agrees to finance P&I
Advances and/or Servicing Advances on such Servicer's behalf, such Servicer
shall remain obligated pursuant to this Agreement to make P&I Advances and
Servicing Advances pursuant to and as required by this Agreement, and shall not
be relieved of such obligations by virtue of such Advance Facility.

         (b) Reimbursement amounts ("Advance Reimbursement Amounts") shall
consist solely of amounts in respect of P&I Advances and/or Servicing Advances
made with respect to the related Mortgage Loans for which Wells Fargo would be
permitted to reimburse itself in accordance with this Agreement, assuming Wells
Fargo had made the related P&I Advance(s) and/or Servicing Advance(s).

         (c) Wells Fargo shall maintain and provide to any successor Servicer
(with, upon request, a copy to the Trustee) a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any advancing person. The successor Servicer shall be entitled to
rely on any such information provided by the predecessor Servicer, and the
successor servicer shall not be liable for any errors in such information.

         (d) Reimbursement amounts distributed with respect to each Mortgage
Loan shall be allocated to outstanding unreimbursed P&I Advances or Servicing
Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" (FIFO) basis. The documentation establishing any Advance
Facility shall require Wells Fargo to provide to the related advancing person or
its designee loan-by-loan information with respect to each such reimbursement
amount distributed to such advancing person or Advance Facility trustee on each
Distribution Date, to enable the advancing person or Advance Facility trustee to
make the FIFO allocation of each such reimbursement amount with respect to each
Mortgage Loan. Wells Fargo shall remain entitled to be reimbursed by the
advancing person or Advance Facility trustee for all P&I Advances and Servicing
Advances funded by Wells Fargo to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an advancing person.

         (e) Any amendment to this Section 3.25 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 3.25, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, and Wells Fargo without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement,
provided, that the Trustee has been provided an Opinion of Counsel that such
amendment is authorized hereunder and has no material adverse effect on the
Certificateholders, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the Trust
Fund; provided, further, that the amendment shall not be deemed to adversely
affect in any material respect the interests of the Certificateholders if the
Person requesting the amendment obtains a letter from each Rating Agency
(instead of obtaining an Opinion of Counsel to such effect) stating that the
amendment would not result in the downgrading or withdrawal of the respective
ratings then assigned to the Certificates; it being understood and agreed that
any such rating letter in and of itself will not represent a determination as to
the materiality of any such amendment and will represent a determination only as
to the credit issues affecting any such rating. Prior to entering into an
Advance Facility, Wells Fargo shall notify the lender under such facility in
writing that: (a) the P&I Advances and/or Servicing Advances financed by and/or
pledged to the lender are obligations owed to Wells Fargo on a non-recourse
basis payable only from the cash flows and proceeds received under this
Agreement for reimbursement of P&I Advances and/or Servicing Advances only to
the extent provided herein, and neither the Master Servicer, the Securities
Administrator, the Trustee nor the Trust are otherwise obligated or liable to
repay any P&I Advances and/or Servicing Advances financed by the lender; (b)
Wells Fargo will be responsible for remitting to the lender the applicable
amounts collected by it as Servicing Fees and as reimbursement for P&I Advances
and/or Servicing Advances funded by the lender, as applicable, subject to the
restrictions and priorities created in this Agreement; and (c) neither the
Master Servicer, the Securities Administrator nor the Trustee shall have any
responsibility to calculate any amount payable under an Advance Facility or to
track or monitor the administration of the financing arrangement between Wells
Fargo and the lender or the payment of any amount under an Advance Facility.

         (f) Wells Fargo shall indemnify the Master Servicer, the Securities
Administrator, the Trustee and the Trust Fund for any cost, liability or expense
relating to the Advance Facility including, without limitation, a claim, pending
or threatened, by an Advance Financing Person.

         SECTION 3.26. The Servicers Indemnification.

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

<PAGE>

                                   ARTICLE IV

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

         SECTION 4.01. Master Servicer.

         The Master Servicer shall, from and after the Closing Date supervise,
monitor and oversee the obligations of Wells Fargo under this Agreement and
Countrywide under the Servicing Agreement to service and administer the related
Mortgage Loans in accordance with the terms of this Agreement and the Servicing
Agreement ,as applicable, 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 Servicers 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
Servicers and shall cause the Servicers to perform and observe the covenants,
obligations and conditions to be performed or observed by the related Servicer
under this Agreement or the Servicing Agreement , as applicable. The Master
Servicer shall independently and separately monitor each 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 each Servicer's and
Master Servicer's records, and based on such reconciled and corrected
information, prepare the statements specified in Section 5.03 and any other
information and statements required to be provided by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of each Servicer to the Distribution
Account pursuant to the terms hereof based on information provided to the Master
Servicer by each Servicer.

         The Trustee shall furnish the related Servicer and the Master Servicer
with any limited powers of attorney and other documents in form acceptable to it
necessary or appropriate to enable the related Servicer and the Master Servicer
to service and administer the related Mortgage Loans and REO Property. The
Trustee shall have no responsibility for any action of the Master Servicer or
the related Servicer pursuant to any such limited power of attorney and shall be
indemnified by the Master Servicer or the related Servicer, as applicable, for
any cost, liability or expense incurred by the Trustee in connection with such
Person's misuse of any such power of attorney.

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

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

         SECTION 4.02. REMIC-Related Covenants.

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

         SECTION 4.03. Monitoring of Servicers.

         (a) The Master Servicer shall be responsible for monitoring the
compliance by Wells Fargo with their its duties under this Agreement and
Countrywide with its duties under the Servicing Agreement. In the review of the
related Servicer's activities, the Master Servicer may rely upon an Officer's
Certificate of the related Servicer with regard to such Servicer's compliance
with the terms of this Agreement or the Servicing Agreement, as applicable. In
the event that the Master Servicer, in its judgment, determines that the related
Servicer should be terminated in accordance with the terms hereof or the terms
of the Servicing Agreement, or that a notice should be sent pursuant to the
terms hereof with respect to the occurrence of an event that, unless cured,
would constitute a Servicer Event of Default or an event of default under the
Servicing Agreement, the Master Servicer shall notify the related Servicer, the
Seller and the Trustee thereof and (i) with respect to Countrywide the Master
Servicer shall issue such notice or take such other action as it deems
appropriate and (ii) with respect to Wells Fargo, the Trustee 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 Wells Fargo under this
Agreement and Countrywide under the Servicing Agreement and shall, in the event
that Wells Fargo fails to perform its obligations in accordance with this
Agreement or Countrywide fails to perform its obligations in accordance with the
Servicing Agreement, subject to this Section and Article VIII, notify the
Trustee and the Trustee shall terminate the rights and obligations of such
Servicer hereunder in accordance with the provisions of Article VIII. In the
event the rights and obligations of Countrywide are terminated, the Master
Servicer shall act as servicer of the related Mortgage Loans or a successor
servicer shall be appointed in accordance with the provisions of Article VIII.
In the event that the rights and obligations of Wells Fargo in its capacity as
Servicer of the Wells Fargo Mortgage Loans are terminated, the Trustee shall act
as servicer of the related Mortgage Loans or a successor servicer shall be
appointed in accordance with the provisions of Article VIII Such enforcement,
including, without limitation, the legal prosecution of claims and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense,
provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.

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

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

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

         SECTION 4.04. Fidelity Bond.

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

         SECTION 4.05. Power to Act; Procedures.

         The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit the 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 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 prepared and delivered to it and reasonably acceptable to it by
empowering the Master Servicer, 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 this Agreement or the
Servicing Agreement, and the Trustee shall execute and deliver such other
documents prepared and delivered to it and reasonably acceptable to it, as the
Master Servicer or the related Servicer may request, to enable the Master
Servicer to master service and administer the related Mortgage Loans and carry
out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer or the related Servicer and shall
be indemnified by the Master Servicer or the related Servicer, as applicable,
for any cost, liability or expense incurred by the Trustee in connection with
such Person's use or misuse of any such power of attorney). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.10. In the performance of its duties hereunder, the Master
Servicer shall be an independent contractor and shall not, except in those
instances where it is taking action in the name of the Trustee, be deemed to be
the agent of the Trustee.

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

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

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

         (a) The Master Servicer shall transmit to the Trustee or the applicable
Custodian such documents and instruments coming into the possession of the
Master Servicer from time to time as are required by the terms hereof to be
delivered to the Trustee or the applicable Custodian. Any funds received by the
Master Servicer in respect of any Mortgage Loan or which otherwise are collected
by the Master Servicer as Liquidation Proceeds or Insurance Proceeds in respect
of any Mortgage Loan shall be remitted to the Securities Administrator for
deposit in the Distribution Account. The Master Servicer shall, and, subject to
Section 3.20 of this Agreement or, to the extent provided therein, the Servicing
Agreement, shall cause the 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 remitted to the Securities Administrator for
deposit in the Distribution Account.

         SECTION 4.08. Standard Hazard Insurance and Flood Insurance Policies.

         For each Mortgage Loan, the Master Servicer shall enforce the
obligation of Wells Fargo under this Agreement and Countrywide under the
Servicing Agreement to maintain or cause to be maintained standard fire and
casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement or the Servicing Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in Section 3.11 of this Agreement or the
eligibility requirements set forth in the Servicing Agreement, as applicable,
and that no earthquake or other additional insurance is to be required of any
Mortgagor or to be maintained on property acquired in respect of a defaulted
loan, other than pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional insurance.

         SECTION 4.09. Presentment of Claims and Collection of Proceeds.

         The Master Servicer shall enforce each Servicer's obligations under
this Agreement or under the Servicing Agreement, as applicable, to prepare and
present on behalf of the Trustee and the Certificateholders all claims under any
insurance policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to the related Servicer and remitted to the Master
Servicer) in respect of such policies, bonds or contracts shall be promptly
deposited in the Distribution Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable insurance policy need
not be so deposited or remitted.

         SECTION 4.10. Maintenance of Primary Mortgage Insurance Policies.

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

         (b) The Master Servicer agrees to cause the related Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any primary mortgage insurance policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
primary mortgage insurance policies respecting defaulted Mortgage Loans.

         SECTION 4.11. Trustee to Retain Possession of Certain Insurance
Policies and Documents.

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

         SECTION 4.12. Reserved.

         SECTION 4.13. Compensation for the Master Servicer.

         As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Master Servicing Fee and the income
from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The compensation payable to
the Master Servicer in respect of any Distribution Date shall be reduced in
accordance with Section 4.18. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder and shall
not be entitled to reimbursement therefor except as provided in this Agreement.

         SECTION 4.14. REO Property.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall cause the related Servicer to
sell, any REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement or the provisions of the Servicing Agreement, as
applicable. Further, the Master Servicer shall cause the related Servicer to
sell any REO Property prior to three years after the end of the calendar year of
its acquisition by REMIC I unless (i) the Trustee shall have been supplied by
the related Servicer with an Opinion of Counsel to the effect that the holding
by the Trust Fund of such REO Property subsequent to such three-year period will
not result in the imposition of taxes on "prohibited transactions" of any REMIC
hereunder as defined in section 860F of the Code or cause any REMIC hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding, in
which case the Trust Fund may continue to hold such Mortgaged Property (subject
to any conditions contained in such Opinion of Counsel) or (ii) the related
Servicer shall have applied for, prior to the expiration of such three-year
period, an extension of such three-year period in the manner contemplated by
Section 856(e)(3) of the Code, in which case the three-year period shall be
extended by the applicable extension period. The Master Servicer shall cause the
related Servicer to protect and conserve, such REO Property in the manner and to
the extent required by this Agreement or the Servicing Agreement, as applicable,
in accordance with the REMIC Provisions and in a manner that does not result in
a tax on "net income from foreclosure property" or cause such REO Property to
fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code.

         (b) The Master Servicer shall cause the related Servicer to deposit all
funds collected and received in connection with the operation of any REO
Property in the REO Account or in the account designated for such amounts under
the Servicing Agreement.

         SECTION 4.15. Annual Officer's Certificate as to Compliance.

         (a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 15 of each year, commencing on March 15, 2006, an
Officer's Certificate signed by a Servicing Officer, certifying that with
respect to the period ending December 31 of the prior year: (i) such Servicing
Officer has reviewed the activities of such Master Servicer during the preceding
calendar year or portion thereof and its performance under this Agreement, (ii)
to the best of such Servicing Officer's knowledge, based on such review, such
Master Servicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement in all material respects throughout such year,
or, if there has been a default in the fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof, (iii) nothing has come to
the attention of such Servicing Officer to lead such Servicing Officer to
believe that the Master Servicer has failed to perform any of its duties,
responsibilities and obligations under this Agreement in all material respects
throughout such year, or, if there has been a material default in the
performance or fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof.

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

         SECTION 4.16. Annual Independent Accountant's Servicing Report.

         If the Master Servicer has, during the course of any calendar year,
directly serviced any of the Mortgage Loans, then the Master Servicer at its
expense shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Seller on or before March 15 of each year, commencing on March 15, 2006 to the
effect that, with respect to the most recently ended fiscal year, such firm has
examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Freddie Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.

         SECTION 4.17. Reserved.

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

         In the event of any Prepayment Interest Shortfalls, the Master Servicer
shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the related Servicer with respect to Prepayment Interest
Shortfalls attributable to Principal Prepayments in full on the Mortgage Loans
for the related Distribution Date, and not so paid by the related Servicer and
(ii) the aggregate amount of the compensation payable to the Master Servicer for
such Distribution Date in accordance with Section 4.13, without reimbursement
therefor.

         SECTION 4.19. Prepayment Penalty Verification.

         On or prior to each Servicer Remittance Date, each Servicer shall
provide in an electronic format acceptable to the Master Servicer the data
necessary for the Master Servicer to perform its verification duties set forth
in this Section 4.19. The Master Servicer or a third party reasonably acceptable
to the Master Servicer and the Depositor (the "Verification Agent") will perform
such verification duties and will use its best efforts to issue its findings in
a report (the "Verification Report") delivered to the Master Servicer and the
Depositor within ten (10) Business Days following the related Distribution Date;
provided, however, that if the Verification Agent is unable to issue the
Verification Report within ten (10) Business Days following the Distribution
Date, the Verification Agent may issue and deliver to the Master Servicer and
the Depositor the Verification Report upon the completion of its verification
duties. The Master Servicer shall forward the Verification Report to the related
Servicer and shall notify the related Servicer if the Master Servicer has
determined that the related Servicer did not deliver the appropriate Prepayment
Charge to the Securities Administrator in accordance with this Agreement. Such
written notification from the Master Servicer shall include the loan number,
prepayment penalty code and prepayment penalty amount as calculated by the
Master Servicer or the Verification Agent, as applicable, of each Mortgage Loan
for which there is a discrepancy. If the related Servicer agrees with the
verified amounts, the related Servicer shall adjust the immediately succeeding
Servicer Report and the amount remitted to the Securities Administrator with
respect to prepayments accordingly. If the related Servicer disagrees with the
determination of the Master Servicer, the related Servicer shall, within five
(5) Business Days of its receipt of the Verification Report, notify the Master
Servicer of such disagreement and provide the Master Servicer with detailed
information to support its position. The related Servicer and the Master
Servicer shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Servicer Remittance Date, and the related Servicer will
indicate the effect of such resolution on the related Servicer Report and shall
adjust the amount remitted with respect to prepayments on such Servicer
Remittance Date accordingly.

         During such time as the related Servicer and the Master Servicer are
resolving discrepancies with respect to the Prepayment Charges, no payments in
respect of any disputed Prepayment Charges will be remitted to the Securities
Administrator for deposit in the Distribution Account and the Master Servicer
shall not be obligated to deposit such payments, unless otherwise required
pursuant to Section 8.01 hereof. In connection with such duties, the Master
Servicer shall be able to rely solely on the information provided to it by the
related Servicer in accordance with this Section. The Master Servicer shall not
be responsible for verifying the accuracy of any of the information provided to
it by the related Servicer.

<PAGE>

                                   ARTICLE V

                         PAYMENTS TO CERTIFICATEHOLDERS

         SECTION 5.01. Distributions.

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

         (a) (1) With respect to the Group IA Mortgage Loans:

                  (i) to Holders of REMIC I Regular Interest A-I, and each of
         REMIC I Regular Interest I-1-A through I-46-B, PRO RATA, in an amount
         equal to (A) Uncertificated Interest for such REMIC I Regular Interests
         for such Distribution Date, plus (B) any amounts payable in respect
         thereof remaining unpaid from previous Distribution Dates;

                  (ii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) above, to the Holders of
         REMIC I Regular Interest A-I, an amount of principal shall be
         distributed to such Holders until the Uncertificated Balance of REMIC I
         Regular Interest A-I is reduced to zero; and

                  (iii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) and (ii) above, payments of
         principal shall be allocated to REMIC I Regular interests I-1-A through
         I-46-B starting with the lowest numerical denomination until the
         Uncertificated Balance of each such REMIC I Regular Interest is reduced
         to zero, provided that, for REMIC I Regular Interests with the same
         numerical denomination, such payments of principal shall be allocated
         PRO RATA between such REMIC I Regular Interests.

                  (2) With respect to the Group IB Mortgage Loans:

                  (i) to Holders of REMIC I Regular Interest A-II, and each of
         REMIC I Regular Interest II-1-A through II-46-B, PRO RATA, in an amount
         equal to (A) Uncertificated Interest for such REMIC I Regular Interests
         for such Distribution Date, plus (B) any amounts payable in respect
         thereof remaining unpaid from previous Distribution Dates;

                  (ii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) above, to the Holders of
         REMIC I Regular Interest A-II, an amount of principal shall be
         distributed to such Holders until the Uncertificated Balance of REMIC I
         Regular Interest A-II is reduced to zero; and

                  (iii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) and (ii) above, payments of
         principal shall be allocated to REMIC I Regular interests II-1-A
         through II-46-B starting with the lowest numerical denomination until
         the Uncertificated Balance of each such REMIC I Regular Interest is
         reduced to zero, provided that, for REMIC I Regular Interests with the
         same numerical denomination, such payments of principal shall be
         allocated PRO RATA between such REMIC I Regular Interests.

                  (3) With respect to the Group II Mortgage Loans:

                  (i) to Holders of REMIC I Regular Interest A-III and each of
         REMIC I Regular Interest III-1-A through III-46-B, PRO RATA, in an
         amount equal to (A) Uncertificated Interest for such REMIC I Regular
         Interests for such Distribution Date, plus (B) any amounts payable in
         respect thereof remaining unpaid from previous Distribution Dates.

                  (ii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) above, to the Holders of
         REMIC I Regular Interest A-III, an amount of principal shall be
         distributed to such Holders until the Uncertificated Balance of REMIC I
         Regular Interest A-III is reduced to zero; and

                  (iii) to the extent of amounts remaining after the
         distributions made pursuant to clause (i) and (ii) above, payments of
         principal shall be allocated to REMIC I Regular interests III-1-A
         through III-46-B starting with the lowest numerical denomination until
         the Uncertificated Balance of each such REMIC I Regular Interest is
         reduced to zero, provided that, for REMIC I Regular Interests with the
         same numerical denomination, such payments of principal shall be
         allocated PRO RATA between such REMIC I Regular Interests.

         (b) to the Holders of REMIC I Regular Interest P, (A) all amounts
representing Prepayment Charges in respect of the Mortgage Loans received during
the related Prepayment Period and (B) on the Distribution Date immediately
following the expiration of the latest Prepayment Charge as identified on the
Prepayment Charge Schedule or any Distribution Date thereafter until 100 has
been distributed pursuant to this clause.

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

                  (i) first to the Holders of REMIC II Regular Interest IO, in
         an amount equal to (A) Uncertificated Interest for such REMIC II
         Regular Interest for such Distribution Date, plus (B) any amounts in
         respect thereof remaining unpaid from previous Distribution Dates and
         second, to the Holders of REMIC II Regular Interest AA, REMIC II
         Regular Interest A-1A, REMIC II Regular Interest A-1B1, REMIC II
         Regular Interest A-1B2, REMIC II Regular Interest A-2A, REMIC II
         Regular Interest A-2B, REMIC II Regular Interest A-2C, REMIC II Regular
         Interest A-2D, REMIC II Regular Interest M-1, REMIC II Regular Interest
         M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest M-4,
         REMIC II Regular Interest M-5, REMIC II Regular Interest M-6, REMIC II
         Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular
         Interest M-9, REMIC II Regular Interest M-10, REMIC II Regular Interest
         M-11 and REMIC II Regular Interest ZZ, PRO RATA, in an amount equal to
         (A) the Uncertificated Interest for such Distribution Date, plus (B)
         any amounts in respect thereof remaining unpaid from previous
         Distribution Dates. Amounts payable as Uncertificated Interest in
         respect of REMIC II Regular Interest ZZ shall be reduced when the REMIC
         II Overcollateralization Amount is less than the REMIC II Required
         Overcollateralization Amount, by the lesser of (x) the amount of such
         difference and (y) the Maximum ZZ Uncertificated Interest Deferral
         Amount and such amount will be payable to the Holders of REMIC II
         Regular Interest A-1A, REMIC II Regular Interest A-1B1, REMIC II
         Regular Interest A-1B2, REMIC II Regular Interest A-2A, REMIC II
         Regular Interest A-2B, REMIC II Regular Interest A-2C, REMIC II Regular
         Interest A-2D, REMIC II Regular Interest M-1, REMIC II Regular Interest
         M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest M-4,
         REMIC II Regular Interest M-5, REMIC II Regular Interest M-6, REMIC II
         Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular
         Interest M-9, REMIC II Regular Interest M-10 and REMIC II Regular
         Interest M-11 in the same proportion as the Overcollateralization
         Increase Amount is allocated to the Corresponding Certificates and the
         Uncertificated Balance of REMIC II Regular Interest ZZ shall be
         increased by such amount;

                  (ii) to Holders of REMIC II Regular Interest IA-SUB, REMIC II
         Regular Interest IA-GRP, REMIC II Regular Interest IB-SUB, REMIC II
         Regular Interest IB-GRP, REMIC II Regular Interest II-SUB, REMIC II
         Regular Interest II-GRP, and REMIC II Regular Interest XX, PRO RATA, in
         an amount equal to (A) the Uncertificated Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates;

                  (iii) to the Holders of REMIC II Regular Interests, in an
         amount equal to the remainder of the REMIC II Marker Allocation
         Percentage 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 to the Holders of REMIC II
         Regular Interest AA, until the Uncertificated Balance of such REMIC II
         Regular Interest is reduced to zero;

                  (B) 2.00% of such remainder, first, to the Holders of REMIC II
         Regular Interest A-1A, REMIC II Regular Interest A-1B1, REMIC II
         Regular Interest A-1B2, REMIC II Regular Interest A-2A, REMIC II
         Regular Interest A-2B, REMIC II Regular Interest A-2C, REMIC II Regular
         Interest A-2D, REMIC II Regular Interest M-1, REMIC II Regular Interest
         M-2, REMIC II Regular Interest M-3, REMIC II Regular Interest M-4,
         REMIC II Regular Interest M-5, REMIC II Regular Interest M-6, REMIC II
         Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular
         Interest M-9, REMIC II Regular Interest M-10 and REMIC II Regular
         Interest M-11, 1% of and in the same proportion as principal payments
         are allocated to the Corresponding Certificates, until the
         Uncertificated Balances of such REMIC II Regular Interests are reduced
         to zero and second to the Holders of REMIC II Regular Interest ZZ,
         until the Uncertificated Balance of such REMIC II Regular Interest is
         reduced to zero;

                  (C) to the Holders of REMIC II Regular Interest P, 100% of the
         amounts deemed distributed on REMIC I Regular Interest P; then

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

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

                  (iv) to the Holders of REMIC II Regular Interests, in an
         amount equal to the remainder of the REMIC II Sub WAC Allocation
         Percentage of available funds for such Distribution Date after the
         distributions made pursuant to clause (ii) above, such that
         distributions of principal shall be deemed to be made to the REMIC II
         Regular Interests first, so as to keep the Uncertificated Balance of
         each REMIC II Regular Interest ending with the designation "GRP" equal
         to 0.01% of the aggregate Stated Principal Balance of the Mortgage
         Loans in the related loan group; second, to each REMIC II Regular
         Interest ending with the designation "SUB," so that the Uncertificated
         Balance of each such REMIC II Regular Interest is equal to 0.01% of the
         excess of (x) the aggregate Stated Principal Balance of the Mortgage
         Loans in the related loan group over (y) the current Certificate
         Principal Balance of the Class A Certificate in the related loan group
         (except that if any such excess is a larger number than in the
         preceding distribution period, the least amount of principal shall be
         distributed to such REMIC II Regular Interests such that the REMIC II
         Subordinated Balance Ratio is maintained); and third, any remaining
         principal to REMIC II Regular Interest XX.

                  (v) Notwithstanding the distributions described in Section
         5.01(a)(1), distributions of funds shall be made to Certificateholders
         only in accordance with Section 5.01(a)(2) through (8).

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

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group I Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event;

                  SECOND, to the Holders of the Class A-1A Certificates, the
                  Senior Interest Distribution Amount allocable to the Class
                  A-1A Certificates; and

                  THIRD, concurrently, to the Holders of the Class A-1B1, Class
                  A-1B2, Class A-2A, Class A-2B, Class A-2C and Class A-2D
                  Certificates, the Senior Interest Distribution Amount
                  allocable to each such Class, to the extent remaining unpaid
                  after the distribution of the Group IB Interest Remittance
                  Amount as set forth in Section 5.01(c)(3) below and the Group
                  II Interest Remittance Amount as set forth in Section
                  5.01(c)(4) below, on a pro rata basis, based on the
                  entitlement of each such Class.

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

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group IB Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event;

                  SECOND, to the Holders of the Class A-1B1 Certificates and
                  Class A-1B2 Certificates, the Senior Interest Distribution
                  Amount allocable to each such Class on a pro rata basis, based
                  on the entitlement of each such Class; and

                  THIRD, concurrently, to the Holders of the Class A-1A, Class
                  A-2A, Class A-2B, Class A-2C and Class A-2D Certificates, the
                  Senior Interest Distribution Amount allocable to each such
                  Class, to the extent remaining unpaid after the distribution
                  of the Group IA Interest Remittance Amount as set forth in
                  Section 5.01(c)(2) above and the Group II Interest Remittance
                  Amount as set forth in Section 5.01(c)(4) below, on a pro rata
                  basis, based on the entitlement of each such Class.

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

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group II Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event;

                  SECOND, concurrently, to the Holders of the Class A-2A, Class
                  A-2B, Class A-2C and Class A-2D Certificates, the Senior
                  Interest Distribution Amount allocable to each such Class, on
                  a pro rata basis, based on the entitlement of each such Class;
                  and

                  THIRD, concurrently, to the Holders of the Class A-1A, Class
                  A-1B1 and Class A-1B2 Certificates, the Senior Interest
                  Distribution Amount allocable to each such Class, to the
                  extent remaining unpaid after the distribution of the Group IA
                  Interest Remittance Amount as set forth in Section 5.01(c)(2)
                  above and the Group IB Interest Remittance Amount as set forth
                  in Section 5.01(c)(3) above, on a pro rata basis, based on the
                  entitlement of each such Class.

                  (5) On each Distribution Date, the Securities Administrator
         shall withdraw from the Distribution Account to the extent on deposit
         therein an amount equal to the Group IA Interest Remittance Amount,
         Group IB Interest Remittance Amount and Group II Interest Remittance
         Amount remaining after the distributions required by clauses (2), (3)
         and (4) above and make the following disbursements and transfers in the
         order of priority described below, in each case to the extent of the
         Group IA Interest Remittance Amount, Group IB Interest Remittance
         Amount and Group II Interest Remittance Amount remaining for such
         Distribution Date:

                  sequentially, to the Holders of the Class M-1, Class M-2,
                  Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
                  M-8, Class M-9, Class M-10 and Class M-11 Certificates, in
                  that order, the Interest Distribution Amount allocable to each
                  such Class.

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

                  (i) The Group IA Principal Distribution Amount shall be
         distributed in the following order of priority:

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group IA Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event to the extent not paid from the Interest
                  Remittance Amount on such Distribution Date;

                  SECOND, to the Holders of the Class A-1A Certificates, until
                  the Certificate Principal Balance of the Class A-1A
                  Certificates has been reduced to zero; and

                  THIRD, concurrently, (i) to the Holders of the Class A-1B1
                  Certificates and Class A-1B2 Certificates and (ii) to the
                  Holders of the Class A-2 Certificates, after taking into
                  account the distribution of the Group IB Principal
                  Distribution Amount as described in Section 5.01(c)(6)(ii)
                  below and the Group II Principal Distribution Amount as
                  described in Section 5.01(c)(6)(iii) below, on a pro rata
                  basis, based on the Certificate Principal Balance of each such
                  Class, until the Certificate Principal Balance of each such
                  Class has been reduced to zero; provided, however that if a
                  Sequential Trigger Event is in effect on such Distribution
                  Date, the pro rata allocation to the Class A-1B1 Certificates
                  and Class A-1B2 Certificates pursuant to this clause third
                  shall be based on the total Certificate Principal Balance of
                  the Class A-1B1 Certificates and Class A-1B2 Certificates, but
                  shall be distributed sequentially to the Class A-1B1
                  Certificates and Class A-1B2 Certificates, in that order,
                  until the Certificate Principal Balance of each such Class has
                  been reduced to zero; provided, further that the pro rata
                  allocation to the Class A-2 Certificates pursuant to this
                  clause third shall be based on the total Certificate Principal
                  Balance of the Class A-2 Certificates, but shall be
                  distributed sequentially to the Class A-2A, Class A-2B, Class
                  A-2C and Class A-2D Certificates, in that order, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero.

                  (ii) The Group IB Principal Distribution Amount shall be
         distributed in the following order of priority:

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group IB Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event to the extent not paid from the Interest
                  Remittance Amount on such Distribution Date;

                  SECOND, concurrently to the Holders of the Class A-1B1
                  Certificates and Class A-1B2 Certificates, on a pro rata basis
                  based on the Certificate Principal Balance of each such Class,
                  until the Certificate Principal Balance of each such Class has
                  been reduced to zero; provided, however that if a Sequential
                  Trigger Event is in effect on such Distribution Date, the
                  distribution to the holders of the Class A-1B1 Certificates
                  and Class A-1B2 Certificates pursuant to this clause second
                  shall be made on a sequential basis to the Class A-1B1
                  Certificates and Class A-1B2 Certificates, in that order,
                  until the Certificate Principal Balance of each such Class has
                  been reduced to zero; and

                  THIRD, concurrently, (i) to the Holders of the Class A-1A
                  Certificates and (ii) to the Holders of the Class A-2
                  Certificates, after taking into account the distribution of
                  the Group IA Principal Distribution Amount as described in
                  Section 5.01(c)(6)(i) above and the Group II Principal
                  Distribution Amount as described in Section 5.01(c)(6)(iii)
                  below, on a pro rata basis, based on the Certificate Principal
                  Balance of each such Class, until the Certificate Principal
                  Balance of each such Class has been reduced to zero; provided,
                  however that the pro rata allocation to the Class A-2
                  Certificates pursuant to this clause third shall be based on
                  the total Certificate Principal Balance of the Class A-2
                  Certificates, but shall be distributed sequentially to the
                  Class A-2A, Class A-2B, Class A-2C and Class A-2D
                  Certificates, in that order, until the Certificate Principal
                  Balance of each such Class has been reduced to zero.

                  (iii) The Group II Principal Distribution Amount shall be
         distributed in the following order of priority:

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group II Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event to the extent not paid from the Interest
                  Remittance Amount on such Distribution Date;

                  SECOND, sequentially, to the Holders of the Class A-2A Class
                  A-2B, Class A-2C and Class A-2D Certificates, in that order,
                  until the Certificate Principal Balance of each such Class has
                  been reduced to zero; and

                  THIRD, concurrently, (i) to the Holders of the Class A-1A
                  Certificates and (ii) to the Holders of the Class A-1B1
                  Certificates and Class A-1B2 Certificates after taking into
                  account the distribution of the Group IA Principal
                  Distribution Amount as described in Section 5.01(c)(6)(i)
                  above and the Group IB Principal Distribution Amount as
                  described in Section 5.01(c)(6)(ii) above, on a pro rata basis
                  based on the Certificate Principal Balance of each such Class,
                  until the Certificate Principal Balance of each such Class has
                  been reduced to zero; provided, however that if a Sequential
                  Trigger Event is in effect on such Distribution Date, the pro
                  rata allocation to the Class A-1B1 Certificates and Class
                  A-1B2 Certificates pursuant to this clause third shall be
                  based on the total Certificate Principal Balance of the Class
                  A-1B1 Certificates and Class A-1B2 Certificates, but shall be
                  distributed sequentially to the Class A-1B1 Certificates and
                  Class A-1B2 Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero.

                  (iv) The Group IA Principal Distribution Amount, Group IB
         Principal Distribution Amount and Group II Principal Distribution
         Amount remaining after distributions pursuant to Sections
         5.01(c)(6)(i), (ii) and (iii) above shall be distributed in the
         following order of priority:

                  sequentially, to the Holders of the Class M-1, Class M-2,
                  Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
                  M-8, Class M-9, Class M-10 and Class M-11 Certificates, in
                  that order, until the Certificate Principal Balance of each
                  such Class has been reduced to zero.

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

                  (i) The Group IA Principal Distribution Amount shall be
         distributed in the following order of priority:

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group IA Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event to the extent not paid from the Interest
                  Remittance Amount on such Distribution Date;

                  SECOND, to the Holders of the Class A-1A Certificates, the
                  Class A-1A Principal Distribution Amount, until the
                  Certificate Principal Balance of such Class has been reduced
                  to zero; and

                  THIRD, concurrently, (i) to the holders of the Class A-1B1
                  Certificates and Class A-1B2 Certificates and (ii) to the
                  holders of the Class A-2 Certificates, after taking into
                  account the distribution of the Group IB Principal
                  Distribution Amount on such Distribution Date pursuant to
                  Section 5.01(c)(7)(ii) below and the Group II Principal
                  Distribution Amount pursuant to Section 5.01(c)(7)(iii) below
                  on such Distribution Date, on a pro rata basis based on the
                  amount required to satisfy the Targeted Credit Enhancement
                  Test with respect to Class A-1B1 Certificates and Class A-1B2
                  Certificates on the one hand and the Class A-2 Certificates on
                  the other; provided, however that if a Sequential Trigger
                  Event is in effect on such Distribution Date, the distribution
                  to the Class A-1B1 Certificates and Class A-1B2 Certificates
                  pursuant to this clause third shall be made on a sequential
                  basis to the Class A-1B1 Certificates and Class A-1B2
                  Certificates, in that order; provided, further that the
                  distribution to the Class A-2 Certificates pursuant to this
                  clause third shall be made on a sequential basis to the Class
                  A-2A, Class A-2B, Class A-2C and Class A-2D Certificates, in
                  that order.

                  (ii) The Group IB Principal Distribution Amount shall be
         distributed in the following order of priority:

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group IB Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event to the extent not paid from the Interest
                  Remittance Amount on such Distribution Date;

                  SECOND, concurrently to the Holders of the Class A-1B1
                  Certificates and Class A-1B2 Certificates, on a pro rata basis
                  based on the Certificate Principal Balance of each such Class,
                  the Class A-1B Principal Distribution Amount until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero; provided, however that if a Sequential
                  Trigger Event is in effect on such Distribution Date, the
                  distribution to the Holders of the Class A-1B1 Certificates
                  and Class A-1B2 Certificates pursuant to this clause second
                  shall be made on a sequential basis to the Class A-1B1
                  Certificates and Class A-1B2 Certificates, in that order,
                  until the Certificate Principal Balance of each such Class has
                  been reduced to zero; and

                  THIRD, concurrently, (i) to the holders of the Class A-1A
                  Certificates and (ii) to the holders of the Class A-2
                  Certificates, after taking into account the distribution of
                  the Group IA Principal Distribution Amount on such
                  Distribution Date pursuant to Section 5.01(c)(7)(i) above and
                  the Group II Principal Distribution Amount on such
                  Distribution Date the Group II Principal Distribution Amount
                  pursuant to Section 5.01(c)(7)(iii) below, on a pro rata basis
                  based on the amount required to satisfy the Targeted Credit
                  Enhancement Test with respect to Class A-1A Certificates on
                  the one hand and the Class A-2 Certificates on the other;
                  provided, however that the distribution to the Class A-2
                  Certificates pursuant to this clause third shall be based on a
                  sequential basis to the Class A-2A, Class A-2B, Class A-2C and
                  Class A-2D Certificates, in that order.

                  (iii) The Group II Principal Distribution Amount shall be
         distributed in the following order of priority:

                  FIRST, to the Supplemental Interest Trust, an amount equal to
                  the Group II Allocation Percentage of (i) any Net Swap Payment
                  owed to the Swap Provider and (ii) any Swap Termination
                  Payment owed to the Swap Provider not due to a Swap Provider
                  Trigger Event to the extent not paid from the Interest
                  Remittance Amount on such Distribution Date;

                  SECOND, sequentially, to the Holders of the Class A-2A, Class
                  A-2B, Class A-2C and Class A-2D Certificates, in that order,
                  the Class A-2 Principal Distribution Amount, until the
                  Certificate Principal Balance of each such Class has been
                  reduced to zero; and

                  THIRD, concurrently, (i) to the holders of the Class A-1A
                  Certificates and (ii) to the holders of the Class A-1B1
                  Certificates and Class A-1B2 Certificates, after taking into
                  account the distribution of the Group IA Principal
                  Distribution Amount on such Distribution Date pursuant to
                  Section 5.01(c)(7)(i) above and the Group IB Principal
                  Distribution Amount on such Distribution Date pursuant to
                  Section 5.01(c)(7)(ii) above, on a pro rata basis based on the
                  amount required to satisfy the Target Credit Enhancement Test
                  with respect to the A-1A Certificates on the one hand and the
                  Class A-1B1 Certificates and Class A-1B2 Certificates on the
                  other; provided, however that if a Sequential Trigger Event is
                  in effect on such Distribution Date, the distribution to the
                  Class A-1B1 Certificates and Class A-1B2 Certificates pursuant
                  to this clause third shall be made on a sequential basis to
                  the Class A-1B1 Certificates and Class A-1B2 Certificates, in
                  that order.

                  (iv) The Principal Distribution Amount remaining after
         distributions pursuant to Sections 5.01(c)(7)(i), (ii) and (iii) above
         shall be distributed in the following order of priority:

                  FIRST, to the Holders of the Class M-1 Certificates, the
                  lesser of (x) the remaining Principal Distribution Amount and
                  (y) the Class M-1 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class M-1 Certificates
                  has been reduced to zero;

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

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

                  FOURTH, to the Holders of the Class M-4 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above and to the Holders of
                  the Class M-3 Certificates under clause third above, and (y)
                  the Class M-4 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class M-4 Certificates
                  has been reduced to zero;

                  FIFTH, to the Holders of the Class M-5 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above and to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, and (y) the Class M-5 Principal Distribution Amount,
                  until the Certificate Principal Balance of the Class M-5
                  Certificates has been reduced to zero;

                  SIXTH, to the Holders of the Class M-6 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above and to the Holders of the Class M-5 Certificates under
                  clause fifth above, and (y) the Class M-6 Principal
                  Distribution Amount, until the Certificate Principal Balance
                  of the Class M-6 Certificates has been reduced to zero;

                  SEVENTH, to the Holders of the Class M-7 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, to the Holders of the Class M-5 Certificates under
                  clause fifth above and to the Holders of the Class M-6
                  Certificates under clause sixth above, and (y) the Class M-7
                  Principal Distribution Amount, until the Certificate Principal
                  Balance of the Class M-7 Certificates has been reduced to
                  zero;

                  EIGHTH, to the Holders of the Class M-8 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, to the Holders of the Class M-5 Certificates under
                  clause fifth above, to the Holders of the Class M-6
                  Certificates under clause sixth above and to the Holders of
                  the Class M-7 Certificates under clause seventh above, and (y)
                  the Class M-8 Principal Distribution Amount, until the
                  Certificate Principal Balance of the Class M-8 Certificates
                  has been reduced to zero;

                  NINTH, to the Holders of the Class M-9 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, to the Holders of the Class M-5 Certificates under
                  clause fifth above, to the Holders of the Class M-6
                  Certificates under clause sixth above, to the Holders of the
                  Class M-7 Certificates under clause seventh above and to the
                  Holders of the Class M-8 Certificates under clause eighth
                  above, and (y) the Class M-9 Principal Distribution Amount,
                  until the Certificate Principal Balance of the Class M-9
                  Certificates has been reduced to zero;

                  TENTH, to the Holders of the Class M-10 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, to the Holders of the Class M-5 Certificates under
                  clause fifth above, to the Holders of the Class M-6
                  Certificates under clause sixth above, to the Holders of the
                  Class M-7 Certificates under clause seventh above, to the
                  Holders of the Class M-8 Certificates under clause eighth
                  above and to the Holders of the Class M-9 Certificates under
                  clause ninth above, and (y) the Class M-10 Principal
                  Distribution Amount, until the Certificate Principal Balance
                  of the Class M-10 Certificates has been reduced to zero; and

                  ELEVENTH, to the Holders of the Class M-11 Certificates, the
                  lesser of (x) the excess of (i) the remaining Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class M-1 Certificates under
                  clause first above, to the Holders of the Class M-2
                  Certificates under clause second above, to the Holders of the
                  Class M-3 Certificates under clause third above, to the
                  Holders of the Class M-4 Certificates under clause fourth
                  above, to the Holders of the Class M-5 Certificates under
                  clause fifth above, to the Holders of the Class M-6
                  Certificates under clause sixth above, to the Holders of the
                  Class M-7 Certificates under clause seventh above, to the
                  Holders of the Class M-8 Certificates under clause eighth
                  above, to the Holders of the Class M-9 Certificates under
                  clause ninth above and to the Holders of the Class M-10
                  Certificates under clause tenth above, and (y) the Class M-11
                  Principal Distribution Amount, until the Certificate Principal
                  Balance of the Class M-11 Certificates has been reduced to
                  zero;

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

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

                  (ii) sequentially, to the Holders of the Class M-1, Class M-2,
         Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
         M-9, Class M-10 and Class M-11 Certificates, in that order, in an
         amount equal to the Interest Carry Forward Amount allocable to each
         such Class;

                  (iii) sequentially, to the Holders of the Class M-1, Class
         M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
         Class M-9, Class M-10 and Class M-11 Certificates, in that order, in an
         amount equal to the Allocated Realized Loss Amount allocable to each
         such Class;

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

                  (v) sequentially, to the Holders of the Class M-1, Class M-2,
         Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
         M-9, Class M-10 and Class M-11 Certificates, in that order, in an
         amount equal to such certificates' share of any Prepayment Interest
         Shortfalls on the Mortgage Loans to the extent not covered by payments
         pursuant to Sections 3.22 or Section 4.18 of this Agreement and any
         Relief Act Interest Shortfall, in each case that were allocated to such
         Class for such Distribution Date and for any prior Distribution Date,
         to the extent not previously reimbursed pursuant to Section 1.02;

                  (vi) to the Reserve Fund, the amount by which the Net WAC Rate
         Carryover Amounts, if any, with respect to the Offered Certificates
         exceeds the amount in the Reserve Fund that was not distributed on
         prior Distribution Dates;

                  (vii) to the Supplemental Interest Trust, an amount equal to
         any Swap Termination Payment owed to the Swap Provider due to a Swap
         Provider Trigger Event pursuant to the Swap Agreement;

                  (viii) to the Holders of the Class CE Certificates the
         Interest Distribution Amount and any Overcollateralization Reduction
         Amount for such Distribution Date; and

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

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

         On each Distribution Date, after making the distributions of the
Available Distribution Amount as set forth above, the Securities Administrator
will first, withdraw from the Reserve Fund all income from the investment of
funds in the Reserve Fund and distribute such amount to the Holders of the Class
CE Certificates, and second, withdraw from the Reserve Fund, to the extent of
amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover
Amount for such Distribution Date and distribute such amount first, concurrently
to the Class A Certificates, on a PRO RATA basis; second, to the Class M-1
Certificates, third, to the Class M-2 Certificates, fourth, to the Class M-3
Certificates, fifth, to the Class M-4 Certificates, sixth, to the Class M-5
Certificates, seventh, to the Class M-6 Certificates, eighth, to the Class M-7
Certificates, ninth, to the Class M-8 Certificates, tenth, to the Class M-9
Certificates, eleventh, to the Class M-10 Certificates and twelfth, to the Class
M-11 Certificates, in each case to the extent to the extent any Net WAC Rate
Carryover Amount is allocable to each such Class.

         (d) (i) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, the Extra Principal Distribution Amount
shall be distributed in the following order of priority;

         FIRST, concurrently, to the holders of the Class A Certificates as
         follows:

                  (1) for each Distribution Date on which a Sequential Trigger
         Event is not in effect for such Distribution Date, concurrently to the
         Holders of the Class A Certificates, on a pro rata basis, based on the
         Certificate Principal Balance of each such Class, until the Certificate
         Principal Balance of each such Class has been reduced to zero;
         provided, however that the pro rata allocation to the Class A-2A, Class
         A-2B, Class A-2C and Class A-2D Certificates pursuant to this clause
         shall be based on the total Certificate Principal Balance of the Class
         A-2A, Class A-2B, Class A-2C and Class A-2D Certificates, but shall be
         distributed to the Class A-2A, Class A-2B, Class A-2C and Class A-2D
         Certificates on a sequential basis, in that order, until the
         Certificate Principal Balance of each such Class has been reduced to
         zero; and

                  (2) for each Distribution Date on which a Sequential Trigger
         Event is in effect for such Distribution Date, concurrently to the
         Holders of the Class A Certificates, on a pro rata basis, based on the
         Certificate Principal Balance of each such Class, until the Certificate
         Principal Balance of each such Class has been reduced to zero;
         provided, however that the pro rata allocation to the Class A-1B1
         Certificates and Class A-1B2 Certificates pursuant to this clause shall
         be based on the total Certificate Principal Balance of the Class A-1B1
         Certificates and Class A-1B2 Certificates, but shall be distributed to
         the Class A-1B1 Certificates and the Class A-1B2 Certificates on a
         sequential basis, in that order, until the Certificate Principal
         Balances of the Class A-1B1 Certificates and Class A-1B2 Certificates
         have been reduced to zero; provided, further that the pro rata
         allocation to the Class A-2A, Class A-2B, Class A-2C and Class A-2D
         Certificates pursuant to this clause shall be based on the total
         Certificate Principal Balance of the Class A-2A, Class A-2B, Class A-2C
         and Class A-2D Certificates, but shall be distributed to the Class
         A-2A, Class A-2B, Class A-2C and Class A-2D Certificates on a
         sequential basis, in that order, until the Certificate Principal
         Balance of each such Class has been reduced to zero.

         SECOND, sequentially, to the Holders of the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class
M-10 and Class M-11 Certificates, in that order, until the Certificate Principal
Balance of each such Class has been reduced to zero.

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

                  FIRST, concurrently to the Class A Certificates as follows:

                           (1) the lesser of (x) the Group IA Principal
                  Distribution Amount and (y) the Class A-1A Principal
                  Distribution Amount, shall be distributed to the Holders of
                  the Class A-1A Certificates, until the Certificate Principal
                  Balance of the Class A-1A Certificates has been reduced to
                  zero;

                           (2) the lesser of (x) the Group IB Principal
                  Distribution Amount and (y) the Class A-1B Principal
                  Distribution Amount, shall be distributed concurrently to the
                  Holders of the Class A-1B1 Certificates and Class A-1B2
                  Certificates on a pro rata basis based on the Certificate
                  Principal Balance of each such Class until the Certificate
                  Principal Balance of each such Class has been reduced to zero;
                  provided, however that if a Sequential Trigger Event is in
                  effect on such Distribution Date, the distribution to the
                  Holders of the Class A-1B1 Certificates and Class A-1B2
                  Certificates pursuant to this clause first shall be made on a
                  sequential basis to the Class A-1B1 Certificates and Class
                  A-1B2 Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;
                  and

                           (3) the lesser of (x) the Group II Principal
                  Distribution Amount and (y) the Class A-2 Principal
                  Distribution Amount, shall be distributed sequentially to the
                  Holders of the Class A-2A, Class A-2B, Class A-2C and Class
                  A-2D Certificates, in that order, until the Certificate
                  Principal Balance of each such Class has been reduced to zero;

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

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

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

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

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

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

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

                  NINTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(d)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(d)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(d)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(d)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(d)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(d)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(d)(ii) and to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(d)(ii), and (y)
                  the Class M-8 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class M-8 Certificates,
                  until the Certificate Principal Balance of such Class has been
                  reduced to zero;

                  TENTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(d)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(d)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(d)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(d)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(d)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(d)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(d)(ii), to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(d)(ii) and to
                  the Holders of the Class M-8 Certificates pursuant to clause
                  ninth of this Section 5.01(d)(ii), and (y) the Class M-9
                  Principal Distribution Amount, shall be distributed to the
                  Holders of the Class M-9 Certificates, until the Certificate
                  Principal Balance of such Class has been reduced to zero;

                  ELEVENTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(d)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(d)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(d)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(d)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(d)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(d)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(d)(ii), to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(d)(ii), to the
                  Holders of the Class M-8 Certificates pursuant to clause ninth
                  of this Section 5.01(d)(ii) and to the Holders of the Class
                  M-9 Certificates pursuant to clause tenth of this Section
                  5.01(d)(ii), and (y) the Class M-10 Principal Distribution
                  Amount, shall be distributed to the Holders of the Class M-10
                  Certificates, until the Certificate Principal Balance of such
                  Class has been reduced to zero; and

                  TWELFTH, the lesser of (x) the excess of (i) the Principal
                  Distribution Amount over (ii) the sum of the amounts
                  distributed to the Holders of the Class A Certificates
                  pursuant to clause first of this Section 5.01(d)(ii), to the
                  Holders of the Class M-1 Certificates pursuant to clause
                  second of this Section 5.01(d)(ii), to the Holders of the
                  Class M-2 Certificates pursuant to clause third of this
                  Section 5.01(d)(ii), to the Holders of the Class M-3
                  Certificates pursuant to clause fourth of this Section
                  5.01(d)(ii), to the Holders of the Class M-4 Certificates
                  pursuant to clause fifth of this Section 5.01(d)(ii), to the
                  Holders of the Class M-5 Certificates pursuant to clause sixth
                  of this Section 5.01(d)(ii), to the Holders of the Class M-6
                  Certificates pursuant to clause seventh of this Section
                  5.01(d)(ii), to the Holders of the Class M-7 Certificates
                  pursuant to clause eighth of this Section 5.01(d)(ii), to the
                  Holders of the Class M-8 Certificates pursuant to clause ninth
                  of this Section 5.01(d)(ii), to the Holders of the Class M-9
                  Certificates pursuant to clause tenth of this Section
                  5.01(d)(ii) and to the Holders of the Class M-10 Certificates
                  pursuant to clause eleventh of this Section 5.01(d)(ii), and
                  (y) the Class M-11 Principal Distribution Amount, shall be
                  distributed to the Holders of the Class M-11 Certificates,
                  until the Certificate Principal Balance of such Class has been
                  reduced to zero.

         (e) As described in Section 5.01(c)(2), (3), (4), (6) and (7) above,
Net Swap Payments and Swap Termination Payments (other than Swap Termination
Payments resulting from a Swap Provider Trigger Event) payable by the
Supplemental Interest Trust to the Swap Provider pursuant to the Swap Agreement
shall be deducted from the Interest Remittance Amount, and to the extent of any
such remaining amounts due, from the Principal Remittance Amount, prior to any
distributions to the Certificateholders. On each Distribution Date, such amounts
will be remitted to the Supplemental Interest Trust, first to make any Net Swap
Payment owed to the Swap Provider pursuant to the Swap Agreement for such
Distribution Date, and second to make any Swap Termination Payment (not due to a
Swap Provider Trigger Event) owed to the Swap Provider pursuant to the Swap
Agreement for such Distribution Date. Any Swap Termination Payment triggered by
a Swap Provider Trigger Event owed to the Swap Provider pursuant to the Swap
Agreement will be subordinated to distributions to the Holders of the Offered
Certificates and shall be paid pursuant to Section 5.01(c)(8)(vii).

         (f) On each Distribution Date, to the extent required, following the
distribution of the Net Monthly Excess Cashflow and withdrawals from the Reserve
Fund, the Securities Administrator will withdraw any amounts in the Supplemental
Interest Trust and distribute such amounts in the following order of priority:

         FIRST, to the Swap Provider, any Net Swap Payment owed to the Swap
Provider pursuant to the Swap Agreement for such Distribution Date;

         SECOND, to the Swap Provider, any Swap Termination Payment owed to the
Swap Provider not due to a Swap Provider Trigger Event pursuant to the Swap
Agreement;

         THIRD, concurrently, to each Class of Class A Certificates, the related
Senior Interest Distribution Amount remaining undistributed after the
distributions of the Group IA Interest Remittance Amount, the Group IB Interest
Remittance Amount and the Group II Interest Remittance Amount, on a PRO RATA
basis based on such respective remaining Senior Interest Distribution Amounts;

         FOURTH, sequentially, to the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, the related Interest Distribution Amount and
Interest Carry Forward Amount, to the extent remaining undistributed after the
distributions of the Group IA Interest Remittance Amount, the Group IB Interest
Remittance Amount, the Group II Interest Remittance Amount and the Net Monthly
Excess Cashflow;

         FIFTH, concurrently, to each Class of Class A Certificates, the related
Net WAC Rate Carryover Amount, to the extent remaining undistributed after
distributions are made from the Reserve Fund, on a PRO RATA basis based on such
respective Net WAC Rate Carryover Amounts remaining;

         SIXTH, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11
Certificates, in that order, the related Net WAC Rate Carryover Amount, to the
extent remaining undistributed after distributions are made from the Reserve
Fund;

         SEVENTH, to the holders of the Class or Classes of Certificates then
entitled to receive distributions in respect of principal, in an amount
necessary to maintain the Required Overcollateralization Amount after taking
into account distributions made pursuant to Section 5.01(c)(8)(i) above;

         EIGHTH, sequentially to the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11
Certificates, in that order, in each case up to the related Allocated Realized
Loss Amount related to such Certificates for such Distribution Date remaining
undistributed after distribution of the Net Monthly Excess Cashflow;

         NINTH, to the Swap Provider, an amount equal to any Swap Termination
Payment owed to the Swap Provider due to a Swap Provider Trigger Event pursuant
to the Swap Agreement; and

         TENTH, to the Class CE Certificates, any remaining amounts.

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

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

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

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

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

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

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

         Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust by the Securities Administrator and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 5.01(j) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Securities Administrator shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Securities Administrator shall, directly
or through an agent, mail a final notice to the remaining non-tendering
Certificateholders concerning surrender of their Certificates but shall continue
to hold any remaining funds for the benefit of non-tendering Certificateholders.
The costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in such trust fund.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Securities Administrator shall pay to the
Depositor all such amounts, and all rights of non-tendering Certificateholders
in or to such amounts shall thereupon cease. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust by the Securities
Administrator as a result of such Certificateholder's failure to surrender its
Certificate(s) on the final Distribution Date for final payment thereof in
accordance with this Section 5.01(j). Any such amounts held in trust by the
Securities Administrator shall be held uninvested in an Eligible Account.

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

         SECTION 5.02. Statements to Certificateholders.

         On each Distribution Date, the Securities Administrator (based on the
information set forth in the Servicer Reports for such Distribution Date and
information provided by the Trustee or the Swap Provider under the Swap
Agreement with respect to payments made pursuant to the Swap Agreement) shall
make available to each Holder of the Certificates, a statement as to the
distributions made on such Distribution Date setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Certificates of each Class allocable to
         principal, and the amount of the distribution made on such Distribution
         Date to the Holders of the Class P Certificates allocable to Prepayment
         Charges;

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

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

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

                  (v) Reserved;

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

                  (vii) the number and aggregate unpaid principal balance of
         Mortgage Loans (a) delinquent thirty (30) to fifty-nine (59) days, (b)
         delinquent sixty (60) to eighty-nine (89) days, (c) delinquent ninety
         (90) or more days, in each case, as of the last day of the preceding
         calendar month, (d) as to which foreclosure proceedings have been
         commenced and (e) with respect to which the related Mortgagor has filed
         for protection under applicable bankruptcy laws, with respect to whom
         bankruptcy proceedings are pending or with respect to whom bankruptcy
         protection is in force;

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

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

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

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

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

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

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

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

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

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

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

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

                  (xx) the Overcollateralization Reduction Amount, if any, for
         such Distribution Date;

                  (xxi) the Net WAC Rate Carryover Amount, if any, for such
         Distribution Date;

                  (xxii) the Net WAC Rate Carryover Amount, if any, outstanding
         after reimbursements therefor on such Distribution Date;

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

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

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

                  (xxvi) the amount of any deposit to the Reserve Fund pursuant
         to Section 5.01(c)(8)(vi);

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

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

                  (xxix) the Aggregate Loss Severity Percentage; and

                  (xxx) amounts payable by or to the Supplemental Interest Trust
         in respect of the Swap Agreement.

         The Securities Administrator will make such statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to the Certificateholders and the Rating Agencies
via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at
http:\\www.ctslink.com and assistance in using the website can be obtained by
calling the Securities Administrator's customer service desk at 1-301-815-6600.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Securities Administrator shall have the
right to change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes.

         In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall be expressed as a dollar amount per Single
Certificate of the relevant Class.

         Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish upon request to each Person who at
any time during the calendar year was a Holder of a Regular Certificate a
statement containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such person was a Certificateholder. Such obligation of the Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time are
in force.

         Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish upon request to each Person who at
any time during the calendar year was a Holder of a Residual Certificate a
statement setting forth the amount, if any, actually distributed with respect to
the Residual Certificates, as appropriate, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.

         The Securities Administrator shall, upon request, furnish to each
Certificateholder during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, as applicable, or otherwise
with respect to the purposes of this Agreement, all such reports or information
to be provided at the expense of the Certificateholder, in accordance with such
reasonable and explicit instructions and directions as the Certificateholder may
provide.

         On each Distribution Date the Securities Administrator shall provide
Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each
Class of Certificates as of such Distribution Date, using a format and media
mutually acceptable to the Securities Administrator and Bloomberg.

         SECTION 5.03. Servicer Reports; P&I Advances.

         (a) (i) With respect to Wells Fargo, on the 18th calendar day of each
month, and if the 18th calendar day is not a Business Day, the immediately
following Business Day, Wells Fargo shall deliver to the Master Servicer and the
Securities Administrator by telecopy or electronic mail (or by such other means
as the related Servicer, the Master Servicer and the Securities Administrator
may agree from time to time) a remittance report containing such information
with respect to the related Mortgage Loans and the related Distribution Date as
is reasonably available to the related Servicer as the Master Servicer or the
Securities Administrator may reasonably require so as to enable the Master
Servicer to master service the related Mortgage Loans and oversee the servicing
by the related Servicer and the Securities Administrator to fulfill its
obligations hereunder with respect to securities and tax reporting.

         (b) The amount of P&I Advances to be made by the related Servicer on
any Distribution Date shall equal, subject to Section 5.03(d), (i) with respect
to the Mortgage Loans other than the Simple Interest Mortgage Loans, the
aggregate amount of Monthly Payments (net of the related Servicing Fees), due
during the related Due Period in respect of the Mortgage Loans serviced by such
Servicer, which Monthly Payments were delinquent as of the close of business on
the related Determination Date, (ii) with respect to the Simple Interest
Mortgage Loans, thirty (30) days' interest (net of the related Servicing Fees)
on each such Simple Interest Mortgage Loan for which the Monthly Payment was due
during the related Due Period which Monthly Payments were delinquent as of the
close of business on the related Determination Date and (iii) with respect to
each REO Property, which was acquired during or prior to the related Prepayment
Period and as to which an REO Disposition did not occur during the related
Prepayment Period, an amount equal to the excess, if any, of the REO Imputed
Interest on such REO Property for the most recently ended calendar month, over
the net income from such REO Property deposited in the related Collection
Account pursuant to Section 3.21 of this Agreement for distribution on such
Distribution Date; provided, however, no Servicer shall be required to make P&I
Advances with respect to Relief Act Interest Shortfalls, or with respect to
Prepayment Interest Shortfalls in excess of its obligations under Section 3.22
or under the Interim Servicing Agreement. For purposes of the preceding
sentence, the Monthly Payment on each Balloon Mortgage Loan with a delinquent
Balloon Payment is equal to the assumed monthly payment that would have been due
on the related Due Date based on the original principal amortization schedule
for such Balloon Mortgage Loan.

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

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

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

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

         SECTION 5.04. Allocation of Realized Losses.

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

         (b) All Realized Losses on the Mortgage Loans allocated to any REMIC I
Regular Interest pursuant to Section 5.04(c) on the Mortgage Loans shall be
allocated by the Securities Administrator on each Distribution Date as follows:
FIRST, to Net Monthly Excess Cashflow; SECOND, to the Class CE Certificates and
to Net Swap Payments received from the Swap Provider under the Swap Agreement
for that purpose; THIRD, to the Class M-11 Certificates until the Certificate
Principal Balance of the Class M-11 Certificates has been reduced to zero,
fourth, to the Class M-10 Certificates until the Certificate Principal Balance
of the Class M-10 Certificates has been reduced to zero, FIFTH, to the Class M-9
Certificates, until the Certificate Principal Balance of the Class M-9
Certificates, has been reduced to zero, SIXTH, to the Class M-8 Certificates,
until the Certificate Principal Balance of the Class M-8 Certificates has been
reduced to zero; SEVENTH, to the Class M-7 Certificates, until the Certificate
Principal Balance of the Class M-7 Certificates has been reduced to zero;
EIGHTH, to the Class M-6 Certificates, until the Certificate Principal Balance
of the Class M-6 Certificates has been reduced to zero; NINTH, to the Class M-5
Certificates, until the Certificate Principal Balance of the Class M-5
Certificates has been reduced to zero; TENTH, to the Class M-4 Certificates,
until the Certificate Principal Balance of the Class M-4 Certificates has been
reduced to zero; ELEVENTH, to the Class M-3 Certificates, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to zero;
TWELFTH, to the Class M-2 Certificates, until the Certificate Principal Balance
of the Class M-2 Certificates has been reduced to zero; and THIRTEENTH, to the
Class M-1 Certificates, until the Certificate Principal Balance of the Class M-1
Certificates has been reduced to zero. All Realized Losses to be allocated to
the Certificate Principal Balances of all Classes on any Distribution Date shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.

         Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
CE Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 5.01(c)(8)(viii). No allocations of any Realized
Losses shall be made to the Certificate Principal Balances of the Class A
Certificates or Class P Certificates.

         As used herein, an allocation of a Realized Loss on a "PRO RATA basis"
among two or more specified Classes of Certificates means an allocation on a PRO
RATA basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date. All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the, Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.

         In addition, in the event that a Servicer receives any Subsequent
Recoveries with respect to a Mortgage Loan serviced by it, the related Servicer
shall deposit such funds into the related Collection Account pursuant to Section
3.08. If, after taking into account such Subsequent Recoveries, and any
Subsequent Recoveries received by Countrywide, the amount of a Realized Loss is
reduced, the amount of such Subsequent Recoveries will be applied to increase
the Certificate Principal Balance of the Class of Subordinate Certificates with
the highest payment priority to which Realized Losses have been allocated, but
not by more than the amount of Realized Losses previously allocated to that
Class of Subordinate Certificates pursuant to this Section 5.04 and not
previously reimbursed to such Class of Subordinate Certificates with Net Monthly
Excess Cashflow pursuant to Section 5.01(c)(8). The amount of any remaining
Subsequent Recoveries will be applied to sequentially increase the Certificate
Principal Balance of the Subordinate Certificates, beginning with the Class of
Subordinate Certificates with the next highest payment priority, up to the
amount of such Realized Losses previously allocated to such Class of Subordinate
Certificates pursuant to this Section 5.04 and not previously reimbursed to such
Class of Subordinate Certificates with Net Monthly Excess Cashflow pursuant to
Section 5.01(c)(8)(iii). Holders of such Certificates will not be entitled to
any payment in respect of current interest on the amount of such increases for
any Interest Accrual Period preceding the 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.

         (i) All Realized Losses on the Group IA Mortgage Loans shall be
allocated on each Distribution Date first, to REMIC I Regular Interest A-I until
the Uncertificated Balance of such REMIC I Regular Interest has been reduced to
zero and second, to REMIC I Regular Interest I-1-A through REMIC I Regular
Interest I-46-B, starting with the lowest numerical denomination until such
REMIC I Regular Interest has been reduced to zero, provided that, for REMIC I
Regular Interests with the same numerical denomination, such Realized Losses
shall be allocated PRO RATA between such REMIC I Regular Interests. All Realized
Losses on the Group IB Mortgage Loans shall be allocated on each Distribution
Date first, to REMIC I Regular Interest A-II until the Uncertificated Balance of
such REMIC I Regular Interest has been reduced to zero and second, to REMIC I
Regular Interest II-1-A through REMIC I Regular Interest II-46-B, starting with
the lowest numerical denomination until such REMIC I Regular Interest has been
reduced to zero, provided that, for REMIC I Regular Interests with the same
numerical denomination, such Realized Losses shall be allocated PRO RATA between
such REMIC I Regular Interests. All Realized Losses on the Group II Mortgage
Loans shall be allocated on each Distribution Date first, to REMIC I Regular
Interest A-III until the Uncertificated Balance of such REMIC I Regular Interest
has been reduced to zero and second, to REMIC I Regular Interest III-1-A through
REMIC I Regular Interest III-46-B, starting with the lowest numerical
denomination until such REMIC I Regular Interest has been reduced to zero,
provided that, for REMIC I Regular Interests with the same numerical
denomination, such Realized Losses shall be allocated PRO RATA between such
REMIC I Regular Interests.

         (ii) The REMIC II Marker Allocation Percentage of all Realized Losses
on the Mortgage Loans shall be allocated by the Trustee, based solely on the
instructions of the Securities Administrator, on each Distribution Date to the
following REMIC II Regular Interests in the specified percentages, as follows:
first, to Uncertificated Interest payable to the REMIC II Regular Interest AA
and REMIC II Regular Interest ZZ up to an aggregate amount equal to the REMIC II
Interest Loss Allocation Amount, 98.00% and 2.00%, respectively; second, to the
Uncertificated Balances of the REMIC II Regular Interest AA and REMIC II Regular
Interest ZZ up to an aggregate amount equal to the REMIC II Principal Loss
Allocation Amount, 98.00% and 2.00%, respectively; third, to the Uncertificated
Balances of REMIC II Regular Interest AA, REMIC II Regular Interest M-11 and
REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC II Regular Interest M-11 has been reduced to
zero; fourth, to the Uncertificated Balances of REMIC II Regular Interest AA,
REMIC II Regular Interest M-10 and REMIC II Regular Interest ZZ, 98.00%, 1.00%
and 1.00%, respectively, until the Uncertificated Balance of REMIC II Regular
Interest M-10 has been reduced to zero; fifth, to the Uncertificated Balances of
REMIC II Regular Interest AA, REMIC II Regular Interest M-9 and REMIC II Regular
Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC II Regular Interest M-9 has been reduced to zero; sixth, to the
Uncertificated Balances of REMIC II Regular Interest AA, REMIC II Regular
Interest M-8 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest M-8
has been reduced to zero; seventh, to the Uncertificated Balances of REMIC II
Regular Interest AA, REMIC II Regular Interest M-7 and REMIC II Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of
REMIC II Regular Interest M-7 has been reduced to zero; eighth, to the
Uncertificated Balances of REMIC II Regular Interest AA, REMIC II Regular
Interest M-6 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest M-6
has been reduced to zero; ninth, to the Uncertificated Balances of REMIC II
Regular Interest AA, REMIC II Regular Interest M-5 and REMIC II Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of
REMIC II Regular Interest M-5 has been reduced to zero; tenth, to the
Uncertificated Balances of REMIC II Regular Interest AA, REMIC II Regular
Interest M-4 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest M-4
has been reduced to zero; eleventh, to the Uncertificated Balances of REMIC II
Regular Interest AA, REMIC II Regular Interest M-3 and REMIC II Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of
REMIC II Regular Interest M-3 has been reduced to zero; twelfth, to the
Uncertificated Balances of REMIC II Regular Interest AA, REMIC II Regular
Interest M-2 and REMIC II Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC II Regular Interest M-2
has been reduced to zero; and thirteenth, to the Uncertificated Balances of
REMIC II Regular Interest AA, REMIC II Regular Interest M-1 and REMIC II Regular
Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC II Regular Interest M-1 has been reduced to zero.

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

         SECTION 5.05. Compliance with Withholding Requirements.

         Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount that the Trustee reasonably believes are applicable under the
Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Securities Administrator does withhold any amount
from interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Securities
Administrator shall indicate the amount withheld to such Certificateholders.

         SECTION 5.06. Reports Filed with Securities and Exchange Commission.

         The Depositor shall prepare or cause to be prepared the initial current
report on Form 8-K. Within fifteen (15) days after each Distribution Date, the
Securities Administrator shall, in accordance with industry standards, file with
the Commission via the Electronic Data Gathering and Retrieval System ("EDGAR"),
a Form 8-K (or other comparable Form containing the same or comparable
information or other information mutually agreed upon) with a copy of the
statement to be furnished to the Certificateholders for such Distribution Date
as an exhibit thereto. Prior to January 30, 2006, the Securities Administrator
shall, in accordance with industry standards, file a Form 15 Suspension Notice
with respect to the Trust Fund, if applicable. Prior to (i) March 20, 2006 and
(ii) unless and until a Form 15 Suspension Notice shall have been filed, prior
to March 20th of each year thereafter, the Master Servicer shall provide the
Securities Administrator with a Master Servicer Certification, together with a
copy of the annual independent accountant's servicing report and annual
statement of compliance of the Servicer to be delivered pursuant to this
Agreement or the Servicing Agreement, as applicable, and, if applicable, the
annual independent accountant's servicing report and annual statement of
compliance to be delivered by the Master Servicer pursuant to Sections 4.15 and
4.16. Prior to (i) March 31, 2006 and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, March 31 of each year thereafter, the Securities
Administrator shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust. Such Form 10-K shall include the Master
Servicer Certification and other documentation provided by the Master Servicer
pursuant to the second preceding sentence. The Depositor hereby grants to the
Securities Administrator a limited power of attorney to execute and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to the
Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement, the Mortgage Loans as the Securities Administrator reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Securities Administrator shall have no responsibility to file any items other
than those specified in this Section 5.06; provided, however, the Securities
Administrator will cooperate with the Depositor in connection with any
additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Exchange Act. Fees and expenses incurred by the Securities
Administrator in connection with this Section 5.06 shall not be reimbursable
from the Trust Fund.

         SECTION 5.07. Supplemental Interest Trust.

         (a) On the Closing Date, the Securities Administrator shall establish
and maintain in the name of the Trustee a separate account for the benefit of
the holders of the Offered Certificates (the "Supplemental Interest Trust"). The
Supplemental Interest Trust shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including, without limitation, other moneys of the Trustee or
of the Securities Administrator held pursuant to this Agreement.

         (b) On each Distribution Date, the Securities Administrator shall
withdraw all amounts which were deposited in the Supplemental Interest Trust as
specifically described in this Agreement and the Swap Agreement and distribute
such amounts in accordance with the provisions of Section 5.01(c) of this
Agreement.

         (c) The Supplemental Interest Trust constitutes an "outside reserve
fund" within the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an
asset of any REMIC. The Holders of the Class CE Certificates shall be the
beneficial owner of the Supplemental Interest Trust, subject to the power of the
Securities Administrator to transfer amounts under this Agreement. The
Securities Administrator shall keep records that accurately reflect the funds on
deposit in the Supplemental Interest Trust. The Securities Administrator shall,
at the written direction of the majority of the Class CE Certificateholders,
invest amounts on deposit in the Supplemental Interest Trust in Permitted
Investments. In the absence of written direction to the Securities Administrator
from the majority of the Class CE Certificateholders, all funds in the
Supplemental Interest Trust shall remain uninvested. On each Distribution Date,
the Securities Administrator shall distribute, not in respect of any REMIC, any
interest earned on the Supplemental Interest Trust to the Holders of the Class
CE Certificates.

         (d) For federal income tax purposes, amounts paid to the Supplemental
Interest Trust on each Distribution Date pursuant to Section 5.01(c)(2), (3),
(4), (6) and (7) and Section 5.01(c)(8)(vii) shall first be deemed paid to the
Supplemental Interest Trust in respect of the Class IO Interest to the extent of
the amount distributable on such Class IO Interest on such Distribution Date,
and any remaining amount shall be deemed paid to the Supplemental Interest Trust
in respect of a Class IO Distribution Amount. For federal income tax purposes,
the Supplemental Interest Trust will be a disregarded entity.

         (e) The Securities Administrator shall treat the Holders of
Certificates (other than the Class P, Class CE and Residual Certificates) as
having entered into a notional principal contract with respect to the Holders of
the Class CE Certificates. Pursuant to each such notional principal contract,
all Holders of Certificates (other than the Class P, Class CE and Residual
Certificates) shall be treated as having agreed to pay, on each Distribution
Date, to the Holder of the Class CE Certificates an aggregate amount equal to
the excess, if any, of (i) the amount payable on such Distribution Date on the
Regular Interest ownership of which is represented by such Class of Certificates
over (ii) the amount payable on such Class of Certificates on such Distribution
Date (such excess, a "Class IO Distribution Amount"). A Class IO Distribution
Amount payable from interest collections shall be allocated pro rata among such
Certificates based on the amount of interest otherwise payable to such
Certificates, and a Class IO Distribution Amount payable from principal
collections shall be allocated to the most subordinate Class of such
Certificates with an outstanding principal balance to the extent of such
balance. In addition, pursuant to such notional principal contract, the Holder
of the Class CE Certificates shall be treated as having agreed to pay Net WAC
Rate Carryover Amounts to the Holders of the Certificates (other than the Class
CE, Class P and Residual Certificates) in accordance with the terms of this
Agreement. Any payments to such Certificates from amounts deemed received in
respect of this notional principal contract shall not be payments with respect
to a Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1).
However, any payment from the Certificates (other than the Class CE, Class P and
Residual Certificates) of a Class IO Distribution Amount shall be treated for
tax purposes as having been received by the Holders of such Certificates in
respect of the Regular Interest ownership of which is represented by such
Certificates, and as having been paid by such Holders to the Supplemental
Interest Trust pursuant to the notional principal contract. Thus, each
Certificate (other than the Class P Certificates and Residual Certificates)
shall be treated as representing not only ownership of a Regular Interest in
REMIC III, REMIC VII, REMIC VIII, REMIC IX, REMIC X, and REMIC XI, as
applicable, but also ownership of an interest in, and obligations with respect
to, a notional principal contract.

         (f) For federal tax return and information reporting, the right of the
holders of the Offered Certificates to receive payments from the Supplemental
Interest Trust shall be assigned a value of [_______].

         (g) In the event that the Swap Agreement is terminated prior to the
Distribution Date in September 2009, the Seller shall use reasonable efforts to
appoint a successor swap provider using any Swap Termination Payments paid by
the Swap Provider. If the Seller is unable to locate a qualified successor swap
provider, any such Swap Termination Payments will be remitted to the Securities
Administrator for payment to the holders of the Offered Certificates in
accordance with Section 5.01(c).

         SECTION 5.08. Tax Treatment of Swap Payments and Swap Termination
Payments.

         For federal income tax purposes, each holder of an Offered Certificate
is deemed to own an undivided beneficial ownership interest in a REMIC regular
interest and the right to receive payments from either the Reserve Fund or the
Supplemental Interest Trust in respect of any Net WAC Rate Carryover Amounts or
the obligation to make payments to the Supplemental Interest Trust. For federal
income tax purposes, the Securities Administrator will account for payments to
each Offered Certificate as follows: each Offered Certificate will be treated as
receiving their entire payment from REMIC III (regardless of any Swap
Termination Payment or obligation under the Swap Agreement) and subsequently
paying their portion of any Swap Termination Payment in respect of each such
Class's obligation under the Swap Agreement. In the event that any such Class is
resecuritized in a REMIC, the obligation under the Swap Agreement to pay any
such Swap Termination Payment (or any shortfall in Net Swap Payment), will be
made by one or more of the REMIC Regular Interests issued by the
resecuritization REMIC subsequent to such REMIC Regular Interest receiving its
full payment from any such Offered Certificate. Resecuritization of any Offered
Certificate in a REMIC will be permissible only if the Securities Administrator
hereunder is the trustee/securities administrator in such resecuritization.

         The REMIC Regular Interest corresponding to an Offered Certificate will
be entitled to receive interest and principal payments at the times and in the
amounts equal to those made on the certificate to which it corresponds, except
that (i) the maximum interest rate of that REMIC regular interest will equal the
Net WAC Pass-Through Rate computed for this purpose by limiting the Swap
Notional Amount of the Swap Agreement to the aggregate Stated Principal Balance
of the Mortgage Loans and (ii) any Swap Termination Payment will be treated as
being payable solely from amounts otherwise payable to the Class CE
Certificates. As a result of the foregoing, the amount of distributions and
taxable income on the REMIC Regular Interest corresponding to an Offered
Certificate may exceed the actual amount of distributions on the Offered
Certificate.

<PAGE>

                                   ARTICLE VI

                                THE CERTIFICATES

         SECTION 6.01. The Certificates.

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

         The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-5. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.

         Upon original issue, the Certificates shall be executed and
authenticated by the Securities Administrator and delivered by the Trustee to
and upon the written order of the Depositor. The Certificates shall be executed
by manual or facsimile signature on behalf of the Trust by the Securities
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Securities Administrator shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.

         (b) The Class A Certificates and the Mezzanine Certificates shall
initially be issued as one or more Certificates held by the Book-Entry Custodian
or, if appointed to hold such Certificates as provided below, the Depository and
registered in the name of the Depository or its nominee and, except as provided
below, registration of such Certificates may not be transferred by the
Securities Administrator except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. All transfers by Certificate Owners of their respective Ownership
Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Securities Administrator
is hereby initially appointed as the Book-Entry Custodian and hereby agrees to
act as such in accordance herewith and in accordance with the agreement that it
has with the Depository authorizing it to act as such. The Book-Entry Custodian
may, and, if it is no longer qualified to act as such, the Book-Entry Custodian
shall, appoint, by a written instrument delivered to the Depositor, the
Servicers and, if the Trustee is not the Book-Entry Custodian, the Trustee, any
other transfer agent (including the Depository or any successor Depository) to
act as Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of its
duties or responsibilities by reason of any such appointment of other than the
Depository. If the Securities Administrator resigns or is removed in accordance
with the terms hereof, the successor Securities Administrator or, if it so
elects, the Depository shall immediately succeed to its predecessor's duties as
Book-Entry Custodian. The Depositor shall have the right to inspect, and to
obtain copies of, any Certificates held as Book-Entry Certificates by the
Book-Entry Custodian.

         (c) The Class CE Certificates and Class P Certificates offered and sold
to QIBs in reliance on Rule 144A under the Securities Act ("Rule 144A") will be
issued in the form of Definitive Certificates.

         (d) The Trustee, the Servicers, the Securities Administrator, the
Master Servicer and the Depositor may for all purposes (including the making of
payments due on the Book-Entry Certificates and Global Certificates) deal with
the Depository as the authorized representative of the Certificate Owners with
respect to the Book-Entry Certificates and Global Certificates for the purposes
of exercising the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the Book-Entry Certificates and Global
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates and Global
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Securities Administrator may establish a reasonable record date in connection
with solicitations of consents from or voting by Certificateholders and shall
give notice to the Depository of such record date.

         If (i)(A) the Depositor advises the Securities Administrator in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Securities
Administrator in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event of
Default, Certificate Owners representing in the aggregate not less than 51% of
the Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. With respect to a Global Certificate, the related
Certificate Owner (other than a Holder of a Regulation S Temporary Global
Certificate) may request that its interest in a Global Certificate be exchanged
for a Definitive Certificate. Upon surrender to the Securities Administrator of
the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, or the Global Certificates by the Depository accompanied by
registration instructions from the Depository for registration of transfer, the
Securities Administrator shall cause the Definitive Certificates to be issued.
Such Definitive Certificates will be issued in minimum denominations of 10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate, or a Global Certificate, as applicable in an amount less than
10,000 immediately prior to the issuance of a Definitive Certificate shall be
issued in a minimum denomination equal to the amount represented by such
Book-Entry Certificate or a Global Certificate, as applicable. None of the
Depositor, the Servicers, the Master Servicer, the Securities Administrator or
the Trustee shall be liable for any delay in the delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Securities Administrator, to the extent
applicable with respect to such Definitive Certificates, and the Securities
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

         SECTION 6.02. Registration of Transfer and Exchange of Certificates.

         (a) The Securities Administrator shall cause to be kept at one of the
offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.

         (b) No transfer of any Class CE Certificate, Class P Certificate or
Residual Certificate shall be made unless that transfer is made pursuant to an
effective registration statement under the Securities Act, and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of a Class CE Certificate, Class P Certificate or
Residual Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor), the Securities Administrator shall require receipt of: (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the
Securities Act, written certifications from the Certificateholder desiring to
effect the transfer and from such Certificateholder's prospective transferee,
substantially in the form attached hereto as Exhibit B-1; (ii) if such transfer
is purportedly being made in reliance upon Rule 501(a) under the Securities Act,
written certifications from the Certificateholder desiring to effect the
transfer and from such Certificateholder's prospective transferee, substantially
in the form attached hereto as Exhibit B-2 and (iii) in all other cases, an
Opinion of Counsel satisfactory to the Securities Administrator that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer, the Securities Administrator or the Servicers),
together with copies of the written certification(s) of the Certificateholder
desiring to effect the transfer and/or such Certificateholder's prospective
transferee upon which such Opinion of Counsel is based, if any. Neither of the
Depositor nor the Securities Administrator is obligated to register or qualify
any such Certificates under the Securities Act or any other securities laws or
to take any action not otherwise required under this Agreement to permit the
transfer of such Certificates without registration or qualification. Any
Certificateholder desiring to effect the transfer of any such Certificate shall,
and does hereby agree to, indemnify the Trustee, the Depositor, the Master
Servicer, the Securities Administrator and the Servicers 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.

         (c) No transfer of a Class CE Certificate, Class P Certificate or a
Residual Certificate or any interest therein shall be made to any Plan subject
to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly,
on behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the Securities
Administrator is provided with an Opinion of Counsel on which the Depositor, the
Master Servicer, the Securities Administrator, the Trustee and the Servicers may
rely, which establishes to the satisfaction of the Securities Administrator that
the purchase of such Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Servicers, the Trustee, the
Master Servicer, the Securities Administrator or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the
Servicers, the Trustee, the Master Servicer, the Securities Administrator, the
Trust Fund. An Opinion of Counsel will not be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the
Securities Administrator, shall be a written representation) from the Depositor
of the status of such transferee as an affiliate of the Depositor.

         For so long as the Supplemental Interest Trust is in existence, each
beneficial owner of a Offered Certificate or any interest therein, shall be
deemed to have represented, by virtue of its acquisition or holding of the
Offered Certificate, or interest therein, that either (i) it is not a Plan or
(ii)(A) it is an accredited investor within the meaning of Prohibited
Transaction Exemption 2002-41, as amended from time to time (the "Exemption")
and (B) the acquisition and holding of such Certificate and the separate right
to receive payments from the Supplemental Interest Trust are eligible for the
exemptive relief available under Prohibited Transaction Class Exemption ("PTCE")
84-14 (for transactions by independent "qualified professional asset managers"),
91-38 (for transactions by bank collective investment funds), 90-1 (for
transactions by insurance company pooled separate accounts), 95-60 (for
transactions by insurance company general accounts) or 96-23 (for transactions
effected by "in-house asset managers").

         Each Transferee of a Mezzanine Certificate or any interest therein that
is acquired after the termination of the Supplemental Interest Trust will be
deemed to have represented by virtue of its purchase or holding of such
Certificate (or interest therein) that either (a) such Transferee is not a Plan
or purchasing such Certificate with Plan Assets, (b) it has acquired and is
holding such Certificate in reliance on Prohibited Transaction Exemption ("PTE")
94-84 or FAN 97-03E, as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21,
1997), PTE 2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41, 67
Fed. Reg. 54487 (August 22, 2002) (the "Exemption"), and that it understands
that there are certain conditions to the availability of the Exemption including
that such Certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by a Rating Agency or (c) the following conditions
are satisfied: (i) such Transferee is an insurance company, (ii) the source of
funds used to purchase or hold such Certificate (or interest therein) is an
"insurance company general account" (as defined in PTCE 95-60, and (iii) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied.

         If any Certificate or any interest therein is acquired or held in
violation of the conditions described in this Section 6.02(c), the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding of
any certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, the Servicers, the Master Servicer, the Securities
Administrator and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by those parties as a result of that
acquisition or holding.

         (d) (i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Securities Administrator or its designee under
clause (iii)(A) below to deliver payments to a Person other than such Person and
to negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of Transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:

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

                  (B) In connection with any proposed Transfer of any Ownership
         Interest in a Residual Certificate, the Securities Administrator shall
         require delivery to it, and shall not register the Transfer of any
         Residual Certificate until its receipt of, an affidavit and agreement
         (a "Transfer Affidavit and Agreement," in the form attached hereto as
         Exhibit B-3) from the proposed Transferee, in form and substance
         satisfactory to the Securities Administrator, representing and
         warranting, among other things, that such Transferee is a Permitted
         Transferee, that it is not acquiring its Ownership Interest in the
         Residual Certificate that is the subject of the proposed Transfer as a
         nominee, trustee or agent for any Person that is not a Permitted
         Transferee, that for so long as it retains its Ownership Interest in a
         Residual Certificate, it will endeavor to remain a Permitted
         Transferee, and that it has reviewed the provisions of this Section
         6.02(d) and agrees to be bound by them. (C) Notwithstanding the
         delivery of a Transfer Affidavit and Agreement by a proposed Transferee
         under clause (B) above, if an authorized officer of the Securities
         Administrator who is assigned to this transaction has actual knowledge
         that the proposed Transferee is not a Permitted Transferee, no Transfer
         of an Ownership Interest in a Residual Certificate to such proposed
         Transferee shall be effected.

                  (D) Each Person holding or acquiring any Ownership Interest in
         a Residual Certificate shall agree (x) to require a Transfer Affidavit
         and Agreement from any other Person to whom such Person attempts to
         transfer its Ownership Interest in a Residual Certificate and (Y) not
         to transfer its Ownership Interest unless it provides a Transferor
         Affidavit (in the form attached hereto as Exhibit B-2) to the
         Securities Administrator stating that, among other things, it has no
         actual knowledge that such other Person is not a Permitted Transferee.

                  (E) Each Person holding or acquiring an Ownership Interest in
         a Residual Certificate, by purchasing an Ownership Interest in such
         Certificate, agrees to give the Securities Administrator written notice
         that it is a "pass-through interest holder" within the meaning of
         temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
         upon acquiring an Ownership Interest in a Residual Certificate, if it
         is, or is holding an Ownership Interest in a Residual Certificate on
         behalf of, a "pass-through interest holder."

                  (ii) The Securities Administrator will register the Transfer
         of any Residual Certificate only if it shall have received the Transfer
         Affidavit and Agreement and all of such other documents as shall have
         been reasonably required by the Securities Administrator as a condition
         to such registration. In addition, no Transfer of a Residual
         Certificate shall be made unless the Securities Administrator shall
         have received a representation letter from the Transferee of such
         Certificate to the effect that such Transferee is a Permitted
         Transferee.

                  (iii) (A) If any purported Transferee shall become a Holder of
         a Residual Certificate in violation of the provisions of this Section
         6.02(d), then the last preceding Permitted Transferee shall be
         restored, to the extent permitted by law, to all rights as holder
         thereof retroactive to the date of registration of such Transfer of
         such Residual Certificate. The Securities Administrator shall be under
         no liability to any Person for any registration of Transfer of a
         Residual Certificate that is in fact not permitted by this Section
         6.02(d) or for making any payments due on such Certificate to the
         holder thereof or for taking any other action with respect to such
         holder under the provisions of this Agreement.

                  (B) If any purported Transferee shall become a holder of a
         Residual Certificate in violation of the restrictions in this Section
         6.02(d) and to the extent that the retroactive restoration of the
         rights of the holder of such Residual Certificate as described in
         clause (iii)(A) above shall be invalid, illegal or unenforceable, then
         the Securities Administrator shall have the right, without notice to
         the holder or any prior holder of such Residual Certificate, to sell
         such Residual Certificate to a purchaser selected by the Securities
         Administrator on such terms as the Securities Administrator may choose.
         Such purported Transferee shall promptly endorse and deliver each
         Residual Certificate in accordance with the instructions of the
         Securities Administrator. Such purchaser may be the Securities
         Administrator itself or any Affiliate of the Securities Administrator.
         The proceeds of such sale, net of the commissions (which may include
         commissions payable to the Securities Administrator or its Affiliates),
         expenses and taxes due, if any, will be remitted by the Securities
         Administrator to such purported Transferee. The terms and conditions of
         any sale under this clause (iii)(B) shall be determined in the sole
         discretion of the Securities Administrator, and the Securities
         Administrator shall not be liable to any Person having an Ownership
         Interest in a Residual Certificate as a result of its exercise of such
         discretion.

                  (iv) The Securities Administrator shall make available to the
         Internal Revenue Service and those Persons specified by the REMIC
         Provisions all information necessary to compute any tax imposed (A) as
         a result of the Transfer of an Ownership Interest in a Residual
         Certificate to any Person who is a Disqualified Organization, including
         the information described in Treasury regulations sections
         1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
         inclusions" of such Residual Certificate and (B) as a result of any
         regulated investment company, real estate investment trust, common
         trust fund, partnership, trust, estate or organization described in
         Section 1381 of the Code that holds an Ownership Interest in a Residual
         Certificate having as among its record holders at any time any Person
         which is a Disqualified Organization. Reasonable compensation for
         providing such information may be charged or collected by the
         Securities Administrator.

                  (v) The provisions of this Section 6.02(d) set forth prior to
         this subsection (v) may be modified, added to or eliminated, provided
         that there shall have been delivered to the Securities Administrator at
         the expense of the party seeking to modify, add to or eliminate any
         such provision the following:

                  (A) written notification from each Rating Agency to the effect
         that the modification, addition to or elimination of such provisions
         will not cause such Rating Agency to downgrade its then-current ratings
         of any Class of Certificates; and

                  (B) an Opinion of Counsel, in form and substance satisfactory
         to the Securities Administrator, to the effect that such modification
         of, addition to or elimination of such provisions will not cause any
         Trust REMIC to cease to qualify as a REMIC and will not cause any Trust
         REMIC, as the case may be, to be subject to an entity-level tax caused
         by the Transfer of any Residual Certificate to a Person that is not a
         Permitted Transferee or a Person other than the prospective transferee
         to be subject to a REMIC-tax caused by the Transfer of a Residual
         Certificate to a Person that is not a Permitted Transferee.

         (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.

         (f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute,
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing. In addition, with
respect to each Class R Certificate, the holder thereof may exchange, in the
manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-I Interest, the Class R-II Interest and the Class R-III Interest,
respectively, in each case that was evidenced by the Class R Certificate being
exchanged.

         (g) No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

         (h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Securities Administrator in accordance with its
customary procedures.

         SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.

         If (i) any mutilated Certificate is surrendered to the Securities
Administrator, or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof, and (ii) there is delivered to the Securities Administrator
such security or indemnity as may be required by it to save it harmless, then,
in the absence of actual knowledge by the Securities Administrator that such
Certificate has been acquired by a protected purchaser, the Securities
Administrator, shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC created hereunder, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.

         SECTION 6.04. Persons Deemed Owners.

         The Depositor, the Servicers, the Trustee, the Master Servicer, the
Securities Administrator and any agent of any of them may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.01 and for all
other purposes whatsoever, and none of the Depositor, the Servicers, the
Trustee, the Master Servicer, the Securities Administrator or any agent of any
of them shall be affected by notice to the contrary.

         SECTION 6.05. Certain Available Information.

         On or prior to the date of the first sale of any Class CE Certificate,
Class P Certificate or Residual Certificate to an Independent third party, the
Depositor shall provide to the Securities Administrator ten copies of any
private placement memorandum or other disclosure document used by the Depositor
in connection with the offer and sale of such Certificate. In addition, if any
such private placement memorandum or disclosure document is revised, amended or
supplemented at any time following the delivery thereof to the Securities
Administrator, the Depositor promptly shall inform the Securities Administrator
of such event and shall deliver to the Securities Administrator ten copies of
the private placement memorandum or disclosure document, as revised, amended or
supplemented. The Securities Administrator shall maintain at its office as set
forth in Section 12.05 hereof and shall make available free of charge during
normal business hours for review by any Holder of a Certificate or any Person
identified to the Securities Administrator as a prospective transferee of a
Certificate, originals or copies of the following items: (i) in the case of a
Holder or prospective transferee of a Class CE Certificate, Class P Certificate
or Residual Certificate, the related private placement memorandum or other
disclosure document relating to such Class of Certificates, in the form most
recently provided to the Securities Administrator; and (ii) in all cases, (A)
this Agreement and any amendments hereof entered into pursuant to Section 11.01,
(B) all monthly statements required to be delivered to Certificateholders of the
relevant Class pursuant to Section 4.02 since the Closing Date, and all other
notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date and (C) any copies of all Officers' Certificates of the Servicers
since the Closing Date delivered to the Master Servicer to evidence such
Person's determination that any P&I Advance or Servicing Advance was, or if
made, would be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance.
Copies and mailing of any and all of the foregoing items will be available from
the Securities Administrator upon request at the expense of the Person
requesting the same.

<PAGE>

                                  ARTICLE VII

              THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER

         SECTION 7.01. Liability of the Depositor, the Servicers and the Master
Servicer.

         The Depositor, Wells Fargo and the Master Servicer each shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement upon them in their respective capacities as Depositor,
a Servicer and Master Servicer and undertaken hereunder by the Depositor, Wells
Fargo and the Master Servicer herein.

         SECTION 7.02. Merger or Consolidation of the Depositor, the Servicers
or the Master Servicer.

         Subject to the following paragraph, the Depositor will keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, Wells
Fargo will keep in full effect its existence, rights and franchises as a
national banking association. Subject to the following paragraph, the Master
Servicer will keep in full effect its existence, rights and franchises as a
national banking association. The Depositor, Wells Fargo and the Master Servicer
each will obtain and preserve its qualification to do business as a foreign
entity in each jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Agreement, the Certificates
or any of the Mortgage Loans and to perform its respective duties under this
Agreement.

         The Depositor, Wells Fargo or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor, a Servicer or the Master Servicer shall be
a party, or any Person succeeding to the business of the Depositor, such
Servicer or the Master Servicer, shall be the successor of the Depositor, such
Servicer or the Master Servicer, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that any successor to a Servicer or the Master Servicer shall meet the
eligibility requirements set forth in Section 8.02(a) or Section 7.06 of this
Agreement or the Servicing Agreement, as applicable.

         SECTION 7.03. Limitation on Liability of the Depositor, the Servicers,
the Master Servicer and Others.

         None of the Depositor, the Servicers, the Securities Administrator, the
Master Servicers or any of the directors, officers, employees or agents of the
Depositor, the Servicer or the Master Servicer shall be under any liability to
the Trust Fund or the Certificateholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement or the
Servicing Agreement, as applicable, or for errors in judgment; provided,
however, that this provision shall not protect the Depositor, a Servicer, the
Securities Administrator, the Master Servicer or any such person against any
breach of warranties, representations or covenants made herein or against any
specific liability imposed on any such Person pursuant hereto or against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder or under the Servicing Agreement,
as applicable. The Depositor, each Servicer, the Securities Administrator, the
Master Servicer and any director, officer, employee or agent of the Depositor,
the related Servicer, the Securities Administrator and the Master Servicer may
rely in good faith on any document of any kind which, prima facie, is properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, the related Servicer, the Securities Administrator, the Master
Servicer and any director, officer, employee or agent of the Depositor, each
Servicer, the Securities Administrator or the Master Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement,
the Servicing Agreement, the Certificates or any Credit Risk Management
Agreement or any loss, liability or expense incurred other than by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or under the Servicing Agreement or by reason of reckless disregard of
obligations and duties hereunder or under the Servicing Agreement. None of the
Depositor, any Servicer, the Securities Administrator or the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement and,
in its opinion, does not involve it in any expense or liability; provided,
however, that each of the Depositor, each Servicer, the Securities Administrator
and the Master Servicer may in its discretion undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom (except any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the related Servicer, the Securities Administrator and the Master
Servicer shall be entitled to be reimbursed therefor from the Collection
Account, the Custodial Account or the Distribution Account as and to the extent
provided in Article III and Article IV, any such right of reimbursement being
prior to the rights of the Certificateholders to receive any amount in the
Collection Account, the Custodial Account and the Distribution Account.

         Notwithstanding anything to the contrary contained herein, no Servicer
shall be liable for any actions or inactions prior to the Cut-off Date of any
prior servicer of the related Mortgage Loans and the Master Servicer shall not
be liable for any action or inaction of any Servicer, except to the extent
expressly provided herein, or the Credit Risk Management Agreement.

         SECTION 7.04. Limitation on Resignation of the Servicers.

         (a) Except as expressly provided herein, no Servicer shall neither
assign all or substantially all of its rights under this Agreement or the
servicing hereunder nor delegate all or substantially all of its duties
hereunder nor sell or otherwise dispose of all or substantially all of its
property or assets without, in each case, the prior written consent of the
Trustee, which consent shall not be unreasonably withheld; provided, that in
each case, there must be delivered to the Trustee and the Master Servicer a
letter from each Rating Agency to the effect that such transfer of servicing or
sale or disposition of assets will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates. Notwithstanding
the foregoing, the Servicer, without the consent of the Trustee or the Master
Servicer, may retain third-party contractors to perform certain servicing and
loan administration functions, including without limitation hazard insurance
administration, tax payment and administration, flood certification and
administration, collection services and similar functions, provided, however,
that the retention of such contractors by the Servicer shall not limit the
obligation of the Servicer to service the related Mortgage Loans pursuant to the
terms and conditions of this Agreement. The Servicer shall not resign from the
obligations and duties hereby imposed on it except by consent of the Trustee or
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to the preceding sentence
permitting the resignation of a Servicer shall be evidenced by an Opinion of
Counsel to such effect obtained at the expense of such Servicer and delivered to
the Trustee and the Rating Agencies. No resignation of a Servicer shall become
effective until the Trustee or a successor servicer shall have assumed such
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.

                  (i) Except as expressly provided herein, no Servicer shall
         assign or transfer any of its rights, benefits or privileges hereunder
         to any other Person, or delegate to or subcontract with, or authorize
         or appoint any other Person to perform any of the duties, covenants or
         obligations to be performed by such Servicer hereunder. The foregoing
         prohibition on assignment shall not prohibit a Servicer from
         designating a Sub-Servicer as payee of any indemnification amount
         payable to the Servicer hereunder; provided, however, that as provided
         in Section 3.02, no Sub-Servicer shall be a third-party beneficiary
         hereunder and the parties hereto shall not be required to recognize any
         Sub-Servicer as an indemnitee under this Agreement.

         SECTION 7.05. Limitation on Resignation of the Master Servicer.

         The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor Master Servicer meeting the criteria specified in Section 7.06 shall
have assumed the Master Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.

         SECTION 7.06. Assignment of Master Servicing.

         The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accept in writing such
assignment and delegation and assume the obligations of the Master Servicer
hereunder (a) shall have a net worth of not less than 25,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (b)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (c) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising out of acts or omissions prior to the
effective date thereof.

         SECTION 7.07. Rights of the Depositor in Respect of the Servicers and
the Master Servicer.

         Each of the Master Servicer and any Servicer that is a party hereto
shall afford (and any Sub-Servicing Agreement shall provide that each
Sub-Servicer shall afford) the Depositor and the Trustee, upon reasonable
notice, during normal business hours, access to all records maintained by the
Master Servicer or the related Servicer (and any such Sub-Servicer) in respect
of the related Servicer's rights and obligations hereunder and access to
officers of the Master Servicer or such Servicer (and those of any such
Sub-Servicer) responsible for such obligations, and the Master Servicer shall
have access to all such records maintained by such Servicer and any
Sub-Servicers. Upon request, each of the Master Servicer and such Servicer shall
furnish to the Depositor and the Trustee its (and any such Sub-Servicer's) most
recent financial statements and such other information relating to the Master
Servicer's or such Servicer's capacity to perform its obligations under this
Agreement as it possesses (and that any such Sub-Servicer possesses). To the
extent such information is not otherwise available to the public, the Depositor
and the Trustee shall not disseminate any information obtained pursuant to the
preceding two sentences without the Master Servicer's or the related Servicer's
written consent, except as required pursuant to this Agreement or to the extent
that it is appropriate to do so (i) to its legal counsel, auditors, taxing
authorities or other governmental agencies and the Certificateholders, (ii)
pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor and the Trustee or the Trust Fund, and in any case, the Depositor or
the Trustee, (iii) disclosure of any and all information that is or becomes
publicly known, or information obtained by the Trustee from sources other than
the Depositor, the related Servicer or the Master Servicer, (iv) disclosure as
required pursuant to this Agreement or (v) disclosure of any and all information
(A) in any preliminary or final offering circular, registration statement or
contract or other document pertaining to the transactions contemplated by the
Agreement approved in advance by the Depositor, the related Servicer or the
Master Servicer or (B) to any affiliate, independent or internal auditor, agent,
employee or attorney of the Trustee having a need to know the same, provided
that the Trustee advises such recipient of the confidential nature of the
information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. Nothing in this
Section 7.07 shall limit the obligation of the Servicer to comply with any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of the related Servicer to provide access as provided in this
Section 7.07 as a result of such obligation shall not constitute a breach of
this Section. Nothing in this Section 7.07 shall require the related Servicer to
collect, create, collate or otherwise generate any information that it does not
generate in its usual course of business. No Servicer shall be required to make
copies of or ship documents to any party unless provisions have been made for
the reimbursement of the costs thereof. The Depositor may, but is not obligated
to, enforce the obligations of the Master Servicer, Wells Fargo under this
Agreement or Countrywide under the Servicing Agreement, and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Master Servicer, Wells Fargo under this Agreement or Countrywide under
the Servicing Agreement, or exercise the rights of the Master Servicer, Wells
Fargo under this Agreement or Countrywide under the Servicing Agreement;
provided that neither the Master Servicer nor the related Servicer shall be
relieved of any of its obligations under this Agreement or the Servicing
Agreement, as applicable, by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer or the Servicer and is not
obligated to supervise the performance of the Master Servicer or the Servicers
under this Agreement or the Servicing Agreement or otherwise.

         SECTION 7.08. Duties of the Credit Risk Manager.

         For and on behalf of the Depositor, the Credit Risk Manager will
provide reports and recommendations concerning certain delinquent and defaulted
Mortgage Loans, and as to the collection of any Prepayment Charges with respect
to the Mortgage Loans. Such reports and recommendations will be based upon
information provided to the Credit Risk Manager pursuant to the Credit Risk
Management Agreements, and the Credit Risk Manager shall look solely to the
Servicers and/or Master Servicer for all information and data (including loss
and delinquency information and data) relating to the servicing of the related
Mortgage Loans. Upon any termination of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Depositor shall give written
notice thereof to the related Servicer, the Master Servicer, the Securities
Administrator, the Trustee, and each Rating Agency. Notwithstanding the
foregoing, the termination of the Credit Risk Manager pursuant to this Section
shall not become effective until the appointment of a successor Credit Risk
Manager. The Trustee is hereby authorized to enter into any Credit Risk
Management Agreement necessary to effect the foregoing.

         SECTION 7.09. Limitation Upon Liability of the Credit Risk Manager.

         Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer under the related Credit Risk
Management Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Credit Risk Manager or any such person against
liability that would otherwise be imposed by reason of willful malfeasance or
bad faith in its performance of its duties. The Credit Risk Manager and any
director, officer, employee, or agent of the Credit Risk Manager may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder, and may rely
in good faith upon the accuracy of information furnished by the related Servicer
pursuant to the related Credit Risk Management Agreement in the performance of
its duties thereunder and hereunder.

         SECTION 7.10. Removal of the Credit Risk Manager.

         The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust Fund, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager, with a copy to
the Securities Administrator and the Master Servicer.

                                     <PAGE>

                                  ARTICLE VIII

                                     DEFAULT

         SECTION 8.01. Servicer Events of Default.

         (a) "Servicer Event of Default," wherever used herein, means with
respect to Wells Fargo any one of the following events:

                  (i) any failure by a Servicer to remit to the Securities
         Administrator for distribution to the Certificateholders any payment
         (other than a P&I Advance required to be made from its own funds on any
         Servicer Remittance Date pursuant to Section 5.03 of this Agreement)
         required to be made by such Servicer under the terms of the
         Certificates and this Agreement which continues unremedied for a period
         of one (1) Business Day after the date upon which written notice of
         such failure, requiring the same to be remedied, shall have been given
         to such Servicer by the Depositor or the Trustee (in which case notice
         shall be provided by telecopy), or to such Servicer, the Depositor, the
         Trustee and by the Holders of Certificates entitled to at least 25% of
         the Voting Rights; or

                  (ii) any failure on the part of a Servicer duly to observe or
         perform in any material respect any other of the covenants or
         agreements on the part of such Servicer contained in this Agreement, or
         the material breach by a Servicer of any representation and warranty
         contained in Section 2.05 of this Agreement, which continues unremedied
         for a period of thirty (30) days after the date on which written notice
         of such failure, requiring the same to be remedied, shall have been
         given to such Servicer by the Depositor or the Trustee or to such
         Servicer, the Depositor and the Trustee by the Holders of Certificates
         entitled to at least 25% of the Voting Rights; provided, however, that
         in the case of a failure that cannot be cured within thirty (30) days,
         the cure period may be extended for an additional thirty (30) days if
         such Servicer can demonstrate to the reasonable satisfaction of the
         Trustee that the Servicer is diligently pursuing remedial action; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, or for the winding-up or
         liquidation of its affairs, shall have been entered against a Servicer
         and such decree or order shall have remained in force undischarged or
         unstayed for a period of ninety (90) days; or

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

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

                  (vi) failure by a Servicer to duly perform, within the
         required time period, its obligations under Sections 3.17, 3.18 or 3.19
         which failure continues unremedied for a period of ten (10) days after
         the date on which written notice of such failure, requiring the same to
         be remedied, shall have been given to the Servicer by any party to this
         Agreement; or

                  (vii) any failure of a Servicer to make any P&I Advance on any
         Servicer Remittance Date required to be made from its own funds
         pursuant to Section 5.03 which continues unremedied until 3:00 p.m. New
         York time on the Business Day immediately following the Servicer
         Remittance Date; or

                  (viii) failure of a Servicer to maintain at least an "average"
         rating from the Rating Agencies.

         A "Servicer Event of Default" whenever used herein means, with respect
to Countrywide, an event of default by under the Servicing Agreement.

         If a Servicer Event of Default described in clauses (i) through (vi) or
(viii) of this Section or a corresponding Servicer Event of Default under the
Servicing Agreement shall occur, then, and in each and every such case, so long
as such Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the defaulting Servicer (and to the Depositor if given by the Trustee
or to the Trustee if given by the Depositor) with a copy to the Master Servicer
and each Rating Agency, terminate all of the rights and obligations of the
defaulting Servicer in its capacity as a Servicer under this Agreement, to the
extent permitted by law, and in and to the related Mortgage Loans and the
proceeds thereof. If a Servicer Event of Default described in clause (vii)
hereof or the corresponding Servicer Event of Default under the Servicing
Agreement shall occur, the Trustee shall, by notice in writing to the defaulting
Servicer, the Depositor and the Master Servicer, terminate all of the rights and
obligations of the defaulting Servicer in its capacity as a Servicer under this
Agreement and in and to the related Mortgage Loans and the proceeds thereof.
Subject to Section 8.02 of this Agreement, on or after the receipt by the
defaulting Servicer of such written notice, all authority and power of the
defaulting Servicer under this Agreement or the Servicing Agreement, as
applicable, whether with respect to the Certificates (other than as a Holder of
any Certificate) or the related Mortgage Loans or otherwise, shall pass to and
be vested in the Master Servicer, or if Wells Fargo is the defaulting Servicer,
the Trustee pursuant to and under this Section, and, without limitation, the
Master Servicer or the Trustee, as applicable, is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the defaulting Servicer, any and all documents and
other instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the related Mortgage
Loans and related documents, or otherwise. The defaulting Servicer agrees
promptly (and in any event no later than ten (10) Business Days subsequent to
such notice) to provide the Master Servicer or the Trustee, as applicable, with
all documents and records requested by it to enable it to assume the defaulting
Servicer's functions under this Agreement, and to cooperate with the Master
Servicer in effecting the termination of the defaulting Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one (1) Business Day to the Master Servicer or the Trustee,
as applicable, for administration by it of all cash amounts which at the time
shall be or should have been credited by the defaulting Servicer to the related
Collection Account held by or on behalf of the defaulting Servicer or thereafter
be received with respect to the related Mortgage Loans or any related REO
Property (provided, however, that the defaulting Servicer shall continue to be
entitled to receive all amounts accrued or owing to it under this Agreement on
or prior to the date of such termination, whether in respect of P&I Advances,
Servicing Advances, accrued and unpaid Servicing Fees or otherwise, and shall
continue to be entitled to the benefits of Section 7.03 of this Agreement,
notwithstanding any such termination, with respect to events occurring prior to
such termination). Reimbursement of unreimbursed P&I Advances, Servicing
Advances and accrued and unpaid Servicing Fees shall be made on a first in,
first out ("FIFO") basis no later than the Servicer Remittance Date. For
purposes of this Section 8.01(a), the Trustee shall not be deemed to have
knowledge of a Servicer Event of Default unless a Responsible Officer of the
Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Servicer Event of Default is received by the Trustee at its Corporate
Trust Office and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Master Servicer and the Rating
Agencies of the occurrence of a Servicer Event of Default of which it has
knowledge as provided above.

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

         (b) "Master Servicer Event of Default," wherever used herein, means any
one of the following events:

                  (i) any failure on the part of the Master Servicer duly to
         observe or perform in any material respect any other of the covenants
         or agreements on the part of the Master Servicer contained in this
         Agreement, or the breach by the Master Servicer of any representation
         and warranty contained in Section 2.04, which continues unremedied for
         a period of 30 days after the date on which written notice of such
         failure, requiring the same to be remedied, shall have been given to
         the Master Servicer by the Depositor or the Trustee or to the Master
         Servicer, the Depositor and the Trustee by the Holders of Certificates
         entitled to at least 25% of the Voting Rights; or

                  (ii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and such decree or order shall have remained in force
         undischarged or unstayed for a period of ninety (90) days; or

                  (iii) the Master Servicer shall consent to the appointment of
         a conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceedings
         of or relating to it or of or relating to all or substantially all of
         its property; or

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

         If a Master Servicer Event of Default shall occur, then, and in each
and every such case, so long as such Master Servicer Event of Default shall not
have been remedied, the Depositor or the Trustee may, and at the written
direction of the Holders of Certificates entitled to at least 51% of Voting
Rights, the Trustee shall, by notice in writing to the Master Servicer (and to
the Depositor if given by the Trustee or to the Trustee if given by the
Depositor) with a copy to each Rating Agency, terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates (other than as a Holder of
any Certificate) or the Mortgage Loans or otherwise including, without
limitation, the compensation payable to the Master Servicer under this
Agreement, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver, on behalf
of and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees promptly (and in any
event no later than ten Business Days subsequent to such notice) to provide the
Trustee with all documents and records requested by it to enable it to assume
the Master Servicer's functions under this Agreement, and to cooperate with the
Trustee in effecting the termination of the Master Servicer's responsibilities
and rights under this Agreement (provided, however, that the Master Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination and shall
continue to be entitled to the benefits of Section 7.03 of this Agreement,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 8.01(b), the Trustee shall not
be deemed to have knowledge of a Master Servicer Event of Default unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Default is received
by the Trustee and such notice references the Certificates, the Trust or this
Agreement. The Trustee shall promptly notify the Rating Agencies of the
occurrence of a Master Servicer Event of Default of which it has knowledge as
provided above.

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

         Notwithstanding the foregoing, the Trustee may, if it shall be
unwilling to continue to act, or shall, if it is unable to so act, petition a
court of competent jurisdiction to appoint, or appoint on its own behalf, any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less than
25,000,000 and meeting such other standards for a successor master servicer as
are set forth in this Agreement, as the successor to such Master Servicer in the
assumption of all of the responsibilities, duties or liabilities of a master
servicer.

         SECTION 8.02. Master Servicer or Trustee to Act; Appointment of
Successor.

         (a) On and after the time a Servicer receives a notice of termination,
the Master Servicer or, if Wells Fargo receives the notice of termination, the
Trustee, shall be the successor in all respects to such Servicer in its capacity
as a Servicer under this Agreement or the Servicing Agreement, as applicable,
and the transactions set forth or provided for herein or therein, and all the
responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Master Servicer or the Trustee, as applicable (except
for any representations or warranties of such Servicer under this Agreement ort
the Servicing Agreement, as applicable, the responsibilities, duties and
liabilities contained in Section 2.03 of this Agreement and the obligation to
deposit amounts in respect of losses pursuant to Section 3.10(b) of this
Agreement) by the terms and provisions hereof including, without limitation,
such Servicer's obligations to make P&I Advances pursuant to Section 5.03 of
this Agreement or pursuant to the Servicing Agreement; provided, however, that
if the Master Servicer or the Trustee, as applicable, is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Master Servicer or the Trustee, as applicable shall not be
obligated to make P&I Advances pursuant to Section 5.03 of this Agreement or
pursuant to the Servicing Agreement; and provided further, that any failure to
perform such duties or responsibilities caused by such Servicer's failure to
provide information required by Section 8.01 of this Agreement or under the
Servicing Agreement shall not be considered a default by the Master Servicer or
the Trustee, as applicable as successor to such Servicer hereunder; provided,
however, that (1) it is understood and acknowledged by the parties hereto that
there will be a period of transition (not to exceed ninety (90) days) before the
actual servicing functions can be fully transferred to the Master Servicer or
the Trustee, as applicable or any successor Servicer appointed in accordance
with the following provisions and (2) any failure to perform such duties or
responsibilities caused by such Servicer's failure to provide information
required by Section 8.01 of this Agreement or under the Servicing Agreement
shall not be considered a default by the Master Servicer or the Trustee, as
applicable as successor to such Servicer. As compensation therefor, the Master
Servicer or the Trustee, as applicable shall be entitled to the Servicing Fee
and all funds relating to the related Mortgage Loans to which the terminated
Servicer would have been entitled if it had continued to act hereunder or under
the Servicing Agreement. Notwithstanding the above and subject to the
immediately following paragraph, the Master Servicer or the Trustee, as
applicable may, if it shall be unwilling to so act, or shall, if it is unable to
so act promptly appoint or petition a court of competent jurisdiction to
appoint, a Person that satisfies the eligibility criteria set forth below as the
successor to the terminated Servicer under this Agreement or under the Servicing
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of the terminated Servicer under this Agreement or under the
Servicing Agreement.

         Notwithstanding anything herein to the contrary, in no event shall the
Trustee or the Master Servicer be liable for any Servicing Fee or for any
differential in the amount of the Servicing Fee paid hereunder or under the
Servicing Agreement and the amount necessary to induce any successor Servicer to
act as successor Servicer under this Agreement or under the Servicing Agreement
and the transactions set forth or provided for herein.

         Any successor Servicer appointed under this Agreement must (i) be an
established mortgage loan servicing institution that is a Fannie Mae and Freddie
Mac approved seller/servicer, (ii) be approved by each Rating Agency by a
written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates, (iii) have a net worth
of not less than 25,000,000 and (iv) assume all the responsibilities, duties or
liabilities of the related Servicer (other than liabilities of the related
Servicer hereunder incurred prior to termination of the related Servicer under
Section 8.01 herein) under this Agreement as if originally named as a party to
this Agreement.

         (b) (1) All servicing transfer costs (including, without limitation,
servicing transfer costs of the type described in Section 8.02(a) of this
Agreement and incurred by the Trustee, the Master Servicer and any successor
Servicer under paragraph (b)(2) below) in connection with the termination of a
Servicer shall be paid by the terminated Servicer upon presentation of
reasonable documentation of such costs, and if such predecessor or initial
Servicer, as applicable, defaults in its obligation to pay such costs, the
successor Servicer, the Master Servicer and the Trustee shall be entitled to
reimbursement therefor from the assets of the Trust Fund.

         (2) No appointment of a successor to a Servicer under this Agreement
shall be effective until the assumption by the successor of all of such
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on the
related Mortgage Loans as it and such successor shall agree; provided, however,
that no such compensation shall be in excess of that permitted the related
Servicer as such hereunder or under the Servicing Agreement. The Depositor, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Pending
appointment of a successor to the related Servicer under this Agreement, the
Master Servicer or the Trustee, as applicable shall act in such capacity as
hereinabove provided.

         SECTION 8.03. Notification to Certificateholders.

         (a) Upon any termination of the Master Servicer or a Servicer pursuant
to Section 8.01(a) or (b) of this Agreement or under the Servicing Agreement, as
applicable, or any appointment of a successor to the master Servicer or a
Servicer pursuant to Section 8.02 of this Agreement or pursuant to the Servicing
Agreement, as applicable, the Trustee shall give prompt written notice thereof
to the Certificateholders at their respective addresses appearing in the
Certificate Register.

         (b) Not later than the later of sixty (60) days after the occurrence of
any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Servicer Event of Default or a Master Servicer Event of
Default or five (5) days after a Responsible Officer of the Trustee becomes
aware of the occurrence of such an event, the Trustee shall transmit by mail to
all Holders of Certificates notice of each such occurrence, unless such default
or Servicer Event of Default or Master Servicer Event of Default shall have been
cured or waived.

         SECTION 8.04. Waiver of Servicer Events of Default.

         The Holders representing at least 66% of the Voting Rights evidenced by
all Classes of Certificates affected by any default, Servicer Event of Default
or Master Servicer Event of Default hereunder may waive such default, Servicer
Event of Default or Master Servicer Event of Default; provided, however, that a
Servicer Event of Default under clause (i) or (vii) of Section 8.01(a) of this
Agreement may be waived only by all of the Holders of the Regular Certificates.
Upon any such waiver of a default, Servicer Event of Default or Master Servicer
Event of Default, such default, Servicer Event of Default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default, Servicer Event of Default or Master Servicer Event of Default or
impair any right consequent thereon except to the extent expressly so waived.
<PAGE>

                                   ARTICLE IX

             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

         SECTION 9.01. Duties of Trustee and Securities Administrator.

         The Trustee, prior to the occurrence of a Master Servicer Event of
Default and after the curing or waiver of all Master Servicer Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. During the continuance of a Master Servicer Event of Default, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.

         Each of the Trustee and the Securities Administrator, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to it, which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee or the Securities Administrator, as the case may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.

         The Trustee shall promptly remit to the related Servicer any complaint,
claim, demand, notice or other document (collectively, the "Notices") delivered
to the Trustee as a consequence of the assignment of any Mortgage Loan hereunder
and relating to the servicing of the Mortgage Loans; provided than any such
notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.

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

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

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

                  (iii) Neither the Trustee nor the Securities Administrator
         shall be liable with respect to any action taken, suffered or omitted
         to be taken by it in good faith in accordance with the direction of the
         Holders of Certificates entitled to at least 25% of the Voting Rights
         relating to the time, method and place of conducting any proceeding for
         any remedy available to the Trustee or the Securities Administrator or
         exercising any trust or power conferred upon the Trustee or the
         Securities Administrator under this Agreement.

         SECTION 9.02. Certain Matters Affecting Trustee and Securities
Administrator.

         (a) Except as otherwise provided in Section 9.01 of this Agreement:

                  (i) The Trustee and the Securities Administrator may request
         and rely upon and shall be protected in acting or refraining from
         acting upon any resolution, Officers' Certificate, certificate of
         auditors or any other certificate, statement, instrument, opinion,
         report, notice, request, consent, order, appraisal, bond or other paper
         or document reasonably believed by it to be genuine and to have been
         signed or presented by the proper party or parties;

                  (ii) The Trustee and the Securities Administrator may consult
         with counsel of its selection and any advice of such counsel or any
         Opinion of Counsel shall be full and complete authorization and
         protection in respect of any action taken or suffered or omitted by it
         hereunder in good faith and in accordance with such advice or Opinion
         of Counsel;

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

                  (iv) Neither the Trustee nor the Securities Administrator
         shall be liable for any action taken, suffered or omitted by it in good
         faith and believed by it to be authorized or within the discretion or
         rights or powers conferred upon it by this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing or waiver of all Master Servicer
         Events of Default which may have occurred with respect to the Trustee
         and at all times with respect to the Securities Administrator, neither
         the Trustee nor the Securities Administrator shall be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document, unless
         requested in writing to do so by the Holders of Certificates entitled
         to at least 25% of the Voting Rights; provided, however, that if the
         payment within a reasonable time to the Trustee or the Securities
         Administrator of the costs, expenses or liabilities likely to be
         incurred by it in the making of such investigation is, in the opinion
         of the Trustee or the Securities Administrator, as applicable, not
         reasonably assured to the Trustee or the Securities Administrator by
         such Certificateholders, the Trustee or the Securities Administrator,
         as applicable, may require reasonable indemnity satisfactory to it
         against such expense, or liability from such Certificateholders as a
         condition to taking any such action;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                  (vii) The Trustee shall not be liable for any loss resulting
         from (a) the investment of funds held in any Collection Account or the
         Custodial Account, (b) the investment of funds held in the Distribution
         Account, (c) the investment of funds held in the Reserve Fund or (d)
         the redemption or sale of any such investment as therein authorized;

                  (viii) The Trustee shall not be deemed to have notice of any
         default, Master Servicer Event of Default or Servicer Event of Default
         unless a Responsible Officer of the Trustee has actual knowledge
         thereof or unless written notice of any event which is in fact such a
         default is received by a Responsible Officer of the Trustee at the
         Corporate Trust Office of the Trustee, and such notice references the
         Certificates and this Agreement; and

                  (ix) The rights, privileges, protections, immunities and
         benefits given to the Trustee, including, without limitation, its right
         to be indemnified, are extended to, and shall be enforceable by, each
         agent, custodian and other Person employed to act hereunder.

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

         (c) The Trustee is hereby directed by the Depositor to execute the Swap
Agreement on behalf of the Supplemental Interest Trust in the form presented to
it by the Depositor and shall have no responsibility for the contents of the
Swap Agreement, including, without limitation, the representations and
warranties contained therein. Any funds payable by the Trustee on behalf of the
Supplemental Interest Trust under the Swap Agreement shall be paid from funds of
the Supplemental Interest Trust in accordance with the terms and provisions of
the Swap Agreement. Notwithstanding anything to the contrary contained herein or
in the Swap Agreement, the Trustee shall not be required to make any payments to
the counterparty under the Swap Agreement.

         (d) None of the Securities Administrator, the Master Servicer, the
Servicers, the Seller, the Depositor, the Custodians or the Trustee shall be
responsible for the acts or omissions of the others or the Swap Provider, it
being understood that this Agreement shall not be construed to render those
partners joint venturers or agents of one another.

         SECTION 9.03. Trustee and Securities Administrator not Liable for
Certificates or Mortgage Loans.

         The recitals contained herein and in the Certificates (other than the
signature of the Securities Administrator, the authentication of the Securities
Administrator on the Certificates, the acknowledgments of the Trustee contained
in Article II and the representations and warranties of the Trustee in Section
9.12 of this Agreement) shall be taken as the statements of the Depositor and
neither the Trustee nor the Securities Administrator assumes any responsibility
for their correctness. Neither the Trustee nor the Securities Administrator
makes any representations or warranties as to the validity or sufficiency of
this Agreement (other than as specifically set forth in Section 9.12 of this
Agreement), the Swap Agreement or of the Certificates (other than the signature
of the Securities Administrator and authentication of the Securities
Administrator on the Certificates) or of any Mortgage Loan or related document.
The Trustee and the Securities Administrator shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from any Collection Account or the Custodial Account
by the related Servicer, other than with respect to the Securities Administrator
any funds held by it or on behalf of the Trustee in accordance with Sections
3.23 and 3.24 of this Agreement.

         SECTION 9.04. Trustee and Securities Administrator May Own
Certificates.

         Each of the Trustee and the Securities Administrator in its individual
capacity or any other capacity may become the owner or pledgee of Certificates
and may transact business with other interested parties and their Affiliates
with the same rights it would have if it were not Trustee or the Securities
Administrator.

         SECTION 9.05. Fees and Expenses of Trustee and Securities
Administrator.

         The fees of the Trustee and the Securities Administrator hereunder, of
Wells Fargo as the Custodian under the Wells Fargo Custodial Agreement and of
DBNT as the Custodian under the DBNT Custodial Agreement shall be paid in
accordance with a side letter agreement with the Master Servicer and at the sole
expense of the Master Servicer. In addition, the Trustee, the Securities
Administrator, the Custodians and any director, officer, employee or agent of
the Trustee, the Securities Administrator and the Custodians shall be
indemnified by the Trust and held harmless against any loss, liability or
expense (including reasonable attorney's fees and expenses) incurred by the
Trustee, the Custodians or the Securities Administrator in connection with any
claim or legal action or any pending or threatened claim or legal action arising
out of or in connection with the acceptance or administration of its respective
obligations and duties under this Agreement, including the Swap Agreement and
any and all other agreements related hereto, other than any loss, liability or
expense (i) for which the Trustee is indemnified by the Master Servicer or any
Servicer, (ii) that constitutes a specific liability of the Trustee or the
Securities Administrator pursuant to Section 11.01(g) of this Agreement or (iii)
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder by the Trustee or the
Securities Administrator or by reason of reckless disregard of obligations and
duties hereunder. In no event shall the Trustee or the Securities Administrator
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01
of this Agreement, including, without limitation, all costs, liabilities and
expenses (including reasonable legal fees and expenses) of investigating and
defending itself against any claim, action or proceeding, pending or threatened,
relating to the provisions of such paragraph. The indemnities in this Section
9.05 shall survive the termination or discharge of this Agreement and the
resignation or removal of the Master Servicer, the Trustee, the Securities
Administrator or the Custodians. Any payment hereunder made by the Master
Servicer to the Trustee shall be from the Master Servicer's own funds, without
reimbursement from REMIC I therefor.

         SECTION 9.06. Eligibility Requirements for Trustee and Securities
Administrator.

         The Trustee and the Securities Administrator shall at all times be a
corporation or an association (other than the Depositor, the Seller, the Master
Servicer or any Affiliate of the foregoing) organized and doing business under
the laws of any state or the United States of America, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least 50,000,000 (or a member of a bank holding company whose capital and
surplus is at least 50,000,000) and subject to supervision or examination by
federal or state authority. If such corporation or association publishes reports
of conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 9.07 of this Agreement.

         SECTION 9.07. Resignation and Removal of Trustee and Securities
Administrator.

         The Trustee and the Securities Administrator may at any time resign and
be discharged from the trust hereby created by giving written notice thereof to
the Depositor, to the Master Servicer, to the Securities Administrator (or the
Trustee, if the Securities Administrator resigns) and to the Certificateholders.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor trustee or successor securities administrator by written instrument,
in duplicate, which instrument shall be delivered to the resigning Trustee or
Securities Administrator, as applicable, and to the successor trustee or
successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee, the Securities
Administrator and the Master Servicer by the Depositor. If no successor trustee
or successor securities administrator shall have been so appointed and have
accepted appointment within thirty (30) days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee, successor securities
administrator, Trustee or Securities Administrator, as applicable.

         If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 of this
Agreement and shall fail to resign after written request therefor by the
Depositor, or if at any time the Trustee or the Securities Administrator shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or the Securities Administrator or of its property shall
be appointed, or any public officer shall take charge or control of the Trustee
or the Securities Administrator or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may remove the
Trustee or the Securities Administrator, as applicable and appoint a successor
trustee or successor securities administrator, as applicable, by written
instrument, in duplicate, which instrument shall be delivered to the Trustee or
the Securities Administrator so removed and to the successor trustee or
successor securities administrator. A copy of such instrument shall be delivered
to the Certificateholders, the Trustee, the Securities Administrator and the
Master Servicer by the Depositor.

         The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee or the Securities Administrator and
appoint a successor trustee or successor securities administrator by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.

         Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 9.08.

         Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.

         SECTION 9.08. Successor Trustee or Securities Administrator.

         Any successor trustee or successor securities administrator appointed
as provided in Section 9.07 of this Agreement shall execute, acknowledge and
deliver to the Depositor and its predecessor trustee or predecessor securities
administrator an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee or
securities administrator herein. The predecessor trustee or predecessor
securities administrator shall deliver to the successor trustee or successor
securities administrator all Mortgage Loan Documents and related documents and
statements to the extent held by it hereunder, as well as all monies, held by it
hereunder, and the Depositor and the predecessor trustee or predecessor
securities administrator shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee or successor securities administrator
all such rights, powers, duties and obligations.

         No successor trustee or successor securities administrator shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee or successor securities administrator shall be eligible
under the provisions of Section 9.06 and the appointment of such successor
trustee or successor securities administrator shall not result in a downgrading
of any Class of Certificates by any Rating Agency, as evidenced by a letter from
each Rating Agency.

         Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section, the Depositor shall mail
notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.

         SECTION 9.09. Merger or Consolidation of Trustee or Securities
Administrator.

         Any corporation or association into which the Trustee or the Securities
Administrator may be merged or converted or with which it may be consolidated or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall be a
party, or any corporation or association succeeding to the business of the
Trustee or the Securities Administrator shall be the successor of the Trustee or
the Securities Administrator hereunder, provided such corporation or association
shall be eligible under the provisions of Section 9.06 of this Agreement,
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 9.10. Appointment of Co-Trustee or Separate Trustee.

         Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the REMIC I or property securing the same may at the time be located, the
Trustee shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 9.08 hereof.

         In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trust conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee, or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee or co-trustee.

         SECTION 9.11. Appointment of Office or Agency.

         The Certificates may be surrendered for registration of transfer or
exchange at the Securities Administrator's office located at Sixth and
Marquette, Minneapolis, Minnesota 55479, and presented for final distribution at
the Corporate Trust Office of the Securities Administrator where notices and
demands to or upon the Securities Administrator in respect of the Certificates
and this Agreement may be served.

         SECTION 9.12. Representations and Warranties.

         The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator, the Servicers and the Depositor as applicable, as of
the Closing Date, that:

                  (i) It is a national banking association duly organized,
         validly existing and in good standing under the laws of the United
         States of America.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its articles of association or bylaws or constitute a
         default (or an event which, with notice or lapse of time, or both,
         would constitute a default) under, or result in the breach of, any
         material agreement or other instrument to which it is a party or which
         is applicable to it or any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of it to perform
         its obligations under this Agreement or its financial condition.

                  (vi) No litigation is pending or, to the best of its
         knowledge, threatened against it, which would prohibit it from entering
         into this Agreement or, in its good faith reasonable judgment, is
         likely to materially and adversely affect either the ability of it to
         perform its obligations under this Agreement or its financial
         condition.

<PAGE>

                                   ARTICLE X

                                  TERMINATION

         SECTION 10.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans.

         (a) Subject to Section 10.02 of this Agreement, the respective
obligations and responsibilities under this Agreement of the Depositor, the
Master Servicer, the Securities Administrator, the Servicer and the Trustee
(other than the obligations of the Master Servicer to the Trustee pursuant to
Section 9.05 of this Agreement and of the Servicers to make remittances to the
Securities Administrator and the Securities Administrator to make payments in
respect of the REMIC I Regular Interests, REMIC II Regular Interests or the
Classes of Certificates as hereinafter set forth) shall terminate upon payment
to the Certificateholders and the deposit of all amounts held by or on behalf of
the Trustee and required hereunder to be so paid or deposited on the
Distribution Date coinciding with or following the earlier to occur of (i) the
purchase by the Master Servicer of all Mortgage Loans and each REO Property
remaining in REMIC I and (ii) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in REMIC I; provided, however, that in no event shall the trust
created hereby continue beyond the 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 Last Scheduled Distribution Date. The purchase by the
Master Servicer of all Mortgage Loans and each REO Property remaining in REMIC I
shall be at a price (the "Termination Price") equal to the sum of (i) the
greater of (A) the aggregate Purchase Price of all the Mortgage Loans included
in REMIC I, plus the appraised value of each REO Property, if any, included in
REMIC I, such appraisal to be conducted by an appraiser mutually agreed upon by
the Master Servicer and the Trustee in their reasonable discretion and (B) the
aggregate fair market value of all of the assets of REMIC I (as determined by
the Master Servicer and the Trustee, as of the close of business on the third
Business Day next preceding the date upon which notice of any such termination
is furnished to Certificateholders pursuant to the third paragraph of this
Section 10.01), (ii) any Swap Termination Payment payable to the Swap Provider
not due to a Swap Provider Trigger Event, which remains unpaid or which is due
to the exercise of the optional termination right by the Master Servicer plus
(iii) any amounts due the Servicers and the Master Servicer in respect of unpaid
Servicing Fees and outstanding P&I Advances and Servicing Advances.

         (b) The Master Servicer shall have the right to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
of the preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Master Servicer may elect to purchase all
of the Mortgage Loans and each REO Property remaining in REMIC I pursuant to
clause (i) above only if the aggregate Scheduled Principal Balance of the
Mortgage Loans and each REO Property remaining in the Trust Fund at the time of
such election is reduced to less than or equal to 10% of the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the Cut-off Date. By acceptance of
the Residual Certificates, the Holder of the Residual Certificates agrees, in
connection with any termination hereunder, to assign and transfer any portion of
the Termination Price in excess of par, and to the extent received in respect of
such termination, to pay any such amounts to the Holders of the Class CE
Certificates.

         (c) Notice of the liquidation of the Certificates shall be given
promptly by the Securities Administrator by letter to the Certificateholders
mailed (a) in the event such notice is given in connection with the purchase of
the Mortgage Loans and each REO Property by the Master Servicer, not earlier
than the 15th day and not later than the 25th day of the month next preceding
the month of the final distribution on the Certificates or (b) otherwise during
the month of such final distribution on or before the Determination Date in such
month, in each case specifying (i) the Distribution Date upon which the Trust
Fund will terminate and the final payment in respect of the REMIC I Regular
Interests or the Certificates will be made upon presentation and surrender of
the related Certificates at the office of the Securities Administrator therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests or Certificates from
and after the Interest Accrual Period relating to the final Distribution Date
therefor and (iv) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates at the office of the Securities Administrator. In the event
such notice is given in connection with the purchase of all of the Mortgage
Loans and each REO Property remaining in REMIC I by the Master Servicer, the
Master Servicer shall deliver to the Securities Administrator for deposit in the
Distribution Account not later than the Business Day prior to the Distribution
Date on which the final distribution on the Certificates an amount in
immediately available funds equal to the above-described Termination Price. The
Securities Administrator shall remit to the Servicers, the Master Servicer, the
Trustee and the applicable Custodian from such funds deposited in the
Distribution Account (i) any amounts which the related Servicer would be
permitted to withdraw and retain from the Custodial Account pursuant to the
Servicing Agreement or from the Collection Account pursuant to Section 3.09 of
this Agreement, as applicable, as if such funds had been deposited therein
(including all unpaid Servicing Fees, Master Servicing Fees and all outstanding
P&I Advances and Servicing Advances) and (ii) any other amounts otherwise
payable by the Securities Administrator to the Master Servicer, the Trustee, the
applicable Custodian and the Servicers from amounts on deposit in the
Distribution Account pursuant to the terms of this Agreement or the Servicing
Agreement prior to making any final distributions pursuant to Section 10.01(d)
below. Upon certification to the Trustee by the Securities Administrator of the
making of such final deposit, the Trustee shall promptly release or cause to be
released to the Master Servicer the Mortgage Files for the remaining Mortgage
Loans, and Trustee shall execute all assignments, endorsements and other
instruments delivered to it and necessary to effectuate such transfer.

         (d) Upon presentation of the Certificates by the Certificateholders on
the final Distribution Date, the Securities Administrator shall distribute to
each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 5.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
10.01 shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Securities Administrator shall mail a
second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the trust funds. If within one (1) year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall pay to the Depositor all such amounts, and all rights of
non-tendering Certificateholders in or to such amounts shall thereupon cease. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust by the Securities Administrator as a result of such Certificateholder's
failure to surrender its Certificate(s) on the final Distribution Date for final
payment thereof in accordance with this Section 10.01. Any such amounts held in
trust by the Securities Administrator shall be held uninvested in an Eligible
Account.

         SECTION 10.02. Additional Termination Requirements.

         (a) In the event that the Master Servicer purchases all the Mortgage
Loans and each REO Property or the final payment on or other liquidation of the
last Mortgage Loan or REO Property remaining in REMIC I pursuant to Section
10.01, the Trust Fund shall be terminated in accordance with the following
additional requirements:

                  (i) The Trustee shall specify the first day in the 90-day
         liquidation period in a statement attached to each Trust REMIC's final
         Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
         satisfy all requirements of a qualified liquidation under Section 860F
         of the Code and any regulations thereunder, as evidenced by an Opinion
         of Counsel obtained by and at the expense of the Master Servicer;

                  (ii) During such 90-day liquidation period and, at or prior to
         the time of making of the final payment on the Certificates, the
         Trustee shall sell all of the assets of REMIC I to the Master Servicer
         for cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Securities Administrator shall distribute or credit,
         or cause to be distributed or credited, to the Holders of the Residual
         Certificates all cash on hand in the Trust Fund (other than cash
         retained to meet claims), and the Trust Fund shall terminate at that
         time.

         (b) At the expense of the Master Servicer (or, if the Trust Fund is
being terminated as a result of the occurrence of the event described in clause
(ii) of the first paragraph of Section 10.01, at the expense of the Trust Fund),
the Master Servicer shall prepare or cause to be prepared the documentation
required in connection with the adoption of a plan of liquidation of each Trust
REMIC pursuant to this Section 10.02.

         (c) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trustee to specify the 90-day liquidation period for each
Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.

<PAGE>

                                   ARTICLE XI

                                REMIC PROVISIONS

         SECTION 11.01. REMIC Administration.

         (a) The Trustee shall elect to treat each Trust REMIC as a REMIC under
the Code and, if necessary, under applicable state law. Each such election will
be made by the Securities Administrator on Form 1066 or other appropriate
federal tax or information return or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
REMIC I, the REMIC I Regular Interests shall be designated as the Regular
Interests in REMIC I and the Class R-I Interest shall be designated as the
"residual interests" in REMIC I. For the purposes of the REMIC election in
respect of REMIC II, the REMIC II Regular Interests shall be designated as the
Regular Interests in REMIC II and the Class R-II Interest shall be designated as
the "residual interests" in REMIC II. The Class A Certificates, the Mezzanine
Certificates, the Class P Certificates and the Class CE Certificates (exclusive
of any right to receive payments from the Reserve Fund) shall be designated as
the Regular Interests in REMIC III and the Class R-III Interest shall be
designated as the Residual Interests in REMIC III. The Trustee shall not permit
the creation of any "interests" in each Trust REMIC (within the meaning of
Section 860G of the Code) other than the REMIC I Regular Interests, the REMIC II
Regular Interests and the interests represented by the Certificates.

         (b) The Closing Date is hereby designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

         (c) The Securities Administrator shall be reimbursed for any and all
expenses relating to any tax audit of the Trust Fund (including, but not limited
to, any professional fees or any administrative or judicial proceedings with
respect to each Trust REMIC that involve the Internal Revenue Service or state
tax authorities), including the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Securities Administrator, as agent for
each Trust REMIC's tax matters person shall (i) act on behalf of the Trust Fund
in relation to any tax matter or controversy involving any Trust REMIC and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.

         (d) The Securities Administrator shall prepare and file and the Trustee
shall sign all of the Tax Returns in respect of each REMIC created hereunder.
The expenses of preparing and filing such returns shall be borne by the
Securities Administrator without any right of reimbursement therefor.

         (e) The Securities Administrator shall perform on behalf of each Trust
REMIC all reporting and other tax compliance duties that are the responsibility
of such REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, as required by the Code, the REMIC Provisions or other
such compliance guidance, the Securities Administrator shall provide (i) to any
Transferor of a Residual Certificate such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
Person who is not a Permitted Transferee upon receipt of additional reasonable
compensation, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of each Trust REMIC. The Depositor shall provide or cause to be
provided to the Securities Administrator, within ten (10) days after the Closing
Date, all information or data that the Securities Administrator reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

         (f) To the extent in the control of the Trustee or the Securities
Administrator, each such Person (i) shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions, (ii) shall
not take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (A) endanger the status of each Trust
REMIC as a REMIC or (B) result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless such action or inaction is permitted under this Agreement or the Trustee
and the Securities Administrator have received an Opinion of Counsel, addressed
to the them (at the expense of the party seeking to take such action but in no
event at the expense of the Trustee or the Securities Administrator) to the
effect that the contemplated action will not, with respect to any Trust REMIC,
endanger such status or result in the imposition of such a tax, nor (iii) shall
the Securities Administrator take or fail to take any action (whether or not
authorized hereunder) as to which the Trustee has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action; provided that the Securities
Administrator may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. In addition, prior to taking any action with respect to any Trust REMIC
or the respective assets of each, or causing any Trust REMIC to take any action,
which is not contemplated under the terms of this Agreement, the Securities
Administrator will consult with the Trustee or its designee, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any Trust REMIC, and the Securities Administrator shall not take any
such action or cause any Trust REMIC to take any such action as to which the
Trustee has advised it in writing that an Adverse REMIC Event could occur. The
Trustee may consult with counsel to make such written advice, and the cost of
same shall be home by the party seeking to take the action not permitted by this
Agreement, but in no event shall such cost be an expense of the Trustee.

         (g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 11.03 of this
Agreement, if such tax arises out of or results from a breach by the Trustee of
any of its obligations under this Article XI, (ii) to the Securities
Administrator pursuant to Section 11.03, if such tax arises out of or results
from a breach by the Securities Administrator of any of its obligations under
this Article XI, (iii) to the Master Servicer pursuant to Section 11.03 of this
Agreement, if such tax arises out of or results from a breach by the Master
Servicer of any of its obligations under Article IV or under this Article XI,
(iv) to the related Servicer pursuant to Section 11.03 of this Agreement, if
such tax arises out of or results from a breach by such Servicer of any of its
obligations under Article III or under this Article XI, or (v) in all other
cases, against amounts on deposit in the Distribution Account and shall be paid
by withdrawal therefrom.

         (h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each Trust REMIC on a
calendar year and on an accrual basis.

         (i) Following the Startup Day, neither the Securities Administrator nor
the Trustee shall accept any contributions of assets to any Trust REMIC other
than in connection with any Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03 unless it shall have received an Opinion of Counsel
to the effect that the inclusion of such assets in the Trust Fund will not cause
the related REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject such REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.

         (j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor permit either REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.

         (k) The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.

         SECTION 11.02. Prohibited Transactions and Activities.

         None of the Depositor, any Servicer, the Securities Administrator, the
Master Servicer or the Trustee shall sell, dispose of or substitute for any of
the Mortgage Loans (except in connection with (i) the foreclosure of a Mortgage
Loan, including but not limited to, the acquisition or sale of a Mortgaged
Property acquired by deed in lieu of foreclosure, (ii) the bankruptcy of REMIC
I, (iii) the termination of REMIC I pursuant to Article X of this Agreement,
(iv) a substitution pursuant to Article II of this Agreement or (v) a purchase
of Mortgage Loans pursuant to Article II of this Agreement), nor acquire any
assets for any Trust REMIC (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Collection Accounts, the Custodial Account or the Distribution Account for gain,
nor accept any contributions to any Trust REMIC after the Closing Date (other
than a Qualified Substitute Mortgage Loan delivered in accordance with Section
2.03), unless it has received an Opinion of Counsel, addressed to the Trustee
and the Securities Administrator (at the expense of the party seeking to cause
such sale, disposition, substitution, acquisition or contribution but in no
event at the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any
Trust REMIC as a REMIC or (b) cause any Trust REMIC to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.

         SECTION 11.03. Indemnification.

         (a) The Trustee agrees to be liable for any taxes and costs incurred by
the Trust Fund, the Depositor, the Master Servicer, the Securities Administrator
or the Servicers including, without limitation, any reasonable attorneys fees
imposed on or incurred by the Trust Fund, the Depositor, the Master Servicer,
the Securities Administrator or the Servicer as a result of the Trustee's
failure to perform its covenants set forth in this Article XI in accordance with
the standard of care of the Trustee set forth in this Agreement.

         (b) Each Servicer party hereto agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee for
any taxes and costs including, without limitation, any reasonable attorneys'
fees imposed on or incurred by the Trust Fund, the Depositor, Countrywide the
Master Servicer, the Securities Administrator or the Trustee, as a result of
Wells Fargo's failure to perform its covenants set forth in Article III in
accordance with the standard of care of Wells Fargo set forth in this Agreement.

         (c) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, each Servicer party hereto and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor, the Servicers or the Trustee, as a
result of the Master Servicer's failure to perform its covenants set forth in
Article IV in accordance with the standard of care of the Master Servicer set
forth in this Agreement.

         (d) The Securities Administrator agrees to be liable for any taxes and
costs incurred by the Trust Fund, the Depositor, any Servicer party hereto or
the Trustee including any reasonable attorneys' fees imposed on or incurred by
the Trust Fund, the Depositor, a Servicer or the Trustee as a result of the
Securities Administrator's failure to perform its covenants set forth in this
Article XI in accordance with the standard of care of the Securities
Administrator set forth in this Agreement.

<PAGE>

                                  ARTICLE XII

                            MISCELLANEOUS PROVISIONS

         SECTION 12.01. Amendment.

         This Agreement may be amended from time to time by the Depositor, Wells
Fargo, the Master Servicer, the Securities Administrator and the Trustee, with
the consent of the Swap Provider but without the consent of any of the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify
or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), or (iii) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement and that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates. No amendment shall be deemed to adversely affect in any material
respect the interests of any Certificateholder who shall have consented thereto,
and no Opinion of Counsel shall be required to address the effect of any such
amendment on any such consenting Certificateholder.

         This Agreement may also be amended from time to time by the Depositor,
each Servicer, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Swap Provider and the Holders of Certificates entitled
to at least 66% of the Voting Rights for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner, other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing at least 66% of the Voting Rights allocated to such Class, or (iii)
modify the consents required by the immediately preceding clauses (i) and (ii)
without the consent of the Holders of all Certificates then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 12.01, Certificates
registered in the name of the Depositor or a Servicer or any Affiliate thereof
shall be entitled to Voting Rights with respect to matters affecting such
Certificates. Without limiting the generality of the foregoing, any amendment to
this Agreement required in connection with the compliance with or the
clarification of any reporting obligations described in Section 5.06 hereof
shall not require the consent of any Certificateholder and without the need for
any Opinion of Counsel or Rating Agency confirmation.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment is permitted
hereunder and will not result in the imposition of any tax on any Trust REMIC
pursuant to the REMIC Provisions or cause any Trust REMIC to fail to qualify as
a REMIC at any time that any Certificates are outstanding and that such
amendment is authorized or permitted by this Agreement.

         Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.

         It shall not be necessary for the consent of Certificateholders under
this Section 12.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         The cost of any Opinion of Counsel to be delivered pursuant to this
Section 12.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Trustee.

         The Trustee may, but shall not be obligated to enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise.

         SECTION 12.02. Recordation of Agreement; Counterparts.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Depositor at the expense of the Certificateholders, but only upon direction of
the Trustee accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.

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

         SECTION 12.03. Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

         No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

         No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder. and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

         SECTION 12.04. Governing Law.

         This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without regard to
conflicts of laws principles thereof other than Section 5-1401 of the New York
General Obligations Law which shall govern.

         SECTION 12.05. Notices.

         All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when received if sent by facsimile,
receipt confirmed, if personally delivered at or mailed by first class mail,
postage prepaid, or by express delivery service or delivered in any other manner
specified herein, to (a) in the case of the Depositor, ACE Securities Corp.,
AMACAR GROUP, 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina
28211, Attention: Juliana Johnson (telecopy number: (704) 365-1362), or such
other address or telecopy number as may hereafter be furnished to the Servicers,
the Master Servicer, the Securities Administrator and the Trustee in writing by
the Depositor, (b) in the case of Wells Fargo, Wells Fargo Bank, National
Association, One Home Campus, Des Moines, Iowa 50328-0001, Attention: ACE
2005-HE7, or such other address or telecopy number as may hereafter be furnished
to Countrywide, the Trustee, the Master Servicer, the Securities Administrator
and the Depositor in writing by Wells Fargo, (c) in the case of the Master
Servicer and the Securities Administrator, P.O. Box 98, Columbia, Maryland 21046
and for overnight delivery to 9062 Old Annapolis Road, Columbia, Maryland 21045,
Attention: Ace Securities Corp., 2005-HE7 (telecopy number: (410) 715-2380), or
such other address or telecopy number as may hereafter be furnished to the
Trustee, the Depositor and the Servicers in writing by the Master Servicer or
the Securities Administrator and (d) in the case of the Trustee, at the
Corporate Trust Office or such other address or telecopy number as the Trustee
may hereafter be furnish to the Servicers, the Master Servicer, the Securities
Administrator and the Depositor in writing by the Trustee. Any notice required
or permitted to be given to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given when mailed, whether or
not the Certificateholder receives such notice. A copy of any notice required to
be telecopied hereunder also shall be mailed to the appropriate party in the
manner set forth above.

         SECTION 12.06. Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         SECTION 12.07. Notice to Rating Agencies.

         The Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies with respect to each of the following of which a Responsible
Officer has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Servicer Event of Default or Master
         Servicer Event of Default that has not been cured or waived;

                  3. The resignation or termination of a Servicer, the Master
         Servicer or the Trustee;

                  4. The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03 of this Agreement;

                  5. The final payment to the Holders of any Class of
         Certificates;

                  6. Any change in the location of the Distribution Account; and

                  7. Any event that would result in the inability of the Master
         Servicer or the Trustee, as applicable, as successor Servicer to make
         advances regarding delinquent Mortgage Loans.

         In addition, the Securities Administrator shall promptly make available
to each Rating Agency copies of each report to Certificateholders described in
Section 5.02 of this Agreement.

         Wells Fargo shall make available to each Rating Agency copies of the
following:

                  1. Each annual statement as to compliance described in Section
         3.17 of this Agreement; and

                  2. Each annual independent public accountants' servicing
         report described in Section 3.18 of this Agreement.

         Any such notice pursuant to this Section 12.07 shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service to Standard &
Poor's, a division of the McGraw-Hill Companies, Inc., 55 Water Street, New
York, New York 10041; and to Moody's Investors Service, Inc., 99 Church Street,
New York, New York 10007 or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.

         SECTION 12.08. Article and Section References.

         All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

         SECTION 12.09. Grant of Security Interest.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Depositor to the Trustee, on behalf of the Trust and
for the benefit of the Certificateholders, be, and be construed as, a sale of
the Mortgage Loans by the Depositor and not a pledge of the Mortgage Loans to
secure a debt or other obligation of the Depositor. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage Loans are
held to be property of the Depositor, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee, on behalf of the Trust and for the benefit of the
Certificateholders, to secure a debt or other obligation of the Depositor and
(b)(1) this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York; (2) the conveyance provided for in
Section 2.01 shall be deemed to be a grant by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders, of a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account and the
Distribution Account, whether in the form of cash, instruments, securities or
other property; (3) the obligations secured by such security agreement shall be
deemed to be all of the Depositor's obligations under this Agreement, including
the obligation to provide to the Certificateholders the benefits of this
Agreement relating to the Mortgage Loans and the Trust Fund; and (4)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee, on behalf of the Trust and for the
benefit of the Certificateholders, a security interest in the Mortgage Loans and
all other property described in clause (2) of the preceding sentence, for the
purpose of securing to the Trustee the performance by the Depositor of the
obligations described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
to be a true, absolute and unconditional sale of the Mortgage Loans and assets
constituting the Trust Fund by the Depositor to the Trustee, on behalf of the
Trust and for the benefit of the Certificateholders.

         SECTION 12.10. Survival of Indemnification.

         Any and all indemnities to be provided by any party to this Agreement
shall survive the termination and resignation of any party hereto and the
termination of this Agreement.

         SECTION 12.11. Servicing Agreement.

         With respect to the Servicing Agreement, in the event of any conflict
between the provisions of this Agreement and the provisions of the Servicing
Agreement, the provisions of the Servicing Agreement shall control.

<PAGE>

         IN WITNESS WHEREOF, the Depositor, Wells Fargo, the Master Servicer,
the Securities Administrator and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized, in each
case as of the day and year first above written.

                                  ACE SECURITIES CORP.,
                                  as Depositor

                                  By: /s/ Evelyn Echevarria
                                      ------------------------------
                                  Name: Evelyn Echevarria
                                  Title: Vice President

                                  By: /s/ Douglas K. Johnson
                                      ------------------------------
                                  Name: Douglas K. Johnson
                                  Title: President

                                  WELLS FARGO BANK, NATIONAL ASSOCIATION
                                  as a Servicer

                                  By: /s/ Laurie McGoogan
                                      ------------------------------
                                  Name: Laurie McGoogan
                                  Title: Vice President

                                  HSBC BANK USA, NATIONAL ASSOCIATION
                                  not in its individual capacity but solely
                                  as Trustee

                                  By: /s/ Susie Moy
                                      ------------------------------
                                  Name: Susie Moy
                                  Title: Vice President

<PAGE>

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

                                  By: /s/ Stacey Taylor
                                      ------------------------------
                                  Name: Stacey Taylor
                                  Title: Vice President

                                  ACKNOWLEDGED AND AGREED FOR PURPOSES OF
                                  SECTION 9.05:

                                  DB STRUCTURED PRODUCTS, INC

                                  By: /s/ Paul Mangione
                                      ------------------------------
                                  Name: Paul Mangione
                                  Title: Director

                                  By: /s/ Susan Valenti
                                      ------------------------------
                                  Name: Susan Valenti
                                  Title: Director

                                  ACKNOWLEDGED AND AGREED FOR PURPOSES OF
                                  SECTION 7.08 AND 7.09:

                                  CLAYTON FIXED INCOME SERVICES INC.

                                  By: /s/ Kevin J. Kanouff
                                      ------------------------------
                                  Name: Kevin J. Kanouff
                                  Title: President and General Counsel

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

         On the ___ day of November 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                       _________________________________________
                                                      Notary Public

[Notarial Seal]                        My commission expires

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

         On the ___ day of November 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                       _________________________________________
                                                      Notary Public

[Notarial Seal]                        My commission expires

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

         On the ___ day of November 2005, 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
nationally banking associations that executed the within instrument, and also
known to me to be the person who executed it on behalf of said federally
chartered savings bank, and acknowledged to me that such federally chartered
savings bank executed the within instrument.

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

                                       _________________________________________
                                                      Notary Public

[Notarial Seal]                        My commission expires

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

         On the ___ day of November 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of Wells Fargo Bank, N.A., one of the national banking
associations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking 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]                        My commission expires

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

         On the ___ day of November 2005, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of HSBC Bank USA, National Association, one of the
national banking associations that executed the within instrument, and also
known to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking 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]                        My commission expires

<PAGE>

                                   EXHIBIT A-1

           FORM OF CLASS A-[1A][1B1][1B2][2A][2B][2C][2D] CERTIFICATE

SOLELY FOR U.S.  FEDERAL  INCOME TAX PURPOSES,  THIS  CERTIFICATE  IS A "REGULAR
INTEREST" IN A "REAL  ESTATE  MORTGAGE  INVESTMENT  CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").

UNLESS THIS  CERTIFICATE  IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY  TRUST  COMPANY TO THE  DEPOSITOR  OR ITS AGENT FOR  REGISTRATION  OF
TRANSFER,  EXCHANGE OR PAYMENT,  AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME  OF  CEDE  &  CO.  OR  SUCH  OTHER  NAME  AS  REQUESTED  BY  AN  AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO.,  ANY  TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL  SINCE THE  REGISTERED  OWNER HEREOF,  CEDE & CO., HAS AN
INTEREST HEREIN.

PRIOR  TO THE  TERMINATION  OF  THE  SUPPLEMENTAL  INTEREST  TRUST,  ANY  PERSON
ACQUIRING A CERTIFICATE  DIRECTLY OR  INDIRECTLY  BY, ON BEHALF OF, OR WITH PLAN
ASSETS OF AN  EMPLOYEE  BENEFIT  PLAN OR OTHER  RETIREMENT  ARRANGEMENT  THAT IS
SUBJECT TO TITLE I OF THE EMPLOYEE  RETIREMENT  INCOME  SECURITY ACT OF 1974, AS
AMENDED,  OR SECTION 4975 OF THE INTERNAL  REVENUE CODE OF 1986, SHALL BE DEEMED
TO HAVE MADE THE REPRESENTATIONS IN SECTION 6.02(C) OF THE POOLING AND SERVICING
AGREEMENT.

<PAGE>

Series 2005-HE7, Class A-       Aggregate Certificate Principal Balance of the
[1A][1B1][1B2][2A][2B][2C][2D]  Class A-[1A][1B1][1B2][2A][2B][2C][2D]
                                      Certificates as of
                                      the Issue Date:
                                      $_____________
 Pass-Through Rate: Variable          Denomination:  $____________

Date of Pooling and  Servicing  Agreement and
Master Servicer: Wells Fargo Bank, N.A.
Cut-off Date: November 1, 2005

First Distribution Date:        Trustee: HSBC Bank USA, National Association
November 25, 2005               Issue Date: November 28, 2005
No.__                           CUSIP:________________

  DISTRIBUTIONS  IN REDUCTION OF THE  CERTIFICATE  PRINCIPAL  BALANCE OF THIS
  CERTIFICATE  MAY BE MADE  MONTHLY  AS SET FORTH  HEREIN.  ACCORDINGLY,  THE
  OUTSTANDING  CERTIFICATE  PRINCIPAL  BALANCE HEREOF AT ANY TIME MAY BE LESS
  THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE7
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                              ACE SECURITIES CORP.

  THIS  CERTIFICATE  DOES NOT  REPRESENT AN  OBLIGATION OF OR INTEREST IN ACE
  SECURITIES CORP., THE MASTER SERVICER,  THE SECURITIES  ADMINISTRATOR,  THE
  SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE  AFFILIATES.  NEITHER THIS
  CERTIFICATE NOR THE UNDERLYING  MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
  OR INSTRUMENTALITY OF THE UNITED STATES.

     This  certifies  that   ________________  is  the  registered  owner  of  a
Percentage  Interest  (obtained by dividing the denomination of this Certificate
by   the    aggregate    Certificate    Principal    Balance    of   the   Class
A-[1A][1B1][1B2][2A][2B][2C][2D]  Certificates  as of the  Issue  Date)  in that
certain   beneficial   ownership   interest   evidenced   by   all   the   Class
A-[1A][1B1][1B2][2A][2B][2C][2D] Certificates in REMIC III created pursuant to a
Pooling and Servicing  Agreement,  dated as specified  above (the  "Agreement"),
among ACE Securities  Corp., as depositor  (hereinafter  called the "Depositor",
which term includes any successor entity under the Agreement), Wells Fargo Bank,
N.A. as master  servicer (the "Master  Servicer") and  securities  administrator
(the  "Securities  Administrator"),  Wells  Fargo Bank,  N.A.  as servicer  (the
"Servicer") and HSBC Bank USA, National  Association as trustee (the "Trustee"),
a  summary  of  certain  of the  pertinent  provisions  of  which  is set  forth
hereafter.  To the extent not defined herein,  the capitalized terms used herein
have the meanings  assigned in the Agreement.  This  Certificate is issued under
and is subject to the terms,  provisions  and  conditions of the  Agreement,  to
which  Agreement  the  Holder of this  Certificate  by virtue of the  acceptance
hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement,  distributions  will be made on the
25th day of each month or, if such 25th day is not a Business  Day, the Business
Day immediately following such 25th day (a "Distribution  Date"),  commencing on
the First  Distribution  Date specified  above, to the Person in whose name this
Certificate  is  registered  on the  Business  Day  immediately  preceding  such
Distribution  Date (the "Record Date"), in an amount equal to the product of the
Percentage  Interest evidenced by this Certificate and the amount required to be
distributed   to   the   Holders   of   Class   A-[1A][1B1][1B2][2A][2B][2C][2D]
Certificates on such Distribution Date pursuant to the Agreement.

     All  distributions  to the Holder of this  Certificate  under the Agreement
will be made or  caused  to be  made  by the  Securities  Administrator  by wire
transfer in immediately  available  funds to the account of the Person  entitled
thereto if such Person shall have so notified the  Securities  Administrator  in
writing at least five Business Days prior to the Record Date  immediately  prior
to   such   Distribution   Date   and  is  the   registered   owner   of   Class
A-[1A][1B1][1B2][2A][2B][2C][2D]  Certificates the aggregate initial Certificate
Principal  Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial  Certificate  Principal Balance of the Class
A-[1A][1B1][1B2][2A][2B][2C][2D]  Certificates,  or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final  distribution  on this  Certificate  will be made  after due notice by the
Securities  Administrator  of the  pendency of such  distribution  and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.

     The  Pass-Through  Rate applicable to the  calculation of interest  payable
with respect to this  Certificate on any  Distribution  Date shall be a rate per
annum equal to the lesser of (i) One-Month  LIBOR plus [_____]%,  in the case of
each  Distribution Date through and including the Distribution Date on which the
aggregate  Scheduled  Principal  Balance of the Mortgage  Loans (and  properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
or equal to 10% of the  aggregate  Scheduled  Principal  Balance of the Mortgage
Loans as of the Cut-off Date, or One-Month  LIBOR plus [_____]%,  in the case of
any  Distribution  Date thereafter and (ii) the applicable Net WAC  Pass-Through
Rate for such Distribution Date.

     This  Certificate  is  one  of a  duly  authorized  issue  of  Certificates
designated as Asset Backed  Pass-Through  Certificate of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates  specified on the face hereof equal to the
denomination  specified on the face hereof divided by the aggregate  Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries  respecting the Mortgage Loans and payments  received pursuant to the
Swap Agreement,  all as more specifically set forth herein and in the Agreement.
As provided in the Agreement,  withdrawals  from the Collection  Account and the
Distribution  Account  may be made from  time to time for  purposes  other  than
distributions to  Certificateholders,  such purposes including  reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The  Agreement  permits,  with certain  exceptions  therein  provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Depositor, the Master Servicer, the Trustee, the Securities  Administrator,  the
Servicer  and the rights of the  Certificateholders  under the  Agreement at any
time  by the  Depositor,  the  Master  Servicer,  the  Trustee,  the  Securities
Administrator  and the Servicer with the consent of the Holders of  Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall be  conclusive  and binding on such Holder and upon all
future  Holders  of this  Certificate  and of any  Certificate  issued  upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this  Certificate.  The Agreement  also permits the
amendment thereof, in certain limited circumstances,  without the consent of the
Holders of any of the Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth,  the  transfer of this  Certificate  is  registrable  in the  Certificate
Register upon surrender of this  Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement,  duly endorsed by, or  accompanied by an assignment in the form below
or other written  instrument of transfer in form  satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing,  and thereupon one or more new  Certificates  of the same
Class in  authorized  denominations  evidencing  the same  aggregate  Percentage
Interest will be issued to the designated transferee or transferees.

     Prior to the termination of the  Supplemental  Interest Trust, any transfer
of this  Certificate to a Plan subject to ERISA or Section 4975 of the Code, any
Person acting, directly or indirectly,  on behalf of any such Plan or any person
using Plan Assets to acquire this Certificate by its acceptance thereof shall be
deemed to make the representations in Section 6.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations  representing Percentage Interests specified in the
Agreement.  As provided  in the  Agreement  and  subject to certain  limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized  denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.

     Any   transferee  of  this   Certificate   shall  be  deemed  to  make  the
representations set forth in Section 6.02(c) of the Agreement.

     No service  charge  will be made for any such  registration  of transfer or
exchange of Certificates,  but the Securities  Administrator may require payment
of a sum  sufficient to cover any tax or other  governmental  charge that may be
imposed in connection with any transfer or exchange of Certificates.

     The  Depositor,   the  Master   Servicer,   the  Trustee,   the  Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee,  the Securities  Administrator or the Servicer may treat the Person
in whose  name  this  Certificate  is  registered  as the owner  hereof  for all
purposes,  and none of the  Depositor,  the Master  Servicer,  the Trustee,  the
Securities  Administrator,  the Servicer nor any such agent shall be affected by
notice to the contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall  terminate upon payment to the  Certificateholders  of all amounts held by
the  Securities  Administrator  and required to be paid to them  pursuant to the
Agreement  following the earlier of (i) the final  payment or other  liquidation
(or any advance with respect  thereto) of the last  Mortgage  Loan  remaining in
REMIC I and (ii) the  purchase by the party  designated  in the  Agreement  at a
price  determined as provided in the Agreement  from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property  acquired in respect of any
Mortgage Loan at a price  determined as provided in the Agreement.  The exercise
of such right will effect early retirement of the  Certificates;  however,  such
right to purchase is subject to the aggregate Scheduled Principal Balance of the
Mortgage  Loans (and  properties  acquired  in respect  thereof)  at the time of
purchase being less than or equal to 10% of the aggregate  principal  balance of
the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and  neither  the  Trustee  nor  the   Securities   Administrator   assumes  any
responsibility for their correctness.

     Unless the  certificate of  authentication  hereon has been executed by the
Securities  Administrator,  by manual  signature,  this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

     IN  WITNESS  WHEREOF,   the  Securities   Administrator   has  caused  this
Certificate to be duly executed.

Dated:
                                              WELLS FARGO BANK, N.A.
                                              as Securities Administrator

                                              By:_______________________________
                                                       Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This  is  one of the  Class  A-[1A][1B1][1B2][2A][2B][2C][2D]  Certificates
referred to in the within-mentioned Agreement.

                                              WELLS FARGO BANK, N.A.
                                              as Securities Administrator

                                              By:_______________________________
                                                       Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

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

TEN COM  -  as tenants in common          UNIF GIFT MIN ACT -    CUSTODIAN
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                               to Minors Act
TEN ENT  -  as tenants by the entireties                     -------------------
                                                                  (State)
JT TEN   -  as joint tenants with right
            if survivorship and not as
            tenants in common

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

                                   ASSIGNMENT

     FOR  VALUE  RECEIVED,   the  undersigned  hereby  sell(s),   assign(s)  and
transfer(s) unto

           ---------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a  Percentage  Interest  equal to ____%  evidenced  by the within  Asset  Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

     I  (we)  further  direct  the  Securities  Administrator  to  issue  a  new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address:

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

-----------------------------------------------------------------------------  .

Dated:                                     -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS
--------------------------------------------------------------------------------

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise,  in immediately
available funds to

--------------------------------------------------------------------------------
for the account of
                  --------------------------------------------------------------
account number                                        or, if mailed by check, to
                  -----------------------------------

--------------------------------------------------------------------------------
Applicable statements should be mailed to
                                          --------------------------------------

--------------------------------------------------------------------------------
     This information is provided by
                                    --------------------------------------------
assignee named above, or
                        --------------------------------------------------------
its agent.

<PAGE>

                                   EXHIBIT A-2

         FORM OF CLASS M-[1][2][3][4][5][6][7][8][9][10][11] CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
         REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
         ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
         REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
         OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
         SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES [[,/AND]
         CLASS M-1 CERTIFICATES [,/AND] CLASS M-2 CERTIFICATES[,/AND] CLASS M-3
         CERTIFICATES [,/AND] CLASS M-4 CERTIFICATES [,/AND] CLASS M-5
         CERTIFICATES [,/AND] CLASS M-6 CERTIFICATES [,/AND] CLASS M-7
         CERTIFICATES [,/AND] CLASS M-8 CERTIFICATES [,/AND] CLASS M-9
         CERTIFICATES [AND] CLASS M-10 CERTIFICATES] TO THE EXTENT DESCRIBED IN
         THE AGREEMENT REFERRED TO HEREIN.

         ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
         REPRESENTATIONS SET FORTH IN SECTION 6.02(C) OF THE AGREEMENT REFERRED
         TO HEREIN.

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
         BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO
         AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
         FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE
         PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
         DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
         ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE
         SECURITIES ADMINISTRATOR NAMED HEREIN.

         ANY PERSON ACQUIRING A CERTIFICATE DIRECTLY OR INDIRECTLY BY, ON BEHALF
         OF, OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
         ARRANGEMENT THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
         INTERNAL REVENUE CODE OF 1986, SHALL BE DEEMED TO HAVE MADE THE
         REPRESENTATIONS IN SECTION 6.02(C) OF THE POOLING AND SERVICING
         AGREEMENT.

<PAGE>

Series 2005-HE7, Class                       Aggregate Certificate Principal
M-[1][2][3][4][5][6][7][8][9][10][11]        Balance of the Class M-
                                             [1][2][3][4][5][6][7][8][9][10][11]
                                             Certificates as of the Issue Date:
                                             $______________

Pass-Through Rate: Variable                  Denomination: $______________

Date of Pooling and Servicing Agreement      Master Servicer:
and Cut-off Date: November 1, 2005           Wells Fargo Bank, N.A.

First Distribution Date: November 25, 2005   Trustee: HSBC Bank USA, National
                                             Association

No.___                                       Issue Date: November 28, 2005

                                             CUSIP:_________________

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE7
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                              ACE SECURITIES CORP.

   THIS  CERTIFICATE  DOES NOT  REPRESENT AN  OBLIGATION OF OR INTEREST IN ACE
   SECURITIES CORP., THE MASTER SERVICER,  THE SECURITIES  ADMINISTRATOR,  THE
   SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE  AFFILIATES.  NEITHER THIS
   CERTIFICATE NOR THE UNDERLYING  MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
   OR INSTRUMENTALITY OF THE UNITED STATES.

     This certifies  that  _____________________  is the  registered  owner of a
Percentage  Interest  (obtained by dividing the denomination of this Certificate
by   the    aggregate    Certificate    Principal    Balance    of   the   Class
M-[1][2][3][4][5][6][7][8][9][10][11] Certificates as of the Issue Date) in that
certain   beneficial   ownership   interest   evidenced   by   all   the   Class
M-[1][2][3][4][5][6][7][8][9][10][11] Certificates in REMIC III created pursuant
to  a  Pooling  and  Servicing   Agreement,   dated  as  specified   above  (the
"Agreement"),  among ACE Securities Corp., as depositor  (hereinafter called the
"Depositor",  which term  includes any  successor  entity under the  Agreement),
Wells Fargo Bank, N.A. as master servicer (the "Master Servicer") and securities
administrator  (the  "Securities  Administrator"),  Wells  Fargo  Bank,  N.A. as
servicer (the  "Servicer")  and HSBC Bank USA,  National  Association as trustee
(the  "Trustee"),  a summary of certain of the pertinent  provisions of which is
set forth  hereafter.  To the extent not defined herein,  the capitalized  terms
used herein have the meanings  assigned in the  Agreement.  This  Certificate is
issued  under and is subject  to the terms,  provisions  and  conditions  of the
Agreement,  to which  Agreement the Holder of this  Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

     Pursuant to the terms of the Agreement,  distributions  will be made on the
25th day of each month or, if such 25th day is not a Business  Day, the Business
Day immediately following such 25th day (a "Distribution  Date"),  commencing on
the First  Distribution  Date specified  above, to the Person in whose name this
Certificate  is  registered  on the  Business  Day  immediately  preceding  such
Distribution  Date (the "Record Date"), in an amount equal to the product of the
Percentage  Interest evidenced by this Certificate and the amount required to be
distributed  to  the  Holders  of  Class   M-[1][2][3][4][5][6][7][8][9][10][11]
Certificates on such Distribution Date pursuant to the Agreement.

     All  distributions  to the Holder of this  Certificate  under the Agreement
will be made or  caused  to be  made  by the  Securities  Administrator  by wire
transfer in immediately  available  funds to the account of the Person  entitled
thereto if such Person shall have so notified the  Securities  Administrator  in
writing at least five Business Days prior to the Record Date  immediately  prior
to   such   Distribution   Date   and  is  the   registered   owner   of   Class
M-[1][2][3][4][5][6][7][8][9][10][11]   Certificates   the   aggregate   initial
Certificate  Principal  Balance  of  which is in  excess  of the  lesser  of (i)
$5,000,000 or (ii)  two-thirds of the aggregate  initial  Certificate  Principal
Balance  of the  Class  M-[1][2][3][4][5][6][7][8][9][10][11]  Certificates,  or
otherwise  by check  mailed by first  class  mail to the  address  of the Person
entitled  thereto,  as such name and  address  shall  appear on the  Certificate
Register.  Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such  distribution and only upon  presentation and surrender of this Certificate
at the  office or agency  appointed  by the  Securities  Administrator  for that
purpose as provided in the Agreement.

     The  Pass-Through  Rate applicable to the  calculation of interest  payable
with respect to this Certificate on any Distribution Date shall equal a rate per
annum equal to the lesser of (i)  One-Month  LIBOR plus [____]% , in the case of
each  Distribution Date through and including the Distribution Date on which the
aggregate  Scheduled  Principal  Balance of the Mortgage  Loans (and  properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
or equal to 10% of the  aggregate  Scheduled  Principal  Balance of the Mortgage
Loans as of the Cut-off  Date, or One-Month  LIBOR plus [____]%,  in the case of
any  Distribution  Date thereafter and (ii) the applicable Net WAC  Pass-Through
Rate for such Distribution Date.

     This  Certificate  is  one  of a  duly  authorized  issue  of  Certificates
designated as Asset Backed  Pass-Through  Certificate of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates  specified on the face hereof equal to the
denomination  specified on the face hereof divided by the aggregate  Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries  respecting the Mortgage Loans and payments  received pursuant to the
Swap Agreement,  all as more specifically set forth herein and in the Agreement.
As provided in the Agreement,  withdrawals  from the Collection  Account and the
Distribution  Account  may be made from  time to time for  purposes  other  than
distributions to  Certificateholders,  such purposes including  reimbursement of
advances made, or certain expenses incurred, with respect to the Mortgage Loans.

     The  Agreement  permits,  with certain  exceptions  therein  provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Depositor, the Master Servicer, the Trustee, the Securities  Administrator,  the
Servicer  and the rights of the  Certificateholders  under the  Agreement at any
time  by the  Depositor,  the  Master  Servicer,  the  Trustee,  the  Securities
Administrator  and the Servicer with the consent of the Holders of  Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall be  conclusive  and binding on such Holder and upon all
future  Holders  of this  Certificate  and of any  Certificate  issued  upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this  Certificate.  The Agreement  also permits the
amendment thereof, in certain limited circumstances,  without the consent of the
Holders of any of the Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth,  the  transfer of this  Certificate  is  registrable  in the  Certificate
Register upon surrender of this  Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement,  duly endorsed by, or  accompanied by an assignment in the form below
or other written  instrument of transfer in form  satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing,  and thereupon one or more new  Certificates  of the same
Class in  authorized  denominations  evidencing  the same  aggregate  Percentage
Interest will be issued to the designated transferee or transferees.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations  representing Percentage Interests specified in the
Agreement.  As provided  in the  Agreement  and  subject to certain  limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized  denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.

     Any   transferee  of  this   Certificate   shall  be  deemed  to  make  the
representations set forth in Section 6.02(c) of the Agreement.

     No service  charge  will be made for any such  registration  of transfer or
exchange of Certificates,  but the Securities  Administrator may require payment
of a sum  sufficient to cover any tax or other  governmental  charge that may be
imposed in connection with any transfer or exchange of Certificates.

     The  Depositor,   the  Master   Servicer,   the  Trustee,   the  Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee,  the Securities  Administrator or the Servicer may treat the Person
in whose  name  this  Certificate  is  registered  as the owner  hereof  for all
purposes,  and none of the  Depositor,  the Master  Servicer,  the Trustee,  the
Securities  Administrator,  the Servicer nor any such agent shall be affected by
notice to the contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall  terminate upon payment to the  Certificateholders  of all amounts held by
the  Securities  Administrator  and required to be paid to them  pursuant to the
Agreement  following the earlier of (i) the final  payment or other  liquidation
(or any advance with respect  thereto) of the last  Mortgage  Loan  remaining in
REMIC I and (ii) the  purchase by the party  designated  in the  Agreement  at a
price  determined as provided in the Agreement  from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property  acquired in respect of any
Mortgage Loan at a price  determined as provided in the Agreement.  The exercise
of such right will effect early retirement of the  Certificates;  however,  such
right to purchase is subject to the aggregate Scheduled Principal Balance of the
Mortgage  Loans (and  properties  acquired  in respect  thereof)  at the time of
purchase being less than or equal to 10% of the aggregate  principal  balance of
the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and  neither  the  Trustee   nor  the   Securities   Administrator   assume  any
responsibility for their correctness.

     Unless the  certificate of  authentication  hereon has been executed by the
Securities  Administrator by manual  signature,  this  Certificate  shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

     IN  WITNESS  WHEREOF,   the  Securities   Administrator   has  caused  this
Certificate to be duly executed.

Dated:

                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                           Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class M-[1][2][3][4][5][6][7][8][9][10][11] Certificates
referred to in the within-mentioned Agreement.

                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                           Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

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

TEN COM  -  as tenants in common          UNIF GIFT MIN ACT -    CUSTODIAN
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                               to Minors Act
TEN ENT  -  as tenants by the entireties                     -------------------
                                                                  (State)
JT TEN   -  as joint tenants with right
            if survivorship and not as
            tenants in common

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

                                   ASSIGNMENT

     FOR  VALUE  RECEIVED,   the  undersigned  hereby  sell(s),   assign(s)  and
transfer(s) unto
                ----------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

     I  (we)  further  direct  the  Securities  Administrator  to  issue  a  new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address:

--------------------------------------------------------------------------------
-----------------------------------------------------------------------------  .

Dated:
                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise,  in immediately
available funds to
                   -------------------------------------------------------------
--------------------------------------------------------------------------------
for the account of
                  --------------------------------------------------------------
account number                                        or, if mailed by check, to
                  -----------------------------------
--------------------------------------------------------------------------------
         Applicable statements should be mailed to
                                                  ------------------------------
--------------------------------------------------------------------------------
This information is provided by
                               -------------------------------------------------
assignee named above, or
                        --------------------------------------------------------
its agent.

<PAGE>

                                   EXHIBIT A-3

                          FORM OF CLASS CE CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
         THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
         INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
         MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT
         REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
         SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
         AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
         OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
         OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
         MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
         ("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
         INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
         144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
         ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
         (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
         TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
         AGREEMENT.

<PAGE>

Series 2005-HE7, Class CE                Aggregate Certificate Principa Balance
                                         of the Class CE Certificates as of the
                                         Issue Date: $-------------

Pass-Through Rate: Variable              Denomination: $_________________

Cut-off Date and date of Pooling and     Master Servicer: Wells Fargo Bank, N.A.
Servicing Agreement: November 1, 2005

First Distribution Date:                 Trustee: HSBC Bank USA, National
November 25, 2005                        Association

No. __                                   Issue Date: November 28, 2005

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE7
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                              ACE SECURITIES CORP.

     THIS  CERTIFICATE  DOES NOT  REPRESENT AN OBLIGATION OF OR INTEREST IN
     ACE   SECURITIES   CORP.,   THE  MASTER   SERVICER,   THE   SECURITIES
     ADMINISTRATOR,  THE SERVICER,  THE TRUSTEE OR ANY OF THEIR  RESPECTIVE
     AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
     ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

     This  certifies  that   ________________  is  the  registered  owner  of  a
Percentage  Interest  (obtained by dividing the denomination of this Certificate
by the aggregate  Certificate  Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain  beneficial  ownership  interest evidenced by
all the Class CE  Certificates  in REMIC III  created  pursuant to a Pooling and
Servicing  Agreement,  dated as  specified  above (the  "Agreement"),  among ACE
Securities Corp., as depositor  (hereinafter  called the "Depositor," which term
includes any successor  entity under the  Agreement),  Wells Fargo Bank, N.A. as
master  servicer  (the "Master  Servicer")  and  securities  administrator  (the
"Securities Administrator"), Wells Fargo Bank, N.A. as servicer (the "Servicer")
and HSBC Bank USA, National Association as trustee (the "Trustee"), a summary of
certain of the  pertinent  provisions  of which is set forth  hereafter.  To the
extent not defined herein,  the capitalized  terms used herein have the meanings
assigned in the  Agreement.  This  Certificate is issued under and is subject to
the terms,  provisions and conditions of the Agreement,  to which  Agreement the
Holder of this  Certificate  by virtue of the  acceptance  hereof assents and by
which such Holder is bound.

     Interest  on this  Certificate  will  accrue  during the month prior to the
month in  which a  Distribution  Date (as  hereinafter  defined)  occurs  on the
Notional  Amount (as defined in the Agreement)  hereof at a per annum rate equal
to the Pass-Through Rate as set forth in the Agreement. Pursuant to the terms of
the Agreement,  distributions  will be made on the 25th day of each month or, if
such 25th day is not a Business Day, the Business Day immediately following such
25th day (a  "Distribution  Date"),  commencing on the First  Distribution  Date
specified  above, to the Person in whose name this  Certificate is registered on
the last Business Day of the calendar month  immediately  preceding the month in
which the related  Distribution  Date occurs (the "Record  Date"),  in an amount
equal to the product of the Percentage  Interest  evidenced by this  Certificate
and  the  amount  required  to  be  distributed  to  the  Holders  of  Class  CE
Certificates on such Distribution Date pursuant to the Agreement.

     All  distributions  to the Holder of this  Certificate  under the Agreement
will be made or  caused  to be  made  by the  Securities  Administrator  by wire
transfer in immediately  available  funds to the account of the Person  entitled
thereto if such Person shall have so notified the  Securities  Administrator  in
writing at least five Business Days prior to the Record Date  immediately  prior
to such  Distribution  Date and is the registered owner of Class CE Certificates
the aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class CE Certificates,  or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final  distribution  on this  Certificate  will be made  after due notice by the
Securities  Administrator  of the  pendency of such  distribution  and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.

     This  Certificate  is  one  of a  duly  authorized  issue  of  Certificates
designated as Asset Backed  Pass-Through  Certificate of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates  specified on the face hereof equal to the
denomination  specified on the face hereof divided by the aggregate  Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries  respecting the Mortgage Loans,  all as more  specifically  set forth
herein and in the Agreement. As provided in the Agreement,  withdrawals from the
Collection  Account and the  Distribution  Account may be made from time to time
for purposes  other than  distributions  to  Certificateholders,  such  purposes
including  reimbursement  of advances made, or certain expenses  incurred,  with
respect to the Mortgage Loans.

     The  Agreement  permits,  with certain  exceptions  therein  provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Depositor, the Master Servicer, the Trustee, the Securities  Administrator,  the
Servicer  and the rights of the  Certificateholders  under the  Agreement at any
time  by the  Depositor,  the  Master  Servicer,  the  Trustee,  the  Securities
Administrator  and the Servicer with the consent of the Holders of  Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall be  conclusive  and binding on such Holder and upon all
future  Holders  of this  Certificate  and of any  Certificate  issued  upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this  Certificate.  The Agreement  also permits the
amendment thereof, in certain limited circumstances,  without the consent of the
Holders of any of the Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth,  the  transfer of this  Certificate  is  registrable  in the  Certificate
Register upon surrender of this  Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement,  duly endorsed by, or  accompanied by an assignment in the form below
or other written  instrument of transfer in form  satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing,  and thereupon one or more new  Certificates  of the same
Class in  authorized  denominations  evidencing  the same  aggregate  Percentage
Interest will be issued to the designated transferee or transferees.

     No transfer of this  Certificate  shall be made unless the transfer is made
pursuant to an effective  registration  statement  under the  Securities  Act of
1933,  as  amended  (the  "1933  Act"),   and  an  effective   registration   or
qualification   under  applicable  state  securities  laws,  or  is  made  in  a
transaction  that does not require such  registration or  qualification.  In the
event  that  such  a  transfer  of  this  Certificate  is  to  be  made  without
registration  or  qualification,  the  Securities  Administrator  shall  require
receipt of (i) if such transfer is purportedly  being made in reliance upon Rule
144A or Regulation S under the 1933 Act, written  certifications from the Holder
of the  Certificate  desiring  to effect the  transfer,  and from such  Holder's
prospective transferee,  substantially in the forms attached to the Agreement as
Exhibit B-1,  (ii) if such transfer is  purportedly  being made in reliance upon
Rule 501(a) under the 1933 Act,  written  certifications  from the Holder of the
Certificate  desiring to effect the transfer and from such Holder's  prospective
transferee,  substantially  in the form attached to the Agreement as Exhibit B-2
and (iii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such  registration or qualification  (which Opinion
of Counsel  shall not be an expense of the Trust Fund or of the  Depositor,  the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the  Certificate  desiring to effect the transfer and/or such Holder's
prospective  transferee upon which such Opinion of Counsel is based. None of the
Depositor,  the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other  securities  law or to take any action not  otherwise  required
under  the  Agreement  to  permit  the  transfer  of such  Certificates  without
registration or qualification.  Any Holder desiring to effect a transfer of this
Certificate  shall be required to indemnify  the  Trustee,  the  Depositor,  the
Master Servicer and the Securities  Administrator against any liability that may
result if the transfer is not so exempt or is not made in  accordance  with such
federal and state laws.

     No transfer of this  Certificate to a Plan subject to ERISA or Section 4975
of the Code,  any Person acting,  directly or indirectly,  on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 6.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations  representing Percentage Interests specified in the
Agreement.  As provided  in the  Agreement  and  subject to certain  limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized  denominations evidencing the same aggregate Percentage
Interest,  as requested by the Holder  surrendering  the same. No service charge
will be made for any such  registration of transfer or exchange of Certificates,
but the  Securities  Administrator  may require  payment of a sum  sufficient to
cover any tax or other  governmental  charge  that may be imposed in  connection
with any transfer or exchange of Certificates.

     The  Depositor,   the  Master   Servicer,   the  Trustee,   the  Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee,  the Securities  Administrator or the Servicer may treat the Person
in whose  name  this  Certificate  is  registered  as the owner  hereof  for all
purposes,  and none of the  Depositor,  the Master  Servicer,  the Trustee,  the
Securities  Administrator,  the Servicer nor any such agent shall be affected by
notice to the contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall  terminate upon payment to the  Certificateholders  of all amounts held by
the  Securities  Administrator  and required to be paid to them  pursuant to the
Agreement  following the earlier of (i) the final  payment or other  liquidation
(or any advance with respect  thereto) of the last  Mortgage  Loan  remaining in
REMIC I and (ii) the  purchase by the party  designated  in the  Agreement  at a
price  determined as provided in the Agreement  from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property  acquired in respect of any
Mortgage Loan at a price  determined as provided in the Agreement.  The exercise
of such right will effect early retirement of the  Certificates;  however,  such
right to purchase is subject to the aggregate Scheduled Principal Balance of the
Mortgage  Loans (and  properties  acquired  in respect  thereof)  at the time of
purchase being less than or equal to 10% of the aggregate  principal  balance of
the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and  neither  the  Trustee   nor  the   Securities   Administrator   assume  any
responsibility for their correctness.

     Unless the  certificate of  authentication  hereon has been executed by the
Securities  Administrator,  by manual  signature,  this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

     IN  WITNESS  WHEREOF,   the  Securities   Administrator   has  caused  this
Certificate to be duly executed.

Dated:
                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the   Class   CE   Certificates   referred   to  in  the
within-mentioned Agreement.

                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                          Authorized Officer

<PAGE>

                                 ABBREVIATIONS

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

TEN COM  -  as tenants in common          UNIF GIFT MIN ACT -    CUSTODIAN
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                               to Minors Act
TEN ENT  -  as tenants by the entireties                     -------------------
                                                                  (State)
JT TEN   -  as joint tenants with right
            if survivorship and not as
            tenants in common

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

                                   ASSIGNMENT

FOR  VALUE  RECEIVED,   the  undersigned  hereby  sell(s),   assign(s)  and
transfer(s) unto
                ----------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

     I  (we)  further  direct  the  Securities  Administrator  to  issue  a  new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address:

--------------------------------------------------------------------------------
-----------------------------------------------------------------------------  .

Dated:
                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise,  in immediately
available funds to
                   -------------------------------------------------------------
--------------------------------------------------------------------------------
for the account of
                  --------------------------------------------------------------
account number                                        or, if mailed by check, to
                  -----------------------------------
--------------------------------------------------------------------------------
         Applicable statements should be mailed to
                                                  ------------------------------
--------------------------------------------------------------------------------
This information is provided by
                               -------------------------------------------------
assignee named above, or
                        --------------------------------------------------------
its agent.

<PAGE>

                                   EXHIBIT A-4

                           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").

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
         SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
         AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
         OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
         OTHER APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE
         MEANING OF AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT
         ("REGULATION S"), OR (2) WITHIN THE UNITED STATES TO (A) "QUALIFIED
         INSTITUTIONAL BUYERS" WITHIN THE MEANING OF AND IN COMPLIANCE WITH RULE
         144A UNDER THE ACT ("RULE 144A") OR (B) TO INSTITUTIONAL INVESTORS THAT
         ARE "ACCREDITED INVESTORS" WITHIN THE MEANING OF RULE 501(A)(1), (2),
         (3) OR (7) OF "REGULATION D" UNDER THE ACT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
         TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(C) OF THE
         AGREEMENT.

<PAGE>

Series 2005-HE7, Class P                             Aggregate Certificate
                                                     Principal Balance of the
                                                     Class P Certificates as of
                                                     the Issue Date: $100.00

Cut-off Date and date of Pooling                     Denomination: $100.00
and Servicing Agreement: November 1, 2005

First Distribution Date: November 25, 2005           Master Servicer:
                                                     Wells Fargo Bank, N.A.

No. __                                               Trustee: HSBC Bank USA,
                                                     National Association

                                                     Issue Date:
                                                     November 28, 2005

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE7
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate, first lien mortgage loans (the "Mortgage Loans") formed and
sold by

                              ACE SECURITIES CORP.

        THIS  CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
        IN ACE  SECURITIES  CORP.,  THE MASTER  SERVICER,  THE SECURITIES
        ADMINISTRATOR,   THE  SERVICER,  THE  TRUSTEE  OR  ANY  OF  THEIR
        RESPECTIVE   AFFILIATES.   NEITHER  THIS   CERTIFICATE   NOR  THE
        UNDERLYING  MORTGAGE  LOANS  ARE  GUARANTEED  BY  ANY  AGENCY  OR
        INSTRUMENTALITY OF THE UNITED STATES.

     This  certifies  that____________________  is  the  registered  owner  of a
Percentage  Interest  (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain  beneficial  ownership interest evidenced by all
the  Class P  Certificates  in REMIC  III  created  pursuant  to a  Pooling  and
Servicing  Agreement,  dated as  specified  above (the  "Agreement"),  among ACE
Securities Corp., as depositor  (hereinafter called the "Depositor",  which term
includes any successor  entity under the  Agreement),  Wells Fargo Bank, N.A. as
master  servicer  (the "Master  Servicer")  and  securities  administrator  (the
"Securities Administrator"), Wells Fargo Bank, N.A. as servicer (the "Servicer")
and HSBC Bank USA, National Association as trustee (the "Trustee"), a summary of
certain of the  pertinent  provisions  of which is set forth  hereafter.  To the
extent not defined herein,  the capitalized  terms used herein have the meanings
assigned in the  Agreement.  This  Certificate is issued under and is subject to
the terms,  provisions and conditions of the Agreement,  to which  Agreement the
Holder of this  Certificate  by virtue of the  acceptance  hereof assents and by
which such Holder is bound.

     Pursuant to the terms of the Agreement,  distributions  will be made on the
25th day of each month or, if such 25th day is not a Business  Day, the Business
Day immediately following such 25th day (a "Distribution  Date"),  commencing on
the First  Distribution  Date specified  above, to the Person in whose name this
Certificate  is  registered  on the  last  Business  Day of the  calendar  month
immediately  preceding the month in which the related  Distribution  Date occurs
(the  "Record  Date"),  in an  amount  equal to the  product  of the  Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class P Certificates on such Distribution Date pursuant to the
Agreement.

     All  distributions  to the Holder of this  Certificate  under the Agreement
will be made or  caused  to be  made  by the  Securities  Administrator  by wire
transfer in immediately  available  funds to the account of the Person  entitled
thereto if such Person shall have so notified the  Securities  Administrator  in
writing at least five Business Days prior to the Record Date  immediately  prior
to such  Distribution  Date and is the registered  owner of Class P Certificates
the aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal  Balance of the Class P Certificates,  or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final  distribution  on this  Certificate  will be made  after due notice by the
Securities  Administrator  of the  pendency of such  distribution  and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.

     This  Certificate  is  one  of a  duly  authorized  issue  of  Certificates
designated as Asset Backed  Pass-Through  Certificate of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates  specified on the face hereof equal to the
denomination  specified on the face hereof divided by the aggregate  Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

     The Certificates are limited in right of payment to certain collections and
recoveries  respecting the Mortgage Loans,  all as more  specifically  set forth
herein and in the Agreement. As provided in the Agreement,  withdrawals from the
Collection  Account and the  Distribution  Account may be made from time to time
for purposes  other than  distributions  to  Certificateholders,  such  purposes
including  reimbursement  of advances made, or certain expenses  incurred,  with
respect to the Mortgage Loans.

     The  Agreement  permits,  with certain  exceptions  therein  provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Depositor, the Master Servicer, the Trustee, the Securities  Administrator,  the
Servicer  and the rights of the  Certificateholders  under the  Agreement at any
time  by the  Depositor,  the  Master  Servicer,  the  Trustee,  the  Securities
Administrator  and the Servicer with the consent of the Holders of  Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this  Certificate  shall be  conclusive  and binding on such Holder and upon all
future  Holders  of this  Certificate  and of any  Certificate  issued  upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this  Certificate.  The Agreement  also permits the
amendment thereof, in certain limited circumstances,  without the consent of the
Holders of any of the Certificates.

     As provided in the Agreement and subject to certain limitations therein set
forth,  the  transfer of this  Certificate  is  registrable  in the  Certificate
Register upon surrender of this  Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement,  duly endorsed by, or  accompanied by an assignment in the form below
or other written  instrument of transfer in form  satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing,  and thereupon one or more new  Certificates  of the same
Class in  authorized  denominations  evidencing  the same  aggregate  Percentage
Interest will be issued to the designated transferee or transferees.

     No transfer of this  Certificate  shall be made unless the transfer is made
pursuant to an effective  registration  statement  under the  Securities  Act of
1933,  as  amended  (the  "1933  Act"),   and  an  effective   registration   or
qualification   under  applicable  state  securities  laws,  or  is  made  in  a
transaction  that does not require such  registration or  qualification.  In the
event  that  such  a  transfer  of  this  Certificate  is  to  be  made  without
registration  or  qualification,  the  Securities  Administrator  shall  require
receipt of (i) if such transfer is purportedly  being made in reliance upon Rule
144A or Regulation S under the 1933 Act, written  certifications from the Holder
of the  Certificate  desiring  to effect the  transfer,  and from such  Holder's
prospective transferee,  substantially in the forms attached to the Agreement as
Exhibit B-1,  (ii) if such transfer is  purportedly  being made in reliance upon
Rule 501(a) under the 1933 Act,  written  certifications  from the Holder of the
Certificate  desiring to effect the transfer and from such Holder's  prospective
transferee,  substantially  in the form attached to the Agreement as Exhibit B-2
and (iii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such  registration or qualification  (which Opinion
of Counsel  shall not be an expense of the Trust Fund or of the  Depositor,  the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the  Certificate  desiring to effect the transfer and/or such Holder's
prospective  transferee upon which such Opinion of Counsel is based. None of the
Depositor,  the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other  securities  law or to take any action not  otherwise  required
under  the  Agreement  to  permit  the  transfer  of such  Certificates  without
registration or qualification.  Any Holder desiring to effect a transfer of this
Certificate  shall be required to indemnify  the  Trustee,  the  Depositor,  the
Master Servicer and the Securities  Administrator against any liability that may
result if the transfer is not so exempt or is not made in  accordance  with such
federal and state laws.

     No transfer of this  Certificate to a Plan subject to ERISA or Section 4975
of the Code,  any Person acting,  directly or indirectly,  on behalf of any such
Plan or any Person using "Plan Assets" to acquire this Certificate shall be made
except in accordance with Section 6.02(c) of the Agreement.

     The Certificates are issuable in fully registered form only without coupons
in Classes and denominations  representing Percentage Interests specified in the
Agreement.  As provided  in the  Agreement  and  subject to certain  limitations
therein set forth, the Certificates are exchangeable for new Certificates of the
same Class in authorized  denominations evidencing the same aggregate Percentage
Interest,  as requested by the Holder  surrendering  the same. No service charge
will be made for any such  registration of transfer or exchange of Certificates,
but the  Securities  Administrator  may require  payment of a sum  sufficient to
cover any tax or other  governmental  charge  that may be imposed in  connection
with any transfer or exchange of Certificates.

     The  Depositor,   the  Master   Servicer,   the  Trustee,   the  Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee,  the Securities  Administrator or the Servicer may treat the Person
in whose  name  this  Certificate  is  registered  as the owner  hereof  for all
purposes,  and none of the  Depositor,  the Master  Servicer,  the Trustee,  the
Securities  Administrator,  the Servicer nor any such agent shall be affected by
notice to the contrary.

     The obligations created by the Agreement and the Trust Fund created thereby
shall  terminate upon payment to the  Certificateholders  of all amounts held by
the  Securities  Administrator  and required to be paid to them  pursuant to the
Agreement  following the earlier of (i) the final  payment or other  liquidation
(or any advance with respect  thereto) of the last  Mortgage  Loan  remaining in
REMIC I and (ii) the  purchase by the party  designated  in the  Agreement  at a
price  determined as provided in the Agreement  from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property  acquired in respect of any
Mortgage Loan at a price  determined as provided in the Agreement.  The exercise
of such right will effect early retirement of the  Certificates;  however,  such
right to purchase is subject to the aggregate Scheduled Principal Balance of the
Mortgage  Loans (and  properties  acquired  in respect  thereof)  at the time of
purchase being less than or equal to 10% of the aggregate  principal  balance of
the Mortgage Loans as of the Cut-off Date.

     The recitals contained herein shall be taken as statements of the Depositor
and  neither  the  Trustee   nor  the   Securities   Administrator   assume  any
responsibility for their correctness.

     Unless the  certificate of  authentication  hereon has been executed by the
Securities  Administrator,  by manual  signature,  this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

     IN  WITNESS  WHEREOF,   the  Securities   Administrator   has  caused  this
Certificate to be duly executed.

Dated:
                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the   Class   P   Certificates   referred   to  in  the
within-mentioned Agreement.

                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                          Authorized Officer

<PAGE>

                                 ABBREVIATIONS

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

TEN COM  -  as tenants in common          UNIF GIFT MIN ACT -    CUSTODIAN
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                               to Minors Act
TEN ENT  -  as tenants by the entireties                     -------------------
                                                                  (State)
JT TEN   -  as joint tenants with right
            if survivorship and not as
            tenants in common

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

                                   ASSIGNMENT

FOR  VALUE  RECEIVED,   the  undersigned  hereby  sell(s),   assign(s)  and
transfer(s) unto
                ----------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

     I  (we)  further  direct  the  Securities  Administrator  to  issue  a  new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address:

--------------------------------------------------------------------------------
-----------------------------------------------------------------------------  .

Dated:
                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise,  in immediately
available funds to
                   -------------------------------------------------------------
--------------------------------------------------------------------------------
for the account of
                  --------------------------------------------------------------
account number                                        or, if mailed by check, to
                  -----------------------------------
--------------------------------------------------------------------------------
         Applicable statements should be mailed to
                                                  ------------------------------
--------------------------------------------------------------------------------
This information is provided by
                               -------------------------------------------------
assignee named above, or
                        --------------------------------------------------------
its agent.

<PAGE>

                                   EXHIBIT A-6

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
         REPRESENTS THE SOLE "RESIDUAL INTEREST" IN EACH "REAL ESTATE MORTGAGE
         INVESTMENT CONDUIT" ("REMIC"), AS THOSE TERMS ARE DEFINED,
         RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
         1986 (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE
         AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         SECURITIES ADMINISTRATOR THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
         STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION
         THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
         AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION
         (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
         EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
         ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
         (3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE
         (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3)
         SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR
         (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
         TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
         SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
         REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
         DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
         AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
         TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
         BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
         CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL
         BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
         PROVISIONS OF SECTION 6.02(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY
         PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
         BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

         ANY PERSON ACQUIRING A CERTIFICATE DIRECTLY OR INDIRECTLY BY, ON BEHALF
         OF, OR WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
         ARRANGEMENT THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
         INTERNAL REVENUE CODE OF 1986, SHALL BE DEEMED TO HAVE MADE THE
         REPRESENTATIONS OR PROVIDED THE OPINION OF COUNSEL IN SECTION 6.02(C)
         OF THE POOLING AND SERVICING AGREEMENT.

<PAGE>

Series 2005-HE7, Class R                    Aggregate Percentage Interest of the
                                            Class R Certificates as of the
                                            Issue Date: 100.00%

Date of Pooling and Servicing Agreement     Master Servicer:
and Cut-off Date: November 1, 2005          Wells Fargo Bank, N.A.

First Distribution Date:                    Trustee: HSBC Bank USA,
November 25, 2005                           National Association

No __                                       Issue Date: November 28, 2005

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE7
                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family, fixed and
adjustable-rate first lien mortgage loans (the "Mortgage Loans") formed and sold
by

                              ACE SECURITIES CORP.

            THIS  CERTIFICATE  DOES NOT  REPRESENT AN  OBLIGATION  OF OR
            INTEREST IN ACE SECURITIES  CORP., THE MASTER SERVICER,  THE
            SECURITIES  ADMINISTRATOR,  THE SERVICER, THE TRUSTEE OR ANY
            OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR
            THE  UNDERLYING  MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY
            OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC III created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among ACE
Securities Corp., as depositor (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), Wells Fargo Bank, N.A. as
master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), Wells Fargo Bank, N.A. as servicer (the "Servicer")
and HSBC Bank USA, National Association as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
R Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificate of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Trustee, the
Securities Administrator and the Servicer with the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Securities Administrator
as provided in the Agreement, duly endorsed by, or accompanied by an assignment
in the form below or other written instrument of transfer in form satisfactory
to the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit B-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee, the Master Servicer or the Securities Administrator in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Trustee or the Securities Administrator is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Master Servicer and the Securities Administrator against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 6.02 of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Securities Administrator (i) an affidavit to the effect that such transferee is
any Person other than a Disqualified Organization or the agent (including a
broker, nominee or middleman) of a Disqualified Organization, and (ii) a
certificate that acknowledges that (A) the Class R Certificates have been
designated as representing the beneficial ownership of the residual interests in
each of REMIC I and REMIC II, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 6.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any portion
of the Trust Fund to cease to qualify as a REMIC or cause the imposition of a
tax upon any REMIC.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

                  The Depositor, the Master Servicer, the Trustee, the
Securities Administrator, the Servicer and any agent of the Depositor, the
Master Servicer, the Trustee, the Securities Administrator or the Servicer may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Master Servicer, the
Trustee, the Securities Administrator, the Servicer nor any such agent shall be
affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Scheduled Principal Balance of the Mortgage Loans (and properties acquired in
respect thereof) at the time of purchase being less than or equal to 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and neither the Trustee nor the Securities Administrator assume
any responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Securities Administrator, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

<PAGE>

     IN  WITNESS  WHEREOF,   the  Securities   Administrator   has  caused  this
Certificate to be duly executed.

Dated:
                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                           Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                                     WELLS FARGO BANK, N.A.
                                                     as Securities Administrator

                                                     By:________________________
                                                          Authorized Signatory

<PAGE>

                                 ABBREVIATIONS

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

TEN COM  -  as tenants in common          UNIF GIFT MIN ACT -    CUSTODIAN
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                               to Minors Act
TEN ENT  -  as tenants by the entireties                     -------------------
                                                                  (State)
JT TEN   -  as joint tenants with right
            if survivorship and not as
            tenants in common

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

                                   ASSIGNMENT

FOR  VALUE  RECEIVED,   the  undersigned  hereby  sell(s),   assign(s)  and
transfer(s) unto
                ----------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to _____% evidenced by the within Asset Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

     I  (we)  further  direct  the  Securities  Administrator  to  issue  a  new
Certificate of a like Percentage  Interest and Class to the above named assignee
and deliver such Certificate to the following address:

--------------------------------------------------------------------------------
-----------------------------------------------------------------------------  .

Dated:
                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise,  in immediately
available funds to
                   -------------------------------------------------------------
--------------------------------------------------------------------------------
for the account of
                  --------------------------------------------------------------
account number                                        or, if mailed by check, to
                  -----------------------------------
--------------------------------------------------------------------------------
         Applicable statements should be mailed to
                                                  ------------------------------
--------------------------------------------------------------------------------
This information is provided by
                               -------------------------------------------------
assignee named above, or
                        --------------------------------------------------------
its agent.

<PAGE>

                                   EXHIBIT B-1
                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                     [Date]

Wells Fargo Bank, N.A.
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2005-HE7

          Re:  ACE  Securities  Corp.  Home Equity Loan Trust,  Series  2005-HE7
               Asset  Backed  Pass-Through  Certificates  Class CE,  Class P and
               Class R Certificates
               -----------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to ___________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
November 1, 2005, among ACE Securities Corp. as Depositor, Wells Fargo Bank,
N.A. as Master Servicer and Securities Administrator, Wells Fargo Bank, N.A. as
Servicer, and HSBC Bank USA, National Association as trustee (the "Pooling and
Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                                     Very truly yours,

                                                     [Transferor]

                                                     By:________________________
                                                        Name:
                                                        Title:

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                                       [Date]

Wells Fargo Bank, N.A.
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2005-HE7

          Re:  ACE  Securities  Corp.  Home Equity Loan Trust,  Series  2005-HE7
               Asset  Backed  Pass-Through  Certificates  Class CE,  Class P and
               Class R Certificates
               -----------------------------------------------------------------
Ladies and Gentlemen:

                  In connection with the purchase from
______________________________ (the "Transferor") on the date hereof of the
captioned trust certificates (the "Certificates"), (the "Transferee") hereby
certifies as follows:

                           1. The Transferee is a "qualified institutional
                  buyer" as that term is defined in Rule 144A ("Rule 144A")
                  under the Securities Act of 1933 (the "1933 Act") and has
                  completed either of the forms of certification to that effect
                  attached hereto as Annex 1 or Annex 2. The Transferee is aware
                  that the sale to it is being made in reliance on Rule 144A.
                  The Transferee is acquiring the Certificates for its own
                  account or for the account of a qualified institutional buyer,
                  and understands that such Certificate may be resold, pledged
                  or transferred only (i) to a person reasonably believed to be
                  a qualified institutional buyer that purchases for its own
                  account or for the account of a qualified institutional buyer
                  to whom notice is given that the resale, pledge or transfer is
                  being made in reliance on Rule 144A, or (ii) pursuant to
                  another exemption from registration under the 1933 Act.

                           2. The Transferee has been furnished with all
                  information regarding (a) the Certificates and distributions
                  thereon, (b) the nature, performance and servicing of the
                  Mortgage Loans, (c) the Pooling and Servicing Agreement
                  referred to below, and (d) any credit enhancement mechanism
                  associated with the Certificates, that it has requested.

                           3. The Transferee: (a) is not an employee benefit
                  plan or other plan subject to the prohibited transaction
                  provisions of the Employee Retirement Income Security Act of
                  1974, as amended ("ERISA"), or Section 4975 of the Internal
                  Revenue Code of 1986, as amended (the "Code") (each, a
                  "Plan"), or any other person (including an investment manager,
                  a named fiduciary or a trustee of any Plan) acting, directly
                  or indirectly, on behalf of or purchasing any Certificate with
                  "plan assets" of any Plan within the meaning of the Department
                  of Labor ("DOL") regulation at 29 C.F.R. ss. 2510.3-101 or (b)
                  has provided the Securities Administrator with an opinion of
                  counsel on which the Trustee, the Depositor, the Master
                  Servicer, the Securities Administrator and the Servicer may
                  rely, acceptable to and in form and substance satisfactory to
                  the Trustee to the effect that the purchase of Certificates is
                  permissible under applicable law, will not constitute or
                  result in any non-exempt prohibited transaction under ERISA or
                  Section 4975 of the Code and will not subject the Trust Fund,
                  the Trustee, the Depositor, the Master Servicer, the
                  Securities Administrator or the Servicer to any obligation or
                  liability (including obligations or liabilities under ERISA or
                  Section 4975 of the Code) in addition to those undertaken in
                  the Pooling and Servicing Agreement.

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 3 above.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of November 1, 2005, among ACE Securities Corp. as
Depositor, Wells Fargo Bank, N.A. as Master Servicer and Securities
Administrator, Wells Fargo Bank, N.A. as Servicer and HSBC Bank USA, National
Association as Trustee, pursuant to which the Certificates were issued.

                                                     [TRANSFEREE]

                                                     By:________________________
                                                        Name:
                                                        Title:

<PAGE>

                                                          ANNEX 1 TO EXHIBIT B-1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $________________(1) in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

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

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

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

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

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

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

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

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

-------------------
(1)   Transferee must own and/or invest on a discretionary basis at least
      $100,000,000 in securities unless Transferee is a dealer, and, in that
      case, Transferee must own and/or invest on a discretionary basis at least
      $10,000,000 in securities.

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

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

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

   ___          ___          Will the Transferee be purchasing the Certificates
   Yes           No          only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

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

Dated:
                                                     ---------------------------
                                                     Print Name of Transferee

                                                     By:________________________
                                                        Name:
                                                        Title:

<PAGE>

                                                          ANNEX 2 TO EXHIBIT B-1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, N.A., as Securities
Administrator, with respect to the asset backed pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

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

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

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

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

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

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

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

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:
                                             -----------------------------------
                                             Print Name of Transferee or Advisor

                                             By:________________________________
                                                Name:
                                                Title:

                                             IF AN ADVISER:

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

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1. I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
         defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
         as amended.

                  3. As of the date specified below (which is not earlier than
         the last day of the Purchaser's most recent fiscal year), the amount of
         "securities", computed for purposes of Rule 144A, owned and invested on
         a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser
                             ---------------------------------------------------

By: (Signature)
                             ---------------------------------------------------

Name of Signatory
                             ---------------------------------------------------

Title
                             ---------------------------------------------------

Date of this certificate
                             ---------------------------------------------------

Date of information provided in paragraph 3
                                            ------------------------------------

<PAGE>

                                                          ANNEX A TO EXHIBIT B-1

                    FORM OF REGULATION S TRANSFER CERTIFICATE

[Date]

Wells Fargo Bank, N.A.
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2005-HE7

               Re:  ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE7
                    Asset   Backed   Pass-Through    Certificates,    Class   CE
                    Certificates and/or Class P Certificates
                    ------------------------------------------------------------

Ladies and Gentlemen:

                  Reference is hereby made to the Pooling and Servicing
Agreement (the "Agreement"), dated as of November 1, 2005, among ACE Securities
Corp. (the "Depositor"), Wells Fargo Bank, N.A., as master servicer and
securities administrator (the "Master Servicer"), Wells Fargo Bank, N.A. as
servicer (the "Servicer") and HSBC Bank USA, National Association, as trustee
(the "Trustee"). Capitalized terms used herein but not defined herein shall have
the meanings assigned thereto in the Agreement.

                  This letter relates to U.S. $[__________] Certificate
Principal Balance of Class [CE][P] Certificates (the "Certificates") which are
held in the name of [name of transferor] (the "Transferor") to effect the
transfer of the Certificates to a person who wishes to take delivery thereof in
the form of an equivalent beneficial interest [name of transferee] (the
"Transferee").

                  In connection with such request, the Transferor hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement relating to the Certificates and that
the following additional requirements (if applicable) were satisfied:

                  (a) the offer of the Certificates was not made to a person in
the United States;

                  (b) at the time the buy order was originated, the Transferee
was outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the Transferee was outside the United States;

                  (c) no directed selling efforts were made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;

                    (d)  the  transfer  or  exchange  is not  part  of a plan or
scheme to evade the  registration  requirements  of the Securities Act;

                  (e) the Transferee is not a U.S. Person, as defined in
Regulation S under the Securities Act;

                  (f) the transfer was made in accordance with the applicable
provisions of Rule 903(b)(2) or (3) or Rule 904(b)(1), as the case may be; and

                  (g) the Transferee understands that the Certificates have not
been and will not be registered under the Securities Act, that any offers, sales
or deliveries of the Certificates purchased by the Transferee in the United
States or to U.S. persons prior to the date that is 40 days after the later of
(i) the commencement of the offering of the Certificates and (ii) the Closing
Date, may constitute a violation of United States law, and that (x)
distributions of principal and interest and (y) the exchange of beneficial
interests in a Temporary Regulation S Global Certificate for beneficial
interests in the related Permanent Regulation S Global Certificate, in each
case, will be made in respect of such Certificates only following the delivery
by the Holder of a certification of non-U.S. beneficial ownership, at the times
and in the manner set forth in the Agreement.

<PAGE>

                  You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

                                                      [Name of Transferor]

                                                      By:_______________________
                                                         Name:
                                                         Title:

<PAGE>

                                   EXHIBIT B-2

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                              ____________, 20__

Wells Fargo Bank, N.A.
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2005-HE7

               Re:  ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE7
                    Asset Backed Pass-Through Certificates,
                    Class CE, Class P and Class R Certificates
                    ------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferor hereby
certifies as follows:

                  Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act'), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.

                                                      Very truly yours,

                                                      --------------------------
                                                      (Transferor)

                                                      By:_______________________
                                                         Name:
                                                         Title:

<PAGE>

                            FORM OF TRANSFEREE LETTER

                                                           _______________, 20__

Wells Fargo Bank, N.A.
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2005-HE7

               Re:  ACE Securities Corp. Home Equity Loan Trust, Series 2005-HE7
                    Asset Backed Pass-Through Certificates,
                    Class CE, Class P and Class R Certificates
                    ------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ______________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferee hereby
certifies as follows:

                  1. The Transferee understands that (a) the Certificates have
         not been and will not be registered or qualified under the Securities
         Act of 1933, as amended (the "Act") or any state securities law, (b)
         the Depositor is not required to so register or qualify the
         Certificates, (c) the Certificates may be resold only if registered and
         qualified pursuant to the provisions of the Act or any state securities
         law, or if an exemption from such registration and qualification is
         available, (d) the Pooling and Servicing Agreement contains
         restrictions regarding the transfer of the Certificates and (e) the
         Certificates will bear a legend to the foregoing effect.

                  2. The Transferee is acquiring the Certificates for its own
         account for investment only and not with a view to or for sale in
         connection with any distribution thereof in any manner that would
         violate the Act or any applicable state securities laws.

                  3. The Transferee is (a) a substantial, sophisticated
         institutional investor having such knowledge and experience in
         financial and business matters, and, in particular, in such matters
         related to securities similar to the Certificates, such that it is
         capable of evaluating the merits and risks of investment in the
         Certificates, (b) able to bear the economic risks of such an investment
         and (c) an "accredited investor" within the meaning of Rule 501(a)
         promulgated pursuant to the Act.

                  4. The Transferee has been furnished with, and has had an
         opportunity to review (a) a copy of the Pooling and Servicing Agreement
         and (b) such other information concerning the Certificates, the
         Mortgage Loans and the Depositor as has been requested by the
         Transferee from the Depositor or the Transferor and is relevant to the
         Transferee's decision to purchase the Certificates. The Transferee has
         had any questions arising from such review answered by the Depositor or
         the Transferor to the satisfaction of the Transferee.

                  5. The Transferee has not and will not nor has it authorized
         or will it authorize any person to (a) offer, pledge, sell, dispose of
         or otherwise transfer any Certificate, any interest in any Certificate
         or any other similar security to any person in any manner, (b) solicit
         any offer to buy or to accept a pledge, disposition of other transfer
         of any Certificate, any interest in any Certificate or any other
         similar security from any person in any manner, (c) otherwise approach
         or negotiate with respect to any Certificate, any interest in any
         Certificate or any other similar security with any person in any
         manner, (d) make any general solicitation by means of general
         advertising or in any other manner or (e) take any other action, that
         (as to any of (a) through (e) above) would constitute a distribution of
         any Certificate under the Act, that would render the disposition of any
         Certificate a violation of Section 5 of the 1933 Act or any state
         securities law, or that would require registration or qualification
         pursuant thereto. The Transferee will not sell or otherwise transfer
         any of the Certificates, except in compliance with the provisions of
         the Pooling and Servicing Agreement.

                  6. The Transferee: (a) is not an employee benefit plan or
         other plan subject to the prohibited transaction provisions of the
         Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
         or Section 4975 of the Internal Revenue Code of 1986, as amended (the
         "Code") (each, a "Plan"), or any other person (including an investment
         manager, a named fiduciary or a trustee of any Plan) acting, directly
         or indirectly, on behalf of or purchasing any Certificate with "plan
         assets" of any Plan within the meaning of the Department of Labor
         ("DOL") regulation at 29 C.F.R. ss. 2510.3-101 or (b) has provided the
         Trustee with an opinion of counsel on which the Depositor, the Master
         Servicer, the Securities Administrator, the Trustee and the Servicer
         may rely, acceptable to and in form and substance satisfactory to the
         Trustee to the effect that the purchase of Certificates is permissible
         under applicable law, will not constitute or result in any non-exempt
         prohibited transaction under ERISA or Section 4975 of the Code and will
         not subject the Trust Fund, the Trustee, the Master Servicer, the
         Securities Administrator, the Depositor or the Servicer to any
         obligation or liability (including obligations or liabilities under
         ERISA or Section 4975 of the Code) in addition to those undertaken in
         the Pooling and Servicing Agreement.

                  In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 6 above.

                                                      Very truly yours,

                                                      By:_______________________
                                                      Name:
                                                      Title:

<PAGE>

                                   EXHIBIT B-3

                        TRANSFER AFFIDAVIT AND AGREEMENT

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

          ___________________________  being duly sworn, deposes, represents and
     warrants as follows:

          1.   I am a _____________________  of  _______________________________
               (the "Owner") a corporation duly organized and existing under the
               laws  of  _________________________,  the  record  owner  of  ACE
               Securities  Corp.  Home Equity Loan Trust,  Series 2005-HE7 Asset
               Backed  Pass-Through  Certificates,  Class  R  Certificates  (the
               "Class R Certificates"),  on behalf of whom I make this affidavit
               and agreement. Capitalized terms used but not defined herein have
               the  respective  meanings  assigned  thereto in the  Pooling  and
               Servicing  Agreement  pursuant to which the Class R  Certificates
               were issued.

          2.   The  Owner  (i) is and  will be a  "Permitted  Transferee"  as of
               ____________________.  ____ and  (ii) is  acquiring  the  Class R
               Certificates  for its own  account or for the  account of another
               Owner from which it has received an  affidavit  in  substantially
               the same form as this affidavit.  A "Permitted Transferee" is any
               person other than a "disqualified  organization"  or a possession
               of  the  United  States.   For  this  purpose,   a  "disqualified
               organization"  means the United  States,  any state or  political
               subdivision  thereof, any agency or instrumentality of any of the
               foregoing (other than an instrumentality all of the activities of
               which are subject to tax and,  except for the  Federal  Home Loan
               Mortgage  Corporation,  a majority of whose board of directors is
               not  selected  by any such  governmental  entity) or any  foreign
               government,   international   organization   or  any   agency  or
               instrumentality of such foreign  government or organization,  any
               real  electric  or  telephone  cooperative,  or any  organization
               (other than  certain  farmers'  cooperatives)  that is  generally
               exempt  from  federal  income tax  unless  such  organization  is
               subject to the tax on unrelated business taxable income.

          3.   The  Owner is  aware  (i) of the tax that  would  be  imposed  on
               transfers   of  the   Class  R   Certificates   to   disqualified
               organizations  under  the  Internal  Revenue  Code of  1986  that
               applies to all transfers of the Class R Certificates  after April
               31, 1988;  (ii) that such tax would be on the  transferor  or, if
               such  transfer  is  through  an agent  (which  person  includes a
               broker, nominee or middleman) for a non-Permitted  Transferee, on
               the agent;  (iii) that the  person  otherwise  liable for the tax
               shall be  relieved  of  liability  for the tax if the  transferee
               furnishes to such person an affidavit  that the  transferee  is a
               Permitted  Transferee  and, at the time of transfer,  such person
               does not have actual  knowledge that the affidavit is false;  and
               (iv) that each of the Class R Certificates  may be a "noneconomic
               residual  interest"  within  the  meaning  of  proposed  Treasury
               regulations promulgated under the Code and that the transferor of
               a  "noneconomic  residual  interest"  will remain  liable for any
               taxes due with respect to the income on such  residual  interest,
               unless no  significant  purpose of the  transfer is to impede the
               assessment or collection of tax.

          4.   The Owner is aware of the tax imposed on a "pass-through  entity"
               holding  the  Class R  Certificates  if, at any time  during  the
               taxable  year  of  the   pass-through   entity,  a  non-Permitted
               Transferee  is the record  holder of an interest in such  entity.
               (For this purpose,  a "pass-through  entity" includes a regulated
               investment  company,  a real  estate  investment  trust or common
               trust  fund,  a  partnership,   trust  or  estate,   and  certain
               cooperatives.)

          5.   The Owner is aware  that the  Securities  Administrator  will not
               register  the  transfer  of any Class R  Certificate  unless  the
               transferee, or the transferee's agent, delivers to the Securities
               Administrator,  among other things, an affidavit in substantially
               the same form as this affidavit.  The Owner expressly agrees that
               it will not  consummate any such transfer if it knows or believes
               that any of the  representations  contained in such affidavit and
               agreement are false.

          6.   The Owner consents to any additional restrictions or arrangements
               that  shall  be  deemed  necessary  upon  advice  of  counsel  to
               constitute  a reasonable  arrangement  to ensure that the Class R
               Certificates  will only be owned,  directly or indirectly,  by an
               Owner that is a Permitted Transferee.

          7.   The Owner's taxpayer identification number is ________________.

          8.   The Owner has reviewed the  restrictions set forth on the face of
               the Class R Certificates and the provisions of Section 6.02(d) of
               the  Pooling  and  Servicing  Agreement  under  which the Class R
               Certificates  were issued (in  particular,  clauses  (iii)(A) and
               (iii)(B)  of  Section  6.02(d)  which  authorize  the  Securities
               Administrator  to  deliver  payments  to a person  other than the
               Owner  and   negotiate  a  mandatory   sale  by  the   Securities
               Administrator  in the event that the Owner holds such Certificate
               in violation of Section  6.02(d));  and that the Owner  expressly
               agrees to be bound by and to comply  with such  restrictions  and
               provisions.

          9.   The  Owner is not  acquiring  and will not  transfer  the Class R
               Certificates  in order to impede the  assessment or collection of
               any tax.

          10.  The Owner anticipates that it will, so long as it holds the Class
               R Certificates,  have sufficient  assets to pay any taxes owed by
               the holder of such Class R Certificates, and hereby represents to
               and for the benefit of the person from whom it acquired the Class
               R  Certificates  that the Owner  intends to pay taxes  associated
               with holding such Class R Certificates  as they become due, fully
               understanding  that it may incur tax liabilities in excess of any
               cash flows generated by the Class R Certificates.

          11.  The Owner has no present  knowledge that it may become  insolvent
               or subject to a bankruptcy proceeding for so long as it holds the
               Class R Certificates.

          12.  The Owner has no present knowledge or expectation that it will be
               unable to pay any United  States  taxes owed by it so long as any
               of the Certificates remain outstanding.

          13.  The  Owner is not  acquiring  the Class R  Certificates  with the
               intent to  transfer  the Class R  Certificates  to any  person or
               entity that will not have sufficient assets to pay any taxes owed
               by the  holder of such Class R  Certificates,  or that may become
               insolvent or subject to a bankruptcy  proceeding,  for so long as
               the Class R Certificates remain outstanding.

          14.  The Owner will, in connection  with any transfer that it makes of
               the  Class  R  Certificates,   obtain  from  its  transferee  the
               representations  required  by Section  6.02(d) of the Pooling and
               Servicing  Agreement  under  which the Class R  Certificate  were
               issued and will not consummate any such transfer if it knows,  or
               knows  facts  that  should  lead it to  believe,  that  any  such
               representations are false.

          15.  The Owner will, in connection  with any transfer that it makes of
               the Class R Certificates, deliver to the Securities Administrator
               an  affidavit,  which  represents  and  warrants  that  it is not
               transferring the Class R Certificates to impede the assessment or
               collection  of any tax and that it has no actual  knowledge  that
               the proposed  transferee:  (i) has insufficient assets to pay any
               taxes  owed  by  such   transferee  as  holder  of  the  Class  R
               Certificates;   (ii)  may  become   insolvent  or  subject  to  a
               bankruptcy  proceeding  for so long as the  Class R  Certificates
               remains outstanding; and (iii) is not a "Permitted Transferee".

          16.  The  Owner is a citizen  or  resident  of the  United  States,  a
               corporation, partnership or other entity created or organized in,
               or  under  the  laws  of,  the  United  States  or any  political
               subdivision  thereof,  or an estate or trust  whose  income  from
               sources without the United States may be included in gross income
               for United States federal  income tax purposes  regardless of its
               connection  with the  conduct of a trade or  business  within the
               United States.

          17.  The Owner of the Class R  Certificate,  hereby agrees that in the
               event that the Trust Fund  created by the Pooling  and  Servicing
               Agreement is terminated  pursuant to Section 10.01  thereof,  the
               undersigned shall assign and transfer to the Holders of the Class
               CE and the  Class P  Certificates  any  amounts  in excess of par
               received in connection with such termination. Accordingly, in the
               event of such termination, the Securities Administrator is hereby
               authorized  to withhold  any such amounts in excess of par and to
               pay such amounts  directly to the Holders of the Class CE and the
               Class  P   Certificates.   This  agreement   shall  bind  and  be
               enforceable against any successor,  transferee or assigned of the
               undersigned  in the Class R Certificate.  In connection  with any
               transfer of the Class R  Certificate,  the Owner shall  obtain an
               agreement   substantially   similar  to  this   clause  from  any
               subsequent owner.

<PAGE>

     IN WITNESS WHEREOF,  the Owner has caused this instrument to be executed on
its behalf,  pursuant to the authority of its Board of Directors,  by its [Vice]
President,   attested   by  its   [Assistant]   Secretary,   this  ____  day  of
_________________, ____.

                                                      [OWNER]

                                                      By:_______________________
                                                         Name:
                                                         Title: [Vice] President

ATTEST:

By:----------------------------
   Name:
   Title: [Assistant] Secretary

     Personally appeared before me the above-named __________________,  known or
proved to me to be the same person who executed the foregoing  instrument and to
be a  [Vice]  President  of the  Owner,  and  acknowledged  to me that  [he/she]
executed  the same as  [his/her]  free act and deed and the free act and deed of
the Owner.

     Subscribed and sworn before me this ______________ day of __________, ____.

                                         _______________________________________
                                         Notary Public

                                         County of _____________________________
                                         State of ______________________________

                                                          My Commission expires:

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

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

     _________________________,   being  duly  sworn,  deposes,  represents  and
warrants as follows:

                  1. I am a ____________________ of _________________________
(the "Owner"), a corporation duly organized and existing under the laws of
_____________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee or a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit B-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

<PAGE>

     IN WITNESS WHEREOF,  the Owner has caused this instrument to be executed on
its behalf,  pursuant to the authority of its Board of Directors,  by its [Vice]
President,   attested   by  its   [Assistant]   Secretary,   this  ____  day  of
________________, ____.

                                                      [OWNER]

                                                      By:_______________________
                                                         Name:
                                                         Title: [Vice] President

ATTEST:

By:____________________________
   Name:
   Title: [Assistant] Secretary

     Personally appeared before me the above-named  _________________,  known or
proved to me to be the same person who executed the foregoing  instrument and to
be a  [Vice]  President  of the  Owner,  and  acknowledged  to me that  [he/she]
executed  the same as  [his/her]  free act and deed and the free act and deed of
the Owner.

     Subscribed and sworn before me this ______ day of _____________, ____.

                                        ________________________________________
                                        Notary Public

                                        County of ______________________________
                                        State of _______________________________

                                        My Commission expires:

<PAGE>

                                    EXHIBIT C

                         FORM OF SERVICER CERTIFICATION

Re:      __________ (the "Trust")

         MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE7

I, [identify the certifying individual], certify to ACE Securities Corp. (the
"Depositor"), HSBC Bank USA, National Association (the "Trustee") and Wells
Fargo Bank, National Association (the "Master Servicer"), and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:

         1.       Based on my knowledge, the information in the Annual Statement
                  of Compliance, the Annual Independent Public Accountant's
                  Servicing Report and all servicing reports, officer's
                  certificates and other information relating to the servicing
                  of the Mortgage Loans submitted to the Master Servicer taken
                  as a whole, does not contain any untrue statement of a
                  material fact or omit to state a material fact (constituting
                  information required to be provided by Wells Fargo Bank, N.A.
                  as Servicer (the "Servicer") under the Agreement) necessary to
                  make the statements made, in light of the circumstances under
                  which such statements were made, not misleading as of the date
                  of this certification.

         2.       Based on my knowledge, the servicing information required to
                  be provided to Master Servicer by the Servicer under the
                  Agreement has been provided to the Master Servicer.

         3.       I am responsible for reviewing the activities performed by the
                  Servicer under the Agreement and based upon my knowledge and
                  the review required by the Agreement, and except as disclosed
                  in the Annual Statement of Compliance or the Annual
                  Independent Public Accountant's Servicing Report submitted to
                  the Master Servicer, the Servicer has fulfilled its
                  obligations under the Agreement; and

         4.       I have disclosed to the Master Servicer all significant
                  deficiencies relating to the Servicer's compliance with the
                  minimum servicing standards in accordance with a review
                  conducted in compliance with the Uniform Single Attestation
                  Program for Mortgage Bankers or similar standard as set forth
                  in the Pooling and Servicing Agreement.

Capitalized terms used and not otherwise defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement, dated as of November 1,
2005, among ACE Securities Corp., Wells Fargo Bank, N.A., Wells Fargo Bank,
National Association and HSBC Bank USA, National Association.

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

---------------------------------
[Signature]

---------------------------------
[Title]

<PAGE>

                                    EXHIBIT D

                            FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
Wells Fargo Bank, N.A.
4828 Loop Central Drive
Houston, Texas 77081

Attn: _________________________________

                            LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that ________________, having its principal
place of business at ____________________, as Trustee (the "Trustee") pursuant
to that Pooling and Servicing Agreement among ___________________ (the
"Depositor"), Wells Fargo Bank, National Association, as Master Servicer and
Securities Administrator, Wells Fargo Bank, N.A. as the Servicer (the
"Servicer") and the Trustee, dated as of November 1, 2005 (the "Pooling and
Servicing Agreement"), hereby constitutes and appoints the Servicer, by and
through the Servicer's officers, the Trustee's true and lawful Attorney-in-Fact,
in the Trustee's name, place and stead and for the Trustee's benefit, in
connection with all mortgage loans serviced by the Servicer pursuant to the
Pooling and Servicing Agreement for the purpose of performing all acts and
executing all documents in the name of the Trustee as may be customarily and
reasonably necessary and appropriate to effectuate the following enumerated
transactions in respect of any of the mortgages or deeds of trust (the
"Mortgages" and the "Deeds of Trust", respectively) and promissory notes secured
thereby (the "Mortgage Notes") for which the undersigned is acting as Trustee
for various certificateholders (whether the undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) and for which the
Servicer is acting as servicer, all subject to the terms of the Pooling and
Servicing Agreement.

This appointment shall apply to the following enumerated transactions only:

1.                The modification or re-recording of a Mortgage or Deed of
                  Trust, where said modification or re-recordings is for the
                  purpose of correcting the Mortgage or Deed of Trust to conform
                  same to the original intent of the parties thereto or to
                  correct title errors discovered after such title insurance was
                  issued and said modification or re-recording, in either
                  instance, does not adversely affect the lien of the Mortgage
                  or Deed of Trust as insured.

2.                The subordination of the lien of a Mortgage or Deed of Trust
                  to an easement in favor of a public utility company of a
                  government agency or unit with powers of eminent domain; this
                  section shall include, without limitation, the execution of
                  partial satisfactions/releases, partial reconveyances or the
                  execution or requests to trustees to accomplish same.

3.                The conveyance of the properties to the mortgage insurer, or
                  the closing of the title to the property to be acquired as
                  real estate owned, or conveyance of title to real estate
                  owned.

4.                The completion of loan assumption agreements.

5.                The full satisfaction/release of a Mortgage or Deed of Trust
                  or full conveyance upon payment and discharge of all sums
                  secured thereby, including, without limitation, cancellation
                  of the related Mortgage Note.

6.                The assignment of any Mortgage or Deed of Trust and the
                  related Mortgage Note, in connection with the repurchase of
                  the mortgage loan secured and evidenced thereby.

7.                The full assignment of a Mortgage or Deed of Trust upon
                  payment and discharge of all sums secured thereby in
                  conjunction with the refinancing thereof, including, without
                  limitation, the assignment of the related Mortgage Note.

8.                With respect to a Mortgage or Deed of Trust, the foreclosure,
                  the taking of a deed in lieu of foreclosure, or the completion
                  of judicial or non-judicial foreclosure or termination,
                  cancellation or rescission of any such foreclosure, including,
                  without limitation, any and all of the following acts:

                    a.   the substitution of trustee(s)  serving under a Deed of
                         Trust,  in  accordance  with  state law and the Deed of
                         Trust;

                    b.   the preparation and issuance of statements of breach or
                         non-performance;

                    c.   the preparation and filing of notices of default and/or
                         notices of sale;

                    d.   the   cancellation/rescission  of  notices  of  default
                         and/or notices of sale;

                    e.   the taking of a deed in lieu of foreclosure; and

                    f.   the  preparation  and execution of such other documents
                         and  performance  of  such  other  actions  as  may  be
                         necessary  under  the  terms of the  Mortgage,  Deed of
                         Trust  or  state  law to  expeditiously  complete  said
                         transactions in paragraphs 8.a. through 8.e., above.

The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.

IN WITNESS WHEREOF, ________________ as Trustee pursuant to that Pooling and
Servicing Agreement among the Depositor, Wells Fargo Bank, National Association,
Wells Fargo Bank, N.A. and the Trustee, dated as of ___________ 1, 200__
(_____________ Asset Backed Certificates, Series 200__-___), has caused its
corporate seal to be hereto affixed and these presents to be signed and
acknowledged in its name and behalf by ____________ its duly elected and
authorized Vice President this _________ day of _________, 200__.

                                       -----------------------------------------
                                                      as Trustee for _____ Asset
                                           Backed Certificates, Series 200__-___

                                                             By:
                                                                ----------------
                                                                ----------------

STATE OF _____________

COUNTY OF ___________

On _______________, 200__, before me, the undersigned, a Notary Public in and
for said state, personally appeared ____________, Vice President of
____________________ as Trustee for ___________ Asset Backed Certificates,
Series 200__-___, personally known to me to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
that same in his/her authorized capacity, and that by his/her signature on the
instrument the entity upon behalf of which the person acted and executed the
instrument.

WITESS my hand and official seal.
         (SEAL)
                                                      --------------------------
                                                                   Notary Public

                                                      My Commission Expires ____

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                                 Filed by paper

<PAGE>

                                   SCHEDULE 4

                   STANDARD FILE LAYOUT- DELINQUENCY REPORTING

EXHIBIT 1: STANDARD FILE LAYOUT - DELINQUENCY REPORTING

<TABLE>
<CAPTION>
COLUMN/HEADER NAME                                       DESCRIPTION                                      DECIMAL    FORMAT COMMENT
------------------                                       -----------                                      -------    --------------
<S>                                       <C>                                                             <C>        <C>
SERVICER_LOAN_NBR                         A unique  number  assigned  to a loan by the  Servicer.  This
                                          may be different than the LOAN_NBR

LOAN_NBR                                  A unique identifier assigned to each loan by the originator.

CLIENT_NBR                                Servicer Client Number

SERV_INVESTOR_NBR                         Contains a unique number as
                                          assigned by an external servicer
                                          to identify a group of loans in
                                          their system.

BORROWER_FIRST_NAME                       First Name of the Borrower.

BORROWER_LAST_NAME                        Last name of the borrower.

PROP_ADDRESS                              Street Name and Number of Property

PROP_STATE                                The state where the  property located.

PROP_ZIP                                  Zip code where the property is located.

BORR_NEXT_PAY_DUE_DATE                    The date that the borrower's next
                                          payment is due to the MM/DD/YYYY
                                          servicer at the end of processing
                                          cycle, as reported by Servicer.

LOAN_TYPE                                 Loan Type (i.e. FHA, VA, Conv)

BANKRUPTCY_FILED_DATE                     The date a particular bankruptcy claim was filed.                          MM/DD/YYYY

BANKRUPTCY_CHAPTER_CODE                   The chapter under which the bankruptcy was filed.

BANKRUPTCY_CASE_NBR                       The case  number  assigned  by the  court  to the  bankruptcy
                                          filing.

POST_PETITION_DUE_DATE                    The payment due date once the  bankruptcy  has been  approved              MM/DD/YYYY
                                          by the courts

BANKRUPTCY_DCHRG_DISM_DATE                The Date The  Loan Is  Removed  From  Bankruptcy.  Either  by              MM/DD/YYYY
                                          Dismissal,   Discharged   and/or  a  Motion  For  Relief  Was
                                          Granted.

LOSS_MIT_APPR_DATE                        The Date The Loss Mitigation Was Approved By The Servicer                  MM/DD/YYYY

LOSS_MIT_TYPE                             The Type Of Loss Mitigation Approved For A Loan Such As;

LOSS_MIT_EST_COMP_DATE                    The Date The Loss Mitigation /Plan Is Scheduled To End/Close               MM/DD/YYYY

LOSS_MIT_ACT_COMP_DATE                    The Date The Loss Mitigation Is Actually Completed                         MM/DD/YYYY

FRCLSR_APPROVED_DATE                      The  date  DA  Admin  sends a  letter  to the  servicer  with              MM/DD/YYYY
                                          instructions to begin foreclosure proceedings.

ATTORNEY_REFERRAL_DATE                    Date File Was Referred To Attorney to Pursue Foreclosure                   MM/DD/YYYY

FIRST_LEGAL_DATE                          Notice of 1st legal  filed by an  Attorney  in a  Foreclosure              MM/DD/YYYY
                                          Action

FRCLSR_SALE_EXPECTED_DATE                 The date by which a foreclosure sale is expected to occur.                 MM/DD/YYYY

FRCLSR_SALE_DATE                          The actual date of the foreclosure sale.                                   MM/DD/YYYY

FRCLSR_SALE_AMT                           The amount a property sold for at the foreclosure sale.            2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

EVICTION_START_DATE                       The date the servicer initiates eviction of the borrower.                  MM/DD/YYYY

EVICTION_COMPLETED_DATE                   The date the court revokes  legal  possession of the property              MM/DD/YYYY
                                          from the borrower.

LIST_PRICE                                The price at which an REO property is marketed.                    2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

LIST_DATE                                 The date an REO property is listed at a particular price.                  MM/DD/YYYY

OFFER_AMT                                 The dollar value of an offer for an REO property.                  2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

OFFER_DATE_TIME                           The date an offer is received by DA Admin or by the Servicer.              MM/DD/YYYY

REO_CLOSING_DATE                          The date the REO sale of the property is scheduled to close.               MM/DD/YYYY

REO_ACTUAL_CLOSING_DATE                   Actual Date Of REO Sale                                                    MM/DD/YYYY

OCCUPANT_CODE                             Classification of how the property is occupied.

PROP_CONDITION_CODE                       A code that indicates the condition of the property.

PROP_INSPECTION_DATE                      The date a  property inspection is performed.                              MM/DD/YYYY

APPRAISAL_DATE                            The date the appraisal was done.                                           MM/DD/YYYY

CURR_PROP_VAL                              The current "as is" value of the  property  based on brokers      2
                                          price opinion or appraisal.

REPAIRED_PROP_VAL                         The amount the property would be
                                          worth if repairs are 2 completed
                                          pursuant to a broker's price
                                          opinion or appraisal.
IF APPLICABLE:

DELINQ_STATUS_CODE                        FNMA Code Describing Status of Loan

DELINQ_REASON_CODE                        The circumstances which caused a
                                          borrower to stop paying on a loan.
                                          Code indicates the reason why the
                                          loan is in default for this cycle.

MI_CLAIM_FILED_DATE                       Date  Mortgage   Insurance  Claim  Was  Filed  With  Mortgage              MM/DD/YYYY
                                          Insurance Company.

MI_CLAIM_AMT                              Amount of Mortgage Insurance Claim Filed                                   No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

MI_CLAIM_PAID_DATE                        Date Mortgage Insurance Company Disbursed Claim Payment                    MM/DD/YYYY

MI_CLAIM_AMT_PAID                         Amount Mortgage Insurance Company Paid On Claim                    2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

POOL_CLAIM_FILED_DATE                     Date Claim Was Filed With Pool Insurance Company                           MM/DD/YYYY

POOL_CLAIM_AMT                            Amount of Claim Filed With Pool Insurance Company                  2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

POOL_CLAIM_PAID_DATE                      Date Claim Was  Settled  and The Check Was Issued By The Pool              MM/DD/YYYY
                                          Insurer

POOL_CLAIM_AMT_PAID                       Amount Paid On Claim By Pool Insurance Company                     2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

FHA_PART_A_CLAIM_FILED_DATE                Date FHA Part A Claim Was Filed With HUD                                  MM/DD/YYYY

FHA_PART_A_CLAIM_AMT                       Amount of FHA Part A Claim Filed                                  2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

FHA_PART_A_CLAIM_PAID_DATE                 Date HUD Disbursed Part A Claim Payment                                   MM/DD/YYYY

FHA_PART_A_CLAIM_PAID_AMT                  Amount HUD Paid on Part A Claim                                   2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

FHA_PART_B_CLAIM_FILED_DATE                 Date FHA Part B Claim Was Filed With HUD                                 MM/DD/YYYY

FHA_PART_B_CLAIM_AMT                        Amount of FHA Part B Claim Filed                                 2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

FHA_PART_B_CLAIM_PAID_DATE                   Date HUD Disbursed Part B Claim Payment                                 MM/DD/YYYY

FHA_PART_B_CLAIM_PAID_AMT                  Amount HUD Paid on Part B Claim                                   2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)

VA_CLAIM_FILED_DATE                        Date VA Claim Was Filed With the Veterans Admin                           MM/DD/YYYY

VA_CLAIM_PAID_DATE                         Date Veterans Admin. Disbursed VA Claim Payment                           MM/DD/YYYY

VA_CLAIM_PAID_AMT                          Amount Veterans Admin. Paid on VA Claim                           2       No    commas(,)
                                                                                                                     or       dollar
                                                                                                                     signs ($)
</TABLE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING

The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:

                    o    ASUM- Approved Assumption
                    o    BAP- Borrower Assistance Program
                    o    CO- Charge Off
                    o    DIL- Deed-in-Lieu
                    o    FFA- Formal Forbearance Agreement
                    o    MOD- Loan Modification
                    o    PRE- Pre-Sale
                    o    SS- Short Sale
                    o    MISC- Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Wells
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.

The OCCUPANT CODE field should show the current status of the property code as
follows:

                    o    Mortgagor
                    o    Tenant
                    o    Unknown
                    o    Vacant

The PROPERTY CONDITION field should show the last reported condition of the
property as follows:

                    o    Damaged
                    o    Excellent
                    o    Fair
                    o    Gone
                    o    Good
                    o    Poor
                    o    Special Hazard
                    o    Unknown

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:

           DELINQUENCY CODE         DELINQUENCY DESCRIPTION
           ----------------         -----------------------

           001                      FNMA-Death of principal mortgagor
           002                      FNMA-Illness of principal mortgagor
           003                      FNMA-Illness of mortgagor's family member
           004                      FNMA-Death of mortgagor's family member
           005                      FNMA-Marital difficulties
           006                      FNMA-Curtailment of income
           007                      FNMA-Excessive Obligation
           008                      FNMA-Abandonment of property
           009                      FNMA-Distant employee transfer
           011                      FNMA-Property problem
           012                      FNMA-Inability to sell property
           013                      FNMA-Inability to rent property
           014                      FNMA-Military Service
           015                      FNMA-Other
           016                      FNMA-Unemployment
           017                      FNMA-Business failure
           019                      FNMA-Casualty loss
           022                      FNMA-Energy environment costs
           023                      FNMA-Servicing problems
           026                      FNMA-Payment adjustment
           027                      FNMA-Payment dispute
           029                      FNMA-Transfer of ownership pending
           030                      FNMA-Fraud
           031                      FNMA-Unable to contact borrower
           INC                      FNMA-Incarceration

<PAGE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:

           STATUS CODE              STATUS DESCRIPTION
           -----------              ------------------

           09                       Forbearance
           17                       Pre-foreclosure Sale Closing Plan Accepted
           24                       Government Seizure
           26                       Refinance
           27                       Assumption
           28                       Modification
           29                       Charge-Off
           30                       Third Party Sale
           31                       Probate
           32                       Military Indulgence
           43                       Foreclosure Started
           44                       Deed-in-Lieu Started
           49                       Assignment Completed
           61                       Second Lien Considerations
           62                       Veteran's Affairs-No Bid
           63                       Veteran's Affairs-Refund
           64                       Veteran's Affairs-Buydown
           65                       Chapter 7 Bankruptcy
           66                       Chapter 11 Bankruptcy
           67                       Chapter 13 Bankruptcy

<PAGE>

EXHIBIT 3: CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET

         1.       The numbers on the form correspond with the numbers
                  listed below.

         LIQUIDATION AND ACQUISITION EXPENSES:

         1.       The Actual Unpaid Principal Balance of the Mortgage Loan. For
                  documentation, an Amortization Schedule from date of default
                  through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         2.       The Total Interest Due less the aggregate amount of servicing
                  fee that would have been earned if all delinquent payments had
                  been made as agreed. For documentation, an Amortization
                  Schedule from date of default through liquidation breaking out
                  the net interest and servicing fees advanced is required.

         3.       Accrued Servicing Fees based upon the Scheduled Principal
                  Balance of the Mortgage Loan as calculated on a monthly basis.
                  For documentation, an Amortization Schedule from date of
                  default through liquidation breaking out the net interest and
                  servicing fees advanced is required.

         4-12.    Complete as applicable. All line entries must be supported by
                  copies of appropriate statements, vouchers, receipts, bills,
                  canceled checks, etc., to document the expense. Entries not
                  properly documented will not be reimbursed to the Servicer.

         13.      The total of lines 1 through 12.

2.       CREDITS:

         14-21.   Complete as applicable. All line entries must be supported by
                  copies of the appropriate claims forms, EOBs, HUD-1 and/or
                  other proceeds verification, statements, payment checks, etc.
                  to document the credit. If the Mortgage Loan is subject to a
                  Bankruptcy Deficiency, the difference between the Unpaid
                  Principal Balance of the Note prior to the Bankruptcy
                  Deficiency and the Unpaid Principal Balance as reduced by the
                  Bankruptcy Deficiency should be input on line 20.

         22.      The total of lines 14 through 21.

         PLEASE NOTE: For HUD/VA loans, use line (15) for Part A/Initial
         proceeds and line (16) for Part B/Supplemental proceeds.

3.       TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)

         23.      The total derived from  subtracting  line 22 from 13.
                  If the amount  represents a realized  gain,  show the amount
                  in parenthesis (   ).

EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332

                             WELLS FARGO BANK, N.A.
                        CALCULATION OF REALIZED LOSS/GAIN

         Prepared by:  __________________                 Date:  _______________
         Phone:  ______________________      Email Address:_____________________

   ---------------------       -------------------      ----------------------
   Servicer Loan No.           Servicer Name            Servicer Address

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

         WELLS FARGO BANK, N.A. Loan No._____________________________
         Borrower's Name:_______________________________________________________
         Property Address:______________________________________________________
         LIQUIDATION AND ACQUISITION EXPENSES:
        (1)     Actual Unpaid Principal Balance
                of Mortgage Loan                         $________________  (1)
        (2)     Interest accrued at Net Rate              ________________  (2)
        (3)     Accrued Servicing Fees                    ________________  (3)
        (4)     Attorney's Fees                           ________________  (4)
        (5)     Taxes                                     ________________  (5)
        (6)     Property Maintenance                      ________________  (6)
        (7)     MI/Hazard Insurance Premiums              ________________  (7)
        (8)     Utility Expenses                          ________________  (8)
        (9)     Appraisal/BPO                             ________________  (9)
        (10)    Property Inspections                      ________________  (10)
        (11)    FC Costs/Other Legal Expenses             ________________  (11)
        (12)    Other (itemize)                          $________________  (12)

                Cash for Keys __________________________   _______________
                HOA/Condo Fees__________________________   _______________

                TOTAL EXPENSES                           $ _______________  (13)
         CREDITS:
        (14)    Escrow Balance                           $ _______________  (14)
        (15)    HIP Refund                                ________________  (15)
        (16)    Rental Receipts                           ________________  (16)
        (17)    Hazard Loss Proceeds                      ________________  (17)
        (18)    Primary Mortgage Insurance
                Proceeds                                  ________________  (18)
        (19)    Pool Insurance Proceeds                   ________________  (19)
        (20)    Proceeds from Sale of Acquired Property   ________________  (20)
        (21)    Other (itemize)                           ________________  (21)

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

             TOTAL CREDITS                               $ _______________  (22)

        TOTAL REALIZED LOSS (OR AMOUNT OF GAIN)          $ _______________  (23)

<PAGE>

                                   SCHEDULE 5

                    STANDARD FILE LAYOUT- SCHEDULED/SCHEDULED

EXHIBIT 1: STANDARD FILE LAYOUT - SCHEDULED/SCHEDULED

<TABLE>
<CAPTION>
COLUMN NAME                                        DESCRIPTION                      DECIMAL    FORMAT COMMENT
------------------------------- -------------------------------------------------- ----------- ------------------------------------
<S>                             <C>                                                <C>         <C>
LOAN_NBR                        Loan Number assigned by investor                               Text up to 10 digits

SERVICER LOAN_NBR               Servicer Loan Number                                           Text up to 10 digits

BORROWER_NAME                   Mortgagor name assigned to Note                                Max length of 30

SCHED_PMT_AMT                   P&I constant                                           2       No commas(,) or dollar signs ($)

NOTE_INT_RATE                   Gross Interest Rate                                    4       Max length of 6

NET_RATE                        Gross Interest Rate less the Service Fee Rate          4       Max length of 6

SERV_FEE_RATE                   Service Fee Rate                                       4       Max length of 6

NEW_PAY_AMT                     ARM loan's forecasted P&I constant                     2       No commas(,) or dollar signs ($)

NEW_LOAN_RATE                   ARM loan's forecasted Gross Interest Rate              4       Max length of 6

ARM_INDEX_RATE                  ARM loan's index Rate used                             4       Max length of 6

ACTL_BEG_BAL                    Beginning Actual Balance                               2       No commas(,) or dollar signs ($)

ACTL_END_BAL                    Ending Actual Balance                                  2       No commas(,) or dollar signs ($)

NEXT_DUE_DATE                   Borrower's next due date                                       MM/DD/YYYY

CURT_AMT_1                      Curtailment Amount                                     2       No commas(,) or dollar signs ($)

CURT_DATE_1                     Due date Curtailment was applied to                            MM/DD/YYYY

CURT_ADJ_ AMT_1                 Curtailment Interest if applicable                     2       No commas(,) or dollar signs ($)

CURT_AMT_2                      Curtailment Amount 2                                   2       No commas(,) or dollar signs ($)

CURT_DATE_2                     Due date Curtailment was applied to                            MM/DD/YYYY

CURT_ADJ_ AMT2                  Curtailment Interest if applicable                     2       No commas(,) or dollar signs ($)

CURT_AMT_3                      Curtailment Amount 3                                   2       No commas(,) or dollar signs ($)

CURT_DATE_3                     Due date Curtailment was applied to                            MM/DD/YYYY

CURT_ADJ_AMT3                   Curtailment Interest, if applicable                    2       No commas(,) or dollar signs ($)

SCHED_BEG_BAL                   Beginning Scheduled Balance                            2       No commas(,) or dollar signs ($)

SCHED_END_BAL                   Ending Scheduled Balance                               2       No commas(,) or dollar signs ($)

SCHED_PRIN_AMT                  Scheduled Principal portion of P&I                     2       No commas(,) or dollar signs ($)

                                Scheduled   Net  Interest   (less   Service  Fee)
SCHED_NET_INT                   portion of P&I                                         2       No commas(,) or dollar signs ($)

                                Liquidation  Principal  Amt to bring  balance  to
LIQ_AMT                         zero                                                   2       No commas(,) or dollar signs ($)

PIF_DATE                        Liquidation Date                                               MM/DD/YYYY

ACTION_CODE                     Either 60 for liquidation or 65 for Repurchase                 Max length of 2

PRIN_ADJ_AMT                    Principal Adjustments made to loan, if applicable      2       No commas(,) or dollar signs ($)

INT_ADJ_AMT                     Interest Adjustment made to loan, if applicable        2       No commas(,) or dollar signs ($)

PREPAYMENT PENALTY AMT          Prepayment penalty amount, if applicable               2       No commas(,) or dollar signs ($)

                                Soldier   and  Sailor   Adjustment   amount,   if
SOILDER_SAILOR ADJ AMT          applicable                                             2       No commas(,) or dollar signs ($)

NON ADV LOAN AMT                Non Recoverable Loan Amount, if applicable             2       No commas(,) or dollar signs ($)
</TABLE>

<PAGE>

                                   SCHEDULE 6

     DATA REQUIREMENTS OF SERVICING ADVANCES INCURRED PRIOR TO CUT-OFF DATE

-------------------------- -----------------------------------------------------
       [LOAN NUMBER]                 [PRE-CUT-OFF DATE ADVANCE AMOUNT]
-------------------------- -----------------------------------------------------Indenture dated as December 30, 2005

     

     

    
      
        

      

     

    OMEGA
      HEALTHCARE INVESTORS, INC.

     

    as
      Issuer,

     

    the
      SUBSIDIARY GUARANTORS named herein,

     

    as
      Subsidiary Guarantors,

     

    and

     

    U.S.
      BANK
      NATIONAL ASSOCIATION,

     

    as
      Trustee

     

    ________________________

     

    INDENTURE

     

    ________________________

     

    Dated
      as
      of December
      30, 2005

    ________________________

     

    7%
      Senior
      Notes due 2016

     

    

    

    CROSS-REFERENCE
      TABLE

     

    Trust
      Indenture Act                                     Indenture

    Section                                         Section 

     

    
      	
              310

            	
              (a)(1)

            	 	
              7.10

            

    

    
      	 	
              (a)(2)

            	 	
              7.10

            

    

    
      	 	
              (a)(3)

            	 	
              N.A.

            

    

    
      	 	
              (a)(4)

            	 	
              N.A.

            

    

    
      	 	
              (a)(5)

            	 	
              7.08;
                7.10

            

    

    
      	 	
              (b)

            	 	
              7.08;
                7.10; 12.02

            

    

    
      	 	
              (c)

            	 	
              N.A.

            

    

    
      	
              311

            	
              (a)

            	 	
              7.11

            

    

    
      	 	
              (b)

            	 	
              7.11

            

    

    
      	 	
              (c)

            	 	
              N.A.

            

    

    
      	
              312

            	
              (a)

            	 	
              2.05

            

    

    
      	 	
              (b)

            	 	
              11.03

            

    

    
      	 	
              (c)

            	 	
              11.03

            

    

    
      	
              313

            	
              (a)

            	 	
              7.06

            

    

    
      	 	
              (b)(1)

            	 	
              7.06

            

    

    
      	 	
              (b)(2)

            	 	
              7.06

            

    

    
      	 	
              (c)

            	 	
              7.06;
                11.02

            

    

    
      	 	
              (d)

            	 	
              7.06

            

    

    
      	
              314

            	
              (a)

            	 	
              4.05;
                4.15; 11.02

            

    

    
      	 	
              (b)

            	 	
              N.A.

            

    

    
      	 	
              (c)(1)

            	 	
              7.02;
                11.04; 11.05

            

    

    
      	 	
              (c)(2)

            	 	
              7.02;
                11.04; 11.05

            

    

    
      	 	
              (c)(3)

            	 	
              N.A.

            

    

    
      	 	
              (d)

            	 	
              N.A.

            

    

    
      	 	
              (e)

            	 	
              11.05

            

    

    
      	 	
              (f)

            	 	
              N.A.

            

    

    
      	
              315

            	
              (a)

            	 	
              7.01(b);
                7.02(a)

            

    

    
      	 	
              (b)

            	 	
              7.05;
                11.02

            

    

    
      	 	
              (c)

            	 	
              7.01

            

    

    
      	 	
              (d)

            	 	
              6.05;
                7.01(c)

            

    

    
      	 	
              (e)

            	 	
              6.11

            

    

    
      	
              316

            	
              (a)(last
                sentence)

            	 	
              2.09

            

    

    
      	 	
              (a)(1)(A)

            	 	
              6.05

            

    

    
      	 	
              (a)(1)(B)

            	 	
              6.04

            

    

    
      	 	
              (a)(2)

            	 	
              9.02

            

    

    
      	 	
              (b)

            	 	
              6.07

            

    

    
      	 	
              (c)

            	 	
              9.04

            

    

    
      	
              317

            	
              (a)(1)

            	 	
              6.08

            

    

    
      	 	
              (a)(2)

            	 	
              6.09

            

    

    
      	 	
              (b)

            	 	
              2.04

            

    

    
      	
              318

            	
              (a)

            	 	
              11.01

            

    

    
      	 	
              (c)

            	 	
              11.01

            

    

    N.A.
      means Not Applicable

     

    Note:
       This
      Cross-Reference Table shall not, for any purpose, be deemed to be a part of
      this
      Indenture.

    

    
      
        
          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF
      CONTENTS

     

                                                                                                Page

    
      
        
          	 	 
	 	 
	
                  ARTICLE
                    ONE

                	 
	 	 
	
                  DEFINITIONS
                    AND INCORPORATION BY REFERENCE

                	 
	
                  SECTION
                    1.01.Definitions.

                	
                  1

                
	
                  SECTION
                    1.02.Other Definitions.

                	
                  22

                
	
                  SECTION
                    1.03.Incorporation by Reference of Trust Indenture Act.

                	
                  23

                
	
                  SECTION
                    1.04.Rules of Construction.

                	
                  23

                
	 	 
	
                  ARTICLE
                    TWO

                	 
	 	 
	
                  THE
                    NOTES

                	 
	
                  SECTION
                    2.01.Form and Dating.

                	
                  24

                
	
                  SECTION
                    2.02.Execution, Authentication and Denomination; Additional Notes;
                    Exchange Notes

                	
                  25

                
	
                  SECTION
                    2.03.Registrar and Paying Agent.

                	
                  26

                
	
                  SECTION
                    2.04.Paying Agent To Hold Assets in Trust.

                	
                  27

                
	
                  SECTION
                    2.05.Holder Lists.

                	
                  27

                
	
                  SECTION
                    2.06.Transfer and Exchange.

                	
                  27

                
	
                  SECTION
                    2.07.Replacement Notes.

                	
                  28

                
	
                  SECTION
                    2.08.Outstanding Notes.

                	
                  28

                
	
                  SECTION
                    2.09.Treasury Notes.

                	
                  29

                
	
                  SECTION
                    2.10.Temporary Notes.

                	
                  29

                
	
                  SECTION
                    2.11.Cancellation.

                	
                  29

                
	
                  SECTION
                    2.12.Defaulted Interest.

                	
                  29

                
	
                  SECTION
                    2.13.CUSIP and ISIN Numbers.

                	
                  30

                
	
                  SECTION
                    2.14.Deposit of Moneys.

                	
                  30

                
	
                  SECTION
                    2.15.Book-Entry Provisions for Global Notes.

                	
                  30

                
	
                  SECTION
                    2.16.Special Transfer and Exchange Provisions.

                	
                  31

                
	 	 
	
                  ARTICLE
                    THREE

                	 
	 	 
	
                  REDEMPTION

                	 
	
                  SECTION
                    3.01.Notices to Trustee.

                	
                  35

                
	
                  SECTION
                    3.02.Selection of Notes To Be Redeemed.

                	
                  35

                
	
                  SECTION
                    3.03.Notice of Redemption.

                	
                  35

                
	
                  SECTION
                    3.04.Effect of Notice of Redemption.

                	
                  36

                
	
                  SECTION
                    3.05.Deposit of Redemption Price.

                	
                  37

                
	
                  SECTION
                    3.06.Notes Redeemed in Part.

                	
                  37

                
	 	 
	
                  ARTICLE
                    FOUR

                	 
	 	 
	
                  COVENANTS

                	 
	
                  SECTION
                    4.01.Payment of Notes.

                	
                  37

                
	
                  SECTION
                    4.02.Maintenance of Office or Agency.

                	
                  37

                
	
                  SECTION
                    4.03.Corporate Existence.

                	
                  38

                
	
                  SECTION
                    4.04.Payment of Taxes.

                	
                  38

                
	
                  SECTION
                    4.05.Compliance Certificate; Notice of Default.

                	
                  38

                
	
                  SECTION
                    4.06.Waiver of Stay, Extension or Usury Laws.

                	
                  39

                
	
                  SECTION
                    4.07.Change of Control.

                	
                  39

                
	
                  SECTION
                    4.08.Limitations on Additional Indebtedness.

                	
                  39

                
	
                  SECTION
                    4.09.Limitations on Restricted Payments.

                	
                  42

                
	
                  SECTION
                    4.10.Maintenance of Total Unencumbered Assets.

                	
                  45

                
	
                  SECTION
                    4.11.Limitations on Asset Sales.

                	
                  45

                
	
                  SECTION
                    4.12.Limitations on Transactions with Affiliates.47

                	 
	
                  SECTION
                    4.13.Limitations on Dividend and Other Payment
                    Restrictions

                	 
	
                  Affecting
                    Restricted Subsidiaries.

                	
                  48

                
	
                  SECTION
                    4.14.Limitation on Issuances of Guarantees by Restricted

                	 
	
                  Subsidiaries.

                	
                  50

                
	
                  SECTION
                    4.15.Reports to Holders.

                	
                  50

                
	
                  SECTION
                    4.16.Suspension of Covenants

                	
                  51

                
	
                  RTICLE
                    FIVE

                	 
	 	 
	
                  SUCCESSOR
                    CORPORATION

                	 
	
                  SECTION
                    5.01.Consolidation, Merger and Sale of Assets.

                	
                  52

                
	 	 
	
                  ARTICLE
                    SIX

                	 
	 	 
	
                  DEFAULT
                    AND REMEDIES

                	 
	
                  SECTION
                    6.01.Events of Default.

                	
                  54

                
	
                  SECTION
                    6.02.Acceleration.

                	
                  55

                
	
                  SECTION
                    6.03.Other Remedies.

                	
                  56

                
	
                  SECTION
                    6.04.Waiver of Past Defaults.

                	
                  56

                
	
                  SECTION
                    6.05.Control by Majority.

                	
                  57

                
	
                  SECTION
                    6.06.Limitation on Suits.

                	
                  57

                
	
                  SECTION
                    6.07.Rights of Holders To Receive Payment.

                	
                  57

                
	
                  SECTION
                    6.08.Collection Suit by Trustee.

                	
                  58

                
	
                  SECTION
                    6.09.Trustee May File Proofs of Claim.

                	
                  58

                
	
                  SECTION
                    6.10.Priorities.

                	
                  58

                
	
                  SECTION
                    6.11.Undertaking for Costs.

                	
                  59

                
	 	 
	
                  ARTICLE
                    SEVEN

                	 
	 	 
	
                  TRUSTEE

                	 
	
                  SECTION
                    7.01.Duties of Trustee.

                	
                  59

                
	
                  SECTION
                    7.02.Rights of Trustee.

                	
                  60

                
	
                  SECTION
                    7.03.Individual Rights of Trustee.

                	
                  61

                
	
                  SECTION
                    7.04.Trustee’s Disclaimer.

                	
                  62

                
	
                  SECTION
                    7.05.Notice of Default.

                	
                  62

                
	
                  SECTION
                    7.06.Reports by Trustee to Holders.

                	
                  62

                
	
                  SECTION
                    7.07.Compensation and Indemnity.

                	
                  62

                
	
                  SECTION
                    7.08.Replacement of Trustee.

                	
                  63

                
	
                  SECTION
                    7.09.Successor Trustee by Merger, Etc.

                	
                  64

                
	
                  SECTION
                    7.10.Eligibility; Disqualification.

                	
                  64

                
	
                  SECTION
                    7.11.Preferential Collection of Claims Against the Issuer.

                	
                  65

                
	 	 
	
                  ARTICLE
                    EIGHT

                	 
	 	 
	
                  DISCHARGE
                    OF INDENTURE; DEFEASANCE

                	 
	
                  SECTION
                    8.01.Termination of the Issuer’s Obligations.

                	
                  65

                
	
                  SECTION
                    8.02.Legal Defeasance and Covenant Defeasance.

                	
                  66

                
	
                  SECTION
                    8.03.Conditions to Legal Defeasance or Covenant
                    Defeasance.

                	
                  67

                
	
                  SECTION
                    8.04.Application of Trust Money.

                	
                  68

                
	
                  SECTION
                    8.05.Repayment to the Issuer.

                	
                  69

                
	
                  SECTION
                    8.06.Reinstatement.

                	
                  69

                
	 	 
	
                  ARTICLE
                    NINE

                	 
	 	 
	
                  AMENDMENTS,
                    SUPPLEMENTS AND WAIVERS

                	 
	
                  SECTION
                    9.01.Without Consent of Holders.

                	
                  69

                
	
                  SECTION
                    9.02.With Consent of Holders.

                	
                  70

                
	
                  SECTION
                    9.03.Compliance with the Trust Indenture Act.

                	
                  71

                
	
                  SECTION
                    9.04.Revocation and Effect of Consents.

                	
                  71

                
	
                  SECTION
                    9.05.Notation on or Exchange of Notes.

                	
                  72

                
	
                  SECTION
                    9.06.Trustee To Sign Amendments, Etc.

                	
                  72

                
	 	 
	
                  ARTICLE
                    TEN

                	 
	 	 
	
                  SUBSIDIARY
                    GUARANTEE

                	 
	
                  SECTION
                    10.01.Guarantee.

                	
                  72

                
	
                  SECTION
                    10.02.Limitation on Subsidiary Guarantor Liability.

                	
                  73

                
	
                  SECTION
                    10.03.Execution and Delivery of Subsidiary Guarantee.

                	
                  74

                
	
                  SECTION
                    10.04.Release of a Subsidiary Guarantor.

                	
                  74

                
	 	 
	
                  ARTICLE
                    ELEVEN

                	 
	 	 
	
                  MISCELLANEOUS

                	 
	
                  SECTION
                    11.01.Trust Indenture Act Controls.

                	
                  75

                
	
                  SECTION
                    11.02.Notices.

                	
                  75

                
	
                  SECTION
                    11.03.Communications by Holders with Other Holders.

                	
                  76

                
	
                  SECTION
                    11.04.Certificate and Opinion as to Conditions Precedent.

                	
                  76

                
	
                  SECTION
                    11.05.Statements Required in Certificate or Opinion.

                	
                  77

                
	
                  SECTION
                    11.06.Rules by Paying Agent or Registrar.

                	
                  77

                
	
                  SECTION
                    11.07.Legal Holidays.

                	
                  77

                
	
                  SECTION
                    11.08.Governing Law.

                	
                  77

                
	
                  SECTION
                    11.09.No Adverse Interpretation of Other Agreements.

                	
                  77

                
	
                  SECTION
                    11.10.No Recourse Against Others.

                	
                  78

                
	
                  SECTION
                    11.11.Successors.

                	
                  78

                
	
                  SECTION
                    11.12.Duplicate Originals.

                	
                  78

                
	
                  SECTION
                    11.13.Severability.

                	
                  78

                
	
                  SIGNATURES

                	
                  S-1

                

        

         

        Exhibit A - Form
          of
          Note

        Exhibit B - Form
          of
          Legends

        Exhibit C - Form
          of
          Certificate To Be Delivered in Connection with Transfers to Non-QIB Accredited
          Investors

        Exhibit D - Form
          of
          Certificate To Be Delivered in Connection with Transfers Pursuant to Regulation
          S

        Exhibit E - Form
          of
          Notation of Subsidiary Guarantee

      

    

     

    
      	
              Note:

            	
              This
                Table of Contents shall not, for any purpose, be deemed to be part
                of this
                Indenture.

            

    

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    INDENTURE
      dated as of December 30, 2005 among Omega Healthcare Investors, Inc., a Maryland
      corporation (the “Issuer”),
      and
      each of the Subsidiary Guarantors named herein, as Subsidiary Guarantors, and
      U.S. Bank National Association, a national banking association organized and
      existing under the laws of the United States of America, as Trustee (the
“Trustee”).

     

    The
      Issuer has duly authorized the creation of an issue of 7% Senior Notes due
      2016
      and, to provide therefor, the Issuer and the Subsidiary Guarantors have duly
      authorized the execution and delivery of this Indenture. All things necessary
      to
      make the Notes, when duly issued and executed by the Issuer and authenticated
      and delivered hereunder, the valid and binding obligations of the Issuer and
      to
      make this Indenture a valid and binding agreement of the Issuer and the
      Subsidiary Guarantors have been done.

     

    THIS
      INDENTURE WITNESSETH

     

    For
      and
      in consideration of the premises and the purchase of the Notes by the Holders
      thereof, the parties hereto covenant and agree, for the equal and proportionate
      benefit of all Holders, as follows: 

     

    ARTICLE
      ONE  

     

    

     

    DEFINITIONS
      AND INCORPORATION BY REFERENCE

     

    
      	SECTION
              1.01.  	
              Definitions.

            

    

     

    Set
      forth
      below are certain defined terms used in this Indenture.

     

    “Acquired
      Indebtedness”
      means
      Indebtedness of a Person existing at the time such Person becomes a Restricted
      Subsidiary or that is assumed in connection with an Asset Acquisition from
      such
      Person by a Restricted Subsidiary and not incurred by such Person in connection
      with, or in anticipation of, such Person becoming a Restricted Subsidiary or
      such Asset Acquisition; provided,
      however,
      that
      Indebtedness of such Person that is redeemed, defeased, retired or otherwise
      repaid at the time of or immediately upon consummation of the transactions
      by
      which such Person becomes a Restricted Subsidiary or such Asset Acquisition
      shall not be Acquired Indebtedness.

     

    “Additional
      Interest”
      has the
      meaning set forth in the Registration Rights Agreement.

     

    “Adjusted
      Consolidated Net Income”
      means,
      for any period, the aggregate net income (or loss) (before giving effect to
      cash
      dividends on preferred stock of the Issuer or charges resulting from the
      redemption of preferred stock of the Issuer) of the Issuer and its Restricted
      Subsidiaries for such period determined on a consolidated basis in conformity
      with GAAP; provided,
      however,
      that the
      following items shall be excluded in computing Adjusted Consolidated Net Income,
      without duplication:

     

    (1) the
      net
      income of any Person, other than the Issuer or a Restricted Subsidiary, except
      to the extent of the amount of dividends or other distributions actually paid
      to
      the Issuer or any of its Restricted Subsidiaries by such Person during such
      period;

     

    (2) the
      net
      income of any Restricted Subsidiary to the extent that the declaration or
      payment of dividends or similar distributions by such Restricted Subsidiary
      of
      such net income is not at the time permitted by the operation of the terms
      of
      its charter or any agreement, instrument, judgment, decree, order, statute,
      rule or governmental regulation applicable to such Restricted
      Subsidiary;

     

    (3) any
      after-tax gains or losses attributable to Asset Sales; and

     

    (4) all
      extraordinary gains and extraordinary losses.

     

    “Adjusted
      Consolidated Net Tangible Assets”
      means
      the total amount of assets of the Issuer and its Restricted Subsidiaries (less
      applicable depreciation, amortization and other valuation reserves), except
      to
      the extent resulting from write-ups of capital assets (excluding write-ups
      in
      connection with accounting for acquisitions in conformity with GAAP), after
      deducting from the total amount of assets:

     

    (1) all
      liabilities of the Issuer and its Restricted Subsidiaries that are classified
      as
      current liabilities in accordance with GAAP, excluding intercompany items;
      and

     

    (2) all
      goodwill, trade names, trademarks, patents, unamortized debt discount and
      expense and other like intangibles, 

     

    all
      as
      set forth on the most recent quarterly or annual consolidated balance sheet
      of
      the Issuer and its Restricted Subsidiaries, prepared in conformity with GAAP
      and
      filed with the SEC or provided to the Trustee pursuant to
      Section 4.15.

     

    “Adjusted
      Total Assets”
      means,
      for any Person, the sum of:

     

    (1) Total
      Assets for such Person as of the end of the fiscal quarter preceding the
      Transaction Date as set forth on the most recent quarterly or annual
      consolidated balance sheet of the Issuer and its Restricted Subsidiaries,
      prepared in conformity with GAAP and filed with the SEC or provided to the
      Trustee pursuant to Section 4.15; and

     

    (2) any
      increase in Total Assets following the end of such quarter including, without
      limitation, any increase in Total Assets resulting from the application of
      the
      proceeds of any additional Indebtedness.

     

    “Affiliate”
      means,
      as applied to any Person, any other Person directly or indirectly controlling,
      controlled by, or under direct or indirect common control with, such Person.
      For
      purposes of this definition, “control”
      (including, with correlative meanings, the terms “controlling,”“controlled
      by”
      and
“under
      common control with”),
      as
      applied to any Person, means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management and policies of such
      Person, whether through the ownership of voting securities, by contract or
      otherwise.

     

    “Agent”
      means
      any Registrar or Paying Agent.

     

    “amend”
      means
      to amend, supplement, restate, amend and restate or otherwise modify, including
      successively; and “amendment”
      shall
      have a correlative meaning.

     

    “Asset
      Acquisition”
      means:

     

    (1) an
      investment by the Issuer or any of its Restricted Subsidiaries in any other
      Person pursuant to which such Person shall become a Restricted Subsidiary or
      shall be merged into or consolidated with the Issuer or any of its Restricted
      Subsidiaries; provided,
      however,
      that
      such Person’s primary business is related, ancillary, incidental or
      complementary to the businesses of the Issuer or any of its Restricted
      Subsidiaries on the date of such investment; or

     

    (2) an
      acquisition by the Issuer or any of its Restricted Subsidiaries from any other
      Person of assets that constitute substantially all of a division or line of
      business, or one or more healthcare properties, of such Person; provided,
      however,
      that the
      assets and properties acquired are related, ancillary, incidental or
      complementary to the businesses of the Issuer or any of its Restricted
      Subsidiaries on the date of such acquisition.

     

    “Asset
      Disposition”
      means
      the sale or other disposition by the Issuer or any of its Restricted
      Subsidiaries, other than to the Issuer or another Restricted Subsidiary,
      of:

     

    (1) all
      or
      substantially all of the Capital Stock of any Restricted Subsidiary;
      or

     

    (2) all
      or
      substantially all of the assets that constitute a division or line of business,
      or one or more healthcare properties, of the Issuer or any of its Restricted
      Subsidiaries.

     

    “Asset
      Sale”
      means
      any sale, transfer or other disposition, including by way of merger,
      consolidation or sale-leaseback transaction, in one transaction or a series
      of
      related transactions by the Issuer or any of its Subsidiaries to any Person
      other than the Issuer or any of its Restricted Subsidiaries of:

     

    (1) all
      or
      any of the Capital Stock of any Restricted Subsidiary;

     

    (2) all
      or
      substantially all of the property and assets of an operating unit or business
      of
      the Issuer or any of its Restricted Subsidiaries; or

     

    (3) any
      other
      property and assets of the Issuer or any of its Restricted Subsidiaries outside
      the ordinary course of business of the Issuer or such Restricted Subsidiary
      and,
      in each case, that is not governed by the provisions of
      Section 5.01;

     

    provided,
      however,
      that
“Asset Sale” shall not include:

     

    (1) sales
      or
      other dispositions of inventory, receivables and other current
      assets;

     

    (2) the
      sale,
      conveyance, transfer, lease, disposition or other transfer of all or
      substantially all of the assets of the Issuer as permitted under
      Section 5.01;

     

    (3) any
      Restricted Payment permitted by Section 4.09 or that constitutes a
      Permitted Investment;

     

    (4) sales,
      transfers or other dispositions of assets with a fair market value not in excess
      of $5 million in any transaction or series of related
      transactions;

     

    (5) sales
      or
      other dispositions of assets for consideration at least equal to the fair market
      value of the assets sold or disposed of, to the extent that the consideration
      received would satisfy Section 4.11(b)(1)(ii);

     

    (6) sales
      or
      other dispositions of Temporary Cash Investments;

     

    (7) the
      creation or realization of any Lien permitted under this Indenture;

     

    (8) transfers
      of damaged, worn-out or obsolete equipment or assets that, in the Issuer’s
      reasonable judgment, are no longer used or useful in the business of the Issuer
      or its Restricted Subsidiaries; or

     

    (9) sales
      or
      other dispositions of any of the Closed Facilities as in existence on the
      Closing Date.

     

    “Average
      Life”
      means
      at any date of determination with respect to any debt security, the quotient
      obtained by dividing:

     

    (1) the
      sum
      of the products of:

     

    
      	 	
              (x)

            	
              the
                number of years from such date of determination to the dates of each
                successive scheduled principal payment of such debt security,
                and

            

    

     

    (y) the
      amount of such principal payment; by

     

    (2) the
      sum
      of all such principal payments.

     

    “Bankruptcy
      Law”
      means
      Title 11 of the United States Code, as amended, or any insolvency or other
      similar federal or state law for the relief of debtors.

     

    “Board
      of Directors”
      means,
      as to any Person, the board of directors (or similar governing body) of such
      Person or any duly authorized committee thereof.

     

    “Board
      Resolution”
      means,
      with respect to any Person, a copy of a resolution certified by the Secretary
      or
      an Assistant Secretary of such Person to have been duly adopted by the Board
      of
      Directors of such Person and to be in full force and effect on the date of
      such
      certification, and delivered to the Trustee.

     

    “Business
      Day”
      means a
      day other than a Saturday, Sunday or other day on which banking institutions
      in
      New York or Maryland are authorized or required by law to close.

     

    “Capital
      Stock”
      means,
      with respect to any Person, any and all shares, interests, participations or
      other equivalents (however designated, whether voting or non-voting), including
      partnership interests, whether general or limited, in the equity of such Person,
      whether outstanding on the Closing Date or issued thereafter, including all
      Common Stock and Preferred Stock.

     

    “Capitalized
      Lease”
      means,
      as applied to any Person, any lease of any property, whether real, personal
      or
      mixed, of which the discounted present value of the rental obligations of such
      Person as lessee, in conformity with GAAP, is required to be capitalized on
      the
      balance sheet of such Person.

     

    “Capitalized
      Lease Obligations”
      means
      the discounted present value of the rental obligations under a Capitalized
      Lease
      as reflected on the balance sheet of such Person determined in conformity with
      GAAP.

     

    “Change
      of Control”
      means
      the occurrence of one or more of the following events:

     

    (1) any
      sale,
      lease, exchange or other transfer (in one transaction or a series of related
      transactions) of all or substantially all of the assets of the Issuer to any
      “person” or “group” (as such terms are defined in Sections 13(d) and
      14(d)(2) of the Exchange Act), together with any Affiliates thereof (whether
      or
      not otherwise in compliance with the provisions of this Indenture);

     

    (2) a
      “person” or “group” (as such terms are defined in Sections 13(d) and
      14(d)(2) of the Exchange Act), becomes the ultimate “beneficial owner” (as
      defined in Rule 13d-3 under the Exchange Act) of more than 50% of the
      total
      voting power of the Voting Stock of the Issuer on a fully diluted
      basis;

     

    (3) the
      approval by the holders of Capital Stock of the Issuer of any plan or proposal
      for the liquidation or dissolution of the Issuer (whether or not otherwise
      in
      compliance with the provisions of this Indenture); or

     

    (4) individuals
      who on the Closing Date constitute the Board of Directors (together with any
      new
      or replacement directors whose election by the Board of Directors or whose
      nomination by the Board of Directors for election by the Issuer’s shareholders
      was approved by a vote of at least a majority of the members of the Board of
      Directors then still in office who either were members of the Board of Directors
      on the Closing Date or whose election or nomination for election was so
      approved) cease for any reason to constitute a majority of the members of the
      Board of Directors then in office.

     

    “Closing
      Date”
      means
      December 30, 2005.

     

    “Closed
      Facilities”
      means
      each of:

     

    (1) Eldorado
      Care Center, SNF, 918 Third Street, Saline, IL 62930; and

     

    (2) Magnolia
      Manor, SNF, 2101 Metropolis Street, Massac, IL 62960.

     

    “Code”
      means
      the Internal Revenue Code of 1986, as amended.

     

    “Common
      Stock”
      means,
      with respect to any Person, any and all shares, interests, participations or
      other equivalents (however designated, whether voting or non-voting) that have
      no preference on liquidation or with respect to distributions over any other
      class of Capital Stock, including partnership interests, whether general or
      limited, of such Person’s equity, whether outstanding on the Closing Date or
      issued thereafter, including all series and classes of common
      stock.

     

    “Consolidated
      EBITDA”
      means,
      for any period, Adjusted Consolidated Net Income for such period plus, to the
      extent such amount was deducted in calculating such Adjusted Consolidated Net
      Income (without duplication):

     

    (1) Consolidated
      Interest Expense (plus the premium, fees and expenses, and the amortization
      thereof, payable in connection with the isssuance and sale of the 7% Senior
      Notes due 2014 on March 22, 2004);

     

    (2) income
      taxes (other than income taxes (either positive or negative) attributable to
      extraordinary and non-recurring gains or losses or sales of
      assets);

     

    (3) depreciation
      expense;

     

    (4) amortization
      expense;

     

    (5) non-cash
      charges resulting from the write-down of the value of accounts receivable and/or
      notes receivable in an aggregate amount from March 22, 2004 not in excess of
      $5 million; and

     

    (6) all
      other
      non-cash items reducing Adjusted Consolidated Net Income (other than items
      that
      will require cash payments and for which an accrual or reserve is, or is
      required by GAAP to be, made);

     

    less
      all
      non-cash items increasing Adjusted Consolidated Net Income, all as determined
      on
      a consolidated basis for the Issuer and its Restricted Subsidiaries in
      conformity with GAAP; provided,
      however,
      that, if
      any Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,
      Consolidated EBITDA shall be reduced (to the extent not already reduced in
      Adjusted Consolidated Net Income or otherwise reduced in accordance with GAAP)
      by an amount equal to:

     

    
      	 	
              (x)

            	
              the
                amount of the Adjusted Consolidated Net Income attributable to such
                Restricted Subsidiary multiplied
                by

            

    

     

    
      	 	
              (y)

            	
              the
                percentage ownership interest in the income of such Restricted Subsidiary
                not owned on the last day of such period by the Issuer or any of
                its
                Restricted Subsidiaries.

            

    

     

    “Consolidated
      Interest Expense”
      means,
      for any period, the aggregate amount of interest expense in respect of
      Indebtedness of the Issuer and the Restricted Subsidiaries during such period,
      all as determined on a consolidated basis in conformity with GAAP including
      (without duplication):

     

    (1) amortization
      of debt issuance costs, debt discount or premium and other financing fees and
      expenses;

     

    (2) the
      interest portion of any deferred payment obligations;

     

    (3) all
      commissions, discounts and other fees and expenses owed with respect to letters
      of credit and bankers’ acceptance financing;

     

    (4) the
      net
      costs associated with Interest Rate Agreements and Indebtedness that is
      Guaranteed or secured by assets of the Issuer or any of its Restricted
      Subsidiaries; and

     

    (5) all
      but
      the principal component of rentals in respect of Capitalized Lease Obligations
      paid, accrued or scheduled to be paid or to be accrued by the Issuer and its
      Restricted Subsidiaries;

     

    excluding,
      to the
      extent included in interest expense above, (x) the amount of such interest
      expense of any Restricted Subsidiary if the net income of such Restricted
      Subsidiary is excluded in the calculation of Adjusted Consolidated Net Income
      pursuant to clause (2) of the definition thereof (but only in the same
      proportion as the net income of such Restricted Subsidiary is excluded from
      the
      calculation of Adjusted Consolidated Net Income pursuant to clause (2)
      of
      the definition thereof), and (y) any premium, fees and expenses, and
      the
      amortization thereof, payable in connection with the issuance and sale of the
      7%
      Senior Notes due 2014 on March 22, 2004, all as determined on a consolidated
      basis (without taking into account Unrestricted Subsidiaries) in conformity
      with
      GAAP.

     

    “Corporate
      Trust Office”
      means
      the corporate trust office of the Trustee located at 1360 Peachtree Street,
      N.E., Suite 1105, EX-GA-ATPT, Atlanta, Georgia 30309, Attention: Corporate
      Trust
      Department, or such other office, designated by the Trustee by written notice
      to
      the Issuer, at which at any particular time its corporate trust business shall
      be administered.

     

    “Currency
      Agreement”
      means
      any foreign exchange contract, currency swap agreement or other similar
      agreement or arrangement.

     

    “Custodian”
      means
      any receiver, trustee, assignee, liquidator or similar official under any
      Bankruptcy Law.

     

    “Default”
      means
      any event that is, or after notice or passage of time or both would be, an
      Event
      of Default.

     

    “Depository”
      means
      The Depository Trust Company, New York, New York, or a successor thereto
      registered under the Exchange Act or other applicable statute or
      regulation.

     

    “Disqualified
      Stock”
      means
      any class or series of Capital Stock of any Person that by its terms or
      otherwise is:

     

    (1) required
      to be redeemed prior to the Stated Maturity of the Notes,

     

    (2) redeemable
      at the option of the holder of such class or series of Capital Stock, at any
      time prior to the Stated Maturity of the Notes, or

     

    (3) convertible
      into or exchangeable for Capital Stock referred to in clause (1) or
      (2) above or Indebtedness having a scheduled maturity prior to the Stated
      Maturity of the Notes;

     

    provided,
      however,
      that any
      Capital Stock that would not constitute Disqualified Stock but for provisions
      thereof giving holders thereof the right to require such Person to repurchase
      or
      redeem such Capital Stock upon the occurrence of an “asset sale” or “change of
      control” occurring prior to the Stated Maturity of the Notes shall not
      constitute Disqualified Stock if the “asset sale” or “change of control”
      provisions applicable to such Capital Stock are no more favorable to the holders
      of such Capital Stock than the provisions contained in Sections 4.07
      and
      4.11 and such Capital Stock specifically provides that such Person will not
      repurchase or redeem any such stock pursuant to such provisions prior to the
      Issuer’s repurchase of the Notes as are required to be repurchased pursuant to
      Sections 4.07 and 4.11.

     

    “Equity
      Offering”
      means a
      public or private offering of Capital Stock (other than Disqualified Stock)
      of
      the Issuer.

     

    “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended, or any successor statute or
      statutes thereto.

     

    “Exchange
      Notes”
      has the
      meaning set forth in the Registration Rights Agreement.

     

    “Exchange
      Offer”
      means
      the offer that may be made by the Issuer pursuant to the Registration Rights
      Agreement to exchange Notes bearing the Private Placement Legend for the
      Exchange Notes.

     

    “fair
      market value”
      means
      the price that would be paid in an arm’s-length transaction between an informed
      and willing seller under no compulsion to sell and an informed and willing
      buyer
      under no compulsion to buy, as determined in good faith by the Board of
      Directors of the Issuer, whose determination shall be conclusive if evidenced
      by
      a Board Resolution.

     

    “Funds
      From Operations”
      for any
      period means the consolidated net income of the Issuer and its Restricted
      Subsidiaries for such period determined in conformity with GAAP after
      adjustments for unconsolidated partnerships and joint ventures, plus
      depreciation of real property (including furniture and equipment) and other
      real
      estate assets and excluding (to the extent such amount was deducted in
      calculating such consolidated net income):

     

    (1) gains
      or
      losses from (a) restructuring of Indebtedness or (b) sales of
      properties;

     

    (2) non-cash
      asset impairment charges;

     

    (3) cash
      litigation charges incurred in an amount not to exceed
      $5 million;

     

    (4) non-cash
      charges associated with the write-down of the value of accounts and/or notes
      receivable in an amount not to exceed $5 million;

     

    (5) non-cash
      charges related to redemptions of Preferred Stock of the Issuer;

     

    (6) satisfaction
      of outstanding unamortized loan fees with respect to the GECC Facility or the
      restructuring or refinancing of any Line of Credit;

     

    (7) any
      non-cash charges associated with the sale or settlement of any Interest Rate
      Agreement in existence with respect to the GECC Facility; and

     

    (8) any
      other
      non-cash charges associated with the sale or settlement of any Interest Rate
      Agreement or other hedging or derivative instruments.

     

    “GAAP”
      means
      generally accepted accounting principles in the United States of America as
      in
      effect as of the March 22, 2004, including those set forth in the opinions
      and
      pronouncements of the Accounting Principles Board of the American Institute
      of
      Certified Public Accountants and statements and pronouncements of the Financial
      Accounting Standards Board or in such other statements by such other entity
      as
      approved by a significant segment of the accounting profession. Except as
      otherwise specifically provided in this Indenture, all ratios and computations
      contained or referred to in this Indenture shall be computed in conformity
      with
      GAAP applied on a consistent basis.

     

    “GECC
      Facility”
      means
      (i) the Loan Agreement dated as of June 23, 2003 among General
      Electric Capital Corporation and certain subsidiaries of the Issuer party
      thereto and (ii) the Guaranty Agreement dated as of June 23,
      2003
      between the Issuer and General Electric Capital Corporation, in each case as
      such agreement may be amended (including any amendment and restatement thereof),
      supplemented or otherwise modified from time to time.

     

    “Guarantee”
      means
      any obligation, contingent or otherwise, of any Person directly or indirectly
      guaranteeing any Indebtedness of any other Person and, without limiting the
      generality of the foregoing, any obligation, direct or indirect, contingent
      or
      otherwise, of such Person:

     

    (1) to
      purchase or pay (or advance or supply funds for the purchase or payment of)
      such
      Indebtedness of such other Person (whether arising by virtue of partnership
      arrangements, or by agreements to keep-well, to purchase assets, goods,
      securities or services (unless such purchase arrangements are on arm’s-length
      terms and are entered into in the ordinary course of business), to take-or-pay,
      or to maintain financial statement conditions or otherwise); or

     

    (2) entered
      into for purposes of assuring in any other manner the obligee of such
      Indebtedness of the payment thereof or to protect such obligee against loss
      in
      respect thereof (in whole or in part);

     

    provided,
      however,
      that the
      term “Guarantee” shall not include endorsements for collection or deposit in the
      ordinary course of business. The term “Guarantee” used as a verb has a
      corresponding meaning.

     

    “Holder”
      means
      any registered holder, from time to time, of the Notes.

     

    “Incur”
      means,
      with respect to any Indebtedness, to incur, create, issue, assume, Guarantee
      or
      otherwise become liable for or with respect to, or become responsible for,
      the
      payment of, contingently or otherwise, such Indebtedness, including an
“Incurrence” of Acquired Indebtedness; provided,
      however,
      that
      neither the accrual of interest nor the accretion of original issue discount
      shall be considered an Incurrence of Indebtedness.

     

    “Indebtedness”
      means,
      with respect to any Person at any date of determination (without
      duplication):

     

    (1) all
      indebtedness of such Person for borrowed money;

     

    (2) all
      obligations of such Person evidenced by bonds, debentures, notes or other
      similar instruments;

     

    (3) the
      face
      amount of letters of credit or other similar instruments (excluding obligations
      with respect to letters of credit (including trade letters of credit) securing
      obligations (other than obligations described in (1) or (2) above
      or
      (5), (6) or (7) below) entered into in the ordinary course of
      business
      of such Person to the extent such letters of credit are not drawn upon or,
      if
      drawn upon, to the extent such drawing is reimbursed no later than the third
      Business Day following receipt by such Person of a demand for
      reimbursement);

     

    (4) all
      unconditional obligations of such Person to pay the deferred and unpaid purchase
      price of property or services, which purchase price is due more than six months
      after the date of placing such property in service or taking delivery and title
      thereto or the completion of such services, except Trade Payables;

     

    (5) all
      Capitalized Lease Obligations;

     

    (6) all
      Indebtedness of other Persons secured by a Lien on any asset of such Person,
      whether or not such Indebtedness is assumed by such Person; provided,
      however,
      that the
      amount of such Indebtedness shall be the lesser of (A) the fair market
      value of such asset at that date of determination and (B) the amount
      of
      such Indebtedness;

     

    (7) all
      Indebtedness of other Persons Guaranteed by such Person to the extent such
      Indebtedness is Guaranteed by such Person; and

     

    (8) to
      the
      extent not otherwise included in this definition or the definition of
      Consolidated Interest Expense, obligations under Currency Agreements and
      Interest Rate Agreements.

     

    The
      amount of Indebtedness of any Person at any date shall be the outstanding
      balance at such date of all unconditional obligations of the type described
      above and, with respect to obligations under any Guarantee, the maximum
      liability upon the occurrence of the contingency giving rise to the obligation;
      provided,
      however,
      that:

     

    (1) the
      amount outstanding at any time of any Indebtedness issued with original issue
      discount shall be deemed to be the face amount with respect to such Indebtedness
      less the remaining unamortized portion of the original issue discount of such
      Indebtedness at the date of determination in conformity with GAAP,
      and

     

    (2) Indebtedness
      shall not include any liability for federal, state, local or other
      taxes.

     

    “Indenture”
      means
      this Indenture, as amended or supplemented from time to time in accordance
      with
      the terms hereof.

     

    “Initial
      Purchasers”
      means
      Deutsche Bank Securities Inc., UBS Securities LLC and Banc of America Securities
      LLC. 

     

    “Institutional
      Accredited Investor”
      or
“IAI”
      means
      an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or
      (7) under the Securities Act.

     

    “interest”
      means,
      with respect to the Notes, interest and Additional Interest, if any, on the
      Notes.

     

    “Interest
      Coverage Ratio”
      means,
      on any Transaction Date, the ratio of:

     

    
      	 	
              (x)

            	
              the
                aggregate amount of Consolidated EBITDA for the then most recent
                four
                fiscal quarters prior to such Transaction Date for which reports
                have been
                filed with the SEC or provided to the Trustee pursuant to
                Section 4.15 (“Four
                Quarter Period”)
                to

            

    

     

    
      	 	
              (y)

            	
              the
                aggregate Consolidated Interest Expense during such Four Quarter
                Period.

            

    

     

    In
      making
      the foregoing calculation,

     

    (1) pro forma
      effect
      shall be given to any Indebtedness Incurred or repaid (other than in connection
      with an Asset Acquisition or Asset Disposition) during the period (“Reference
      Period”)
      commencing on the first day of the Four Quarter Period and ending on the
      Transaction Date (other than Indebtedness Incurred or repaid under a revolving
      credit or similar arrangement), in each case as if such Indebtedness had been
      Incurred or repaid on the first day of such Reference Period;

     

    (2) Consolidated
      Interest Expense attributable to interest on any Indebtedness (whether existing
      or being Incurred) computed on a pro forma
      basis
      and bearing a floating interest rate shall be computed as if the rate in effect
      on the Transaction Date (taking into account any Interest Rate Agreement
      applicable to such Indebtedness if such Interest Rate Agreement has a remaining
      term in excess of 12 months or, if shorter, at least equal to the remaining
      term of such Indebtedness) had been the applicable rate for the entire
      period;

     

    (3) pro forma
      effect
      shall be given to Asset Dispositions and Asset Acquisitions and Permitted
      Mortgage Investments (including giving pro forma
      effect
      to the application of proceeds of any Asset Disposition and any Indebtedness
      Incurred or repaid in connection with any such Asset Acquisitions or Asset
      Dispositions or Permitted Mortgage Investments) that occur during such Reference
      Period but subsequent to the end of the related Four Quarter Period as if they
      had occurred and such proceeds had been applied on the first day of such
      Reference Period; and

     

    (4) pro forma
      effect
      shall be given to asset dispositions and asset acquisitions (including giving
      pro forma
      effect
      to (i) the application of proceeds of any asset disposition and any
      Indebtedness Incurred or repaid in connection with any such asset acquisitions
      or asset dispositions and (ii) expense and cost reductions calculated
      on a
      basis consistent with Regulation S-X under the Exchange Act) that have
      been
      made by any Person that has become a Restricted Subsidiary or has been merged
      with or into the Issuer or any of its Restricted Subsidiaries during such
      Reference Period but subsequent to the end of the related Four Quarter Period
      and that would have constituted asset dispositions or asset acquisitions during
      such Reference Period but subsequent to the end of the related Four Quarter
      Period had such transactions occurred when such Person was a Restricted
      Subsidiary as if such asset dispositions or asset acquisitions were Asset
      Dispositions or Asset Acquisitions and had occurred on the first day of such
      Reference Period;

     

    provided,
      however,
      that to
      the extent that clause (3) or (4) of this paragraph requires
      that
pro forma
      effect
      be given to an Asset Acquisition or Asset Disposition or asset acquisition
      or
      asset disposition, as the case may be, such pro forma
      calculation shall be based upon the four full fiscal quarters immediately
      preceding the Transaction Date of the Person, or division or line of business,
      or one or more healthcare properties, of the Person that is acquired or disposed
      of to the extent that such financial information is available.

     

    “Interest
      Payment Date”
      means
      the Stated Maturity of an installment of interest on the Notes.

     

    “Interest
      Rate Agreement”
      means
      any interest rate protection agreement, interest rate future agreement, interest
      rate option agreement, interest rate swap agreement, interest rate cap
      agreement, interest rate collar agreement, interest rate hedge agreement, option
      or future contract or other similar agreement or arrangement with respect to
      interest rates.

     

    “Investment”
      in any
      Person means any direct or indirect advance, loan or other extension of credit
      (including by way of Guarantee or similar arrangement, but excluding advances
      to
      customers in the ordinary course of business that are, in conformity with GAAP,
      recorded as accounts receivable on the consolidated balance sheet of the Issuer
      and its Restricted Subsidiaries) or capital contribution to (by means of any
      transfer of cash or other property (tangible or intangible) to others or any
      payment for property or services solely for the account or use of others, or
      otherwise), or any purchase or acquisition of Capital Stock, bonds, notes,
      debentures or other similar instruments issued by, such Person and shall
      include:

     

    (1) the
      designation of a Restricted Subsidiary as an Unrestricted Subsidiary;
      and

     

    (2) the
      fair
      market value of the Capital Stock (or any other Investment), held by the Issuer
      or any of its Restricted Subsidiaries of (or in) any Person that has ceased
      to
      be a Restricted Subsidiary;

     

    provided,
      however,
      that the
      fair market value of the Investment remaining in any Person that has ceased
      to
      be a Restricted Subsidiary shall be deemed not to exceed the aggregate amount
      of
      Investments previously made in such Person valued at the time such Investments
      were made, less the net reduction of such Investments. For purposes of the
      definition of “Unrestricted Subsidiary” and Section 4.09:

     

    (i)  “Investment”
      shall include the fair market value of the assets (net of liabilities (other
      than liabilities to the Issuer or any of its Restricted Subsidiaries)) of any
      Restricted Subsidiary at the time such Restricted Subsidiary is designated
      an
      Unrestricted Subsidiary;

     

    (ii)  the
      fair
      market value of the assets (net of liabilities (other than liabilities to the
      Issuer or any of its Restricted Subsidiaries)) of any Unrestricted Subsidiary
      at
      the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary
      shall be considered a reduction in outstanding Investments; and

     

    (iii)  any
      property transferred to or from an Unrestricted Subsidiary shall be valued
      at
      its fair market value at the time of such transfer.

     

    “Investment
      Grade Status”
      means,
      with respect to the Issuer, when the Notes have both (1) a rating of
“Baa3”
      or higher from Moody’s and (2) a rating of “BBB-” or higher from S&P
      (or, if either such agency ceases to rate the Notes for reasons outside the
      control of the Issuer, the equivalent investment grade credit rating from any
      other “nationally recognized statistical rating organization” within the meaning
      of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Issuer
      as a replacement agency), in each case published by the applicable agency with
      no negative outlook. 

     

    “Lien”
      means
      any mortgage, pledge, security interest, encumbrance, lien or charge of any
      kind
      (including any conditional sale or other title retention agreement or lease
      in
      the nature thereof or any agreement to give any security interest).

     

    “Line
      of Credit”
      means
      the Credit Agreement dated as of March 22, 2004, by and among the Issuer, the
      lenders party thereto in their capacities as lenders thereunder and Bank of
      America, N.A., as administrative agent, together with the related documents
      thereto (including any guarantee agreements and security documents), in each
      case as such agreements may be amended (including any amendment and restatement
      thereof), supplemented or otherwise modified from time to time, including one
      or
      more credit agreements, loan agreements, indentures or similar agreements
      extending the maturity of, refinancing, replacing or otherwise restructuring
      (including increasing the amount of available borrowings thereunder or adding
      Restricted Subsidiaries of the Issuer as additional borrowers or guarantors
      thereunder) all or any portion of the Indebtedness under such agreement or
      agreements or any successor or replacement agreement or agreements and whether
      by the same or any other agent, lender or group of lenders.

     

    “Moody’s”
      means
      Moody’s Investors Service, Inc. and its successors.

     

    “Net
      Cash Proceeds”
      means:

     

    (1) with
      respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash
      or Temporary Cash Investments, including payments in respect of deferred payment
      obligations (to the extent corresponding to the principal, but not interest,
      component thereof) when received in the form of cash or Temporary Cash
      Investments (except to the extent such obligations are financed or sold with
      recourse to the Issuer or any of its Restricted Subsidiaries) and proceeds
      from
      the conversion of other property received when converted to cash or cash
      equivalents, net of:

     

    
      	(i)  	
              brokerage
                commissions and other fees and expenses (including fees and expenses
                of
                counsel and investment bankers) related to such Asset
                Sale,

            

    

     

    (ii)  provisions
      for all taxes actually paid or payable as a result of such Asset Sale by the
      Issuer and its Restricted Subsidiaries, taken as a whole,

     

    
      	(iii)  	
              payments
                made to repay Indebtedness or any other obligation outstanding at
                the time
                of such Asset Sale that either (A) is secured by a Lien on
                the
                property or assets sold or (B) is required to be paid as a
                result of
                such sale, and

            

    

     

    
      	(iv)  	
              amounts
                reserved by the Issuer and its Restricted Subsidiaries against any
                liabilities associated with such Asset Sale, including pension and
                other
                post-employment benefit liabilities, liabilities related to environmental
                matters and liabilities under any indemnification obligations associated
                with such Asset Sale, all as determined on a consolidated basis in
                conformity with GAAP; and

            

    

     

    (2) with
      respect to any issuance or sale of Capital Stock, the proceeds of such issuance
      or sale in the form of cash or Temporary Cash Investments, including payments
      in
      respect of deferred payment obligations (to the extent corresponding to the
      principal, but not interest, component thereof) when received in the form of
      cash or Temporary Cash Investments (except to the extent such obligations are
      financed or sold with recourse to the Issuer or any of its Restricted
      Subsidiaries) and proceeds from the conversion of other property received when
      converted to cash or Temporary Cash Investments, net of attorney’s fees,
      accountants’ fees, underwriters’ or placement agents’ fees, discounts or
      commissions and brokerage, consultant and other fees incurred in connection
      with
      such issuance or sale and net of tax paid or payable as a result
      thereof.

     

    “Non-U.S.
      Person”
      has the
      meaning assigned to such term in Regulation S.

     

    “Notes”
      means,
      collectively, the Issuer’s 7% Senior Notes due 2016 issued in accordance with
      Section 2.02 (whether issued on the Closing Date, issued as Additional
      Notes, issued as Exchange Notes or Private Exchange Notes, or otherwise issued
      after the Closing Date) treated as a single class of securities under this
      Indenture, as amended or supplemented from time to time in accordance with
      the
      terms of this Indenture.

     

    “Offer
      to Purchase”
      means
      an offer to purchase Notes by the Issuer from the Holders commenced by mailing
      a
      notice to the Trustee and each Holder stating:

     

    (1) the
      covenant pursuant to which the offer is being made and that all Notes validly
      tendered will be accepted for payment on a pro rata
      basis;

     

    (2) the
      purchase price and the date of purchase (which shall be a Business Day no
      earlier than 30 days nor later than 60 days from the date such
      notice
      is mailed) (the “Payment
      Date”);

     

    (3) that
      any
      Note not tendered will continue to accrue interest pursuant to its
      terms;

     

    (4) that,
      unless the Issuer defaults in the payment of the purchase price, any Note
      accepted for payment pursuant to the Offer to Purchase shall cease to accrue
      interest on and after the Payment Date;

     

    (5) that
      Holders electing to have a Note purchased pursuant to the Offer to Purchase
      will
      be required to surrender the Note, together with the form entitled “Option of
      the Holder to Elect Purchase” on the reverse side of the Note completed, to the
      Paying Agent at the address specified in the notice prior to the close of
      business on the Business Day immediately preceding the Payment
      Date;

     

    (6) that
      Holders will be entitled to withdraw their election if the Paying Agent
      receives, not later than the close of business on the third Business Day
      immediately preceding the Payment Date, a telegram, facsimile transmission
      or
      letter setting forth the name of such Holder, the principal amount of Notes
      delivered for purchase and a statement that such Holder is withdrawing his
      election to have such Notes purchased; and

     

    (7) that
      Holders whose Notes are being purchased only in part will be issued new Notes
      equal in principal amount to the unpurchased portion of the Notes surrendered;
      provided,
      however,
      that
      each Note purchased and each new Note issued shall be in a principal amount
      of
      $1,000 or integral multiples thereof.

     

    On
      the
      Payment Date, the Issuer shall

     

    
      	(i)  	
              accept
                for payment on a pro rata
                basis Notes or portions thereof tendered pursuant to an Offer to
                Purchase;
                and

            

    

     

    (ii)  deposit
      with the Paying Agent money sufficient to pay the purchase price of all Notes
      or
      portions thereof so accepted; and

     

    (iii)  shall
      promptly thereafter deliver, or cause to be delivered, to the Trustee all Notes
      or portions thereof so accepted together with an Officers’ Certificate
      specifying the Notes or portions thereof accepted for payment by the
      Issuer.

     

    The
      Paying Agent shall promptly mail to the Holders of Notes so accepted payment
      in
      an amount equal to the purchase price, and the Trustee shall promptly
      authenticate and mail to such Holders a new Note equal in principal amount
      to
      any unpurchased portion of any Note surrendered; provided,
      however,
      that
      each Note purchased and each new Note issued shall be in a principal amount
      of
      $1,000 or integral multiples thereof. The Issuer will publicly announce the
      results of an Offer to Purchase as soon as practicable after the Payment Date.
      The Issuer will comply with Rule 14e-1 under the Exchange Act and any
      other
      securities laws and regulations thereunder to the extent such laws and
      regulations are applicable, in the event that the Issuer is required to
      repurchase Notes pursuant to an Offer to Purchase.

     

    “Officer”
      means
      any of the following of the Issuer or a Subsidiary Guarantor, as applicable:
      the
      Chairman of the Board of Directors, the Chief Executive Officer, the Chief
      Financial Officer, the President, any Vice President, the Treasurer or the
      Secretary.

     

    “Officers’
      Certificate”
      means a
      certificate signed by two Officers.

     

    “Opinion
      of Counsel”
      means a
      written opinion from legal counsel who is reasonably acceptable to the Trustee.
      The counsel may be an employee of, or counsel to, the Issuer, a Subsidiary
      Guarantor or the Trustee.

     

    “Pari
      Passu Indebtedness”
      means
      any Indebtedness of the Issuer or any Subsidiary Guarantor that ranks
pari passu
      in right
      of payment with the Notes or the Guarantee thereof by such Subsidiary Guarantor,
      as applicable.

     

    “Permitted
      Investment”
      means:

     

    (1) an
      investment in the Issuer or any of its Restricted Subsidiaries or a Person
      that
      will, upon the making of such Investment, become a Restricted Subsidiary or
      be
      merged or consolidated with or into or transfer or convey all or substantially
      all its assets to, the Issuer or any of its Restricted Subsidiaries;
provided,
      however,
      that
      such Person’s primary business is related, ancillary, incidental or
      complementary to the businesses of the Issuer or any of its Restricted
      Subsidiaries on the date of such Investment;

     

    (2) investments
      in cash and Temporary Cash Investments;

     

    (3) Investments
      made by the Issuer or its Restricted Subsidiaries as a result of consideration
      received in connection with an Asset Sale made in compliance with
      Section 4.11

     

    (4) Investments
      represented by Guarantees that are otherwise permitted under this
      Indenture;

     

    (5) payroll,
      travel and similar advances to cover matters that are expected at the time
      of
      such advances ultimately to be treated as expenses in accordance with
      GAAP;

     

    (6) stock,
      obligations or securities received in satisfaction of judgments;

     

    (7) Permitted
      Mortgage Investments; and

     

    (8) additional
      Investments not to exceed $25 million at any time outstanding.

     

    “Permitted
      Mortgage Investment”
      means
      any Investment in secured notes, mortgage, deeds of trust, collateralized
      mortgage obligations, commercial mortgage-backed securities, other secured
      debt
      securities, secured debt derivative or other secured debt instruments, so long
      as such investment relates directly or indirectly to real property that
      constitutes or is used as a skilled nursing home center, hospital, assisted
      living facility or other property customarily constituting an asset of a real
      estate investment trust specializing in healthcare or senior housing
      property.

     

    “Person”
      means
      any individual, corporation, partnership, limited liability company, joint
      venture, incorporated or unincorporated association, joint-stock company, trust,
      unincorporated organization or government or other agency or political
      subdivision thereof or other entity of any kind.

     

    “Preferred
      Stock”
      means,
      with respect to any Person, any and all shares, interests, participations or
      other equivalents (however designated, whether voting or non-voting) that have
      a
      preference on liquidation or with respect to distributions over any other class
      of Capital Stock, including preferred partnership interests, whether general
      or
      limited, or such Person’s preferred or preference stock, whether outstanding on
      the Closing Date or issued thereafter, including, without limitation, all series
      and classes of such preferred or preference stock.

     

    “principal”
      means,
      with respect to the Notes, the principal of and premium, if any, on the
      Notes.

     

    “Private
      Exchange”
      has the
      meaning given to it in the Registration Rights Agreement.

     

    “Private
      Exchange Notes”
      has the
      meaning given to it in the Registration Rights Agreement.

     

    “Private
      Placement Legend”
      means
      the legends initially set forth on the Notes in the form set forth in
Exhibit B.

     

    “Qualified
      Institutional Buyer”
      or
“QIB”
      shall
      have the meaning specified in Rule 144A under the Securities
      Act.

     

    “Record
      Date”
      means
      the applicable Record Date specified in the Notes; provided,
      however,
      that if
      any such date is not a Business Day, the Record Date shall be the first day
      immediately succeeding such specified day that is a Business Day.

     

    “redeem”
      means
      to redeem, repurchase, purchase, defease, retire, discharge or otherwise acquire
      or retire for value; and “redemption”
      shall
      have a correlative meaning; provided,
      however,
      that
      this definition shall not apply for purposes of Section 5 or Section 6
      of the Notes or Article Three.

     

    “Redemption
      Date,”
      when
      used with respect to any Note to be redeemed, means the date fixed for such
      redemption pursuant to this Indenture and the Notes.

     

    “Redemption
      Price,”
      when
      used with respect to any Note to be redeemed, means the price fixed for such
      redemption, payable in immediately available funds, pursuant to this Indenture
      and the Notes.

     

    “Registration
      Rights Agreement”
      means
      the Registration Rights Agreement dated as of December 30, 2005 among the
      Issuer, the Subsidiary Guarantors and the Initial Purchasers, as amended,
      supplemented or modified from time to time, and any similar agreement entered
      into in connection with the issuance of any Additional Notes.

     

    “Regulation S”
      means
      Regulation S under the Securities Act.

     

    “Responsible
      Officer”
      means,
      when used with respect to the Trustee, any officer in the Corporate Trust Office
      of the Trustee to whom any corporate trust matter is referred because of such
      officer’s knowledge of and familiarity with the particular subject and shall
      also mean any officer who shall have direct responsibility for the
      administration of this Indenture.

     

    “Restricted
      Security”
      means a
      Note that constitutes a “Restricted Security” within the meaning of
      Rule 144(a)(3) under the Securities Act; provided,
      however,
      that the
      Trustee shall be entitled to request and conclusively rely on an Opinion of
      Counsel with respect to whether any Note constitutes a Restricted
      Security.

     

    “Restricted
      Subsidiary”
      means
      any Subsidiary of the Issuer other than an Unrestricted Subsidiary.

     

    “Rule 144A”
      means
      Rule 144A under the Securities Act.

     

    “SEC”
      means
      the U.S. Securities and Exchange Commission.

     

    “Secured
      Indebtedness”
      means
      any Indebtedness secured by a Lien upon the property of the Issuer or any of
      its
      Restricted Subsidiaries.

     

    “Securities
      Act”
      means
      the U.S. Securities Act of 1933, as amended, or any successor statute or
      statutes thereto.

     

    “Significant
      Subsidiary,”
      with
      respect to any Person, means any restricted subsidiary of such Person that
      satisfies the criteria for a “significant subsidiary” set forth in
      Rule 1.02(w) of Regulation S-X under the Exchange Act.

     

    “S&P”
      means
      Standard & Poor’s Ratings Services and its successors.

     

    “Stated
      Maturity”
      means:

     

    (1) with
      respect to any debt security, the date specified in such debt security as the
      fixed date on which the final installment of principal of such debt security
      is
      due and payable; and

     

    (2) with
      respect to any scheduled installment of principal of or interest on any debt
      security, the date specified in such debt security as the fixed date on which
      such installment is due and payable.

     

    “Subsidiary”
      means,
      with respect to any Person, any corporation, association or other business
      entity of which more than 50% of the voting power of the outstanding Voting
      Stock is owned, directly or indirectly, by such Person and one or more other
      Subsidiaries of such Person and the accounts of which would be consolidated
      with
      those of such Person in its consolidated financial statements in accordance
      with
      GAAP, if such statements were prepared as of such date.

     

    “Subsidiary
      Debt”
      means
      all unsecured Indebtedness of which a Restricted Subsidiary is the primary
      obligor.

     

    “Subsidiary
      Guarantee”
      means a
      Guarantee by each Subsidiary Guarantor for payment of the Notes by such
      Subsidiary Guarantor. The Subsidiary Guarantee will be an unsecured senior
      obligation of each Subsidiary Guarantor and will be unconditional regardless
      of
      the enforceability of the Notes and this Indenture. Notwithstanding the
      foregoing, each Subsidiary Guarantee by a Subsidiary Guarantor shall provide
      by
      its terms that it shall be automatically and unconditionally released and
      discharged upon any sale, exchange or transfer, to any Person not an Affiliate
      of the Issuer, of all of the Capital Stock owned by the Issuer and its
      Restricted Subsidiaries in, or all or substantially all the assets of, such
      Restricted Subsidiary (which sale, exchange or transfer is not then prohibited
      by this Indenture).

     

    “Subsidiary
      Guarantors”
      means
      (i) each Restricted Subsidiary of the Issuer on the Closing Date and
      (ii) each other Person that is required to become a Subsidiary Guarantor
      by
      the terms of this Indenture after the Closing Date, in each case, until such
      Person is released from its Subsidiary Guarantee.

     

    “Temporary
      Cash Investment”
      means
      any of the following:

     

    (1) direct
      obligations of the United States of America or any agency thereof or obligations
      fully and unconditionally guaranteed by the United States of America or any
      agency thereof;

     

    (2) time
      deposits accounts, certificates of deposit and money market deposits maturing
      within 180 days of the date of acquisition thereof issued by a bank
      or
      trust company which is organized under the laws of the United States of America,
      any state thereof, and which bank or trust company has capital, surplus and
      undivided profits aggregating in excess of $250 million and has outstanding
      debt which is rated “A” (or such similar equivalent rating) or higher by at
      least one nationally recognized statistical rating organization (as defined
      in
      Rule 436 under the Securities Act) or any money-market fund sponsored
      by a
      registered broker dealer or mutual fund distributor;

     

    (3) repurchase
      obligations with a term of not more than 30 days for underlying securities
      of the types described in clause (1) above entered into with a bank
      meeting
      the qualifications described in clause (2) above;

     

    (4) commercial
      paper, maturing not more than 90 days after the date of acquisition,
      issued
      by a corporation (other than an Affiliate of the Issuer) organized and in
      existence under the laws of the United States of America, any state of the
      United States of America with a rating at the time as of which any investment
      therein is made of “P-1” (or higher) according to Moody’s or “A-1” (or higher)
      according to S&P; and

     

    (5) securities
      with maturities of six months or less from the date of acquisition issued or
      fully and unconditionally guaranteed by any state, commonwealth or territory
      of
      the United States of America, or by any political subdivision or taxing
      authority thereof, and rated at least “A” by S&P or Moody’s.

     

    “Total
      Assets”
      means
      the sum (without duplication) of:

     

    (1) Undepreciated
      Real Estate Assets; and

     

    (2) all
      other
      assets (excluding intangibles and accounts receivable) of the Issuer and its
      Restricted Subsidiaries on a consolidated basis determined in conformity with
      GAAP.

     

    “Total
      Unencumbered Assets”
      as of
      any date means the sum of:

     

    (1) those
      Undepreciated Real Estate Assets not securing any portion of Secured
      Indebtedness; and

     

    (2) all
      other
      assets (but excluding intangibles and accounts receivable) of the Issuer and
      its
      Restricted Subsidiaries not securing any portion of Secured Indebtedness
      determined on a consolidated basis in conformity with GAAP.

     

    “Trade
      Payables”
      means,
      with respect to any Person, any accounts payable or any other indebtedness
      or
      monetary obligation to trade creditors created, assumed or Guaranteed by such
      Person or any of its Subsidiaries arising in the ordinary course of business
      in
      connection with the acquisition of goods or services.

     

    “Transaction
      Date”
      means,
      with the respect to the Incurrence of any Indebtedness by the Issuer or any
      of
      its Restricted Subsidiaries, the date such Indebtedness is to be Incurred and,
      with respect to any Restricted Payment, the date such Restricted Payment is
      to
      be made.

     

    “Trust
      Indenture Act”
      means
      the Trust Indenture Act of 1939, as amended.

     

    “Trustee”
      means
      the party named as such in this Indenture until a successor replaces it in
      accordance with the provisions of this Indenture and thereafter means such
      successor.

     

    “Undepreciated
      Real Estate Assets”
      means,
      as of any date, the cost (being the original cost to the Issuer or any of its
      Restricted Subsidiaries plus capital improvements) of real estate assets of
      the
      Issuer and its Restricted Subsidiaries on such date, before depreciation and
      amortization of such real estate assets, determined on a consolidated basis
      in
      conformity with GAAP.

     

    “Unrestricted
      Subsidiary”
      means

     

    (1) any
      Subsidiary of the Issuer that at the time of determination shall be designated
      an Unrestricted Subsidiary by the Board of Directors of the Issuer in the manner
      provided below; and

     

    (2) any
      Subsidiary of an Unrestricted Subsidiary.

     

    Except
      during a Suspension Period, the Board of Directors of the Issuer may designate
      any Subsidiary (including any newly acquired or newly formed Subsidiary of
      the
      Issuer) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital
      Stock of, or owns or holds any Lien on any property of, the Issuer or any of
      its
      Restricted Subsidiaries; provided,
      however,
      that:

     

    (i)  any
      Guarantee by the Issuer or any of its Restricted Subsidiaries of any
      Indebtedness of the Subsidiary being so designated shall be deemed an
“Incurrence” of such Indebtedness and an “Investment” by the Issuer or such
      Restricted Subsidiary (or all, if applicable) at the time of such
      designation;

     

    (ii)  either
      (i) the Subsidiary to be so designated has total assets of $1,000 or
      less
      or (ii) if such Subsidiary has assets greater than $1,000, such designation
      would be permitted under Section 4.09; and

     

    (iii)  if
      applicable, the Incurrence of Indebtedness and the Investment referred to in
      clause (i) of this proviso would be permitted under Section 4.08
      and
      Section 4.09.

     

    The
      Board
      of Directors of the Issuer may designate any Unrestricted Subsidiary to be
      a
      Restricted Subsidiary; provided,
      however,
      that:

     

    
      	 	
              (x)

            	
              no
                Default or Event of Default shall have occurred and be continuing
                at the
                time of or after giving effect to such designation;
                and

            

    

     

    
      	 	
              (y)

            	
              all
                Liens and Indebtedness of such Unrestricted Subsidiary outstanding
                immediately after such designation would, if Incurred at such time,
                have
                been permitted to be Incurred (and shall be deemed to have been Incurred)
                for all purposes of this Indenture.

            

    

     

    Any
      such
      designation by the Board of Directors of the Issuer shall be evidenced to the
      Trustee by promptly filing with the Trustee a copy of the Board Resolution
      giving effect to such designation and an Officers’ Certificate certifying that
      such designation complied with the foregoing provisions.

     

    “Unsecured
      Indebtedness”
      means
      any Indebtedness of the Issuer or any of its Restricted Subsidiaries that is
      not
      Secured Indebtedness.

     

    “U.S.
      Government Obligations”
      means
      direct obligations of, obligations guaranteed by, or participations in pools
      consisting solely of obligations of or obligations guaranteed by, the United
      States of America for the payment of which obligations or guarantee the full
      faith and credit of the United States of America is pledged and that are not
      callable or redeemable at the option of the issuer thereof.

     

    “U.S.
      Legal Tender”
      means
      such coin or currency of the United States of America that at the time of
      payment shall be legal tender for the payment of public and private
      debts.

     

    “Voting
      Stock”
      means
      with respect to any Person, Capital Stock of any class or kind ordinarily having
      the power to vote for the election of directors, managers or other voting
      members of the governing body of such Person.

     

    “Wholly
      Owned”
      means,
      with respect to any Subsidiary of any Person, the ownership of all of the
      outstanding Capital Stock of such Subsidiary (other than any director’s
      qualifying shares or Investments by individuals mandated by applicable law)
      by
      such Person or one or more Wholly Owned Subsidiaries of such
      Person.

     

    SECTION
      1.02.  Other
      Definitions.

     

    
      	
              Term

               

            	
              Defined
                in Section

               

            
	
              “144A
                Global Note”

            	
              2.01

            
	
              “Additional
                Notes”

            	
              2.02

            
	
              “Authentication
                Order”

            	
              2.02

            
	
              “Covenant
                Defeasance”

            	
              8.02

            
	
              “Event
                of Default”

            	
              6.01

            
	
              “Excess
                Proceeds”

            	
              4.11

            
	
              “Four
                Quarter Period”

            	
              1.01

            
	
              “Global
                Note”

            	
              2.01

            
	
              “Guaranteed
                Indebtedness”

            	
              4.14

            
	
              “IAI
                Global Note”

            	
              2.01

            
	
              “Initial
                Global Notes”

            	
              2.01

            
	
              “Initial
                Notes”

            	
              2.02

            
	
              “Issuer”

            	
              Preamble

            
	
              “Legal
                Defeasance”

            	
              8.02

            
	
              “Participants”

            	
              2.15

            
	
              “Paying
                Agent”

            	
              2.03

            
	
              “Payment
                Date”

            	
              1.01

            
	
              “Physical
                Notes”

            	
              2.01

            
	
              “Reference
                Period”

            	
              1.01

            
	
              “Registrar”

            	
              2.03

            
	
              “Regulation
                S Global Note

            	
              2.01

            
	
              “Restricted
                Payments”

            	
              4.09

            
	
              “Reversion
                Date”

            	
              4.16

            
	
              “Suspension
                Period”

            	
              4.16

            

    

    

    
      	SECTION
              1.03.  	
              Incorporation
                by Reference of Trust Indenture Act.

            

    

     

    Whenever
      this Indenture refers to a provision of the Trust Indenture Act, such provision
      is incorporated by reference in, and made a part of, this Indenture. The
      following Trust Indenture Act terms used in this Indenture have the following
      meanings:

     

    “indenture
      securities”
      means
      the Notes.

     

    “indenture
      security holder”
      means a
      Holder.

     

    “indenture
      to be qualified”
      means
      this Indenture.

     

    “indenture
      trustee”
      or
“institutional
      trustee”
      means
      the Trustee.

     

    “obligor”
      on the
      indenture securities means the Issuer, any Subsidiary Guarantor or any other
      obligor on the Notes.

     

    All
      other
      Trust Indenture Act terms used in this Indenture that are defined by the Trust
      Indenture Act, defined by Trust Indenture Act reference to another statute
      or
      defined by SEC rule and not otherwise defined herein have the meanings
      assigned to them therein.

     

    
      	SECTION
              1.04.  	
              Rules
                of Construction.

            

    

     

    Unless
      the context otherwise requires:

     

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

     

    (2)  an
      accounting term not otherwise defined has the meaning assigned to it in
      accordance with GAAP;

     

    (3)  “or”
      is
      not exclusive;

     

    (4)  words
      in
      the singular include the plural, and words in the plural include the
      singular;

     

    (5)  provisions
      apply to successive events and transactions;

     

    (6)  “herein,”“hereof”
      and other words of similar import refer to this Indenture as a whole and not
      to
      any particular Article, Section or other subdivision; and

     

    (7)  the
      words
“including,”“includes” and similar words shall be deemed to be followed by
“without limitation.”

     

    ARTICLE
      TWO  

     

    

     

    THE
      NOTES

     

    
      	SECTION
              2.01.  	
              Form
                and Dating.

            

    

     

    The
      Notes
      and the Trustee’s certificate of authentication shall be substantially in the
      form of Exhibit A
      hereto.
      The Notes may have notations, legends or endorsements required by law, stock
      exchange rule or usage. The Issuer shall approve the form of the Notes
      and
      any notation, legend or endorsement on them. Each Note shall be dated the date
      of its issuance and show the date of its authentication. Each Note shall have
      an
      executed Subsidiary Guarantee from each of the Subsidiary Guarantors existing
      on
      the Closing Date endorsed thereon substantially in the form of Exhibit E.

     

    The
      terms
      and provisions contained in the Notes and the Subsidiary Guarantees shall
      constitute, and are hereby expressly made, a part of this Indenture and, to
      the
      extent applicable, the Issuer, the Subsidiary Guarantors and the Trustee, by
      their execution and delivery of this Indenture, expressly agree to such terms
      and provisions and to be bound thereby.

     

    Notes
      offered and sold in reliance on Rule 144A shall be issued initially
      in the
      form of a single permanent global Note in registered form, substantially in
      the
      form set forth in Exhibit A
      (the
“144A
      Global Note”),
      deposited with the Trustee, as custodian for the Depository, duly executed
      by
      the Issuer (and having an executed Subsidiary Guarantee from each of the
      Subsidiary Guarantors endorsed thereon) and authenticated by the Trustee as
      hereinafter provided and shall bear the legends set forth in Exhibit B.
      

     

    Notes
      offered and sold in offshore transactions in reliance on Regulation S
      shall
      be issued initially in the form of a single permanent global Note in registered
      form, substantially in the form of Exhibit A
      (the
“Regulation S
      Global Note”),
      deposited with the Trustee, as custodian for the Depository, duly executed
      by
      the Issuer (and having an executed Subsidiary Guarantee from each of the
      Subsidiary Guarantors endorsed thereon) and authenticated by the Trustee as
      hereinafter provided and shall bear the legends set forth in Exhibit B.

     

    The
      initial offer and resale of the Notes shall not be to an Institutional
      Accredited Investor. The Notes resold to Institutional Accredited Investors
      in
      connection with the first transfer made pursuant to Section 2.16(a)
      shall
      be issued initially in the form of a single permanent Global Note in registered
      form, substantially in the form set forth in Exhibit A
      (the
“IAI
      Global Note,”
      and,
      together with the 144A Global Note and the Regulation S Global Note, the
“Initial
      Global Notes”),
      deposited with the Trustee, as custodian for the Depository, duly executed
      by
      the Issuer (and having an executed Subsidiary Guarantee from each of the
      Subsidiary Guarantors endorsed thereon) and authenticated by the Trustee as
      hereinafter provided and shall bear the legend set forth in Exhibit B.

     

    Notes
      issued after the Closing Date shall be issued initially in the form of one
      or
      more global Notes in registered form, substantially in the form set forth in
      Exhibit A,
      deposited with the Trustee, as custodian for the Depository, duly executed
      by
      the Issuer (and having an executed Subsidiary Guarantee from each of the
      Subsidiary Guarantors endorsed thereon) and authenticated by the Trustee as
      hereinafter provided and shall bear any legends required by applicable law
      (together with the Initial Global Notes, the “Global
      Notes”)
      or as
      Physical Notes.

     

    The
      aggregate principal amount of the Global Notes may from time to time be
      increased or decreased by adjustments made on the records of the Trustee, as
      custodian for the Depository, as hereinafter provided. Notes issued in exchange
      for interests in a Global Note pursuant to Section 2.16 may be issued
      in
      the form of permanent certificated Notes in registered form in substantially
      the
      form set forth in Exhibit A
      and
      bearing the applicable legends, if any, (the “Physical
      Notes”).
      

     

    
      	SECTION
              2.02.  	
              Execution,
                Authentication and Denomination;
                Additional
                Notes; Exchange Notes

            

    

     

    One
      Officer of the Issuer (who shall have been duly authorized by all requisite
      corporate actions) shall sign the Notes for such Issuer by manual or facsimile
      signature. One Officer of a Subsidiary Guarantor (who shall have been duly
      authorized by all requisite corporate actions) shall sign the Subsidiary
      Guarantee for such Subsidiary Guarantor by manual or facsimile
      signature.

     

    If
      an
      Officer whose signature is on a Note or Subsidiary Guarantee, as the case may
      be, was an Officer at the time of such execution but no longer holds that office
      at the time the Trustee authenticates the Note, the Note shall nevertheless
      be
      valid.

     

    A
      Note
      (and the Subsidiary Guarantees in respect thereof) shall not be valid until
      an
      authorized signatory of the Trustee manually signs the certificate of
      authentication on the Note. The signature shall be conclusive evidence that
      the
      Note has been authenticated under this Indenture.

     

    The
      Trustee shall authenticate (i) on the Closing Date, Notes for original
      issue in the aggregate principal amount not to exceed $175,000,000 (the
“Initial
      Notes”),
      (ii) additional Notes (the “Additional
      Notes”)
      in an
      unlimited amount (so long as not otherwise prohibited by the terms of this
      Indenture, including Section 4.08) and (iii) Exchange Notes or
      Private
      Exchange Notes (x) in exchange for a like principal amount of Initial
      Notes
      or (y) in exchange for a like principal amount of Additional Notes in
      each
      case upon a written order of the Issuer in the form of a certificate of an
      Officer of the Issuer (an “Authentication
      Order”).
      Each
      such Authentication Order shall specify the amount of Notes to be authenticated
      and the date on which the Notes are to be authenticated, whether the Notes
      are
      to be Initial Notes, Exchange Notes, Private Exchange Notes or Additional Notes
      and whether the Notes are to be issued as certificated Notes or Global Notes
      or
      such other information as the Trustee may reasonably request. In addition,
      with
      respect to authentication pursuant to clause (ii) or (iii) of the first sentence
      of this paragraph, the first such Authentication Order from the Issuer shall
      be
      accompanied by an Opinion of Counsel of the Issuer in a form reasonably
      satisfactory to the Trustee.

     

    All
      Notes
      issued under this Indenture shall be treated as a single class for all purposes
      under this Indenture. The Additional Notes and the Private Exchange Notes shall
      bear any legend required by applicable law.

     

    The
      Trustee may appoint an authenticating agent reasonably acceptable to the Issuer
      to authenticate Notes. Unless otherwise provided in the appointment, an
      authenticating agent may authenticate Notes whenever the Trustee may do so.
      Each
      reference in this Indenture to authentication by the Trustee includes
      authentication by such agent. An authenticating agent has the same rights as
      an
      Agent to deal with the Issuer and Affiliates of the Issuer. The Trustee shall
      have the right to decline to authenticate and deliver any Notes under this
      Indenture if the Trustee, being advised by counsel, determines that such action
      may not lawfully be taken or if the Trustee in good faith shall determine that
      such action would expose the Trustee to personal liability.

     

    The
      Notes
      shall be issuable only in registered form without coupons in denominations
      of
      $1,000 and integral multiples thereof.

     

    
      	SECTION
              2.03.  	
              Registrar
                and Paying Agent.

            

    

     

    The
      Issuer shall maintain or cause to be maintained an office or agency in the
      Borough of Manhattan, The City of New York, where (a) Notes may be
      presented or surrendered for registration of transfer or for exchange
      (“Registrar”),
      (b) Notes may, subject to Section 2 of the Notes, be presented
      or
      surrendered for payment (“Paying
      Agent”)
      and
      (c) notices and demands to or upon the Issuer in respect of the Notes
      and
      this Indenture may be served. The Issuer may also from time to time designate
      one or more other offices or agencies where the Notes may be presented or
      surrendered for any or all such purposes and may from time to time rescind
      such
      designations; provided,
      however,
      that no
      such designation or rescission shall in any manner relieve the Issuer of its
      obligation to maintain or cause to be maintained an office or agency in the
      Borough of Manhattan, The City of New York, for such purposes. The Issuer may
      act as Registrar or Paying Agent, except that for the purposes of Articles
      Three
      and Eight and Sections 4.07 and 4.11, neither the Issuer nor any Affiliate
      of the Issuer shall act as Paying Agent. The Registrar shall keep a register
      of
      the Notes and of their transfer and exchange. The Issuer, upon notice to the
      Trustee, may have one or more co-registrars and one or more additional paying
      agents reasonably acceptable to the Trustee. The term “Registrar” includes any
      co-registrar and the term “Paying Agent” includes any additional paying agent.
      The Issuer initially appoints the Trustee as Registrar and Paying Agent until
      such time as the Trustee has resigned or a successor has been
      appointed.

     

    The
      Issuer shall enter into an appropriate agency agreement with any Agent not
      a
      party to this Indenture, which agreement shall implement the provisions of
      this
      Indenture that relate to such Agent. The Issuer shall notify the Trustee, in
      advance, of the name and address of any such Agent. If the Issuer fails to
      maintain a Registrar or Paying Agent, the Trustee shall act as
      such.

     

    
      	SECTION
              2.04.  	
              Paying
                Agent To Hold Assets in Trust.

            

    

     

    The
      Issuer shall require each Paying Agent other than the Trustee or the Issuer
      or
      any Subsidiary to agree in writing that each Paying Agent shall hold in trust
      for the benefit of Holders or the Trustee all assets held by the Paying Agent
      for the payment of principal of, or interest on, the Notes (whether such assets
      have been distributed to it by the Issuer or any other obligor on the Notes),
      and shall notify the Trustee of any Default by the Issuer (or any other obligor
      on the Notes) in making any such payment. The Issuer at any time may require
      a
      Paying Agent to distribute all assets held by it to the Trustee and account
      for
      any assets disbursed and the Trustee may at any time during the continuance
      of
      any payment Default, upon written request to a Paying Agent, require such Paying
      Agent to distribute all assets held by it to the Trustee and to account for
      any
      assets distributed. Upon distribution to the Trustee of all assets that shall
      have been delivered by the Issuer to the Paying Agent, the Paying Agent shall
      have no further liability for such assets.

     

    
      	SECTION
              2.05.  	
              Holder
                Lists.

            

    

     

    The
      Trustee shall preserve in as current a form as is reasonably practicable the
      most recent list available to it of the names and addresses of Holders. If
      the
      Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least
      two (2) Business Days prior to each Interest Payment Date and at such other
      times as the Trustee may request in writing a list, in such form and as of
      such
      date as the Trustee may reasonably require, of the names and addresses of
      Holders, which list may be conclusively relied upon by the Trustee.

     

    
      	SECTION
              2.06.  	
              Transfer
                and Exchange.

            

    

     

    Subject
      to Sections 2.15 and 2.16, when Notes are presented to the Registrar
      with a
      request to register the transfer of such Notes or to exchange such Notes for
      an
      equal principal amount of Notes of other authorized denominations, the Registrar
      shall register the transfer or make the exchange as requested if its
      requirements for such transaction are met; provided,
      however,
      that the
      Notes surrendered for transfer or exchange shall be duly endorsed or accompanied
      by a written instrument of transfer in form satisfactory to the Issuer and
      the
      Registrar, duly executed by the Holder thereof or his or her attorney duly
      authorized in writing. To permit registrations of transfers and exchanges,
      the
      Issuer shall execute and the Trustee shall authenticate Notes at the Registrar’s
      request. No service charge shall be made for any registration of transfer or
      exchange, but the Issuer may require payment of a sum sufficient to cover any
      transfer tax or similar governmental charge payable in connection
      therewith.

     

    Without
      the prior written consent of the Issuer, the Registrar shall not be required
      to
      register the transfer of or exchange of any Note (i) during a period
      beginning at the opening of business 15 days before the mailing of a notice
      of
      redemption of Notes and ending at the close of business on the day of such
      mailing, (ii) selected for redemption in whole or in part pursuant to
      Article Three, except the unredeemed portion of any Note being redeemed in
      part,
      and (iii) beginning at the opening of business on any Record Date and
      ending on the close of business on the related Interest Payment
      Date.

     

    Any
      Holder of a beneficial interest in a Global Note shall, by acceptance of such
      beneficial interest, agree that transfers of beneficial interests in such Global
      Notes may be effected only through a book-entry system maintained by the Holder
      of such Global Note (or its agent) in accordance with the applicable legends
      thereon, and that ownership of a beneficial interest in the Note shall be
      required to be reflected in a book-entry system.

     

    
      	SECTION
              2.07.  	
              Replacement
                Notes.

            

    

     

    If
      a
      mutilated Note is surrendered to the Trustee or if the Holder of a Note claims
      that the Note has been lost, destroyed or wrongfully taken, the Issuer shall
      issue and the Trustee shall authenticate a replacement Note if the Trustee’s
      requirements are met. Such Holder must provide an indemnity bond or other
      indemnity, sufficient in the judgment of both the Issuer and the Trustee, to
      protect the Issuer, the Trustee or any Agent from any loss which any of them
      may
      suffer if a Note is replaced. The Issuer may charge such Holder for its
      reasonable out-of-pocket expenses in replacing a Note pursuant to this
      Section 2.07, including reasonable fees and expenses of counsel and
      of the
      Trustee.

     

    Every
      replacement Note is an additional obligation of the Issuer and every replacement
      Subsidiary Guarantee shall constitute an additional obligation of the Subsidiary
      Guarantor thereof.

     

    The
      provisions of this Section 2.07 are exclusive and shall preclude (to
      the
      extent lawful) all other rights and remedies with respect to the replacement
      or
      payment of lost, destroyed or wrongfully taken Notes.

     

    
      	SECTION
              2.08.  	
              Outstanding
                Notes.

            

    

     

    Notes
      outstanding at any time are all the Notes that have been authenticated by the
      Trustee except those cancelled by it, those delivered to it for cancellation
      and
      those described in this Section 2.08 as not outstanding. A Note does
      not
      cease to be outstanding because the Issuer, the Subsidiary Guarantors or any
      of
      their respective Affiliates hold the Note (subject to the provisions of
      Section 2.09).

     

    If
      a Note
      is replaced pursuant to Section 2.07 (other than a mutilated Note
      surrendered for replacement), it ceases to be outstanding unless a Responsible
      Officer of the Trustee receives proof satisfactory to it that the replaced
      Note
      is held by a bona
      fide
      purchaser. A mutilated Note ceases to be outstanding upon surrender of such
      Note
      and replacement thereof pursuant to Section 2.07. 

     

    If
      the
      principal amount of any Note is considered paid under Section 4.01,
      it
      ceases to be outstanding and interest ceases to accrue. If on a Redemption
      Date
      or the Stated Maturity the Trustee or Paying Agent (other than the Issuer or
      an
      Affiliate thereof) holds U.S. Legal Tender or U.S. Government Obligations
      sufficient to pay all of the principal and interest due on the Notes payable
      on
      that date, then on and after that date such Notes cease to be outstanding and
      interest on them ceases to accrue.

     

    
      	SECTION
              2.09.  	
              Treasury
                Notes.

            

    

     

    In
      determining whether the Holders of the required principal amount of Notes have
      concurred in any direction, waiver or consent, Notes owned by the Issuer or
      any
      of its Affiliates shall be disregarded, except that, for the purposes of
      determining whether the Trustee shall be protected in relying on any such
      direction, waiver or consent, only Notes that a Responsible Officer of the
      Trustee actually knows are so owned shall be disregarded.

     

    
      	SECTION
              2.10.  	
              Temporary
                Notes.

            

    

     

    Until
      definitive Notes are ready for delivery, the Issuer may prepare and the Trustee
      shall authenticate temporary Notes. Temporary Notes shall be substantially
      in
      the form of definitive Notes but may have variations that the Issuer considers
      appropriate for temporary Notes. Without unreasonable delay, the Issuer shall
      prepare and the Trustee shall authenticate definitive Notes in exchange for
      temporary Notes. Until such exchange, temporary Notes shall be entitled to
      the
      same rights, benefits and privileges as definitive Notes. Notwithstanding the
      foregoing, so long as the Notes are represented by a Global Note, such Global
      Note may be in typewritten form.

     

    
      	SECTION
              2.11.  	
              Cancellation.

            

    

     

    The
      Issuer at any time may deliver Notes to the Trustee for cancellation. The
      Registrar and the Paying Agent shall forward to the Trustee any Notes
      surrendered to them for transfer, exchange or payment. The Trustee, or at the
      direction of the Trustee, the Registrar or the Paying Agent (other than the
      Issuer or a Subsidiary), and no one else, shall cancel and, at the written
      direction of the Issuer, shall dispose of all Notes surrendered for transfer,
      exchange, payment or cancellation in accordance with its customary procedures.
      Subject to Section 2.07, the Issuer may not issue new Notes to replace
      Notes that it has paid or delivered to the Trustee for cancellation. If the
      Issuer or any Subsidiary Guarantor shall acquire any of the Notes, such
      acquisition shall not operate as a redemption or satisfaction of the
      Indebtedness represented by such Notes unless and until the same are surrendered
      to the Trustee for cancellation pursuant to this Section 2.11.

     

    
      	SECTION
              2.12.  	
              Defaulted
                Interest.

            

    

     

    If
      the
      Issuer defaults in a payment of interest on the Notes, it shall pay the
      defaulted interest, plus (to the extent lawful) any interest payable on the
      defaulted interest, in any lawful manner. The Issuer may pay the defaulted
      interest to the persons who are Holders on a subsequent special record date,
      which date shall be the fifteenth day next preceding the date fixed by the
      Issuer for the payment of defaulted interest or the next succeeding Business
      Day
      if such date is not a Business Day. At least 15 days before any such subsequent
      special record date, the Issuer shall mail to each Holder, with a copy to the
      Trustee, a notice that states the subsequent special record date, the payment
      date and the amount of defaulted interest, and interest payable on such
      defaulted interest, if any, to be paid.

     

    
      	SECTION
              2.13.  	
              CUSIP
                and ISIN Numbers.

            

    

     

    The
      Issuer in issuing the Notes may use “CUSIP” or “ISIN” numbers, and if so, the
      Trustee shall use the “CUSIP” or “ISIN” numbers in notices of redemption or
      exchange as a convenience to Holders; provided,
      however,
      that any
      such notice may state that no representation is made as to the correctness
      or
      accuracy of the “CUSIP” or “ISIN” numbers printed in the notice or on the Notes,
      and that reliance may be placed only on the other identification numbers printed
      on the Notes. The Issuer will promptly notify the Trustee of any change in
      the
“CUSIP” or “ISIN” numbers.

     

    
      	SECTION
              2.14.  	
              Deposit
                of Moneys.

            

    

     

    Subject
      to Section 2 of the Notes, prior to 10:00 a.m. New York City time on
      each
      Interest Payment Date, Stated Maturity, Redemption Date and Payment Date, the
      Issuer shall have deposited with the Paying Agent in immediately available
      funds
      money sufficient to make cash payments, if any, due on such Interest Payment
      Date, Stated Maturity, Redemption Date and Payment Date, as the case may be,
      in
      a timely manner which permits the Paying Agent to remit payment to the Holders
      on such Interest Payment Date, Stated Maturity, Redemption Date and Payment
      Date, as the case may be.

     

    
      	SECTION
              2.15.  	
              Book-Entry
                Provisions for Global Notes.

            

    

     

    (a)  The
      Global Notes initially shall (i) be registered in the name of the Depository
      or
      the nominee of such Depository, (ii) be delivered to the Trustee as custodian
      for such Depository and (iii) bear legends as set forth in Exhibit B,
      as
      applicable.

     

    Members
      of, or participants in, the Depository (“Participants”)
      shall
      have no rights under this Indenture with respect to any Global Note held on
      their behalf by the Depository, or the Trustee as its custodian, or under the
      Global Note, and the Depository may be treated by the Issuer, the Trustee and
      any agent of the Issuer or the Trustee as the absolute owner of the Global
      Note
      for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
      shall
      prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from
      giving effect to any written certification, proxy or other authorization
      furnished by the Depository or impair, as between the Depository and
      Participants, the operation of customary practices governing the exercise of
      the
      rights of a Holder of any Note.

     

    (b)  Transfers
      of Global Notes shall be limited to transfers in whole, but not in part, to
      the
      Depository, its successors or their respective nominees. Interests of beneficial
      owners in the Global Notes may be transferred or exchanged for Physical Notes
      in
      accordance with the rules and procedures of the Depository and the provisions
      of
      Section 2.16. In addition, Physical Notes shall be transferred to all
      beneficial owners in exchange for their beneficial interests in Global Notes
      if
      (i) the Depository notifies the Issuer that it is unwilling or unable
      to
      act as Depository for any Global Note, the Issuer so notifies the Trustee in
      writing and a successor Depository is not appointed by the Issuer within 90
      days
      of such notice or (ii) a Default or Event of Default has occurred and
      is
      continuing and the Registrar has received a written request from any owner
      of a
      beneficial interest in a Global Note to issue Physical Notes. Upon any issuance
      of a Physical Note in accordance with this Section 2.15(b) the Trustee
      is
      required to register such Physical Note in the name of, and cause the same
      to be
      delivered to, such person or persons (or the nominee of any thereof). All such
      Physical Notes shall bear the applicable legends, if any.

     

    (c)  In
      connection with any transfer or exchange of a portion of the beneficial interest
      in a Global Note to beneficial owners pursuant to paragraph (b) of this
      Section 2.15, the Registrar shall (if one or more Physical Notes are
      to be
      issued) reflect on its books and records the date and a decrease in the
      principal amount of such Global Note in an amount equal to the principal amount
      of the beneficial interest in the Global Note to be transferred, and the Issuer
      shall execute, and the Trustee shall authenticate and deliver, one or more
      Physical Notes of authorized denominations in an aggregate principal amount
      equal to the principal amount of the beneficial interest in the Global Note
      so
      transferred.

     

    (d)  In
      connection with the transfer of a Global Note as an entirety to beneficial
      owners pursuant to paragraph (b) of this Section 2.15, such Global
      Note shall be deemed to be surrendered to the Trustee for cancellation, and
      (i)
      the Issuer shall execute, (ii) the Subsidiary Guarantors shall execute notations
      of Subsidiary Guarantees on and (iii) the Trustee shall upon written
      instructions from the Issuer authenticate and deliver, to each beneficial owner
      identified by the Depository in exchange for its beneficial interest in such
      Global Note, an equal aggregate principal amount of Physical Notes of authorized
      denominations.

     

    (e)  Any
      Physical Note constituting a Restricted Security delivered in exchange for
      an
      interest in a Global Note pursuant to paragraph (b) or (c) of this
      Section 2.15 shall, except as otherwise provided by Section 2.16,
      bear
      the Private Placement Legend.

     

    (f)  The
      Holder of any Global Note may grant proxies and otherwise authorize any Person,
      including Participants and Persons that may hold interests through Participants,
      to take any action which a Holder is entitled to take under this Indenture
      or
      the Notes.

     

    
      	SECTION
              2.16.  	
              Special
                Transfer and Exchange Provisions.

            

    

     

    (a)  Transfers
      to Non-QIB Institutional Accredited Investors.
      The
      following provisions shall apply with respect to the registration of any
      proposed transfer of a Restricted Security to any Institutional Accredited
      Investor which is not a QIB:

     

    (i)  the
      Registrar shall register the transfer of any Restricted Security, whether or
      not
      such Note bears the Private Placement Legend, if (x) the requested transfer
      is
      after the second anniversary of the Closing Date; provided,
      however,
      that
      neither the Issuer nor any Affiliate of the Issuer has held any beneficial
      interest in such Note, or portion thereof, at any time on or prior to the second
      anniversary of the Closing Date or (y) the proposed transferee has
      delivered to the Registrar a certificate substantially in the form of
Exhibit C
      hereto
      and any legal opinions and certifications as may be reasonably requested by
      the
      Trustee and the Issuer;

     

    (ii)  if
      the
      proposed transferee is a Participant and the Notes to be transferred consist
      of
      Physical Notes which after transfer are to be evidenced by an interest in the
      IAI Global Note, upon receipt by the Registrar of the Physical Note and
      (x) written instructions given in accordance with the Depository’s and the
      Registrar’s procedures and (y) the certificate, if required, referred to in
      clause (y) of paragraph (i) above (and any legal opinion or other
      certifications), the Registrar shall register the transfer and reflect on its
      books and records the date and an increase in the principal amount of the IAI
      Global Note in an amount equal to the principal amount of Physical Notes to
      be
      transferred, and the Registrar shall cancel the Physical Notes so transferred;
      and

     

    (iii)  if
      the
      proposed transferor is a Participant seeking to transfer an interest in a Global
      Note, upon receipt by the Registrar of (x) written instructions given
      in
      accordance with the Depository’s and the Registrar’s procedures and (y) the
      certificate, if required, referred to in clause (y) of paragraph (i)
      above, the Registrar shall register the transfer and reflect on its books and
      records the date and (A) a decrease in the principal amount of the Global Note
      from which such interests are to be transferred in an amount equal to the
      principal amount of the Notes to be transferred and (B) an increase in the
      principal amount of the IAI Global Note in an amount equal to the principal
      amount of the Notes to be transferred.

     

    (b)  Transfers
      to QIBs.
      The
      following provisions shall apply with respect to the registration of any
      proposed transfer of a Restricted Security to a QIB:

     

    (i)  the
      Registrar shall register the transfer of any Restricted Security, whether or
      not
      such Note bears the Private Placement Legend, if (x) the requested transfer
      is after the second anniversary of the Closing Date; provided,
      however,
      that
      neither the Issuer nor any Affiliate of the Issuer has held any beneficial
      interest in such Note, or portion thereof, at any time on or prior to the second
      anniversary of the Closing Date or (y) such transfer is being made by
      a
      proposed transferor who has checked the box provided for on the applicable
      Global Note stating, or has otherwise advised the Issuer and the Registrar
      in
      writing, that the sale has been made in compliance with the provisions of
      Rule 144A to a transferee who has signed the certification provided
      for on
      the applicable Global Note stating, or has otherwise advised the Issuer and
      the
      Registrar in writing, that it is purchasing the Note for its own account or
      an
      account with respect to which it exercises sole investment discretion and that
      it and any such account is a QIB within the meaning of Rule 144A, and
      is
      aware that the sale to it is being made in reliance on Rule 144A and
      acknowledges that it has received such information regarding the Issuer as
      it
      has requested pursuant to Rule 144A or has determined not to request
      such
      information and that it is aware that the transferor is relying upon its
      foregoing representations in order to claim the exemption from registration
      provided by Rule 144A;

     

    (ii)  if
      the
      proposed transferee is a Participant and the Notes to be transferred consist
      of
      Physical Notes which after transfer are to be evidenced by an interest in the
      144A Global Note, upon receipt by the Registrar of the Physical Note and written
      instructions given in accordance with the Depository’s and the Registrar’s
      procedures, the Registrar shall register the transfer and reflect on its book
      and records the date and an increase in the principal amount of the 144A Global
      Note in an amount equal to the principal amount of Physical Notes to be
      transferred, and the Registrar shall cancel the Physical Notes so transferred;
      and

     

    (iii)  if
      the
      proposed transferor is a Participant seeking to transfer an interest in the
      IAI
      Global Note or the Regulation S Global Note, upon receipt by the Registrar
      of written instructions given in accordance with the Depository’s and the
      Registrar’s procedures, the Registrar shall register the transfer and reflect on
      its books and records the date and (A) a decrease in the principal amount of
      the
      IAI Global Note or the Regulation S Global Note, as the case may be,
      in an
      amount equal to the principal amount of the Notes to be transferred and (B)
      an
      increase in the principal amount of the 144A Global Note in an amount equal
      to
      the principal amount of the Notes to be transferred.

     

    (c)  Transfers
      to Non-U.S. Persons.
      The
      following provisions shall apply with respect to any transfer of a Restricted
      Security to a Non-U.S. Person under Regulation S:

     

    (i)  the
      Registrar shall register any proposed transfer of a Restricted Security to
      a
      Non-U.S. Person upon receipt of a certificate substantially in the form of
      Exhibit D
      from the
      proposed transferor and such certifications, legal opinions and other
      information as the Trustee or the Issuer may reasonably request;
      and

     

    (ii)  (a)
      if
      the proposed transferor is a Participant holding a beneficial interest in the
      Rule 144A Global Note or the IAI Global Note or the Note to be transferred
      consists of Physical Notes, upon receipt by the Registrar of (x) the documents
      required by paragraph (i) and (y) instructions in accordance
      with the
      Depository’s and the Registrar’s procedures, the Registrar shall reflect on its
      books and records the date and a decrease in the principal amount of the
      Rule 144A Global Note or the IAI Global Note, as the case may be, in
      an
      amount equal to the principal amount of the beneficial interest in the
      Rule 144A Global Note or the IAI Global Note, as the case may be, to
      be
      transferred or cancel the Physical Notes to be transferred, and (b) if
      the
      proposed transferee is a Participant, upon receipt by the Registrar of
      instructions given in accordance with the Depository’s and the Registrar’s
      procedures, the Registrar shall reflect on its books and records the date and
      an
      increase in the principal amount of the Regulation S Global Note in
      an
      amount equal to the principal amount of the Rule 144A Global Note, the
      IAI
      Global Note or the Physical Notes, as the case may be, to be
      transferred.

     

    (d)  Exchange
      Offer.
      Upon
      the occurrence of the Exchange Offer in accordance with the Registration Rights
      Agreement, the Issuer shall issue and, upon receipt of an Authentication Order
      in accordance with Section 2.02, the Trustee shall authenticate one
      or more
      Global Notes and/or Physical Notes not bearing the Private Placement Legend
      in
      an aggregate principal amount equal to the principal amount of the beneficial
      interests in the Initial Global Notes or Physical Notes, as the case may be,
      tendered for acceptance in accordance with the Exchange Offer and accepted
      for
      exchange in the Exchange Offer.

     

    (e)  Restrictions
      on Transfer and Exchange of Global Notes.
      Notwithstanding any other provisions of this Indenture, a Global Note may not
      be
      transferred as a whole except by the Depository to a nominee of the Depository
      or by a nominee of the Depository to the Depository or another nominee of the
      Depository or by the Depository or any such nominee to a successor Depository
      or
      a nominee of such successor Depository.

     

    (f)  Private
      Placement Legend.
      Upon
      the transfer, exchange or replacement of Notes not bearing the Private Placement
      Legend unless otherwise required by applicable law, the Registrar shall deliver
      Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
      or replacement of Notes bearing the Private Placement Legend, the Registrar
      shall deliver only Notes that bear the Private Placement Legend unless (i)
      there
      is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to
      the
      Issuer and the Trustee to the effect that neither such legend nor the related
      restrictions on transfer are required in order to maintain compliance with
      the
      provisions of the Securities Act or (ii) such Note has been offered and sold
      (including pursuant to the Exchange Offer) pursuant to an effective registration
      statement under the Securities Act.

     

    (g)  General.
      By its
      acceptance of any Note bearing the Private Placement Legend, each Holder of
      such
      a Note acknowledges the restrictions on transfer of such Note set forth in
      this
      Indenture and in the Private Placement Legend and agrees that it will transfer
      such Note only as provided in this Indenture.

     

    The
      Registrar shall retain copies of all letters, notices and other written
      communications received pursuant to Section 2.15 or Section 2.16.
      The
      Issuer shall have the right to inspect and make copies of all such letters,
      notices or other written communications at any reasonable time upon the giving
      of reasonable written notice to the Registrar.

     

    The
      Trustee shall have no obligation or duty to monitor, determine or inquire as
      to
      compliance with any restrictions on transfer imposed under this Indenture or
      under applicable law with respect to any transfer of any interest in any Note
      (including any transfers between or among Depository Participants or beneficial
      owners of interests in any Global Note) other than to require delivery of such
      certificates and other documentation or evidence as are expressly required
      by,
      and to do so if and when expressly required by the terms of, this Indenture,
      and
      to examine the same to determine substantial compliance as to form with the
      express requirements hereof.

     

    The
      Trustee shall have no responsibility for the actions or omissions of the
      Depository, or the accuracy of the books and records of the
      Depository.

     

    (h)  Cancellation
      and/or Adjustment of Global Note.
      At such
      time as all beneficial interests in a particular Global Note have been exchanged
      for Physical Notes or a particular Global Note has been redeemed, repurchased
      or
      canceled in whole and not in part, each such Global Note shall be returned
      to or
      retained and canceled by the Trustee in accordance with Section 2.11
      hereof. At any time prior to such cancellation, if any beneficial interest
      in a
      Global Note is exchanged for or transferred to a Person who will take delivery
      thereof in the form of a beneficial interest in another Global Note or for
      Physical Notes, the principal amount of Notes represented by such Global Note
      shall be reduced accordingly and an endorsement shall be made on such Global
      Note by the Trustee or by the Depositary at the direction of the Trustee to
      reflect such reduction; and if the beneficial interest is being exchanged for
      or
      transferred to a Person who will take delivery thereof in the form of a
      beneficial interest in another Global Note, such other Global Note shall be
      increased accordingly and an endorsement shall be made on such Global Note
      by
      the Trustee or by the Depositary at the direction of the Trustee to reflect
      such
      increase.

     

    ARTICLE
      THREE  

     

    

     

    REDEMPTION

     

    
      	SECTION
              3.01.  	
              Notices
                to Trustee.

            

    

     

    If
      the
      Issuer elects to redeem Notes pursuant to Section 5 or Section 6
      of
      the Notes, it shall notify the Trustee in writing of the Redemption Date, the
      Redemption Price and the principal amount of Notes to be redeemed. The Issuer
      shall give notice of redemption to the Trustee at least 45 days but not more
      than 60 days before the Redemption Date (unless a shorter notice shall be agreed
      to by the Trustee in writing), together with such documentation and records
      as
      shall enable the Trustee to select the Notes to be redeemed.

     

    
      	SECTION
              3.02.  	
              Selection
                of Notes To Be Redeemed.

            

    

     

    If
      less
      than all of the Notes are to be redeemed at any time pursuant to Section 5
      or 6 of the Notes, the Trustee will select Notes for redemption as
      follows:

     

    (x) if
      the
      Notes are listed on a national securities exchange, in compliance with the
      requirements of the principal national securities exchange on which the Notes
      are listed; or

     

    (y) if
      the
      Notes are not so listed, on a pro
      rata
      basis,
      by lot or by such method as the Trustee shall deem fair and
      appropriate;

     

    provided,
      however,
      that,
      in the case of such redemption pursuant to Section 6 of the Notes, the
      Trustee will select the Notes on a pro
      rata
      basis or
      on as nearly a pro
      rata basis
      as
      practicable (subject to the procedures of the Depository) unless that method
      is
      otherwise prohibited.

     

    No
      Notes
      of $1,000 or less shall be redeemed in part.

     

    
      	SECTION
              3.03.  	
              Notice
                of Redemption.

            

    

     

    At
      least
      30 days but not more than 60 days before a Redemption Date, the Issuer shall
      mail a notice of redemption by first class mail, postage prepaid, to each Holder
      whose Notes are to be redeemed at its registered address (except that a notice
      issued in connection with a redemption referred to in Section 8.01 may
      be
      more than 60 days before such Redemption Date). At the Issuer’s request, the
      Trustee shall forward the notice of redemption in the Issuer’s name and at the
      Issuer’s expense. Each notice for redemption shall identify the Notes (including
      the CUSIP or ISIN number) to be redeemed and shall state:

     

    (1)  the
      Redemption Date;

     

    (2)  the
      Redemption Price and the amount of accrued interest, if any, to be
      paid;

     

    (3)  the
      name
      and address of the Paying Agent;

     

    (4)  that
      Notes called for redemption must be surrendered to the Paying Agent to collect
      the Redemption Price plus accrued interest, if any;

     

    (5)  that,
      unless the Issuer defaults in making the redemption payment, interest on Notes
      called for redemption ceases to accrue on and after the Redemption Date, and
      the
      only remaining right of the Holders of such Notes is to receive payment of
      the
      Redemption Price upon surrender to the Paying Agent of the Notes
      redeemed;

     

    (6)  if
      any
      Note is being redeemed in part, the portion of the principal amount of such
      Note
      to be redeemed and that, after the Redemption Date, and upon surrender and
      cancellation of such Note, a new Note or Notes in aggregate principal amount
      equal to the unredeemed portion thereof will be issued;

     

    (7)  if
      fewer
      than all the Notes are to be redeemed, the identification of the particular
      Notes (or portion thereof) to be redeemed, as well as the aggregate principal
      amount of Notes to be redeemed and the aggregate principal amount of Notes
      to be
      outstanding after such partial redemption; and

     

    (8)  the
      Section of the Notes or the Indenture, as applicable, pursuant to which
      the
      Notes are to be redeemed.

     

    The
      notice, if mailed in a manner herein provided, shall be conclusively presumed
      to
      have been given, whether or not the Holder receives such notice. In any case,
      failure to give such notice by mail or any defect in the notice to the Holder
      of
      any Note designated for redemption in whole or in part shall not affect the
      validity of the proceedings for the redemption of any other Note. Notices of
      redemption may not be conditional.

     

    
      	SECTION
              3.04.  	
              Effect
                of Notice of Redemption.

            

    

     

    Once
      notice of redemption is mailed in accordance with Section 3.03, Notes
      called for redemption become due and payable on the Redemption Date and at
      the
      Redemption Price plus accrued interest, if any. Upon surrender to the Trustee
      or
      Paying Agent, such Notes called for redemption shall be paid at the Redemption
      Price (which shall include accrued interest thereon to, but not including,
      the
      Redemption Date), but installments of interest, the maturity of which is on
      or
      prior to the Redemption Date, shall be payable to Holders of record at the
      close
      of business on the relevant Record Dates. On and after the Redemption Date
      interest shall cease to accrue on Notes or portions thereof called for
      redemption unless the Issuer shall have not complied with its obligations
      pursuant to Section 3.05.

     

    
      	SECTION
              3.05.  	
              Deposit
                of Redemption Price.

            

    

     

    On
      or
      before 10:00 a.m. New York time on the Redemption Date, the Issuer shall deposit
      with the Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price
      plus accrued and unpaid interest, if any, of all Notes to be redeemed on that
      date.

     

    If
      the
      Issuer complies with the preceding paragraph, then, unless the Issuer defaults
      in the payment of such Redemption Price plus accrued interest, if any, interest
      on the Notes to be redeemed will cease to accrue on and after the applicable
      Redemption Date, whether or not such Notes are presented for
      payment.

     

    
      	SECTION
              3.06.  	
              Notes
                Redeemed in Part.

            

    

     

    If
      any
      Note is to be redeemed in part only, the notice of redemption that relates
      to
      such Note shall state the portion of the principal amount thereof to be
      redeemed. A new Note or Notes in principal amount equal to the unredeemed
      portion of the original Note or Notes shall be issued in the name of the Holder
      thereof upon surrender and cancellation of the original Note or
      Notes.

     

    ARTICLE
      FOUR  

     

    

     

    COVENANTS

     

    
      	SECTION
              4.01.  	
              Payment
                of Notes.

            

    

     

    The
      Issuer shall pay the principal of, premium, if any, and interest on the Notes
      in
      the manner provided in the Notes, the Registration Rights Agreement and this
      Indenture. An installment of principal of, or interest on, the Notes shall
      be
      considered paid on the date it is due if the Trustee or Paying Agent (other
      than
      the Issuer or an Affiliate thereof) holds on that date U.S. Legal Tender
      designated for and sufficient to pay the installment. Interest on the Notes
      will
      be computed on the basis of a 360-day year comprised of twelve 30-day
      months.

     

    The
      Issuer shall pay interest on overdue principal (including post petition interest
      in a proceeding under any Bankruptcy Law), and overdue interest, to the extent
      lawful, at the same rate per
      annum
      borne by
      the Notes.

     

    
      	SECTION
              4.02.  	
              Maintenance
                of Office or Agency.

            

    

     

    The
      Issuer shall maintain in the Borough of Manhattan, The City of New York, the
      office or agency required under Section 2.03 (which may be an office
      of the
      Trustee or an affiliate of the Trustee or Registrar). The Issuer shall give
      prompt written notice to the Trustee of the location, and any change in the
      location, of such office or agency. If at any time the Issuer shall fail to
      maintain any such required office or agency or shall fail to furnish the Trustee
      with the address thereof, such presentations, surrenders, notices and demands
      may be made or served at the address of the Trustee set forth in
      Section 11.02.

     

    The
      Issuer may also from time to time designate one or more other offices or
      agencies where the Notes may be presented or surrendered for any or all such
      purposes and may from time to time rescind such designations. The Issuer will
      give prompt written notice to the Trustee of any such designation or rescission
      and of any change in the location of any such other office or
      agency.

     

    The
      Issuer hereby initially designates U.S. Bank National Association, located
      at
      1360 Peachtree Street, N.E., Suite 1105, EX-GA-ATPT, Atlanta, Georgia 30309,
      Attention: Corporate Trust Department, as such office of the Issuer in
      accordance with Section 2.03.

     

    
      	SECTION
              4.03.  	
              Corporate
                Existence.

            

    

     

    Except
      as
      otherwise permitted by Article Five, the Issuer shall do or cause to be done
      all
      things necessary to preserve and keep in full force and effect its corporate
      existence and the corporate, partnership or other existence of each of its
      Restricted Subsidiaries in accordance with the respective organizational
      documents of each such Restricted Subsidiary and the material rights (charter
      and statutory) and material franchises of the Issuer and each of its Restricted
      Subsidiaries; provided,
      however,
      that the
      Issuer shall not be required to preserve any such right, franchise or corporate
      existence with respect to itself or any Restricted Subsidiary if the Board
      of
      Directors shall determine that the preservation thereof is no longer desirable
      in the conduct of the business of the Issuer and its Restricted Subsidiaries,
      taken as a whole, and that the loss thereof is not adverse in any material
      respect to the Holders of the Notes.

     

    
      	SECTION
              4.04.  	
              Payment
                of Taxes.

            

    

     

    The
      Issuer and the Subsidiary Guarantors shall, and shall cause each of the
      Restricted Subsidiaries to, pay or discharge or cause to be paid or discharged,
      before the same shall become delinquent, (a) all material taxes,
      assessments and governmental charges levied or imposed upon it or any of the
      Restricted Subsidiaries or upon the income, profits or property of it or any
      of
      the Restricted Subsidiaries and (b) all lawful claims for labor, materials
      and supplies which, in each case, if unpaid, might by law become a material
      liability or Lien upon the property of it or any of the Restricted Subsidiaries;
      provided,
      however,
      that the
      Issuer and the Subsidiary Guarantors shall not be required to pay or discharge
      or cause to be paid or discharged any such tax, assessment, charge or claim
      whose amount the applicability or validity is being contested in good faith
      by
      appropriate actions and for which appropriate provision has been
      made.

     

    
      	SECTION
              4.05.  	
              Compliance
                Certificate; Notice of Default.

            

    

     

    (a)  The
      Issuer shall deliver to the Trustee, within 120 days after the close of each
      fiscal year, an Officers’ Certificate stating that a review of the activities of
      the Issuer and its Subsidiaries has been made under the supervision of the
      signing Officers with a view to determining whether the Issuer and the
      Subsidiary Guarantors have kept, observed, performed and fulfilled their
      obligations under this Indenture and further stating, as to each such Officer
      signing such certificate, that to the best of such Officer’s knowledge, the
      Issuer and the Subsidiary Guarantors during such preceding fiscal year has
      kept,
      observed, performed and fulfilled each and every such covenant and no Default
      occurred during such year and at the date of such certificate there is no
      Default that has occurred and is continuing or, if such signers do know of
      such
      Default, the certificate shall specify such Default and what action, if any,
      the
      Issuer is taking or proposes to take with respect thereto. The Officers’
      Certificate shall also notify the Trustee should the Issuer elect to change
      the
      manner in which it fixes the fiscal year end.

     

    (b)  The
      Issuer shall deliver to the Trustee promptly and in any event within five days
      after the Issuer becomes aware of the occurrence of any Default an Officers’
      Certificate specifying the Default and what action, if any, the Issuer is taking
      or proposes to take with respect thereto.

     

    
      	SECTION
              4.06.  	
              Waiver
                of Stay, Extension or Usury Laws.

            

    

     

    The
      Issuer and each Subsidiary Guarantor covenants (to the extent permitted by
      applicable law) that it will not at any time insist upon, plead, or in any
      manner whatsoever claim or take the benefit or advantage of, any stay or
      extension law or any usury law or other law that would prohibit or forgive
      such
      Issuer or such Subsidiary Guarantor from paying all or any portion of the
      principal of and/or interest on the Notes or the Subsidiary Guarantee of any
      such Subsidiary Guarantor as contemplated herein, wherever enacted, now or
      at
      any time hereafter in force, or which may affect the covenants or the
      performance of this Indenture, and (to the extent permitted by applicable law)
      each hereby expressly waives all benefit or advantage of any such law, and
      covenants that it will not hinder, delay or impede the execution of any power
      herein granted to the Trustee, but will suffer and permit the execution of
      every
      such power as though no such law had been enacted.

     

    
      	SECTION
              4.07.  	
              Change
                of Control.

            

    

     

    The
      Issuer must commence, within 30 days of the occurrence of a Change of
      Control, and consummate an Offer to Purchase for all Notes then outstanding,
      at
      a purchase price equal to 101% of the principal amount of the Notes, plus
      accrued and unpaid interest, if any, to the Payment Date.

     

    
      	SECTION
              4.08.  	
              Limitations
                on Additional Indebtedness.

            

    

     

    (a)  The
      Issuer will not, and will not permit any of its Restricted Subsidiaries to,
      Incur any Indebtedness (including Acquired Indebtedness) if, immediately after
      giving effect to the Incurrence of such additional Indebtedness and the receipt
      and application of the proceeds therefrom, the aggregate principal amount of
      all
      outstanding Indebtedness of the Issuer and its Restricted Subsidiaries on a
      consolidated basis determined in conformity with GAAP is greater than 60% of
      Adjusted Total Assets.

     

    (b)  The
      Issuer will not, and will not permit any of its Restricted Subsidiaries to,
      Incur any Subsidiary Debt or any Secured Indebtedness if, immediately after
      giving effect to the Incurrence of such additional Subsidiary Debt or Secured
      Indebtedness and the receipt and application of the proceeds therefrom, the
      aggregate principal amount of all outstanding Subsidiary Debt and Secured
      Indebtedness of the Issuer and its Restricted Subsidiaries on a consolidated
      basis determined in conformity with GAAP is greater than 40% of Adjusted Total
      Assets.

     

    (c)  The
      Issuer will not, and will not permit any of its Restricted Subsidiaries to,
      Incur any Indebtedness (other than the Notes issued on the Closing Date and
      other Indebtedness existing on the Closing Date); provided,
      however,
      that the
      Issuer or any of the Subsidiary Guarantors may Incur Indebtedness if, after
      giving effect to the Incurrence of such Indebtedness and the receipt and
      application of the proceeds therefrom, the Interest Coverage Ratio of the Issuer
      and its Restricted Subsidiaries on a consolidated basis would be greater than
      2.0 to 1.

     

    (d)  Notwithstanding
      paragraph (a), (b) or (c) above, the Issuer or any of its Restricted
      Subsidiaries (except as specified below) may Incur each and all of the
      following:

     

    (1)  Indebtedness
      outstanding under the Line of Credit at any time in an aggregate principal
      amount not to exceed $200 million;

     

    (2)  Indebtedness
      owed to:

     

    
      	(i)  	
              the
                Issuer evidenced by an unsubordinated promissory
                note,

            

    

     

    
      	(ii)  	
              to
                any Restricted Subsidiary;

            

    

     

    provided,
      however,
      that any
      event which results in any such Restricted Subsidiary ceasing to be a Restricted
      Subsidiary or any subsequent transfer of such Indebtedness (other than to the
      Issuer or any other Restricted Subsidiary) shall be deemed, in each case, to
      constitute an Incurrence of such Indebtedness not permitted by this clause
      (2);

     

    (3)  Indebtedness
      issued in exchange for, or the net proceeds of which are used to refinance
      or
      refund, outstanding Indebtedness (other than Indebtedness Incurred under clause
      (1), (2) or (4) of this paragraph (d)) and any refinancings thereof
      in an
      amount not to exceed the amount so refinanced or refunded (plus premiums,
      accrued interest, fees and expenses); provided,
      however,
      that
      Indebtedness the proceeds of which are used to refinance or refund the Notes
      or
      Indebtedness that ranks equally with or subordinate in right of payment to,
      the
      Notes shall only be permitted under this clause (3) if:

     

    
      	(i)  	
              in
                case the Notes are refinanced in part or the Indebtedness to be refinanced
                ranks equally with the Notes, such new Indebtedness, by its terms
                or by
                the terms of any agreement or instrument pursuant to which such new
                Indebtedness is outstanding, ranks equally with or is expressly made
                subordinate in right of payment to the remaining
                Notes;

            

    

     

    
      	(ii)  	
              in
                case the Indebtedness to be refinanced is subordinated in right of
                payment
                to the Notes, such new Indebtedness, by its terms or by the terms
                of any
                agreement or instrument pursuant to which such new Indebtedness is
                issued
                or remains outstanding, is expressly made subordinate in right of
                payment
                to the Notes at least to the extent that the Indebtedness to be refinanced
                is subordinated to the Notes; and

            

    

     

    
      	(iii)  	
              such
                new Indebtedness, determined as of the date of Incurrence of such
                new
                Indebtedness, does not mature prior to the Stated Maturity of the
                Indebtedness to be refinanced or refunded, and the Average Life of
                such
                new Indebtedness is at least equal to the remaining Average Life
                of the
                Indebtedness to be refinanced or
                refunded;

            

    

     

    provided
      further,
      however,
      that in
      no event may Indebtedness of the Issuer that ranks equally with or subordinate
      in right of payment to the Notes be refinanced by means of any Indebtedness
      of
      any Restricted Subsidiary pursuant to this clause (3);

     

    (4)  Indebtedness:

     

    
      	(i)  	
              in
                respect of performance, surety or appeal bonds provided in the ordinary
                course of business,

            

    

     

    
      	(ii)  	
              under
                Currency Agreements and Interest Rate Agreements; provided, however,
                that
                such agreements (x) are designed solely to protect the Issuer or
                any of
                its Restricted Subsidiaries against fluctuations in foreign currency
                exchange rates or interest rates and (y) do not increase the Indebtedness
                of the obligor outstanding at any time other than as a result of
                fluctuations in foreign currency exchange rates or interest rates
                or by
                reason of fees, indemnities and compensation payable thereunder;
                and

            

    

     

    
      	(iii)  	
              arising
                from agreements providing for indemnification, adjustment of purchase
                price or similar obligations, or from Guarantees or letters of credit,
                surety bonds or performance bonds securing any obligations of the
                Issuer
                or any of its Restricted Subsidiaries pursuant to such agreements,
                in any
                case Incurred in connection with the disposition of any business,
                assets
                or Restricted Subsidiary (other than Guarantees of Indebtedness Incurred
                by any Person acquiring all or any portion of such business, assets
                or
                Restricted Subsidiary for the purpose of financing such acquisition),
                in a
                principal amount not to exceed the gross proceeds actually received
                by the
                Issuer and its Restricted Subsidiaries on a consolidated basis in
                connection with such disposition;

            

    

     

    (5)  Indebtedness
      of the Issuer, to the extent the net proceeds thereof are promptly:

     

    
      	(i)  	
              used
                to purchase Notes tendered in an Offer to Purchase made as a result
                of a
                Change in Control, or

            

    

     

    
      	(ii)  	
              deposited
                to defease the Notes as described in Sections 8.02 and 8.03,
                or

            

    

     

    
      	(iii)  	
              deposited
                to discharge the obligations under the Notes and this Indenture as
                described in Section 8.01;

            

    

     

    (6)  Guarantees
      of the Notes and Guarantees of Indebtedness of the Issuer by any of its
      Restricted Subsidiaries provided the guarantee of such Indebtedness is permitted
      by and made in accordance with Section 4.14; or

     

    (7)  additional
      Indebtedness of the Issuer and its Restricted Subsidiaries not to exceed $30
      million in aggregate principal amount at any time outstanding.

     

    (e)  Notwithstanding
      any other provision of this Section 4.08, the maximum amount of
      Indebtedness that the Issuer or any of its Restricted Subsidiaries may Incur
      pursuant to this Section 4.08 shall not be deemed to be exceeded, with
      respect to any outstanding Indebtedness, due solely to the result of
      fluctuations in the exchange rates of currencies.

     

    (f)  For
      purposes of determining any particular amount of Indebtedness under this
      Section 4.08,

     

    (1)  Indebtedness
      Incurred under the Line of Credit on or prior to the Closing Date shall be
      treated as Incurred pursuant to clause (1) of paragraph (d) of this
      Section 4.08, and

     

    (2)  Guarantees,
      Liens or obligations with respect to letters of credit supporting Indebtedness
      otherwise included in the determination of such particular amount shall not
      be
      included.

     

    For
      purposes of determining compliance with this Section 4.08, in the event
      that an item of Indebtedness meets the criteria of more than one of the
      categories of permitted Indebtedness described in clauses (1) through (7) of
      paragraph (d) above or is entitled to be incurred pursuant to
      paragraph (c) above, the Issuer shall, in its sole discretion, classify
      (and may later reclassify) such item of Indebtedness and may divide and classify
      such Indebtedness in more than one of the types of Indebtedness described,
      except that Indebtedness incurred under the Line of Credit on the Closing Date
      shall be deemed to have been incurred under clause (1) of paragraph (d)
      above.

     

    
      	SECTION
              4.09.  	
              Limitations
                on Restricted Payments.

            

    

     

    (a)  The
      Issuer will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly:

     

    (1)  declare
      or pay any dividend or make any distribution on or with respect to Capital
      Stock
      of the Issuer held by Persons other than the Issuer or any of its Restricted
      Subsidiaries, other than dividends or distributions payable solely in shares
      of
      its Capital Stock (other than Disqualified Stock) or in options, warrants or
      other rights to acquire shares of such Capital Stock;

     

    (2)  purchase,
      redeem, retire or otherwise acquire for value any shares of Capital Stock
      (including options, warrants or other rights to acquire such shares of Capital
      Stock) of the Issuer;

     

    (3)  make
      any
      voluntary or optional principal payment, or voluntary or optional redemption,
      repurchase, defeasance, or other acquisition or retirement for value, of
      Indebtedness of the Issuer that is subordinated in right of payment to the
      Notes
      or the Subsidiary Guaranties of the Notes; or

     

    (4)  make
      an
      Investment, other than a Permitted Investment, in any Person

     

    (such
      payments or any other actions described in clauses (1) through (4) above being
      collectively “Restricted
      Payments”)
      if, at
      the time of, and after giving effect to, the proposed Restricted
      Payment:

     

    (A) a
      Default
      or Event of Default shall have occurred and be continuing,

     

    (B) the
      Issuer could not Incur at least $1.00 of Indebtedness under paragraphs (a),
      (b) and (c) of Section 4.08, or

     

    (C) the
      aggregate amount of all Restricted Payments (the amount, if other than in cash,
      to be determined in good faith by the Board of Directors, whose determination
      shall be conclusive and evidenced by a Board Resolution) made after March 22,
      2004 shall exceed the sum of:

     

    
      	(i)  	
              95%
                of the aggregate amount of the Funds From Operations (or, if the
                amount of
                Funds From Operations is a loss, minus 100% of the amount of such
                loss)
                accrued on a cumulative basis during the period (taken as one accounting
                period) beginning January 1, 2004 and ending on the last day of the
                last
                fiscal quarter preceding the Transaction Date for which reports have
                been
                filed with the SEC or provided to the Trustee pursuant to the
                Section 4.15, plus

            

    

     

    
      	(ii)  	
              100%
                of the aggregate Net Cash Proceeds received by the Issuer after March
                22,
                2004 from the issuance and sale permitted by this Indenture of its
                Capital
                Stock (other than Disqualified Stock) to a Person who is not a Subsidiary
                of the Issuer, including from an issuance or sale permitted by this
                Indenture of Indebtedness of the Issuer for cash subsequent to March
                22,
                2004 upon the conversion of such Indebtedness into Capital Stock
                (other
                than Disqualified Stock) of the Issuer, or from the issuance to a
                Person
                who is not a Subsidiary of the Issuer of any options, warrants or
                other
                rights to acquire Capital Stock of the Issuer (in each case, exclusive
                of
                any Disqualified Stock or any options, warrants or other rights that
                are
                redeemable at the option of the holder, or are required to be redeemed,
                prior to the Stated Maturity of the Notes), plus

            

    

     

    
      	(iii)  	
              an
                amount equal to the net reduction in Investments (other than reductions
                in
                Permitted Investments) in any Person after March 22, 2004 resulting
                from
                payments of interest on Indebtedness, dividends, repayments of loans
                or
                advances, or other transfers of assets, in each case to the Issuer
                or any
                of its Restricted Subsidiaries or from the Net Cash Proceeds from
                the sale
                of any such Investment (except, in each case, to the extent any such
                payment or proceeds are included in the calculation of Funds From
                Operations) or from redesignations of Unrestricted Subsidiaries as
                Restricted Subsidiaries (valued in each case as provided in the definition
                of “Investments”) not to exceed, in each case, the amount of Investments
                previously made by the Issuer and its Restricted Subsidiaries in
                such
                Person or Unrestricted Subsidiary, plus

            

    

     

    
      	(iv)  	
              the
                fair market value of noncash tangible assets or Capital Stock acquired
                in
                exchange for an issuance of Capital Stock (other than Disqualified
                Stock
                or Capital Stock issued in exchange for Capital Stock of the Issuer
                pursuant to clauses (3) or (4) of the Section 4.09(c)) of
                the Issuer
                subsequent to March 22, 2004, plus

            

    

     

    
      	(v)  	
              $25
                million.

            

    

     

    (b)  Notwithstanding
      Section 4.09(a), the Issuer may declare or pay any dividend or make
      any
      distribution that is necessary to maintain the Issuer’s status as a REIT under
      the Code if:

     

    (1)  the
      aggregate principal amount of all outstanding Indebtedness of the Issuer and
      its
      Restricted Subsidiaries on a consolidated basis at such time is less than 60%
      of
      Adjusted Total Assets; and

     

    (2)  no
      Default or Event of Default shall have occurred and be continuing.

     

    (c)  The
      provisions of Section 4.09(a) and 4.09(b) shall not be violated by reason
      of:

     

    (1)  the
      payment of any dividend within 60 days after the date of declaration thereof
      if,
      at said date of declaration, such payment would comply with
      Section 4.09(b);

     

    (2) the
      redemption, repurchase, defeasance or other acquisition or retirement for value
      of Indebtedness that is subordinated in right of payment to the Notes including
      premium, if any, and accrued and unpaid interest, with the proceeds of, or
      in
      exchange for, Indebtedness Incurred under Section 4.08(d)(3);

     

    (3) the
      repurchase, redemption or other acquisition of Capital Stock of the Issuer
      or an
      Unrestricted Subsidiary (or options, warrants or other rights to acquire such
      Capital Stock) in exchange for, or out of the proceeds of an issuance of, shares
      of Capital Stock (other than Disqualified Stock) of the Issuer (or options,
      warrants or other rights to acquire such Capital Stock) within 90 days of such
      repurchase, redemption or other acquisition;

     

    (4) the
      making of any principal payment on, or the repurchase, redemption, retirement,
      defeasance or other acquisition for value of, Indebtedness of the Issuer which
      is subordinated in right of payment to the Notes in exchange for, or out of
      the
      proceeds of an issuance of, shares of the Capital Stock (other than Disqualified
      Stock) of the Issuer (or options, warrants or other rights to acquire such
      Capital Stock) within 90 days of such principal payment, repurchase, redemption,
      retirement, defeasance or other acquisition;

     

    (5) payments
      or distributions, to dissenting stockholders pursuant to applicable law pursuant
      to or in connection with a consolidation, merger or transfer of assets that
      complies with the provisions of this Indenture applicable to mergers,
      consolidations and transfers of all or substantially all of the property and
      assets of the Issuer; 

     

    (6) the
      payment of any regularly scheduled cash dividend on shares of cumulative
      preferred stock of the Issuer outstanding on March 22, 2004 as in effect on
      March 22, 2004;

     

    (7) the
      repurchase, redemption or other acquisition or retirement for value of any
      shares of Capital Stock of the Issuer held by any member of the Issuer’s (or any
      of the Restricted Subsidiaries’) management or other employees pursuant to (A)
      any management or employee equity subscription agreement, stock option agreement
      or similar agreement in an aggregate amount not to exceed $1 million in the
      aggregate in any 12-month period or (B) the terms of any employee stock option
      plan of the Issuer for the purpose of paying employee withholding taxes with
      respect to such shares; or

     

    (8) additional
      Restricted Payments in an aggregate amount not to exceed $15
      million;

     

    provided,
      however,
      that,
      except in the case of clauses (1) and (3), no Default or Event of Default shall
      have occurred and be continuing or occur as a direct consequence of the actions
      or payments set forth therein.

     

    Each
      Restricted Payment permitted pursuant to the immediately preceding
      paragraph (other than the Restricted Payment referred to in clause (2)
      of
      the immediately preceding paragraph or an exchange of Capital Stock
      for
      Capital Stock or Indebtedness referred to in clause (3) or (4) of the
      immediately preceding paragraph), and the Net Cash Proceeds from any issuance
      of
      Capital Stock referred to in clauses (3) and (4) of the immediately preceding
      paragraph, shall be included in calculating whether the conditions of
      Section 4.09(a)(C) have been met with respect to any subsequent Restricted
      Payments.

     

    
      	SECTION
              4.10.  	
              Maintenance
                of Total Unencumbered Assets.

            

    

     

    The
      Issuer and its Restricted Subsidiaries will maintain Total Unencumbered Assets
      of not less than 150% of the aggregate outstanding principal amount of the
      Unsecured Indebtedness of the Issuer and its Restricted Subsidiaries on a
      consolidated basis.

     

    
      	SECTION
              4.11.  	
              Limitations
                on Asset Sales.

            

    

     

    (a)  The
      Issuer will not, and will not permit any of its Restricted Subsidiaries to,
      consummate any Asset Sale, unless:

     

    (1)  the
      consideration received by the Issuer or such Restricted Subsidiary is at least
      equal to the fair market value of the assets sold or disposed of;
      and

     

    (2)  at
      least
      75% of the consideration received consists of cash or Temporary Cash
      Investments; provided,
      however,
      with
      respect to the sale of one or more healthcare properties that (A) up to 75%
      of
      the consideration may consist of indebtedness of the purchaser of such
      healthcare properties so long as such indebtedness is secured by a first
      priority Lien on the healthcare property or properties sold and (B) up to
      66-2/3% of the consideration may consist of indebtedness of the purchaser of
      such healthcare properties so long as such indebtedness is secured by a second
      priority Lien on the healthcare property or properties sold and such
      indebtedness together with all other indebtedness received pursuant to this
      clause (B) does not exceed $7.5 million in aggregate principal amount at any
      time outstanding.

     

    (b)  In
      the
      event and to the extent that the Net Cash Proceeds received by the Issuer or
      such Restricted Subsidiary from one or more Asset Sales occurring on or after
      the Closing Date in any period of 12 consecutive months exceed 5% of Adjusted
      Consolidated Net Tangible Assets (determined as of the date closest to the
      commencement of such 12-month period for which a consolidated balance sheet
      of
      the Issuer and its Restricted Subsidiaries has been filed with the SEC or
      provided to the Trustee pursuant to Section 4.15), then the Issuer shall
      or
      shall cause the relevant Restricted Subsidiary to:

     

    (1) within
      12
      months after the date Net Cash Proceeds so received exceed 5% of Adjusted
      Consolidated Net Tangible Assets:

     

    
      	(i)  	
              apply
                an amount equal to such excess Net Cash Proceeds to permanently reduce
                Indebtedness under the Line of Credit,
                or

            

    

     

    
      	(ii)  	
              invest
                an equal amount, or the amount not so applied pursuant to clause (i)
                of this Section 4.11(b)(1) (or enter into a definitive agreement
                committing to so invest within six months after the date of such
                agreement), in property or assets (which may include Permitted Mortgage
                Investments) (other than current assets) of a nature or type or that
                are
                used in a business (or in a Restricted Subsidiary having property
                and
                assets of a nature or type, or engaged in a business) similar or
                related
                to the nature or type of the property and assets of, or the business
                of,
                the Issuer or any of its Restricted Subsidiaries existing on the
                date of
                such Investment, and

            

    

     

    (2) apply
      (no
      later than the end of the 12-month period referred to in clause (1)) such excess
      Net Cash Proceeds (to the extent not applied pursuant to clause (1)) as provided
      in the following paragraph of this Section 4.11.

     

    The
      amount of such excess Net Cash Proceeds required to be applied (or to be
      committed to be applied) during such 12-month period as set forth in clause
      (1)
      of the preceding sentence and not applied as so required by the end of such
      period shall constitute “Excess
      Proceeds.”
      If, as
      of the first day of any calendar month, the aggregate amount of Excess Proceeds
      not previously subject to an Offer to Purchase pursuant to this
      Section 4.11 totals at least $10 million, the Issuer must commence,
      not
      later than the fifteenth Business Day of such month, and consummate an Offer
      to
      Purchase from the Holders of the Notes and, to the extent required by the terms
      of any Pari Passu Indebtedness, to all holders of such Pari Passu Indebtedness
      on a pro
      rata
      basis an
      aggregate principal amount of Notes (and Pari Passu Indebtedness) equal to
      the
      Excess Proceeds on such date, at a purchase price equal to 100% of the principal
      amount of the Notes (and Pari Passu Indebtedness), plus, in each case, accrued
      and unpaid interest, if any, to the Payment Date.

     

    
      	SECTION
              4.12.  	
              Limitations
                on Transactions with Affiliates.

            

    

     

    (a)  The
      Issuer will not, and will not permit any of its Restricted Subsidiaries to,
      directly or indirectly, enter into, renew or extend any transaction (including
      the purchase, sale, lease or exchange of property or assets, or the rendering
      of
      any service) with any holder (or any Affiliate of such holder) of 5% or more
      of
      any class of Capital Stock of the Issuer or with any Affiliate of the Issuer
      or
      any of its Restricted Subsidiaries, except upon fair and reasonable terms no
      less favorable to the Issuer or such Restricted Subsidiary than could be
      obtained, at the time of such transaction or, if such transaction is pursuant
      to
      a written agreement, at the time of the execution of the agreement providing
      therefor, in a comparable arm’s-length transaction with a Person that is not
      such a holder or an Affiliate.

     

    (b)  The
      limitation set forth in Section 4.12(a) does not limit, and shall not
      apply
      to:

     

    (1)  transactions
      (A) approved by a majority of the independent directors of the Board of
      Directors of the Issuer or (B) for which the Issuer or any Restricted Subsidiary
      delivers to the Trustee a written opinion of a nationally recognized investment
      banking firm stating that the transaction is fair to the Issuer or such
      Restricted Subsidiary from a financial point of view;

     

    (2)  any
      transaction solely between the Issuer and any of its Wholly Owned Restricted
      Subsidiaries or solely between Wholly Owned Restricted
      Subsidiaries;

     

    (3)  the
      payment of reasonable and customary fees and expenses to directors of the Issuer
      who are not employees of the Issuer;

     

    (4)  any
      Restricted Payments not prohibited by Section 4.09;

     

    (5)  any
      employment agreement entered into by the Issuer or any Restricted Subsidiary
      with an employee of the Issuer or such Restricted Subsidiary in the ordinary
      course consistent with past practice; or

     

    (6)  advances
      to employees of the Issuer or any Restricted Subsidiary for reasonable moving
      and relocation, entertainment and travel expenses and similar expenses in the
      ordinary course of business and consistent with past practice.

     

    (c)  Notwithstanding
      Section 4.12(a) and 4.12(b), any transaction or series of related
      transactions covered by Section 4.12(a) and not covered by clause (2)
      through (6) of Section 4.12(b):

     

    
      	(i)  	
              the
                aggregate amount of which exceeds $5 million in value must be approved
                or
                determined to be fair in the manner provided for in
                Section 4.12(b)(1)(A) or (B);
                and

            

    

     

    
      	(ii)  	
              the
                aggregate amount of which exceeds $10 million in value, must be determined
                to be fair in the manner provided for in
                Section 4.12(b)(1)(B);

            

    

     

    
      	SECTION
              4.13.  	
              Limitations
                on Dividend and Other Payment
                Restrictions

            

    

     

    Affecting
      Restricted Subsidiaries.

     

    (a)  The
      Issuer will not, and will not permit any of its Restricted Subsidiaries to,
      create or otherwise cause or suffer to exist or become effective any consensual
      encumbrance or restriction of any kind on the ability of any Restricted
      Subsidiary to:

     

    (1)  pay
      dividends or make any other distributions permitted by applicable law on any
      Capital Stock of such Restricted Subsidiary owned by the Issuer or any of its
      Restricted Subsidiaries;

     

    (2)  pay
      any
      Indebtedness owed to the Issuer or any other Restricted Subsidiary;

     

    (3)  make
      loans or advances to the Issuer or any other Restricted Subsidiary;
      or

     

    (4)  transfer
      its property or assets to the Issuer or any other Restricted
      Subsidiary.

     

    (b)  Section 4.13(a)
      shall not restrict any encumbrances or restrictions:

     

    (1)  existing
      on the Closing Date in this Indenture, the Line of Credit and any other
      agreement in effect on the Closing Date as in effect on the Closing Date, and
      any extensions, refinancings, renewals or replacements of such agreements;
      provided,
      however,
      that the
      encumbrances and restrictions in any such extensions, refinancings, renewals
      or
      replacements are no less favorable in any material respect to the Holders than
      those encumbrances or restrictions that are then in effect and that are being
      extended, refinanced, renewed or replaced;

     

    (2)  existing
      under or by reason of applicable law;

     

    (3)  existing
      with respect to any Person or the property or assets of such Person acquired
      by
      the Issuer or any Restricted Subsidiary, existing at the time of such
      acquisition and not Incurred in contemplation thereof, which encumbrances or
      restrictions are not applicable to any Person or the property or assets of
      any
      Person other than such Person or the property or assets of such Person so
      acquired;

     

    (4)  in
      the
      case of Section 4.15(a)(4):

     

    
      	(i)  	
              that
                restrict in a customary manner the subletting, assignment or transfer
                of
                any property or asset that is a lease, license, conveyance or contract
                or
                similar property or asset,

            

    

     

    
      	(ii)  	
              existing
                by virtue of any transfer of, agreement to transfer, option or right
                with
                respect to, or Lien on, any property or assets of the Issuer or any
                Restricted Subsidiary not otherwise prohibited by this Indenture,
                or

            

    

     

    
      	(iii)  	
              arising
                or agreed to in the ordinary course of business, not relating to
                any
                Indebtedness, and that do not, individually or in the aggregate,
                detract
                from the value of property or assets of the Issuer or any Restricted
                Subsidiary in any manner material to the Issuer and its Restricted
                Subsidiaries taken as a whole;

            

    

     

    (5)  with
      respect to a Restricted Subsidiary and imposed pursuant to an agreement that
      has
      been entered into for the sale or disposition of all or substantially all of
      the
      Capital Stock of, or property and assets of, such Restricted
      Subsidiary;

     

    (6)  contained
      in the terms of any Indebtedness or any agreement pursuant to which such
      Indebtedness was issued if:

     

    
      	(i)  	
              the
                encumbrance or restriction applies only in the event of a payment
                default
                or a default with respect to a financial covenant contained in such
                Indebtedness or agreement,

            

    

     

    
      	(ii)  	
              the
                encumbrance or restriction is not materially more disadvantageous
                to the
                Holders of the Notes than is customary in comparable financings (as
                determined by the good faith judgment of the Board of Directors of
                the
                Issuer), and

            

    

     

    
      	(iii)  	
              the
                Board of Directors of the Issuer, in its good faith, determines that
                such
                encumbrance or restriction will not materially affect the Issuer’s ability
                to make principal or interest payments on the Notes;
                or

            

    

     

    (7)  restrictions
      on the transfer of assets subject to any Lien permitted under this Indenture
      imposed by the holder of such Lien.

     

    (c)  Nothing
      contained in this Section 4.13 shall prevent the Issuer or any Restricted
      Subsidiary from restricting the sale or other disposition of property or assets
      of the Issuer or any of its Restricted Subsidiaries that secure Indebtedness
      of
      the Issuer or any of its Restricted Subsidiaries.

     

    
      	SECTION
              4.14.  	
              Limitation
                on Issuances of Guarantees by
                Restricted

            

    

     

    Subsidiaries.

     

    (a)  The
      Issuer will not permit any of its Restricted Subsidiaries, directly or
      indirectly, to Guarantee any Indebtedness of the Issuer which ranks equally
      with
      or subordinate in right of payment to the Notes (“Guaranteed
      Indebtedness”),
      unless:

     

    (1)  such
      Restricted Subsidiary simultaneously executes and delivers a supplemental
      indenture to this Indenture providing for a Subsidiary Guarantee by such
      Restricted Subsidiary; and

     

    (2)  such
      Restricted Subsidiary waives and will not in any manner whatsoever claim or
      take
      the benefit or advantage of, any rights of reimbursement, indemnity or
      subrogation or any other rights against the Issuer or any other Restricted
      Subsidiary as a result of any payment by such Restricted Subsidiary under its
      Subsidiary Guarantee;

     

    provided,
      however,
      that
      this paragraph shall not be applicable to any Guarantee of any Restricted
      Subsidiary that existed at the time such Person became a Restricted Subsidiary
      and was not Incurred in connection with, or in contemplation of, such person
      becoming a Restricted Subsidiary. If the Guaranteed Indebtedness:

     

    
      	(i)  	
              ranks
                equally with the Notes, then the Guarantee of such Guaranteed Indebtedness
                shall rank equally with, or subordinate to, the Subsidiary Guarantee;
                or

            

    

     

    
      	(ii)  	
              is
                subordinate to the Notes, then the Guarantee of such Guaranteed
                Indebtedness shall be subordinated to the Subsidiary Guarantee at
                least to
                the extent that the Guaranteed Indebtedness is subordinated to the
                Notes.

            

    

     

    (b)  Any
      Subsidiary Guarantee by a Restricted Subsidiary may provide by its terms that
      it
      shall be automatically and unconditionally released and discharged
      upon:

     

    (1) any
      sale,
      exchange or transfer, to any Person not an Affiliate of the Issuer of all of
      the
      Capital Stock held by the Issuer and its Restricted Subsidiaries in, or all
      or
      substantially all the assets of, such Restricted Subsidiary (which sale,
      exchange or transfer is not prohibited by this Indenture); or

     

    (2) the
      release or discharge of the Guarantee which resulted in the creation of such
      Subsidiary Guarantee, except a discharge or release by or as a result of payment
      under such Guarantee.

     

    
      	SECTION
              4.15.  	
              Reports
                to Holders.

            

    

     

    Whether
      or not the Issuer is then required to file reports with the SEC, the Issuer
      shall file with the SEC all such reports and other information as it would
      be
      required to file with the SEC by Sections 13 (a) or 15 (d) under
      the
      Exchange Act if it was subject thereto; provided,
      however,
      that,
      if filing such documents by the Issuer with the SEC is not permitted under
      the
      Exchange Act, the Issuer shall provide such documents to the Trustee and upon
      written request supply copies of such documents to any prospective Holder.
      The
      Issuer shall supply the Trustee and each Holder or shall supply to the Trustee
      for forwarding to each Holder, without cost to such Holder, copies of such
      reports and other information.

     

    
      	SECTION
              4.16.  	
              Suspension
                of Covenants

            

    

     

    During
      a
      Suspension Period, the Issuer and its Subsidiaries will not be subject to
      Section 4.07, 4.09, 4.11, 4.12, 4.13 or 4.14. All other provisions of
      this
      Indenture shall continue to apply during any Suspension Period so long as any
      Notes remain outstanding.

     

    “Suspension
      Period”
      means
      any period (1) beginning on the date that:

     

    (1)  the
      Notes
      have Investment Grade status by both Rating Agencies;

     

    (2)  no
      Default or Event of Default has occurred and is continuing; and

     

    (3)  the
      Issuer has delivered an Officers’ Certificate to the Trustee certifying that the
      conditions set forth in clauses (1) and (2) above are satisfied;
      and

     

    (2) ending
      on
      the date (the “Reversion
      Date”)
      that
      the Notes cease to have Investment Grade Status.

     

    On
      each
      Reversion Date, all Indebtedness incurred during the Suspension Period prior
      to
      such Reversion Date will be deemed to have been outstanding on the Closing
      Date.

     

    For
      purposes of calculating the amount available to be made as Restricted Payments
      under Section 4.09(a)(C), calculations under that clause will be made
      with
      reference to the Transaction Date as set forth in that clause. Accordingly,
      (x)
      Restricted Payments made during the Suspension Period permitted pursuant to
      any
      of clauses (1) through (8) of Section 4.09(c), will reduce the amount
      available to be made as Restricted Payments under Section 4.09(a)(C)
      to the
      extent that would otherwise be required by the second paragraph of
      Section 4.09(b); provided,
      however,
      that
      the amount available to be made as a Restricted Payment on the Transaction
      Date
      shall not be reduced to below zero solely as a result of such Restricted
      Payments, but may be reduced to below zero as a result of cumulative Funds
      from
      Operations for the purpose of Section 4.09(a)(C)(i) being a negative,
      and
      (y) the items specified in Section 4.09(a)(C)(i), (ii), (iii)
      and (iv)
      that occur during the Suspension Period will increase the amount available
      to be
      made as Restricted Payment under Section 4.09(a)(C). Any Restricted
      Payment
      made during the Suspension Period that are of the type described in
      Section 4.09(c) (other than the Restricted Payment referred to in
      clause (2) of Section 4.09(c) or an exchange of Capital Stock
      for
      Capital Stock or Indebtedness referred to in clause (3) or (4) of
      Section 4.09(c)), and the Net Cash Proceeds from any issuance of Capital
      Stock referred to in clauses (3) and (4) of Section 4.09(c)
      shall
      be included in calculating the amounts permitted to be incurred under
      Section 4.09(a)(C) on each Reversion Date.

     

    For
      purposes of Section 4.11, on each Reversion Date, the unutilized Excess
      Proceeds will be reset to zero.

     

    During
      any Suspension Period, the Issuer will not, and will not permit any of its
      Restricted Subsidiaries to, make any Investment in an Unrestricted
      Subsidiary.

     

    ARTICLE
      FIVE  

     

    

     

    SUCCESSOR
      CORPORATION

     

    
      	SECTION
              5.01.  	
              Consolidation,
                Merger and Sale of Assets.

            

    

     

    (a)  The
      Issuer will not consolidate with or merge with or into, or sell, convey,
      transfer, lease or otherwise dispose of all or substantially of its property
      and
      assets (as an entirety or substantially an entirety in one transaction or a
      series of related transactions) to, any Person or permit any Person to merge
      with or into the Issuer unless:

     

    (1)  the
      Issuer shall be the continuing Person, or the Person (if other than the Issuer)
      formed by such consolidation or into which the Issuer is merged or that acquired
      or leased such property and assets of the Issuer shall be a corporation
      organized and validly existing under the laws of the United States of America
      or
      any state or jurisdiction thereof and shall expressly assume, by a supplemental
      indenture, executed and delivered to the Trustee, all of the obligations of
      the
      Issuer on the Notes and under this Indenture;

     

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

     

    (3)  immediately
      after giving effect to such transaction on a pro
      forma
      basis
      the Issuer, or any Person becoming the successor obligor of the Notes, as the
      case may be, could Incur at least $1.00 of Indebtedness under
      paragraphs (a), (b) and (c) of Section 4.08; provided,
      however,
      that
      this clause (3) shall not apply to a consolidation or merger with or into a
      Wholly Owned Restricted Subsidiary with a positive net worth; provided
      further,
      however,
      that,
      in connection with any such merger or consolidation, no consideration (other
      than Capital Stock (other than Disqualified Stock) in the surviving Person
      or
      the Issuer) shall be issued or distributed to the holders of Capital Stock
      of
      the Issuer; and

     

    (4)  the
      Issuer delivers to the Trustee an Officers’ Certificate (attaching the
      arithmetic computations to demonstrate compliance with clause (3) above) and
      an
      Opinion of Counsel, in each case stating that such consolidation, merger or
      transfer and such supplemental indenture complies with this Section 5.01
      and that all conditions precedent provided for herein relating to such
      transaction have been complied with; provided,
      however,
      that
      clause (3) above does not apply if, in the good faith determination of the
      Board
      of Directors of the Issuer, whose determination shall be evidenced by a Board
      Resolution, the principal purpose of such transaction is to change the state
      of
      domicile of the Issuer; provided
      further,
      however,
      that
      any such transaction shall not have as one of its purposes the evasion of the
      foregoing limitations.

     

    (b)  Except
      as
      provided in Section 10.04, no Subsidiary Guarantor may consolidate with
      or
      merge with or into (whether or not such Subsidiary Guarantor is the surviving
      Person) another Person, unless: 

     

    (1)  either
      such Subsidiary Guarantor shall be the continuing Person or the Person (if
      other
      than such Subsidiary Guarantor) formed by such consolidation or into which
      Subsidiary Guarantor is merged shall be a corporation or other legal entity
      organized and validly existing under the laws of the United States of America
      or
      any state or jurisdiction thereof and shall expressly assume, by a supplemental
      indenture, executed and delivered to the Trustee, all of the obligations of
      such
      Subsidiary Guarantor under the Subsidiary Guarantee of such Subsidiary Guarantor
      and under this Indenture;

     

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

     

    (c)  For
      purposes of the foregoing, the transfer (by lease, assignment, sale or
      otherwise, in a single transaction or series of transactions) of all or
      substantially all of the properties or assets of one or more Restricted
      Subsidiaries, the Capital Stock of which constitute all or substantially all
      of
      the properties and assets of the Issuer, will be deemed to be the transfer
      of
      all or substantially all of the properties and assets of the
      Issuer.

     

    (d)  Upon
      any
      such consolidation, combination or merger of the Issuer or a Subsidiary
      Guarantor, or any such sale, conveyance, transfer, lease or other disposition
      of
      all or substantially all of the assets of the Issuer in accordance with this
      Section 5.01, in which the Issuer or such Subsidiary Guarantor is not
      the
      continuing obligor under the Notes or its Subsidiary Guarantee, the surviving
      entity formed by such consolidation or into which the Issuer or such Subsidiary
      Guarantor is merged or the entity to which the sale, conveyance, transfer,
      lease
      or other disposition is made will succeed to, and be substituted for, and may
      exercise every right and power of, the Issuer or such Subsidiary Guarantor
      under
      this Indenture and, the Notes and the Subsidiary Guarantees with the same effect
      as if such surviving entity had been named therein as the Issuer or such
      Subsidiary Guarantor and, except in the case of a lease, the Issuer or such
      Subsidiary Guarantor, as the case may be, will be released from the obligation
      to pay the principal of and interest on the Notes or in respect of its
      Subsidiary Guarantee, as the case may be, and all of the Issuer’s or such
      Subsidiary Guarantor’s other obligations and covenants under the Notes, this
      Indenture and its Subsidiary Guarantee, if applicable.

     

    (e)  Notwithstanding
      the foregoing, any Restricted Subsidiary may consolidate with or merge with
      or
      into the Issuer or another Restricted Subsidiary.

     

    ARTICLE
      SIX  

     

    

     

    DEFAULT
      AND REMEDIES

     

    
      	SECTION
              6.01.  	
              Events
                of Default.

            

    

     

    Each
      of
      the following is an “Event
      of Default”:

     

    (1)  default
      in the payment of principal of, or premium, if any, on any Note when they are
      due and payable at maturity, upon acceleration, redemption or
      otherwise;

     

    (2)  default
      in the payment of interest on any Note when they are due and payable, and such
      default continues for a period of 30 days;

     

    (3)  default
      in the performance or breach of the provisions of this Indenture applicable
      to
      mergers, consolidations and transfers of all or substantially all of the assets
      of the Issuer or the failure by the Issuer to make or consummate an Offer to
      Purchase in accordance with Section 4.07 or Section 4.11;

     

    (4)  the
      Issuer defaults in the performance of or breaches any other covenant or
      agreement of the Issuer in this Indenture or under the Notes (other than a
      default specified in clause (1), (2) or (3) above) and such default or breach
      continues for a period of 30 consecutive days after written notice by the
      Trustee or the Holders of 25% or more in aggregate principal amount of the
      Notes;

     

    (5)  there
      occurs with respect to any issue or issues of Indebtedness of the Issuer or
      any
      Significant Subsidiary having an outstanding principal amount of $10 million
      or
      more in the aggregate for all such issues of all such Persons, whether such
      Indebtedness now exists or shall hereafter be created,

     

    
      	(i)  	
              an
                event of default that has caused the Holder thereof to declare such
                Indebtedness to be due and payable prior to its Stated Maturity and
                such
                Indebtedness has not been discharged in full or such acceleration
                has not
                been rescinded or annulled within 30 days of such acceleration
                and/or

            

    

     

    
      	(ii)  	
              the
                failure to make a principal payment at the final (but not any interim)
                fixed maturity and such defaulted payment shall not have been made,
                waived
                or extended within 30 days of such payment
                default;

            

    

     

    (6)  any
      final
      judgment or order (not covered by insurance) for the payment of money in excess
      of $10 million in the aggregate for all such final judgments or orders against
      all such Persons (treating any deductibles, self-insurance or retention as
      not
      covered by insurance):

     

    
      	(i)  	
              shall
                be rendered against the Issuer or any Significant Subsidiary and
                shall not
                be paid or discharged, and

            

    

     

    
      	(ii)  	
              and
                there shall be any period of 60 consecutive days following entry
                of the
                final judgment or order that causes the aggregate amount for all
                such
                final judgments or orders outstanding and not paid or discharged
                against
                all such Persons to exceed $10 million during which a stay of enforcement
                of such final judgment or order, by reason of a pending appeal or
                otherwise, shall not be in effect;

            

    

     

    (7)  a
      court
      of competent jurisdiction enters a decree or order for:

     

    
      	(i)  	
              relief
                in respect of the Issuer or any Significant Subsidiary in an involuntary
                case under any Bankruptcy Law now or hereafter in
                effect,

            

    

     

    
      	(ii)  	
              appointment
                of a receiver, liquidator, assignee, custodian, trustee, sequestrator
                or
                similar official of the Issuer or any Significant Subsidiary or for
                all or
                substantially all of the property and assets of the Issuer or any
                Significant Subsidiary, or

            

    

     

    
      	(iii)  	
              the
                winding up or liquidation of the affairs of the Issuer or any Significant
                Subsidiary and, in each case, such decree or order shall remain unstayed
                and in effect for a period of 60 consecutive days;
                or

            

    

     

    (8)  the
      Issuer or any Significant Subsidiary:

     

    
      	(i)  	
              commences
                a voluntary case under any Bankruptcy Law now or hereafter in effect,
                or
                consents to the entry of an order for relief in an involuntary case
                under
                such law,

            

    

     

    
      	(ii)  	
              consents
                to the appointment of or taking possession by a receiver, liquidator,
                assignee, custodian trustee, sequestrator or similar official of
                the
                Issuer or such Significant Subsidiary or for all or substantially
                all of
                the property and assets of the Issuer or such Significant Subsidiary,
                or

            

    

     

    
      	(iii)  	
              effects
                any general assignment for the benefit of its
                creditors.

            

    

     

    
      	SECTION
              6.02.  	
              Acceleration.

            

    

     

    If
      an
      Event of Default (other than an Event of Default specified in clause (7) or
      (8)
      of Section 6.01 that occurs with respect to the Issuer) occurs and is
      continuing under this Indenture, the Trustee or the Holders of at least 25%
      in
      aggregate principal amount of the Notes then outstanding, by written notice
      to
      the Issuer (and to the Trustee if such notice is given by the Holders), may,
      and
      the Trustee at the request of the Holders of at least 25% in aggregate principal
      amount of the Notes then outstanding shall, declare the principal of, premium,
      if any, and accrued interest on the Notes to be immediately due and payable.
      Upon a declaration of acceleration, such principal of, premium, if any, and
      accrued interest shall be immediately due and payable. In the event of a
      declaration of acceleration because an Event of Default set forth in clause
      (5)
      of Section 6.01 has occurred and is continuing, such declaration of
      acceleration shall be automatically rescinded and annulled if the event of
      default triggering such Event of Default pursuant to clause (5) of
      Section 6.01 shall be remedied or cured by the Issuer or the relevant
      Significant Subsidiary or waived by the holders of the relevant Indebtedness
      within 60 days after the declaration of acceleration with respect
      thereto.

     

    If
      an
      Event or Default specified in clause (7) or (8) of Section 6.01 occurs
      with
      respect to the Issuer, the principal of, premium, if any, and accrued interest
      on the Notes then outstanding shall automatically become and be immediately
      due
      and payable without any declaration or other act on the part of the Trustee
      or
      any Holder. The Holders of at least a majority in principal amount of the
      outstanding Notes by written notice to the Issuer and to the Trustee, may waive
      all past defaults and rescind and annul a declaration of acceleration and its
      consequences if:

     

    
      	 	
              (x)

            	
              all
                existing Events of Default, other than the nonpayment of the principal
                of,
                premium, if any, and interest on the Notes that have become due solely
                by
                such declaration of acceleration, have been cured or
                waived;

            

    

     

    
      	 	
              (y)

            	
              the
                rescission would not conflict with any judgment or decree of a court
                of
                competent jurisdiction; and

            

    

     

    
      	 	
              (z)

            	
              in
                the event of a cure or waiver of a Default of the type set forth
                in
                Section 6.01(7) or (8), the Trustee shall have received an Officers’
                Certificate and an Opinion of Counsel that such Default has been
                cured or
                waived.

            

    

     

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

     

    
      	SECTION
              6.03.  	
              Other
                Remedies.

            

    

     

    If
      a
      Default occurs and is continuing, the Trustee may pursue any available remedy
      by
      proceeding at law or in equity to collect the payment of principal of, or
      interest on, the Notes or to enforce the performance of any provision of the
      Notes or this Indenture.

     

    The
      Trustee may maintain a proceeding even if it does not possess any of the Notes
      or does not produce any of them in the proceeding. A delay or omission by the
      Trustee or any Holder in exercising any right or remedy accruing upon a Default
      shall not impair the right or remedy or constitute a waiver of or acquiescence
      in the Default. No remedy is exclusive of any other remedy. All available
      remedies are cumulative to the extent permitted by law.

     

    
      	SECTION
              6.04.  	
              Waiver
                of Past Defaults.

            

    

     

    Subject
      to Sections 2.09, 6.07 and 9.02, the Holders of a majority in principal
      amount of the outstanding Notes (which may include consents obtained in
      connection with a tender offer or exchange offer of Notes) by notice to the
      Trustee may waive an existing Default and its consequences, except a Default
      in
      the payment of principal of, or interest on, any Note as specified in
      Section 6.01(1) or (2). The Issuer shall deliver to the Trustee an
      Officers’ Certificate stating that the requisite percentage of Holders have
      consented to such waiver and attaching copies of such consents. When a Default
      is waived, it is cured and ceases.

     

    
      	SECTION
              6.05.  	
              Control
                by Majority.

            

    

     

    The
      Holders of at least a majority in principal amount of the outstanding Notes
      may
      direct the time, method and place of conducting any proceeding for any remedy
      available to the Trustee or exercising any trust or power conferred on it.
      Subject to Section 7.01, however, the Trustee may refuse to follow any
      direction that conflicts with any law or this Indenture, that may involve the
      Trustee in personal liability, or that the Trustee determines in good faith
      may
      be unduly prejudicial to the rights of another Holder; provided,
      however,
      that
      the Trustee may take any other action deemed proper by the Trustee which is
      not
      inconsistent with such direction.

     

    In
      the
      event the Trustee takes any action or follows any direction pursuant to this
      Indenture, the Trustee shall be entitled to indemnification against any loss
      or
      expense caused by taking such action or following such direction.

     

    
      	SECTION
              6.06.  	
              Limitation
                on Suits.

            

    

     

    No
      Holder
      will have any right to institute any proceeding with respect to this Indenture
      or for any remedy thereunder, unless the Trustee:

     

    (1)  the
      Holder gives the Trustee written notice of a continuing Event of
      Default;

     

    (2)  the
      Holders of at least 25% in aggregate principal amount of outstanding Notes
      make
      a written request to the Trustee to pursue the remedy;

     

    (3)  such
      Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
      against any costs, liability or expense;

     

    (4)  the
      Trustee does not comply with the request within 60 days after receipt of the
      request and the offer of indemnity; and

     

    (5)  during
      such 60-day period, the Holders of a majority in aggregate principal amount
      of
      the outstanding Notes do not give the Trustee a direction that is inconsistent
      with the request.

     

    However,
      such limitations do not apply to a suit instituted by a Holder of any Note
      for
      enforcement of payment of the principal of or interest on such Note on or after
      the due date therefor.

     

    A
      Holder
      may not use this Indenture to prejudice the rights of another Holder or to
      obtain a preference or priority over such other Holder.

     

    
      	SECTION
              6.07.  	
              Rights
                of Holders To Receive Payment.

            

    

     

    Notwithstanding
      any other provision of this Indenture, the right of any Holder to receive
      payment of principal of and premium, if any, and interest on, a Note, on or
      after the respective due dates therefor, or to bring suit for the enforcement
      of
      any such payment on or after such respective dates, shall not be impaired or
      affected without the consent of the Holder.

     

    
      	SECTION
              6.08.  	
              Collection
                Suit by Trustee.

            

    

     

    If
      a
      Default in payment of principal or interest specified in Section 6.01(1)
      or
      (2) occurs and is continuing, the Trustee may recover judgment in its own name
      and as trustee of an express trust against the Issuer or any other obligor
      on
      the Notes for the whole amount of principal and accrued interest and fees
      remaining unpaid, together with interest on overdue principal and, to the extent
      that payment of such interest is lawful, interest on overdue installments of
      interest, in each case at the rate per
      annum
      borne by
      the Notes and such further amount as shall be sufficient to cover the costs
      and
      expenses of collection, including the reasonable compensation, expenses,
      disbursements and advances of the Trustee, its agents and counsel.

     

    
      	SECTION
              6.09.  	
              Trustee
                May File Proofs of Claim.

            

    

     

    The
      Trustee may file such proofs of claim and other papers or documents as may
      be
      necessary or advisable in order to have the claims of the Trustee (including
      any
      claim for the compensation, expenses, disbursements and advances of the Trustee,
      its agents and counsel) and the Holders allowed in any judicial proceedings
      relating to the Issuer, their creditors or their property and shall be entitled
      and empowered to collect and receive any monies or other property payable or
      deliverable on any such claims and to distribute the same, and any Custodian
      in
      any such judicial proceedings is hereby authorized by each Holder to make such
      payments to the Trustee and, in the event that the Trustee shall consent to
      the
      making of such payments directly to the Holders, to pay to the Trustee any
      amount due to it for the reasonable compensation, expenses, disbursements and
      advances of the Trustee, its agent and counsel, and any other amounts due the
      Trustee under Section 7.07. Nothing herein contained shall be deemed
      to
      authorize the Trustee to authorize or consent to or accept or adopt on behalf
      of
      any Holder any plan of reorganization, arrangement, adjustment or composition
      affecting the Notes or the rights of any Holder thereof, or to authorize the
      Trustee to vote in respect of the claim of any Holder in any such proceeding.
      The Trustee shall be entitled to participate as a member of any official
      committee of creditors in the matters as it deems necessary or
      advisable.

     

    
      	SECTION
              6.10.  	
              Priorities.

            

    

     

    If
      the
      Trustee collects any money or property pursuant to this Article Six, it shall
      pay out the money or property in the following order:

     

    First:
      to
      the Trustee for amounts due under Section 7.07;

     

    Second:
      to Holders for interest accrued on the Notes, ratably, without preference or
      priority of any kind, according to the amounts due and payable on the Notes
      for
      interest;

     

    Third:
      to
      Holders for principal amounts due and unpaid on the Notes, ratably, without
      preference or priority of any kind, according to the amounts due and payable
      on
      the Notes for principal; and

     

    Fourth:
      to the Issuer or, if applicable, the Subsidiary Guarantors, as their respective
      interests may appear. 

     

    The
      Trustee, upon prior notice to the Issuer, may fix a record date and payment
      date
      for any payment to Holders pursuant to this Section 6.10.

     

    
      	SECTION
              6.11.  	
              Undertaking
                for Costs.

            

    

     

    In
      any
      suit for the enforcement of any right or remedy under this Indenture or in
      any
      suit against the Trustee for any action taken or omitted by it as Trustee,
      a
      court in its discretion may require the filing by any party litigant in the
      suit
      of an undertaking to pay the costs of the suit, and the court in its discretion
      may assess reasonable costs, including reasonable attorneys’ fees and expenses,
      against any party litigant in the suit, having due regard to the merits and
      good
      faith of the claims or defenses made by the party litigant. This
      Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
      pursuant to Section 6.07, or a suit by a Holder or Holders of more than
      10%
      in principal amount of the outstanding Notes.

     

    ARTICLE
      SEVEN  

     

    

     

    TRUSTEE

     

    
      	SECTION
              7.01.  	
              Duties
                of Trustee.

            

    

     

    (a)  If
      a
      Default has occurred and is continuing, the Trustee shall exercise such of
      the
      rights and powers vested in it by this Indenture and use the same degree of
      care
      and skill in their exercise as a prudent person would exercise or use under
      the
      circumstances in the conduct of his or her own affairs. 

     

    (b)  Except
      during the continuance of a Default:

     

    (1)  The
      Trustee need perform only those duties as are specifically set forth herein
      or
      in the Trust Indenture Act and no duties, covenants, responsibilities or
      obligations shall be implied in this Indenture against the Trustee.

     

    (2)  In
      the
      absence of bad faith on its part, the Trustee may conclusively rely, as to
      the
      truth of the statements and the correctness of the opinions expressed therein,
      upon certificates (including Officers’ Certificates) or opinions (including
      Opinions of Counsel) furnished to the Trustee and conforming to the requirements
      of this Indenture. However, in the case of any such certificates or opinions
      which by any provision hereof are specifically required to be furnished to
      the
      Trustee, the Trustee shall examine the certificates and opinions to determine
      whether or not they conform to the requirements of this Indenture.

     

    (c)  Notwithstanding
      anything to the contrary herein, the Trustee may not be relieved from liability
      for its own negligent action, its own negligent failure to act, or its own
      willful misconduct, except that:

     

    (1)  This
      paragraph does not limit the effect of Section 7.01(b).

     

    (2)  The
      Trustee shall not be liable for any error of judgment made in good faith by
      a
      Responsible Officer, unless it is proved that the Trustee was negligent in
      ascertaining the pertinent facts.

     

    (3)  The
      Trustee shall not be liable with respect to any action it takes or omits to
      take
      in good faith in accordance with a direction received by it pursuant to
      Section 6.05.

     

    (d)  No
      provision of this Indenture shall require the Trustee to expend or risk its
      own
      funds or otherwise incur any financial liability in the performance of any
      of
      its duties hereunder or to take or omit to take any action under this Indenture
      or take any action at the request or direction of Holders if it shall have
      reasonable grounds for believing that repayment of such funds is not assured
      to
      it.

     

    (e)  Whether
      or not therein expressly so provided, every provision of this Indenture that
      in
      any way relates to the Trustee is subject to this
      Section 7.01.

     

    (f)  The
      Trustee shall not be liable for interest on any money received by it except
      as
      the Trustee may agree in writing with the Issuer. Money held in trust by the
      Trustee need not be segregated from other funds except to the extent required
      by
      law.

     

    (g)  In
      the
      absence of bad faith, negligence or willful misconduct on the part of the
      Trustee, the Trustee shall not be responsible for the application of any money
      by any Paying Agent other than the Trustee.

     

    
      	SECTION
              7.02.  	
              Rights
                of Trustee.

            

    

     

    Subject
      to Section 7.01:

     

    (a)  The
      Trustee may rely conclusively on any resolution, certificate (including any
      Officers’ Certificate), statement, instrument, opinion (including any Opinion of
      Counsel), notice, request, direction, consent, order, bond, debenture, or other
      paper or document believed by it to be genuine and to have been signed or
      presented by the proper Person. The Trustee need not investigate any fact or
      matter stated in the document.

     

    (b)  Before
      the Trustee acts or refrains from acting, it may require an Officers’
      Certificate and an Opinion of Counsel, which shall conform to the provisions
      of
      Section 11.05. The Trustee shall not be liable for any action it takes
      or
      omits to take in good faith in reliance on such Officer’s Certificate or Opinion
      of Counsel.

     

    (c)  The
      Trustee may act through its attorneys and agents and shall not be responsible
      for the misconduct or negligence of any agent (other than an agent who is an
      employee of the Trustee) appointed with due care.

     

    (d)  The
      Trustee shall not be liable for any action it takes or omits to take in good
      faith which it reasonably believes to be authorized or within its rights or
      powers under this Indenture.

     

    (e)  The
      Trustee may consult with counsel of its selection and the advice or opinion
      of
      such counsel as to matters of law shall be full and complete authorization
      and
      protection from liability in respect of any action taken, omitted or suffered
      by
      it hereunder in good faith and in accordance with the advice or opinion of
      such
      counsel.

     

    (f)  The
      Trustee shall be under no obligation to exercise any of the rights or powers
      vested in it by this Indenture at the request, order or direction of any of
      the
      Holders pursuant to the provisions of this Indenture, unless such Holders shall
      have offered to the Trustee reasonable security or indemnity satisfactory to
      it
      against the costs, expenses and liabilities which may be incurred therein or
      thereby.

     

    (g)  The
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate (including any Officers’ Certificate),
      statement, instrument, opinion (including any Opinion of Counsel), notice,
      request, direction, consent, order, bond, debenture, or other paper or document,
      but the Trustee, in its discretion, may make such further inquiry or
      investigation into such facts or matters as it may see fit and, if the Trustee
      shall determine to make such further inquiry or investigation, it shall be
      entitled, upon reasonable notice to the Issuer, to examine the books, records,
      and premises of the Issuer, personally or by agent or attorney at the sole
      cost
      of the Issuer.

     

    (h)  The
      Trustee shall not be required to give any bond or surety in respect of the
      performance of its powers and duties hereunder.

     

    (i)  The
      permissive rights of the Trustee to do things enumerated in this Indenture
      shall
      not be construed as duties.

     

    (j)  Except
      with respect to Section 4.01 and 4.05, the Trustee shall have no duty
      to
      inquire as to the performance of the Issuer with respect to the covenants
      contained in Article 4. In addition, the Trustee shall not be deemed to have
      knowledge of an Event of Default except (i) any Default or Event of Default
      occurring pursuant to Sections 4.01, 6.01(1) or 6.01(2) or (ii) any
      Default
      or Event of Default known to a Responsible Officer.

     

    (k)  The
      rights, privileges, protections, immunities and benefits given to the Trustee,
      including its right to be indemnified, are extended to, and shall be enforceable
      by, the Trustee in each of its capacities hereunder, and to each agent,
      custodian and other Person employed to act hereunder.

     

    
      	SECTION
              7.03.  	
              Individual
                Rights of Trustee.

            

    

     

    The
      Trustee in its individual or any other capacity may become the owner or pledgee
      of Notes and may otherwise deal with the Issuer, its Subsidiaries or its
      respective Affiliates with the same rights it would have if it were not Trustee.
      Any Agent may do the same with like rights. However, the Trustee must comply
      with Sections 7.10 and 7.11.

     

    
      	SECTION
              7.04.  	
              Trustee’s
                Disclaimer.

            

    

     

    The
      Trustee shall not be responsible for and makes no representation as to the
      validity or adequacy of this Indenture or the Notes, it shall not be accountable
      for the Issuer’s use of the proceeds from the Notes, and it shall not be
      responsible for any statement of the Issuer in this Indenture or any document
      issued in connection with the sale of Notes or any statement in the Notes other
      than the Trustee’s certificate of authentication. The Trustee makes no
      representations with respect to the effectiveness or adequacy of this
      Indenture.

     

    
      	SECTION
              7.05.  	
              Notice
                of Default.

            

    

     

    If
      a
      Default occurs and is continuing and is deemed to be known to the Trustee
      pursuant to Section 7.02(j), the Trustee shall mail to each Holder notice of
      the
      uncured Default within 30 days after such Default occurs. Except in the case
      of
      a Default in payment of principal of, or interest on, any Note, including an
      accelerated payment and the failure to make a payment on a Payment Date pursuant
      to an Offer to Purchase or a Default in complying with the provisions of Article
      Five, the Trustee may withhold the notice if and so long as the Board of
      Directors, the executive committee, or a trust committee of directors and/or
      Responsible Officers, of the Trustee in good faith determines that withholding
      the notice is in the interest of the Holders.

     

    
      	SECTION
              7.06.  	
              Reports
                by Trustee to Holders.

            

    

     

    Within
      60
      days after each January 1, beginning with January 1, 2005, the
      Trustee
      shall, to the extent that any of the events described in Trust Indenture Act
      § 313(a) occurred within the previous twelve months, but not otherwise,
      mail to each Holder a brief report dated as of such date that complies with
      Trust Indenture Act § 313(a). The Trustee also shall comply with Trust
      Indenture Act §§ 313(b), 313(c) and 313(d).

     

    A
      copy of
      each report at the time of its mailing to Holders shall be mailed to the Issuer
      and filed with the SEC and each securities exchange, if any, on which the Notes
      are listed.

     

    The
      Issuer shall notify the Trustee if the Notes become listed on any securities
      exchange or of any delisting thereof and the Trustee shall comply with Trust
      Indenture Act § 313(d).

     

    
      	SECTION
              7.07.  	
              Compensation
                and Indemnity.

            

    

     

    The
      Issuer shall pay to the Trustee from time to time such compensation as the
      Issuer and the Trustee shall from time to time agree in writing for its services
      hereunder. The Trustee’s compensation shall not be limited by any law on
      compensation of a trustee of an express trust. The Issuer shall reimburse the
      Trustee upon request for all reasonable disbursements, expenses and advances
      (including reasonable fees and expenses of counsel) incurred or made by it
      in
      addition to the compensation for its services, except any such disbursements,
      expenses and advances as may be attributable to the Trustee’s negligence, bad
      faith or willful misconduct. Such expenses shall include the reasonable fees
      and
      expenses of the Trustee’s agents and counsel.

     

    The
      Issuer shall indemnify each of the Trustee or any predecessor Trustee and its
      agents for, and hold them harmless against, any and all loss, damage, claims
      including taxes (other than taxes based upon, measured by or determined by
      the
      income of the Trustee), liability or expense incurred by them except for such
      actions to the extent caused by any negligence, bad faith or willful misconduct
      on their part, arising out of or in connection with the acceptance or
      administration of this trust including the reasonable costs and expenses of
      defending themselves against or investigating any claim or liability in
      connection with the exercise or performance of any of the Trustee’s rights,
      powers or duties hereunder. The Trustee shall notify the Issuer promptly of
      any
      claim asserted against the Trustee or any of its agents for which it may seek
      indemnity. The Issuer may, subject to the approval of the Trustee (which
      approval shall not be unreasonably withheld), defend the claim and the Trustee
      shall cooperate in the defense. The Trustee and its agents subject to the claim
      may have separate counsel and the Issuer shall pay the reasonable fees and
      expenses of such counsel; provided,
      however,
      that the
      Issuer will not be required to pay such fees and expenses if, subject to the
      approval of the Trustee (which approval shall not be unreasonably withheld),
      it
      assumes the Trustee’s defense and there is no conflict of interest between the
      Issuer and the Trustee and its agents subject to the claim in connection with
      such defense as reasonably determined by the Trustee. The Issuer need not pay
      for any settlement made without its written consent. The Issuer need not
      reimburse any expense or indemnify against any loss or liability to the extent
      incurred by the Trustee through its negligence, bad faith or willful
      misconduct.

     

    To
      secure
      the Issuer’s payment obligations in this Section 7.07, the Trustee shall
      have a Lien prior to the Notes against all money or property held or collected
      by the Trustee, in its capacity as Trustee, except money or property held in
      trust to pay principal and interest on particular Notes. 

     

    When
      the
      Trustee incurs expenses or renders services after a Default specified in
      Section 6.01(7) or 6.01(8) occurs, such expenses and the compensation
      for
      such services shall be paid to the extent allowed under any Bankruptcy
      Law.

     

    Notwithstanding
      any other provision in this Indenture, the foregoing provisions of this
      Section 7.07 shall survive the satisfaction and discharge of this Indenture
      or the appointment of a successor Trustee.

     

    
      	SECTION
              7.08.  	
              Replacement
                of Trustee.

            

    

     

    The
      Trustee may resign at any time by so notifying the Issuer in writing. The
      Holders of a majority in principal amount of the outstanding Notes may remove
      the Trustee by so notifying the Issuer and the Trustee and may appoint a
      successor Trustee. The Issuer may remove the Trustee if:

     

    (1)  the
      Trustee fails to comply with Section 7.10;

     

    (2)  the
      Trustee is adjudged a bankrupt or an insolvent;

     

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

     

    (4)  the
      Trustee becomes incapable of acting.

     

    If
      the
      Trustee resigns or is removed or if a vacancy exists in the office of Trustee
      for any reason, the Issuer shall notify each Holder of such event and shall
      promptly appoint a successor Trustee. Within one year after the successor
      Trustee takes office, the Holders of a majority in principal amount of the
      Notes
      may appoint a successor Trustee to replace the successor Trustee appointed
      by
      the Issuer.

     

    A
      successor Trustee shall deliver a written acceptance of its appointment to
      the
      retiring Trustee and to the Issuer. Immediately after that, the retiring Trustee
      shall transfer, after payment of all sums then owing to the Trustee pursuant
      to
      Section 7.07, all property held by it as Trustee to the successor Trustee,
      subject to the Lien provided in Section 7.07, the resignation or removal
      of
      the retiring Trustee shall become effective, and the successor Trustee shall
      have all the rights, powers and duties of the Trustee under this Indenture.
      A
      successor Trustee shall mail notice of its succession to each
      Holder.

     

    If
      a
      successor Trustee does not take office within 60 days after the retiring Trustee
      resigns or is removed, the retiring Trustee, the Issuer or the Holders of at
      least 10% in principal amount of the outstanding Notes may petition any court
      of
      competent jurisdiction for the appointment of a successor Trustee at the expense
      of the Issuer.

     

    If
      the
      Trustee fails to comply with Section 7.10, any Holder may petition any
      court of competent jurisdiction for the removal of the Trustee and the
      appointment of a successor Trustee.

     

    Notwithstanding
      replacement of the Trustee pursuant to this Section 7.08, the Issuer’s
      obligations under Section 7.07 shall continue for the benefit of the
      retiring Trustee.

     

    
      	SECTION
              7.09.  	
              Successor
                Trustee by Merger, Etc.

            

    

     

    If
      the
      Trustee consolidates with, merges or converts into, or transfers all or
      substantially all of its corporate trust business to, another corporation,
      the
      resulting, surviving or transferee corporation without any further act shall,
      if
      such resulting, surviving or transferee corporation is otherwise eligible
      hereunder, be the successor Trustee; provided
      that
      such corporation shall be otherwise qualified and eligible under this Article
      Seven.

     

    
      	SECTION
              7.10.  	
              Eligibility;
                Disqualification.

            

    

     

    This
      Indenture shall always have a Trustee who satisfies the requirement of Trust
      Indenture Act §§ 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have
      a combined capital and surplus of at least $150,000,000 as set forth in its
      most
      recent published annual report of condition. The Trustee shall comply with
      Trust
      Indenture Act § 310(b); provided,
      however,
      that
      there shall be excluded from the operation of Trust Indenture Act
§ 310(b)(1) any indenture or indentures under which other securities,
      or
      certificates of interest or participation in other securities, of the Issuer
      are
      outstanding, if the requirements for such exclusion set forth in Trust Indenture
      Act § 310(b)(1) are met. The provisions of Trust Indenture Act § 310
      shall apply to the Issuer and any other obligor of the Notes.

     

    
      	SECTION
              7.11.  	
              Preferential
                Collection of Claims Against the Issuer.

            

    

     

    The
      Trustee, in its capacity as Trustee hereunder, shall comply with Trust Indenture
      Act § 311(a), excluding any creditor relationship listed in Trust Indenture
      Act § 311(b). A Trustee who has resigned or been removed shall be subject
      to Trust Indenture Act § 311(a) to the extent indicated.

     

    ARTICLE
      EIGHT  

     

    

     

    DISCHARGE
      OF INDENTURE;
      DEFEASANCE

     

    
      	SECTION
              8.01.  	
              Termination
                of the Issuer’s Obligations.

            

    

     

    The
      Issuer may terminate its obligations under the Notes and this Indenture and
      the
      obligations of the Subsidiary Guarantors under the Subsidiary Guarantees and
      this Indenture and this Indenture shall cease to be of further effect, except
      those obligations referred to in the penultimate paragraph of this
      Section 8.01, if:

     

    (1)  either

     

    (A)  all
      the
      Notes theretofore authenticated and delivered (except lost, stolen or destroyed
      Notes which have been replaced or paid and Notes for whose payment money has
      theretofore been deposited in trust or segregated and held in trust by the
      Issuer and thereafter repaid to the Issuer or discharged from such trust) have
      been delivered to the Trustee for cancellation; or

     

    (B)  all
      Notes
      not theretofore delivered to the Trustee for cancellation (1) have become
      due and payable or (2) will become due and payable within one year,
      or are
      to be called for redemption within one year, under arrangements reasonably
      satisfactory to the Trustee for the giving of notice of redemption by the
      Trustee in the name, and at the expense, of the Issuer, and the Issuer has
      irrevocably deposited or caused to be deposited with the Trustee funds in an
      amount sufficient to pay and discharge the entire Indebtedness on the Notes
      not
      theretofore delivered to the Trustee for cancellation, for principal of,
      premium, if any, and interest on the Notes to the date of maturity or
      redemption, as the case may be, together with irrevocable instructions from
      the
      Issuer directing the Trustee to apply such funds to the payment thereof at
      maturity or redemption, as the case may be;

     

    (2)  the
      Issuer has paid all sums payable by them under this Indenture, and

     

    (3)  the
      Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of
      Counsel stating that all conditions precedent under this Indenture relating
      to
      the satisfaction and discharge of this Indenture have been complied
      with.

     

    In
      the
      case of clause (B) of this Section 8.01, and subject to the next sentence
      and notwithstanding the foregoing paragraph, the Issuer’s obligations in
      Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 4.03 (as to legal existence
      of
      the Issuer only), 7.07, 8.05 and 8.06 shall survive until the Notes are no
      longer outstanding pursuant to the last paragraph of Section 2.08.
      After the Notes are no longer outstanding, the Issuer’s obligations in
      Sections 7.07, 8.05 and 8.06 shall survive.

     

    After
      such delivery or irrevocable deposit, the Trustee upon request shall acknowledge
      in writing the discharge of the Issuer’s obligations under the Notes and this
      Indenture except for those surviving obligations specified above.

     

    
      	SECTION
              8.02.  	
              Legal
                Defeasance and Covenant Defeasance.

            

    

     

    (a)  The
      Issuer may, at its option and at any time, elect to have either
      paragraph (b) or (c) below be applied to all outstanding Notes upon
      compliance with the conditions set forth in Section 8.03.

     

    (b)  Upon
      the
      Issuer’s exercise under Section 8.02(a) hereof of the option applicable to
      this Section 8.02(b), the Issuer and the Subsidiary Guarantors shall,
      subject to the satisfaction of the conditions set forth in Section 8.03,
      be
      deemed to have been discharged from their obligations with respect to all
      outstanding Notes on the date the conditions set forth below are satisfied
      (hereinafter, “Legal
      Defeasance”).
      For
      this purpose, Legal Defeasance means that the Issuer and the Subsidiary
      Guarantors shall be deemed to have paid and discharged the entire Indebtedness
      represented by the outstanding Notes and Subsidiary Guarantees, which shall
      thereafter be deemed to be “outstanding” only for the purposes of
      Section 8.04 hereof and the other Sections of this Indenture
      referred
      to in (i) and (ii) below, and to have satisfied all its other obligations under
      such Notes and this Indenture and the Subsidiary Guarantors shall be deemed
      to
      have satisfied all of their obligations under the Subsidiary Guarantees and
      this
      Indenture (and the Trustee, on demand of and at the expense of the Issuer,
      shall
      execute proper instruments acknowledging the same), except for the following
      provisions which shall survive until otherwise terminated or discharged
      hereunder:

     

    (i)  the
      rights of Holders of outstanding Notes to receive, solely from the trust fund
      described in Section 8.04, and as more fully set forth in such
      Section 8.04, payments in respect of the principal of, premium, if any,
      and
      interest on such Notes when such payments are due;

     

    (ii)  the
      Issuer’s obligations with respect to such Notes under Article Two and
      Section 4.02 hereof;

     

    (iii)  the
      rights, powers, trusts, duties and immunities of the Trustee hereunder and
      the
      Issuer’s obligations in connection therewith; and

     

    (iv)  the
      provisions of this Article Eight applicable to Legal
      Defeasance.

     

    Subject
      to compliance with this Article Eight, the Issuer may exercise its option under
      this Section 8.02(b) notwithstanding the prior exercise of its option
      under
      Section 8.02(c).

     

    (c)  Upon
      the
      Issuer’s exercise under paragraph (a) hereof of the option applicable to
      this paragraph (c), the Issuer and the Subsidiary Guarantors shall,
      subject
      to the satisfaction of the conditions set forth in Section 8.03, be
      released from their respective obligations under the covenants contained in
      Sections 4.03 (other than with respect to the legal existence of the
      Issuer), 4.04, 4.07 through 4.16 and clause (3) of Section 5.01(a)
      with respect to the outstanding Notes on and after the date the conditions
      set
      forth in Section 8.03 are satisfied (hereinafter, “Covenant
      Defeasance”),
      and
      the Notes shall thereafter be deemed not “outstanding” for the purposes of any
      direction, waiver, consent or declaration or act of Holders (and the
      consequences of any thereof) in connection with such covenants, but shall
      continue to be deemed “outstanding” for all other purposes hereunder (it being
      understood that such Notes shall not be deemed outstanding for accounting
      purposes). For this purpose, Covenant Defeasance means that, with respect to
      the
      outstanding Notes, the Issuer and the Subsidiary Guarantors may omit to comply
      with and shall have no liability in respect of any term, condition or limitation
      set forth in any such covenant, whether directly or indirectly, by reason of
      any
      reference elsewhere herein to any such covenant or by reason of any reference
      in
      any such covenant to any other provision herein or in any other document and
      such omission to comply shall not constitute an Event of Default under
      Section 6.01, but, except as specified above, the remainder of this
      Indenture and such Notes shall be unaffected thereby. In addition, upon the
      Issuer’s exercise under paragraph (a) hereof of the option applicable to
      this paragraph (c), subject to the satisfaction of the conditions set
      forth
      in Section 8.03, clauses (3), (4), (5) and (6) of Section 6.01
      shall
      not constitute Events of Default.

     

    
      	SECTION
              8.03.  	
              Conditions
                to Legal Defeasance or Covenant Defeasance.

            

    

     

    The
      following shall be the conditions to the application of either
      Section 8.02(b) or 8.02(c) hereof to the outstanding Notes:

     

    (1)  the
      Issuer must irrevocably deposit with the Trustee, in trust, for the benefit
      of
      the Holders, U.S. Legal Tender, U.S. Government Obligations or a combination
      thereof, in such amounts as will be sufficient (without reinvestment), in the
      opinion of a nationally recognized firm of independent public accountants
      selected by the Issuer, to pay the principal of and interest and premium, if
      any, on the Notes on the stated date for payment or on the redemption date
      Notes;

     

    (2)  in
      the
      case of Legal Defeasance, the Issuer shall have delivered to the Trustee an
      Opinion of Counsel in the United States confirming that:

     

    (a)  the
      Issuer has received from, or there has been published by the Internal Revenue
      Service, a ruling, or

     

    (b)  since
      the
      date of this Indenture, there has been a change in the applicable U.S. federal
      income tax law,

     

    in
      either
      case to the effect that, and based thereon the Holders will not recognize
      income, gain or loss for U.S. federal income tax purposes as a result of such
      Legal Defeasance and will be subject to U.S. federal income tax on the same
      amounts, in the same manner and at the same times as would have been the case
      if
      such Legal Defeasance had not occurred;

     

    (3)  in
      the
      case of Covenant Defeasance, the Issuer shall have delivered to the Trustee
      an
      Opinion of Counsel in the United States reasonably acceptable to the Trustee
      confirming that the Holders will not recognize income, gain or loss for U.S.
      federal income tax purposes as a result of such Covenant Defeasance and will
      be
      subject to U.S. federal income tax on the same amounts, in the same manner
      and
      at the same times as would have been the case if such Covenant Defeasance had
      not occurred;

     

    (4)  no
      Default shall have occurred and be continuing on the date of such deposit (other
      than a Default resulting from the borrowing of funds to be applied to such
      deposit);

     

    (5)  the
      Legal
      Defeasance or Covenant Defeasance shall not result in a breach or violation
      of,
      or constitute a Default under this Indenture or a default under any other
      material agreement or instrument to which the Issuer or any of its Subsidiaries
      is a party or by which the Issuer or any of its Subsidiaries is bound (other
      than any such Default or default resulting solely from the borrowing of funds
      to
      be applied to such deposit);

     

    (6)  the
      Issuer shall have delivered to the Trustee an Officers’ Certificate stating that
      the deposit was not made by it with the intent of preferring the Holders over
      any other creditors of the Issuer or with the intent of defeating, hindering,
      delaying or defrauding any other of its creditors; and

     

    (7)  the
      Issuer shall have delivered to the Trustee an Officers’ Certificate and an
      Opinion of Counsel, each stating that the conditions provided for in, in the
      case of the Officers’ Certificate, clauses (1) through (6), as applicable, and,
      in the case of the Opinion of Counsel, clauses (2), if applicable, and/or (3)
      and (5) of this Section 8.03 have been complied with.

     

    
      	SECTION
              8.04.  	
              Application
                of Trust Money.

            

    

     

    The
      Trustee or Paying Agent shall hold in trust U.S. Legal Tender and U.S.
      Government Obligations deposited with it pursuant to this Article Eight, and
      shall apply the deposited U.S. Legal Tender and the money from U.S. Government
      Obligations in accordance with this Indenture to the payment of the principal
      of
      and the interest on the Notes. The Trustee shall be under no obligation to
      invest said U.S. Legal Tender and U.S. Government Obligations, except as it
      may
      agree with the Issuer.

     

    The
      Issuer shall pay and indemnify the Trustee against any tax, fee or other charge
      imposed on or assessed against the U.S. Legal Tender and U.S. Government
      Obligations deposited pursuant to Section 8.03 or the principal and
      interest received in respect thereof, other than any such tax, fee or other
      charge which by law is for the account of the Holders of the outstanding
      Notes.

     

    Anything
      in this Article Eight to the contrary notwithstanding, the Trustee shall deliver
      or pay to the Issuer from time to time upon the Issuer’s request any U.S. Legal
      Tender and U.S. Government Obligations held by it as provided in
      Section 8.03 which, in the opinion of a nationally recognized firm of
      independent public accountants expressed in a written certification thereof
      delivered to the Trustee, are in excess of the amount thereof that would then
      be
      required to be deposited to effect an equivalent Legal Defeasance or Covenant
      Defeasance.

     

    
      	SECTION
              8.05.  	
              Repayment
                to the Issuer.

            

    

     

    The
      Trustee and the Paying Agent shall pay to the Issuer upon request any money
      held
      by them for the payment of principal or interest that remains unclaimed for
      two
      years; provided,
      however,
      that
      the Trustee or such Paying Agent, before being required to make any payment,
      may
      at the expense of the Issuer cause to be published once in a newspaper of
      general circulation in the City of New York or mail to each Holder entitled
      to
      such money notice that such money remains unclaimed and that after a date
      specified therein which shall be at least 30 days from the date of such
      publication or mailing any unclaimed balance of such money then remaining will
      be repaid to the Issuer. After payment to the Issuer, Holders entitled to such
      money must look to the Issuer for payment as general creditors unless an
      applicable law designates another Person.

     

    
      	SECTION
              8.06.  	
              Reinstatement.

            

    

     

    If
      the
      Trustee or Paying Agent is unable to apply any U.S. Legal Tender and U.S.
      Government Obligations in accordance with this Article Eight by reason of any
      legal proceeding or by reason of any order or judgment of any court or
      governmental authority enjoining, restraining or otherwise prohibiting such
      application, or if the funds deposited with the Trustee to effect Covenant
      Defeasance are insufficient to pay the principal of, and interest on, the Notes
      when due, the Issuer’s obligations under this Indenture, and the Notes and the
      Subsidiary Guarantees shall be revived and reinstated as though no deposit
      had
      occurred pursuant to this Article Eight until such time as the Trustee or Paying
      Agent is permitted to apply all such U.S. Legal Tender and U.S. Government
      Obligations in accordance with this Article Eight; provided
      that if
      the Issuer has made any payment of interest on, or principal of, any Notes
      because of the reinstatement of its obligations, the Issuer shall be subrogated
      to the rights of the Holders of such Notes to receive such payment from the
      U.S.
      Legal Tender and U.S. Government Obligations held by the Trustee or Paying
      Agent.

     

    ARTICLE
      NINE  

     

    

     

    AMENDMENTS,
      SUPPLEMENTS AND WAIVERS

     

    
      	SECTION
              9.01.  	
              Without
                Consent of Holders.

            

    

     

    (a)  The
      Issuer, the Subsidiary Guarantors and the Trustee, together, may amend or
      supplement this Indenture, the Notes or the Subsidiary Guarantees without notice
      to or consent of any Holder:

     

    (1)  to
      cure
      any ambiguity, defect or inconsistency;

     

    (2)  to
      provide for uncertificated Notes in addition to or in place of certificated
      Notes;

     

    (3)  to
      provide for the assumption of the Issuer’s or a Subsidiary Guarantor’s
      obligations to the Holders of the Notes in the case of a merger, consolidation
      or sale of all or substantially all of the assets, in accordance with Article
      Five;

     

    (4)  to
      release any Subsidiary Guarantor from any of its obligations under its
      Subsidiary Guarantee or this Indenture (to the extent permitted by this
      Indenture);

     

    (5)  to
      make
      any change that would not materially adversely affect the rights of any Holder;
      or

     

    (6)  to
      comply
      with requirements of the SEC in order to effect or maintain the qualification
      of
      this Indenture under the Trust Indenture Act;

     

    provided,
      however,
      that
      the Issuer has delivered to the Trustee an Opinion of Counsel and an Officers’
      Certificate, each stating that such amendment or supplement complies with the
      provisions of this Section 9.01.

     

    
      	SECTION
              9.02.  	
              With
                Consent of Holders.

            

    

     

    (a)  Subject
      to Section 6.07, the Issuer, the Subsidiary Guarantors and the Trustee,
      together, with the written consent of the Holder or Holders of a majority in
      aggregate principal amount of the outstanding Notes may amend or supplement
      this
      Indenture, the Notes or the Subsidiary Guarantees, without notice to any other
      Holders. Subject to Sections 6.07, the Holder or Holders of a majority
      in
      aggregate principal amount of the outstanding Notes may waive compliance with
      any provision of this Indenture, the Notes or the Subsidiary Guarantees without
      notice to any other Holders.

     

    (b)  Notwithstanding
      Section 9.02(a), without the consent of each Holder affected, no amendment
      or waiver may:

     

    (1)  change
      the Stated Maturity of the principal of, or any installment of interest on,
      any
      Note;

     

    (2)  reduce
      the principal amount of, or premium, if any, or interest on, any
      Note;

     

    (3)  change
      the place of payment of principal of, or premium, if any, or interest on, any
      Note;

     

    (4)  impair
      the right to institute suit for the enforcement of any payment on or after
      the
      Stated Maturity (or, in the case of a redemption, on or after the Redemption
      Date) of any Note;

     

    (5)  reduce
      the above-stated percentages of outstanding Notes the consent of whose Holders
      is necessary to modify or amend this Indenture;

     

    (6)  waive
      a
      default in the payment of principal of, premium, if any, or interest on the
      Notes;

     

    (7)  voluntarily
      release a Subsidiary Guarantor of the Notes, except as permitted by this
      Indenture; or

     

    (8)  reduce
      the percentage or aggregate principal amount of outstanding Notes the consent
      of
      whose Holders is necessary for waiver of compliance with Sections 6.02
      and
      6.04.

     

    (c)  It
      shall
      not be necessary for the consent of the Holders under this Section to
      approve the particular form of any proposed amendment, supplement or waiver
      but
      it shall be sufficient if such consent approves the substance
      thereof.

     

    (d)  A
      consent
      to any amendment, supplement or waiver under this Indenture by any Holder given
      in connection with an exchange (in the case of an exchange offer) or a tender
      (in the case of a tender offer) of such Holder’s Notes will not be rendered
      invalid by such tender or exchange.

     

    (e)  After
      an
      amendment, supplement or waiver under this Section 9.02 becomes effective,
      the Issuer shall mail to the Holders affected thereby a notice briefly
      describing the amendment, supplement or waiver. Any failure of the Issuer to
      mail such notice, or any defect therein, shall not, however, in any way impair
      or affect the validity of any such amendment, supplement or waiver.

     

    
      	SECTION
              9.03.  	
              Compliance
                with the Trust Indenture Act.

            

    

     

    From
      the
      date on which this Indenture is qualified under the Trust Indenture Act, every
      amendment, waiver or supplement of this Indenture, the Notes or the Subsidiary
      Guarantees shall comply with the Trust Indenture Act as then in
      effect.

     

    
      	SECTION
              9.04.  	
              Revocation
                and Effect of Consents.

            

    

     

    Until
      an
      amendment, waiver or supplement becomes effective, a consent to it by a Holder
      is a continuing consent by the Holder and every subsequent Holder of a Note
      or
      portion of a Note that evidences the same debt as the consenting Holder’s Note,
      even if notation of the consent is not made on any Note. However, any such
      Holder or subsequent Holder may revoke the consent as to his Note or portion
      of
      his Note by notice to the Trustee or the Issuer received before the date on
      which the Trustee receives an Officers’ Certificate certifying that the Holders
      of the requisite principal amount of Notes have consented (and not theretofore
      revoked such consent) to the amendment, supplement or waiver. 

     

    The
      Issuer may, but shall not be obligated to, fix a record date for the purpose
      of
      determining the Holders entitled to consent to any amendment, supplement or
      waiver, which record date shall be at least 30 days prior to the first
      solicitation of such consent. If a record date is fixed, then notwithstanding
      the last sentence of the immediately preceding paragraph, those Persons who
      were
      Holders at such record date (or their duly designated proxies), and only those
      Persons, shall be entitled to revoke any consent previously given, whether
      or
      not such Persons continue to be Holders after such record date. No such consent
      shall be valid or effective for more than 90 days after such record date. The
      Issuer shall inform the Trustee in writing of the fixed record date if
      applicable.

     

    After
      an
      amendment, supplement or waiver becomes effective, it shall bind every Holder,
      unless it makes a change described in any of clauses (1) through (8)
      of
      Section 9.02(b), in which case, the amendment, supplement or waiver
      shall
      bind only each Holder of a Note who has consented to it and every subsequent
      Holder of a Note or portion of a Note that evidences the same debt as the
      consenting Holder’s Note; provided,
      however,
      that
      any such waiver shall not impair or affect the right of any Holder to receive
      payment of principal of, and interest on, a Note, on or after the respective
      due
      dates therefor, or to bring suit for the enforcement of any such payment on
      or
      after such respective dates without the consent of such Holder.

     

    
      	SECTION
              9.05.  	
              Notation
                on or Exchange of Notes.

            

    

     

    If
      an
      amendment, supplement or waiver changes the terms of a Note, the Issuer may
      require the Holder of the Note to deliver it to the Trustee. The Issuer shall
      provide the Trustee with an appropriate notation on the Note about the changed
      terms and cause the Trustee to return it to the Holder at the Issuer’s expense.
      Alternatively, if the Issuer or the Trustee so determines, the Issuer in
      exchange for the Note shall issue, and the Trustee shall authenticate, a new
      Note that reflects the changed terms. Failure to make the appropriate notation
      or issue a new Note shall not affect the validity and effect of such amendment,
      supplement or waiver.

     

    
      	SECTION
              9.06.  	
              Trustee
                To Sign Amendments, Etc.

            

    

     

    The
      Trustee shall execute any amendment, supplement or waiver authorized pursuant
      to
      this Article Nine; provided,
      however,
      that
      the Trustee may, but shall not be obligated to, execute any such amendment,
      supplement or waiver which affects the Trustee’s own rights, duties or
      immunities under this Indenture. The Trustee shall be entitled to receive,
      and
      shall be fully protected in relying upon, an Opinion of Counsel and an Officers’
      Certificate each stating that the execution of any amendment, supplement or
      waiver authorized pursuant to this Article Nine is authorized or permitted
      by
      this Indenture and constitutes legal, valid and binding obligations of the
      Issuer enforceable in accordance with its terms. Such Opinion of Counsel shall
      be at the expense of the Issuer.

     

    ARTICLE
      TEN  

     

    

     

    SUBSIDIARY
      GUARANTEE

     

    
      	SECTION
              10.01.  	
              Guarantee.

            

    

     

    Subject
      to this Article 10, each of the Subsidiary Guarantors hereby, jointly
      and
      severally, unconditionally guarantees to each Holder of a Note authenticated
      and
      delivered by the Trustee and to the Trustee and its successors and assigns,
      irrespective of the validity and enforceability of this Indenture, the Notes
      or
      the obligations of the Issuer hereunder or thereunder, that: (a) the principal
      of and interest on the Notes will be promptly paid in full when due, whether
      at
      maturity, by acceleration, redemption or otherwise, and interest on the overdue
      principal of and interest on the Notes, if any, if lawful, and all other
      obligations of the Issuer to the Holders or the Trustee hereunder or thereunder
      will be promptly paid in full or performed, all in accordance with the terms
      hereof and thereof; and (b) in case of any extension of time of payment or
      renewal of any Notes or any of such other obligations, that same will be
      promptly paid in full when due or performed in accordance with the terms of
      the
      extension or renewal, whether at stated maturity, by acceleration or otherwise.
      Failing payment when due of any amount so guaranteed or any performance so
      guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly
      and
      severally obligated to pay the same immediately. Each Subsidiary Guarantor
      agrees that this is a guarantee of payment and not a guarantee of
      collection.

     

    The
      Subsidiary Guarantors hereby agree that their obligations hereunder shall be
      unconditional, irrespective of the validity, regularity or enforceability of
      the
      Notes or this Indenture, the absence of any action to enforce the same, any
      waiver or consent by any Holder of the Notes with respect to any provisions
      hereof or thereof, the recovery of any judgment against the Issuer, any action
      to enforce the same or any other circumstance which might otherwise constitute
      a
      legal or equitable discharge or defense of a guarantor. Each Subsidiary
      Guarantor hereby waives, to the extent permitted by applicable law, diligence,
      presentment, demand of payment, filing of claims with a court in the event
      of
      insolvency or bankruptcy of the Issuer, any right to require a proceeding first
      against the Issuer, protest, notice and all demands whatsoever and covenant
      that
      this Note Guarantee shall not be discharged except by complete performance
      of
      the obligations contained in the Notes and this Indenture.

     

    If
      any
      Holder or the Trustee is required by any court or otherwise to return to the
      Issuer, the Subsidiary Guarantors or any custodian, trustee, liquidator or
      other
      similar official acting in relation to either the Issuer or the Subsidiary
      Guarantors, any amount paid by either to the Trustee or such Holder, this
      Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
      in full force and effect.

     

    Each
      Subsidiary Guarantor agrees that it shall not be entitled to any right of
      subrogation in relation to the Holders in respect of any obligations guaranteed
      hereby until payment in full of all obligations guaranteed hereby. Each
      Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors,
      on the one hand, and the Holders and the Trustee, on the other hand, (x) the
      maturity of the obligations guaranteed hereby may be accelerated as provided
      in
      Article Six hereof for the purposes of this Subsidiary Guarantee,
      notwithstanding any stay, injunction or other prohibition preventing such
      acceleration in respect of the obligations guaranteed hereby, and (y) in the
      event of any declaration of acceleration of such obligations as provided in
      Article Six hereof, such obligations (whether or not due and payable) shall
      forthwith become due and payable by the Subsidiary Guarantors for the purpose
      of
      this Subsidiary Guarantee. 

     

    
      	SECTION
              10.02.  	
              Limitation
                on Subsidiary Guarantor Liability.

            

    

     

    Each
      Subsidiary Guarantor, and by its acceptance of Notes, each Holder, hereby
      confirms that it is the intention of all such parties that the Subsidiary
      Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer
      or
      conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
      Act, the Uniform Fraudulent Transfer Act or any similar federal or state law
      to
      the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
      intention, the Trustee, the Holders and the Subsidiary Guarantors hereby
      irrevocably agree that the obligations of such Subsidiary Guarantor will, after
      giving effect to such maximum amount and all other contingent and fixed
      liabilities of such Subsidiary Guarantor that are relevant under such laws,
      and
      after giving effect to any collections from, rights to receive contribution
      from
      or payments made by or on behalf of any other Subsidiary Guarantor in respect
      of
      the obligations of such other Subsidiary Guarantor under this Article Ten,
      result in the obligations of such Subsidiary Guarantor under its Subsidiary
      Guarantee not constituting a fraudulent transfer or conveyance. Each Subsidiary
      Guarantor that makes a payment for distribution under its Subsidiary Guarantee
      is entitled to a contribution from each other Subsidiary Guarantor in a
pro
      rata
      amount
      based on the adjusted net assets of each Subsidiary Guarantor.

     

    
      	SECTION
              10.03.  	
              Execution
                and Delivery of Subsidiary Guarantee.

            

    

     

    To
      evidence its Subsidiary Guarantee set forth in Section 10.01, each
      Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guarantee
      substantially in the form included in Exhibit E
      shall be
      endorsed by an Officer of such Subsidiary Guarantor on each Note authenticated
      and delivered by the Trustee and that this Indenture shall be executed on behalf
      of such Subsidiary Guarantor by an Officer.

     

    Each
      Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth
      in
      Section 10.01 shall remain in full force and effect notwithstanding
      any
      failure to endorse on each Note a notation of such Subsidiary
      Guarantee.

     

    If
      an
      Officer whose signature is on this Indenture or on the Subsidiary Guarantee
      no
      longer holds that office at the time the Trustee authenticates the Note on
      which
      a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid
      nevertheless.

     

    The
      delivery of any Note by the Trustee, after the authentication thereof hereunder,
      shall constitute due delivery of the Subsidiary Guarantee set forth in this
      Indenture on behalf of the Subsidiary Guarantors.

     

    
      	SECTION
              10.04.  	
              Release
                of a Subsidiary Guarantor.

            

    

     

    A
      Subsidiary Guarantor shall be released from its obligations under its Note
      Guarantee and its obligations under this Indenture and the Registration Rights
      Agreement in the event of:

     

    (1)  any
      sale,
      exchange or transfer, to any Person not an Affiliate of the Issuer of all of
      Capital Stock held by the Issuer and its Restricted Subsidiaries in, or all
      or
      substantially all the assets of, such Subsidiary Guarantor (which sale, exchange
      or transfer is not prohibited by this Indenture); 

     

    (2)  the
      release or discharge of the Guarantee which resulted in the creation of such
      Subsidiary Guarantee, except a discharge or release by or as a result of payment
      under such Guarantee; or

     

    (3)  the
      designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in
      accordance with the provisions of this Indenture.

     

    The
      Trustee shall execute an appropriate instrument prepared by the Issuer
      evidencing the release of a Subsidiary Guarantor from its obligations under
      its
      Subsidiary Guarantee and this Indenture upon receipt of a request by the Issuer
      or such Subsidiary Guarantor accompanied by an Officers’ Certificate and an
      Opinion of Counsel certifying as to the compliance with this Section 10.04;
      provided,
      however,
      that the
      legal counsel delivering such Opinion of Counsel may rely as to matters of
      fact
      on one or more Officers’ Certificates of the Issuer.

     

    Nothing
      contained in this Indenture or in any of the Notes shall prevent any
      consolidation or merger of a Subsidiary Guarantor with or into the Issuer (in
      which case such Subsidiary Guarantor shall no longer be a Subsidiary Guarantor)
      or another Subsidiary Guarantor or shall prevent any sale or conveyance of
      the
      property of a Subsidiary Guarantor as an entirety or substantially as an
      entirety to the Issuer or another Subsidiary Guarantor.

     

    ARTICLE
      ELEVEN  

     

    

     

    MISCELLANEOUS

     

    
      	SECTION
              11.01.  	
              Trust
                Indenture Act Controls.

            

    

     

    If
      any
      provision of this Indenture limits, qualifies, or conflicts with another
      provision which is required or deemed to be included in this Indenture by the
      Trust Indenture Act, such required or deemed provision shall
      control.

     

    
      	SECTION
              11.02.  	
              Notices.

            

    

     

    Any
      notices or other communications required or permitted hereunder shall be in
      writing, and shall be sufficiently given if made by hand delivery, by telex,
      by
      nationally recognized overnight courier service, by telecopier or registered
      or
      certified mail, postage prepaid, return receipt requested, addressed as
      follows:

     

    if
      to the
      Issuer or a Subsidiary Guarantor:

     

    c/o
      Omega
      Healthcare Investors, Inc.

                9690
      Deereco Road,
      Suite 100

                Timonium,
      Maryland
      21093

                Attention:
      Robert O.
      Stephenson

                Telephone: (410)
      427-1700

                Facsimile: (410)
      427-8800

     

    with
      a
      copy to:

     

    Powell
      Goldstein LLP

    One
      Atlantic Center

    Fourteenth
      Floor 

    1201
      W.
      Peachtree Street, NW 

    Atlanta,
      Georgia  30309-3488

    Attention:  Richard
      H. Miller 

    Telephone: (404)
      572-6600

              Facsimile: (404)
      572-6999

     

    if
      to the
      Trustee:

     

    1360
      Peachtree Street, N.E.

    Suite
      1105, EX-GA-ATPT

    Atlanta,
      Georgia 30309

    Attention:
      Corporate Trust Department

             
       Telephone: (404)
      965-7222

               
      Facsimile: (404)
      365-7946

     

    Each
      of
      the Issuer and the Trustee by written notice to each other such Person may
      designate additional or different addresses for notices to such Person. Any
      notice or communication to the Issuer and the Trustee, shall be deemed to have
      been given or made as of the date so delivered if personally delivered; when
      replied to; when receipt is acknowledged, if telecopied; five (5) calendar
      days
      after mailing if sent by registered or certified mail, postage prepaid (except
      that a notice of change of address shall not be deemed to have been given until
      actually received by the addressee); and next Business Day if by nationally
      recognized overnight courier service.

     

    Any
      notice or communication mailed to a Holder shall be mailed to him by first
      class
      mail or other equivalent means at his address as it appears on the registration
      books of the Registrar and shall be sufficiently given to him if so mailed
      within the time prescribed.

     

    Failure
      to mail a notice or communication to a Holder or any defect in it shall not
      affect its sufficiency with respect to other Holders. If a notice or
      communication is mailed in the manner provided above, it is duly given, whether
      or not the addressee receives it.

     

    
      	SECTION
              11.03.  	
              Communications
                by Holders with Other Holders.

            

    

     

    Holders
      may communicate pursuant to Trust Indenture Act § 312(b) with other Holders
      with respect to their rights under this Indenture, the Notes or the Subsidiary
      Guarantees. The Issuer, the Trustee, the Registrar and any other Person shall
      have the protection of Trust Indenture Act § 312(c).

     

    
      	SECTION
              11.04.  	
              Certificate
                and Opinion as to Conditions Precedent.

            

    

     

    Upon
      any
      request or application by the Issuer to the Trustee to take any action under
      this Indenture, the Issuer shall furnish to the Trustee at the request of the
      Trustee:

     

    (1)  an
      Officers’ Certificate, in form and substance satisfactory to the Trustee,
      stating that, in the opinion of the signers, all conditions precedent to be
      performed or effected by the Issuer, if any, provided for in this Indenture
      relating to the proposed action have been complied with; and

     

    (2)  an
      Opinion of Counsel stating that, in the opinion of such counsel, all such
      conditions precedent have been complied with.

     

    
      	SECTION
              11.05.  	
              Statements
                Required in Certificate or Opinion.

            

    

     

    Each
      certificate or opinion with respect to compliance with a condition or covenant
      provided for in this Indenture, other than the Officers’ Certificate required by
      Section 4.06, shall include:

     

    (1)  a
      statement that the Person making such certificate or opinion has read such
      covenant or condition;

     

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

     

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

     

    (4)  a
      statement as to whether or not, in the opinion of each such Person, such
      condition or covenant has been complied with; provided,
      however,
      that
      with respect to matters of fact, an Opinion of Counsel may rely on an Officers’
      Certificate or certificates of public officials.

     

    
      	SECTION
              11.06.  	
              Rules
                by Paying Agent or Registrar.

            

    

     

    The
      Paying Agent or Registrar may make reasonable rules and set reasonable
      requirements for their functions.

     

    
      	SECTION
              11.07.  	
              Legal
                Holidays.

            

    

     

    If
      a
      payment date is not a Business Day, payment may be made on the next succeeding
      day that is a Business Day.

     

    
      	SECTION
              11.08.  	
              Governing
                Law.

            

    

     

    This
      Indenture, the Notes and the Subsidiary Guarantees will be governed by and
      construed in accordance with the laws of the State of New
      York.

     

    
      	SECTION
              11.09.  	
              No
                Adverse Interpretation of Other Agreements.

            

    

     

    This
      Indenture may not be used to interpret another indenture, loan or debt agreement
      of any of the Issuer or any of its Subsidiaries. Any such indenture, loan or
      debt agreement may not be used to interpret this Indenture.

     

    
      	SECTION
              11.10.  	
              No
                Recourse Against Others.

            

    

     

    No
      director, officer, employee, incorporator, stockholder, member or manager of
      the
      Issuer or any Subsidiary Guarantor shall have any liability for any obligations
      of the Issuer under the Notes or this Indenture or of any Subsidiary Guarantor
      under its Subsidiary Guarantee or the Indenture or for any claim based on,
      in
      respect of, or by reason of, such obligations or their creation. Each Holder
      of
      Notes by accepting a Note waives and releases all such liability. Such waiver
      and release are part of the consideration for issuance of the
      Notes.

     

    
      	SECTION
              11.11.  	
              Successors.

            

    

     

    All
      agreements of the Issuer and the Subsidiary Guarantors in this Indenture, the
      Notes and the Note Guarantees shall bind their respective successors. All
      agreements of the Trustee in this Indenture shall bind its
      successor.

     

    
      	SECTION
              11.12.  	
              Duplicate
                Originals.

            

    

     

    All
      parties may sign any number of copies of this Indenture. Each signed copy or
      counterpart shall be an original, but all of them together shall represent
      the
      same agreement.

     

    
      	SECTION
              11.13.  	
              Severability.

            

    

     

    To
      the
      extent permitted by applicable law, in case any one or more of the provisions
      in
      this Indenture, in the Notes or in the Subsidiary Guarantees shall be held
      invalid, illegal or unenforceable, in any respect for any reason, the validity,
      legality and enforceability of any such provision in every other respect and
      of
      the remaining provisions shall not in any way be affected or impaired thereby,
      it being intended that all of the provisions hereof shall be enforceable to
      the
      full extent permitted by law.

     

    

    
      
        
          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    SIGNATURES

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
      executed all as of the date first written above.

     

    OMEGA
      HEALTHCARE INVESTORS, INC.,

    as
      Issuer

     

    By:/s/
      Robert O. Stephenson

    Name: Robert
      O.
      Stephenson

                                    Title: Chief
      Financial Officer 

     

    BAYSIDE
      ALABAMA HEALTHCARE SECOND, INC.

    BAYSIDE
      ARIZONA HEALTHCARE ASSOCIATES, INC.

    BAYSIDE
      ARIZONA HEALTHCARE SECOND, INC.

    BAYSIDE
      COLORADO HEALTHCARE ASSOCIATES, INC.

    BAYSIDE
      COLORADO HEALTHCARE SECOND, INC.

    OHI
      (CONNECTICUT), INC.

    BAYSIDE
      STREET II, INC.

    OHI
      ASSET
      (CA), LLC

    OHI
      ASSET
      (FL), LLC

    OHI
      ASSET
      (ID), LLC

    OHI
      ASSET
      (IN), LLC

    OHI
      ASSET
      (LA), LLC

    as
      Subsidiary Guarantors

     

    By:/s/
      Robert O. Stephenson

    Name: Robert
      O.
      Stephenson

                                    Title: Chief
      Financial Officer and 

                                       Treasurer

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OHI
      ASSET
      (MI/NC), LLC

    OHI
      ASSET
      (MO), LLC

    OHI
      ASSET
      (OH), LLC

    OHI
      ASSET
      (PA), LLC

    OHI
      ASSET
      (TX), LLC

    OHI
      ASSET
      II (CA), LLC

    OHI
      ASSET, LLC

    OMEGA
      ACQUISITION FACILITY I, LLC

    OHI
      (FLORIDA), INC.

    OHI
      SUNSHINE, INC.

    LONG
      TERM
      CARE ASSOCIATES - ILLINOIS, INC.

    OHI
      (ILLINOIS), INC.

    SKILLED
      NURSING - HERRIN, INC.

    SKILLED
      NURSING - PARIS, INC.

    BAYSIDE
      INDIANA HEALTHCARE ASSOCIATES, INC.

    LONG
      TERM
      CARE ASSOCIATES - INDIANA, INC.

    OHI
      (INDIANA), INC.

    SKILLED
      NURSING - GASTON, INC.

    OHI
      (IOWA), INC.

    OHI
      (KANSAS), INC.

    OMEGA
      (KANSAS), INC.

    NRS
      VENTURES, LLC

    OS
      LEASING COMPANY

    STERLING
      ACQUISITION CORP.

    STERLING
      ACQUISITION CORP. II

    ARIZONA
      LESSOR - INFINIA, INC.

    BAYSIDE
      STREET, INC.

    COLORADO
      LESSOR - CONIFER, INC.

    DELTA
      INVESTORS I, LLC

    DELTA
      INVESTORS II, LLC

    FLORIDA
      LESSOR - CRYSTAL SPRINGS, INC. 

    as
      Subsidiary Guarantors

     

    By:/s/
      Robert O. Stephenson

    Name: Robert
      O.
      Stephenson

                                    Title: Chief
      Financial Officer and 

                                        Treasurer

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FLORIDA
      LESSOR - EMERALD, INC.

    FLORIDA
      LESSOR - LAKELAND, INC.

    FLORIDA
      LESSOR - MEADOWVIEW, INC.

    FLORIDA
      LESSOR - WEST PALM BEACH AND SOUTHPOINT, INC.

    GEORGIA
      LESSOR - BONTERRA/PARKVIEW, INC.

    INDIANA
      LESSOR - JEFFERSONVILLE, INC.

    INDIANA
      LESSOR - WELLINGTON MANOR, INC.

    JEFFERSON
      CLARK, INC.

    OHI
      OF
      KENTUCKY, INC.

    OHI
      OF
      TEXAS, INC.

    OMEGA
      TRS
      I, INC.

    TEXAS
      LESSOR - STONEGATE GP, INC.

    TEXAS
      LESSOR - STONEGATE LIMITED, INC.

    TEXAS
      LESSOR - STONEGATE, L.P.

    TEXAS
      LESSOR - TREEMONT, INC.

    WASHINGTON
      LESSOR - SILVERDALE, INC.

    OHIMA,
      INC.

    LONG
      TERM
      CARE - MICHIGAN, INC.

    LONG
      TERM
      CARE - NORTH CAROLINA, INC.

    SKILLED
      NURSING - HICKSVILLE, INC.

    CENTER
      HEALTHCARE ASSOCIATES, INC.

    CHERRY
      STREET - SKILLED NURSING, INC. 

    as
      Subsidiary Guarantors

     

    By:/s/
      Robert O. Stephenson

    Name: Robert
      O.
      Stephenson

                                    Title: Chief
      Financial Officer and 

                                        Treasurer

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    DALLAS
      SKILLED NURSING, INC.

    HERITAGE
      TEXARKANA HEALTHCARE ASSOCIATES, INC.

    LAKE
      PARK
      SKILLED NURSING, INC.

    LONG
      TERM
      CARE ASSOCIATES - TEXAS, INC.

    PARKVIEW
      - SKILLED NURSING, INC.

    PINE
      TEXARKANA HEALTHCARE ASSOCIATES, INC.

    REUNION
      TEXARKANA HEALTHCARE ASSOCIATES, INC.

    SAN
      AUGUSTINE HEALTHCARE ASSOCIATES, INC.

    SOUTH
      ATHENS HEALTHCARE ASSOCIATES, INC.

    WAXAHACHIE
      HEALTHCARE ASSOCIATES, INC.

    WEST
      ATHENS HEALTHCARE ASSOCIATES, INC. 

    OHI
      ASSET
      II (TX), LLC

    OHI
      ASSET
      (OH) LENDER, LLC

    OHI
      ASSET
      (OH) NEW PHILADELPHIA, LLC

    OHI
      ASSET
      (PA) TRUST

    BALDWIN
      HEALTH CENTER, INC.

    CANTON
      HEALTH CARE LAND, INC.

    DICON
      HEALTH CARE CENTER, INC.

    HANOVER
      HOUSE, INC.

    HOUSE
      OF
      HANOVER, LTD.

    HUTTON
      I
      LAND, INC.

    HUTTON
      II
      LAND, INC.

    HUTTON
      III LAND, INC.

    as
      Subsidiary Guarantors

     

    By:/s/
      Robert O. Stephenson

    Name: Robert
      O.
      Stephenson

                                    Title: Chief
      Financial Officer and 

                                        Treasurer

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    LEATHERMAN
      90-1, INC.

    LEATHERMAN
      PARTNERSHIP 89-1, IN.C

    LEATHERMAN
      PARTNERSHIP 89-2, INC.

    MERIDIAN
      ARMS LAND, INC.

    OHI
      ASSET
      II (PA) TRUST

    OHI
      ASSET
      III (PA) TRUST

    ORANGE
      VILLAGE CARE CENTER, INC.

    PAVILLION
      NORTH, LLP

    PAVILLION
      NORTH PARTNES, INC.

    PAVILLION
      NURSING CENTER NORTH, INC.

    ST.
      MARY’S PROPERTIES, INC.

    WILCARE,
      LLC

    as
      Subsidiary Guarantors

     

    By:/s/
      Robert O. Stephenson

    Name: Robert
      O.
      Stephenson

                                    Title: Chief
      Financial Officer and 

                                        Treasurer

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OHI
      ASSET
      (CT) LENDER, LLC

    OHI
      ASSET
      II (OH), LLC 

    COLONIAL
      GARDENS, LLC

    COPLEY
      HEALTH CENTER, INC.

    THE
      SUBURBAN PAVILION, INC.

    

    

    as
      Subsidiary Guarantors

     

    By:/s/
      Robert O. Stephenson

    Name: Robert
      O.
      Stephenson

                                    Title: Chief
      Financial Officer and 

                                        Treasurer

     

     

    

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    U.S.
      BANK
      NATIONAL ASSOCIATION,

    as
      Trustee

     

    By:/s/
      Teresa L. Davis

     

    Name:
      Teresa L. Davis

                                    Title:

     

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT A

     

    [Insert
      the Global Note Legend, if applicable pursuant to the provisions of the
      Indenture]

     

    [Insert
      the Private Placement Legend, if applicable pursuant to the provisions of the
      Indenture]

     

    OMEGA
      HEALTHCARE INVESTORS, INC.

    7%
      Senior
      Notes due 2016

     

    CUSIP
      No.

    No.
      [        ]$[      
            ]

     

    OMEGA
      HEALTHCARE INVESTORS, INC., a Maryland corporation (the “Issuer”),
      for
      value received promise to pay to Cede & Co., or its registered assigns, the
      principal sum of
      [                         ]
      DOLLARS [or such other amount as is provided in a schedule attached
      hereto]1  This
      language should be included only if the Note is issued in global
      form.
      on
      January 15, 2016.

     

    Interest
      Payment Dates: January 15 and July 15, commencing [ ].

     

    Record
      Dates: January 1 and July 1.

     

    Reference
      is made to the further provisions of this Note contained herein, which will
      for
      all purposes have the same effect as if set forth at this place.

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by
      facsimile by its duly authorized officer.

     

    Dated:
      

     

    OMEGA
      HEALTHCARE INVESTORS, INC., as Issuer

     

    By:   

     

     

    Name: 

     

     

    Title: 

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    [FORM
      OF]
      TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

     

    This
      is
      one of the 7% Senior Notes due 2016 described in the within-mentioned
      Indenture.

     

    Dated:
      

    U.S.
      Bank
      National Association,

    as
      Trustee

     

    By:   

     

     

    Authorized
      Signatory

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (Reverse
      of Note)

     

    

     

    7%
      Senior
      Notes due 2016

     

    Capitalized
      terms used herein shall have the meanings assigned to them in the Indenture
      referred to below unless otherwise indicated.

     

    SECTION 1.
      Interest.
      Omega
      Healthcare Investors, Inc., a Maryland corporation (the “Issuer”)
      promises to pay interest on the principal amount of this Note at 7% per annum
      from [ ], [ ] until maturity. The Issuer will pay interest semi-annually on
      January 15 and July 15 of each year, or if any such day is not a Business Day,
      on the next succeeding Business Day (each an “Interest
      Payment Date”),
      commencing July 15, 2006. Interest on the Notes will accrue from the most recent
      date to which interest has been paid or, if no interest has been paid, from
      [ ],
      2005. The Issuer shall pay interest (including post-petition interest in any
      proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
      from time to time on demand to the extent lawful at the interest rate applicable
      to the Notes; it shall pay interest (including post-petition interest in any
      proceeding under any Bankruptcy Law) on overdue installments of interest
      (without regard to any applicable grace periods) from time to time on demand
      at
      the same rate to the extent lawful. Interest will be computed on the basis
      of a
      360-day year of twelve 30-day months.

     

    SECTION 2.
      Method
      of Payment.
      The
      Issuer will pay interest on the Notes to the Persons who are registered Holders
      of Notes at the close of business on the January 1 or July 1 next preceding
      the
      Interest Payment Date, even if such Notes are canceled after such record date
      and on or before such Interest Payment Date, except as provided in
      Section 2.12 of the Indenture with respect to defaulted interest. The
      Notes
      will be issued in denominations of $1,000 and integral multiples thereof. The
      Issuer shall pay principal, premium, if any, and interest on the Notes in such
      coin or currency of the United States of America as at the time of payment
      is
      legal tender for payment of public and private debts (“U.S.
      Legal Tender”).
      Principal, premium, if any, and interest on the Notes will be payable at the
      office or agency of the Issuer maintained for such purpose except that, at
      the
      option of the Issuer, the payment of interest may be made by check mailed to
      the
      Holders of the Notes at their respective addresses set forth in the register
      of
      Holders of Notes. Until otherwise designated by the Issuer, the Issuer’s office
      or agency in New York will be the office of the Trustee maintained for such
      purpose. 

     

    SECTION 3.
      Paying
      Agent and Registrar.
      Initially, U.S. Bank National Association, the Trustee under the Indenture,
      will
      act as Paying Agent and Registrar. The Issuer may change any Paying Agent or
      Registrar without notice to any Holder. Except as provided in the Indenture,
      the
      Issuer or any of their Subsidiaries may act in any such capacity.

     

    SECTION 4.
      Indenture.
      The
      Issuer issued the Notes under an Indenture dated as of December 30, 2005
      (“Indenture”)
      by and
      among the Issuer, the Subsidiary Guarantors and the Trustee. The terms of the
      Notes include those stated in the Indenture and those made part of the Indenture
      by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
      Code §§ 77aaa-77bbbb) (the “Trust
      Indenture Act”).
      The
      Notes are subject to all such terms, and Holders are referred to the Indenture
      and the Trust Indenture Act for a statement of such terms.

     

    SECTION 5.
      Optional
      Redemption.
      Except
      as
      set forth in Section 6 hereof, the Notes will not be redeemable at the
      Issuer’s option prior to January 15, 2011. The Notes will be redeemable at the
      option of the Issuer, in whole or in part, at any time, and from time to time,
      on and after January 15, 2011, upon not less than 30 days’ nor more than
      60 days’ notice, at the following redemption prices (expressed as
      percentages of the principal amount thereof) if redeemed during the 12-month
      period commencing January 15 of the years indicated below, in each case together
      with accrued and unpaid interest thereon to the redemption date:

     

    
      	
              Year

               

            	
              Percentage 

               

            
	
              2011

            	
              103.500%

            
	
              2012

            	
              102.333%

            
	
              2013

            	
              101.167%

            
	
              2014
                and thereafter

            	
              100.000%

            

    

    

    SECTION 6.
      Optional
      Redemption With Proceeds From Equity Offerings.
      At any
      time, or from time to time, on or prior to January 15, 2009, the Issuer may,
      at
      its option, use the Net Cash Proceeds of one or more Equity Offerings to redeem
      up to 35% of the principal amount of the Notes issued under the Indenture at
      a
      redemption price of 107% of the principal amount thereof plus accrued and unpaid
      interest thereon, if any, to the date of redemption; provided,
      however,
      that:

     

    (1) at
      least
      65% of the principal amount of Notes issued under the Indenture remains
      outstanding immediately after such redemption; and

     

    (2) the
      Issuer makes such redemption not more than 90 days after the consummation
      of any such Equity Offering.

     

    SECTION 7.
      Notice
      of Redemption.
      Notice
      of redemption will be mailed by first class mail at least 30 days but not more
      than 60 days before the redemption date to each Holder of Notes to be redeemed
      at its registered address. Notes in denominations larger than $1,000 may be
      redeemed in part. If any Note is to be redeemed in part only, the notice of
      redemption that relates to such Note shall state the portion of the principal
      amount thereof to be redeemed. A new Note in principal amount equal to the
      unredeemed portion thereof will be issued in the name of the Holder thereof
      upon
      cancellation of the original Note. On and after the redemption date interest
      ceases to accrue on Notes or portions thereof called for
      redemption.

     

    SECTION 8.
      Mandatory
      Redemption.
      For
      the
      avoidance of doubt, an offer to purchase pursuant to Section 9 hereof
      shall
      not be deemed a redemption. The Issuer shall not be required to make mandatory
      redemption payments with respect to the Notes.

     

    SECTION 9.
      Repurchase
      at Option of Holder.
      Upon
      the
      occurrence of a Change of Control, and subject to certain conditions set forth
      in the Indenture, the Issuer will be required to offer to purchase all of the
      outstanding Notes at a purchase price equal to 101% of the principal amount
      thereof, plus accrued and unpaid interest, if any, thereon to the date of
      repurchase.

     

    The
      Issuer is, subject to certain conditions and exceptions, obligated to make
      an
      offer to purchase Notes at 100% of their principal amount, plus accrued and
      unpaid interest, if any, thereon to the date of repurchase, with certain net
      cash proceeds of certain sales or other dispositions of assets in accordance
      with the Indenture.

     

    SECTION 10.
      Denominations,
      Transfer, Exchange.
      The
      Notes are in registered form without coupons in denominations of $1,000 and
      integral multiples of $1,000. The transfer of Notes may be registered and Notes
      may be exchanged as provided in the Indenture. The Registrar and the Trustee
      may
      require a Holder, among other things, to furnish appropriate endorsements and
      transfer documents and the Issuer may require a Holder to pay any taxes and
      fees
      required by law or permitted by the Indenture. The Issuer and the Registrar
      are
      not required to transfer or exchange any Note selected for redemption. Also,
      the
      Issuer and the Registrar are not required to transfer or exchange any Notes
      for
      a period of 15 days before a selection of Notes to be redeemed.

     

    SECTION 11.
      Persons
      Deemed Owners.
      The
      registered Holder of a Note may be treated as its owner for all
      purposes.

     

    SECTION 12.
      Amendment,
      Supplement and Waiver.
      Subject
      to certain exceptions, the Indenture and the Notes may be amended or
      supplemented with the written consent of the Holders of at least a majority
      in
      aggregate principal amount of the Notes then outstanding, and any existing
      Default or compliance with any provision may be waived with the consent of
      the
      Holders of a majority in aggregate principal amount of the Notes then
      outstanding. Without notice to or consent of any Holder, the parties thereto
      may
      amend or supplement the Indenture and the Notes to, among other things, cure
      any
      ambiguity, defect or inconsistency in the Indenture, provide for uncertificated
      Notes in addition to certificated Notes, comply with any requirements of the
      SEC
      in connection with the qualification of the Indenture under the Trust Indenture
      Act, or make any change that does not materially adversely affect the rights
      of
      any Holder of a Note.

     

    SECTION 13.
      Defaults
      and Remedies.
      If a
      Default occurs and is continuing, the Trustee or the Holders of at least 25%
      in
      principal amount of the then outstanding Notes generally may declare all the
      Notes to be due and payable immediately. Notwithstanding the foregoing, in
      the
      case of a Default arising from certain events of bankruptcy or insolvency as
      set
      forth in the Indenture, with respect to the Issuer, all outstanding Notes will
      become due and payable without further action or notice. Holders of the Notes
      may not enforce the Indenture or the Notes except as provided in the Indenture.
      Subject to certain limitations, Holders of a majority in principal amount of
      the
      then outstanding Notes may direct the Trustee in its exercise of any trust
      or
      power. The Trustee may withhold from Holders of the Notes notice of any
      continuing Default if it determines that withholding notice is in their
      interest. The Holders of a majority in aggregate principal amount of the Notes
      then outstanding by notice to the Trustee may on behalf of the Holders of all
      of
      the Notes waive any existing Default and its consequences under the Indenture
      except a continuing Default in the payment of interest on, or the principal
      of,
      or the premium on, the Notes.

     

    SECTION 14.
      Restrictive
      Covenants.
      The
      Indenture contains certain covenants that, among other things, limit the ability
      of the Issuer and its Restricted Subsidiaries to make restricted payments,
      to
      incur indebtedness, to create liens, to sell assets, to permit restrictions
      on
      dividends and other payments by Restricted Subsidiaries of the Issuer, to
      consolidate, merge or sell all or substantially all of its assets or to engage
      in transactions with affiliates. The limitations are subject to a number of
      important qualifications and exceptions. The Issuer must annually report to
      the
      Trustee on compliance with such limitations and other provisions in the
      Indenture.

     

    SECTION 15.
      No
      Recourse Against Others.
      No
      director, officer, employee, incorporator, stockholder, member or manager of
      the
      Issuer or any Subsidiary Guarantor shall have any liability for any obligations
      of the Issuer under the Notes or the Indenture, or of any Subsidiary Guarantor
      under its Subsidiary Guarantee or the Indenture or for any claim based on,
      in
      respect of, or by reason of, such obligations or their creation. Each Holder
      of
      Notes by accepting a Note waives and releases all such liability. The waiver
      and
      release are part of the consideration for issuance of the Notes.

     

    SECTION 16.
      Subsidiary
      Guarantees.
      This
      Note will be entitled to the benefits of certain Subsidiary Guarantees made
      for
      the benefit of the Holders. Reference is hereby made to the Indenture for a
      statement of the respective rights, limitations of rights, duties and
      obligations thereunder of the Subsidiary Guarantors, the Trustee and the
      Holders.

     

    SECTION 17.
      Trustee
      Dealings with the Issuer.
      Subject
      to certain terms, the Trustee under the Indenture, in its individual or any
      other capacity, may become the owner or pledgee of Notes and may otherwise
      deal
      with the Issuer, their Subsidiaries or their respective Affiliates as if it
      were
      not the Trustee.

     

    SECTION 18.
      Authentication.
      This
      Note shall not be valid until authenticated by the manual signature of the
      Trustee or an authenticating agent.

     

    SECTION 19.
      Abbreviations.
      Customary abbreviations may be used in the name of a Holder or an assignee,
      such
      as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT
      TEN
      (= joint tenants with right of survivorship and not as tenants in common),
      CUST
      (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

     

    SECTION 20.
      Additional
      Rights of Holders of Restricted Global Notes and Restricted Definitive
      Notes.
      Pursuant to, but subject to the exceptions in, the Registration Rights
      Agreement, the Issuer and the Subsidiary Guarantors will be obligated to
      consummate an exchange offer pursuant to which the Holder of this Note shall
      have the right to exchange this Note for a 7% Senior Note due 2016 of the Issuer
      which shall have been registered under the Securities Act, in like principal
      amount and having terms identical in all material respects to this Note (except
      that such Note shall not be entitled to Additional Interest and shall not
      contain terms with respect to transfer restrictions). The Holders shall be
      entitled to receive certain Additional Interest in the event such exchange
      offer
      is not consummated or the Notes are not offered for resale and upon certain
      other conditions, all pursuant to and in accordance with the terms of the
      Registration Rights Agreement.2  This
      Section not to appear on Exchange Notes or Private Exchange Notes or
      Additional Notes unless required by the terms of such Additional
      Notes.

     

    SECTION 21.
      CUSIP
      and ISIN Numbers.
      Pursuant to a recommendation promulgated by the Committee on Uniform Security
      Identification Procedures, the Issuer has caused CUSIP and ISIN numbers to
      be
      printed on the Notes and the Trustee may use CUSIP or ISIN numbers in notices
      of
      redemption as a convenience to Holders. No representation is made as to the
      accuracy of such numbers either as printed on the Notes or as contained in
      any
      notice of redemption and reliance may be placed only on the other identification
      numbers placed thereon.

     

    SECTION 22.
      Governing
      Law.
      This
      Note shall be governed by, and construed in accordance with, the laws of the
      State of New York.

     

    The
      Issuer will furnish to any Holder upon written request and without charge a
      copy
      of the Indenture.

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT
      FORM

     

    I
      or we
      assign and transfer this Note to

     

     

    (Print
      or
      type name, address and zip code of assignee or transferee)

     

    (Insert
      Social Security or other identifying number of assignee or
      transferee)

     

    and
      irrevocably appoint _______________________________________ agent to transfer
      this Note on the books of the Issuer. The agent may substitute another to act
      for him.

     

    
      	
              Dated:
                _________________

               

            	
              Signed:
                __________________________________

               

              (Sign
                exactly as name appears on

               

              the
                other side of this Note)

               

            

    

    

    
      	
              Signature
                Guarantee:

               

            	
              ___________________________________________

               

              Participant
                in a recognized Signature Guarantee Medallion Program (or other signature
                guarantor program reasonably acceptable to the Trustee)

               

            

    

    

    In
      connection with any transfer of this Note occurring prior to the date which
      is
      the date following the second anniversary of the original issuance of this
      Note,
      the undersigned confirms that it has not utilized any general solicitation
      or
      general advertising in connection with the transfer and is making the transfer
      pursuant to one of the following:

     

    [Check
      One]

     

    (1)
      ___ to
      the
      Issuer or a subsidiary thereof; or

     

    
      	
              (2)
                ___

            	
              to
                a person who the transferor reasonably believes is a “qualified
                institutional buyer” pursuant to and in compliance with Rule 144A
                under the Securities Act of 1933, as amended (the “Securities Act”);
                or

            

    

     

    
      	
              (3)
                ___

            	
              to
                an institutional “accredited investor” (as defined in Rule 501(a)(1),
                (2), (3) or (7) under the Securities Act) that has furnished to the
                Trustee a signed letter containing certain representations and agreements
                (the form of which letter can be obtained from the Trustee);
                or

            

    

     

    
      	
              (4)
                ___

            	
              outside
                the United States to a non-“U.S. person” as defined in Rule 902 of
                Regulation S under the Securities Act in compliance with
                Rule 904 of Regulation S under the Securities Act;
                or

            

    

     

    
      	
              (5)
                ___

            	
              pursuant
                to the exemption from registration provided by Rule 144 under
                the
                Securities Act; or

            

    

     

    
      	
              (6)
                ___

            	
              pursuant
                to an effective registration statement under the Securities
                Act.

            

    

     

    
      

and
      unless the box below is checked, the undersigned confirms that such Note is
      not
      being transferred to an “affiliate” of the Issuer as defined in Rule 144
      under the Securities Act (an “Affiliate”):

     

    The
      transferee is an Affiliate of the Issuer.

     

    Unless
      one of the foregoing items (1) through (6) is checked, the Trustee will refuse
      to register any of the Notes evidenced by this certificate in the name of any
      person other than the registered Holder thereof; provided,
      however,
      that if
      item (3), (4) or (5) is checked, the Issuer or the Trustee may require, prior
      to
      registering any such transfer of the Notes, in their sole discretion, such
      written legal opinions, certifications (including an investment letter in the
      case of box (3) or (4)) and other information as the Trustee or the Issuer
      has
      reasonably requested to confirm that such transfer is being made pursuant to
      an
      exemption from, or in a transaction not subject to, the registration
      requirements of the Securities Act.

     

    If
      none
      of the foregoing items (1) through (6) are checked, the Trustee or Registrar
      shall not be obligated to register this Note in the name of any person other
      than the Holder hereof unless and until the conditions to any such transfer
      of
      registration set forth herein and in Section 2.16 of the Indenture shall
      have been satisfied.

     

    Dated:
        Signed:  

     

    (Sign
      exactly as name appears on the other

     

    side
      of
      this Note)

     

    Signature
      Guarantee: 

     

    
      	 	
              Participant
                in a recognized Signature Guarantee Medallion Program (or other signature
                guarantor program reasonably acceptable to the Trustee)

               

            

    

    

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TO
      BE
      COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

     

    The
      undersigned represents and warrants that it is purchasing this Note for its
      own
      account or an account with respect to which it exercises sole investment
      discretion and that it and any such account is a “qualified institutional buyer”
      within the meaning of Rule 144A under the Securities Act and is aware
      that
      the sale to it is being made in reliance on Rule 144A and acknowledges
      that
      it has received such information regarding the Issuer as the undersigned has
      requested pursuant to Rule 144A or has determined not to request such
      information and that it is aware that the transferor is relying upon the
      undersigned’s foregoing representations in order to claim the exemption from
      registration provided by Rule 144A.

     

    Dated:
         

    NOTICE: To
      be
      executed by an executive

     

    officer

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OPTION
      OF
      HOLDER TO ELECT PURCHASE

     

    If
      you
      want to elect to have this Note purchased by the Issuer pursuant to
      Section 4.07 or Section 4.11 of the Indenture, check the appropriate
      box:

     

    Section 4.07
      [      ] Section 4.11
      [       ]

     

    If
      you
      want to elect to have only part of this Note purchased by the Issuer pursuant
      to
      Section 4.07 or Section 4.11 of the Indenture, state the amount
      (in
      denominations of $1,000 and integral multiples thereof):
      $___________

     

    
      	
              Dated:
                _________________Signed:

               

            	
              (Sign
                exactly as name appears on the other side of this Note)

               

            

    

    

    
      	
              Signature
                Guarantee:

               

            	
               

              Participant
                in a recognized Signature Guarantee Medallion Program (or other signature
                guarantor program reasonably acceptable to the Trustee)

               

            

    

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE3  This
      schedule should be included only if the Note is issued in global
      form.

     

    The
      following exchanges of a part of this Global Note for an interest in another
      Global Note or for a Physical Note, or exchanges of a part of another Global
      Note or Physical Note for an interest in this Global Note, have been
      made:

     

    
      	
               

               

               

              Date
                of Exchange

            	
               

              Amount
                of decrease in

              Principal
                Amount of

              this
                Global Note

            	
               

              Amount
                of increase in

              Principal
                Amount of

              this
                Global Note

            	
              Principal
                Amount of

              this
                Global Note

              following
                such decrease

              (or
                increase)

            	
              Signature
                of

              authorized
                officer of

              Trustee
                or Note

              Custodian

            
	 	 	 	 	 
	 	 	 	 	 

    

    

    

    

      

      
        1

         

      

      
        2

         

      

      
        3

         

      

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT B

     

    FORM
      OF
      LEGENDS

     

    Each
      Global Note and Physical Note that constitutes a Restricted Security shall
      bear
      the following legend (the “Private
      Placement Legend”)
      on the
      face thereof until after the second anniversary of the Closing Date, unless
      otherwise agreed by the Issuer and the Holder thereof or if such legend is
      no
      longer required by Section 2.16(f) of the Indenture:

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
      EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER
      (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
      DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S.
      PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
      WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
      WITHIN
      TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
      TRANSFER THIS SECURITY EXCEPT (A) TO OMEGA HEALTHCARE INVESTORS, INC.
      OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
      INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
      (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS DEFINED IN
      RULE
      501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (AN “ACCREDITED
      INVESTOR”) THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
      BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
      CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
      OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE
      FOR
      THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
      IN
      COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE),
      (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
      UNDER
      THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION
      FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
      OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR (G) PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES
      THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
      SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
      OF
      THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY,
      IF
      THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
      SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS,
      LEGAL
      OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
      CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
      IN A
      TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
      ACT.
      AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,”“UNITED STATES” AND “U.S.
      PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
      ACT.

     

    Each
      Global Note authenticated and delivered hereunder shall also bear the following
      legend:

     

    THIS
      NOTE
      IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
      AND
      IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A
      SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN
      THE
      NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
      CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
      THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
      DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
      NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
      DESCRIBED IN THE INDENTURE.

     

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

     

    TRANSFERS
      OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
      TO
      NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
      AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
      MADE
      IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE
      INDENTURE.

     

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT C

     

    Form
      of
      Certificate To Be

                                                  Delivered
      in Connection
      with

     

    Transfers
      to Non-QIB Institutional Accredited Investors

     

    [                  ],
      [     ]

     

    U.S.
      Bank
      National Association

     

    1360
      Peachtree Street, N.E.

     

    Suite
      1105, EX-GA-ATPT

     

    Atlanta,
      Georgia 30309

     

    T:
      [                     ]

     

    F:
      [                     ]

     

    Attention:
      Corporate Trust Department

     

    Ladies
      and Gentlemen:

     

    In
      connection with our proposed purchase of 7% Senior Notes due 2016 (the
“Notes”)
      of
      OMEGA HEALTHCARE INVESTORS, INC., a Maryland corporation (the “Issuer”),
      we
      confirm that:

     

    1. We
      understand that any subsequent transfer of the Notes is subject to certain
      restrictions and conditions set forth in the Indenture relating to the Notes
      (the “Indenture”)
      and
      the undersigned agrees to be bound by, and not to resell, pledge or otherwise
      transfer the Notes except in compliance with, such restrictions and conditions
      and the Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      all applicable state securities laws.

     

    2. We
      understand that the offer and sale of the Notes have not been registered under
      the Securities Act, and that the Notes may not be offered, sold, pledged or
      otherwise transferred except as permitted in the following sentence. We agree,
      on our own behalf and on behalf of any accounts for which we are acting as
      hereinafter stated, that if we should sell, offer, pledge or otherwise transfer
      any Notes, we will do so only (A) to the Issuer or any of the Issuer’s
      Subsidiaries, (B) inside the United States to a “qualified institutional
      buyer” (as defined in Rule 144A under the Securities Act) in a transaction
      complying with Rule 144A under the Securities Act, (C) inside
      the
      United States to an institutional “accredited investor” (as defined in
      Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
      (an
“Accredited
      Investor”),
      that,
      prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
      broker-dealer) to the Trustee a signed letter containing certain representations
      and agreements relating to the restrictions on transfer of the Notes (the form
      of which letter can be obtained from such Trustee), (D) outside the
      United
      States in compliance with Rule 904 under the Securities Act,
      (E) pursuant to the exemption from registration provided by Rule 144
      under the Securities Act (if available), (F) in accordance with another
      exemption from the registration requirements of the Securities Act (and based
      upon an opinion of counsel if we so request) or (G) pursuant to an
      effective registration statement under the Securities Act, and we further agree
      to provide to any person purchasing any of the Notes from us a notice advising
      such purchaser that resales of the Notes are restricted as stated
      herein.

     

    3. We
      are
      not acquiring the Notes for or on behalf of, and will not transfer the Notes
      to,
      any employee benefit plan subject to Title I of the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”),
      any
      plan, individual retirement accounts or other arrangements subject to
      Section 4975 of the Internal Revenue Code of 1986, as amended (the
“Code”),
      or
      provisions under any federal, state, local, or non-U.S. or other laws or
      regulations that are similar to such provisions of ERISA of the Code or any
      entity whose underlying assets are considered to include “plan assets” of such
      plans, accounts or arrangements, except as permitted in the
      Sections entitled “Notice to investors” and “Certain ERISA considerations”
      of the Offering Memorandum of the Issuer relating to the Notes dated March
      15,
      2004.

     

    4. We
      understand that, on any proposed resale of any Notes, we will be required to
      furnish to the Trustee and the Issuer such certification, legal opinions and
      other information as the Trustee and the Issuer may reasonably require to
      confirm that the proposed sale complies with the foregoing restrictions. We
      further understand that the Notes purchased by us will bear a legend to the
      foregoing effect.

     

    5. We
      are an
      institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3)
      or (7) of Regulation D under the Securities Act) and have such knowledge and
      experience in financial and business matters as to be capable of evaluating
      the
      merits and risks of our investment in the Notes, and we and any accounts for
      which we are acting are each able to bear the economic risk of our or their
      investment, as the case may be.

     

    6. We
      are
      acquiring the Notes purchased by us for our account or for one or more accounts
      (each of which is an institutional “accredited
      investor”)
      as to
      each of which we exercise sole investment discretion.

     

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    You,
      as
      Trustee, the Issuer, counsel for the Issuer and others are entitled to rely
      upon
      this letter and are irrevocably authorized to produce this letter or a copy
      hereof to any interested party in any administrative or legal proceeding or
      official inquiry with respect to the matters covered hereby.

     

    Very
      truly yours,

    [Name
      of
      Transferee]

     

     

    By:   

     

     

    Name: 

     

     

    Title: 

     

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT D

     

    Form
      of
      Certificate To Be Delivered

    in
      Connection with Transfers

          Pursuant
      to Regulation S     

     

    [                ],
      [     ]

     

    U.S.
      Bank
      National Association

     

    1360
      Peachtree Street, N.E.

     

    Suite
      1105, EX-GA-ATPT

     

    Atlanta,
      Georgia 30309

     

    T:
      [                     ]

     

    F:
      [                     ]

     

    Attention:
      Corporate Trust Department

     

    Re: Omega
      Healthcare Investors, Inc. (the “Issuer”)

     

    7%
      Senior Notes due 2016 (the “Notes”)  

     

    Ladies
      and Gentlemen:

     

    In
      connection with our proposed sale of
      $[        ] aggregate
      principal amount
      of the Notes, we confirm that such sale has been effected pursuant to and in
      accordance with Regulation S under the U.S. Securities Act of 1933, as amended
      (the “Securities
      Act”),
      and,
      accordingly, we represent that:

     

    (1) the
      offer
      of the Notes was not made to a person in the United States;

     

    (2) either
      (a) at the time the buy offer was originated, the transferee was outside the
      United States or we and any person acting on our behalf reasonably believed
      that
      the transferee was outside the United States, or (b) the transaction was
      executed in, on or through the facilities of a designated offshore securities
      market and neither we nor any person acting on our behalf knows that the
      transaction has been prearranged with a buyer in the United States;

     

    (3) no
      directed selling efforts have been made in the United States in contravention
      of
      the requirements of Rule 903(b) or Rule 904(b) of Regulation
      S, as
      applicable;

     

    (4) the
      transaction is not part of a plan or scheme to evade the registration
      requirements of the Securities Act; and

     

    (5) we
      have
      advised the transferee of the transfer restrictions applicable to the
      Notes.

     

    You,
      as
      Trustee, the Issuer, counsel for the Issuer and others are entitled to rely
      upon
      this letter and are irrevocably authorized to produce this letter or a copy
      hereof to any interested party in any administrative or legal proceedings or
      official inquiry with respect to the matters covered hereby. Terms used in
      this
      certificate have the meanings set forth in Regulation S.

     

    Very
      truly yours,

     

    [Name
      of
      Transferor]

     

    By:   

     

     

    Authorized
      Signatory

     

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT E

     

    SUBSIDIARY
      GUARANTEE

     

    For
      value
      received, each of the undersigned (including any successor Person under the
      Indenture) hereby unconditionally guarantees, jointly and severally, to the
      extent set forth in the Indenture (as defined below) to the Holder of this
      Note
      the payment of principal, premium, if any, and interest on this Note in the
      amounts and at the times when due and interest on the overdue principal,
      premium, if any, and interest, if any, of this Note when due, if lawful, and,
      to
      the extent permitted by law, the payment or performance of all other obligations
      of the Issuer under the Indenture or the Notes, to the Holder of this Note
      and
      the Trustee, all in accordance with and subject to the terms and limitations
      of
      this Note, the Indenture, including Article Ten thereof, and this Subsidiary
      Guarantee. This Subsidiary Guarantee will become effective in accordance with
      Article Ten of the Indenture and its terms shall be evidenced therein. The
      validity and enforceability of any Subsidiary Guarantee shall not be affected
      by
      the fact that it is not affixed to any particular Note.

     

    Capitalized
      terms used but not defined herein shall have the meanings ascribed to them
      in
      the Indenture dated as of December 30, 2005, among
      Omega
      Healthcare Investors, Inc., a Maryland corporation (the “Issuer”),
      the
      Subsidiary Guarantors named therein and U.S. Bank National Association, as
      trustee (the “Trustee”),
      as
      amended or supplemented (the “Indenture”).

     

    The
      obligations of the undersigned to the Holders of Notes and to the Trustee
      pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth
      in Article Ten of the Indenture and reference is hereby made to the Indenture
      for the precise terms of the Subsidiary Guarantee and all of the other
      provisions of the Indenture to which this Subsidiary Guarantee
      relates.

     

    No
      director, officer, employee, incorporator, stockholder, member or manager of
      any
      Subsidiary Guarantor, as such, shall have any liability for any obligations
      of
      such Subsidiary Guarantors under such Subsidiary Guarantors’ Subsidiary
      Guarantee or the Indenture or for any claim based on, in respect of, or by
      reason of, such obligation or its creation.

     

    This
      Subsidiary Guarantee shall be governed by, and construed in accordance with,
      the
      laws of the State of New York.

     

    This
      Subsidiary Guarantee is subject to release upon the terms set forth in the
      Indenture.

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each Subsidiary Guarantor has caused its Subsidiary Guarantee
      to be duly executed.

     

    Date:
      

     

    [                                   ]

     

    By:   

     

     

    Name: 

     

     

    Title:

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