Document:

<PAGE>
                                                                   EXHIBIT 10.22

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                 FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT

                                     between

                             BANK OF AMERICA, N.A.,
                           as Seller and as Servicer,

                                       and

                      MORGAN STANLEY MORTGAGE CAPITAL INC.,
                                  as Purchaser

                                 October 1, 2003

                           Residential Mortgage Loans

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                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               Page
<S>         <C>                                                                                                <C>
SECTION 1.  Definitions...........................................................................................1
SECTION 2.  Purchase and Conveyance..............................................................................13
SECTION 3.  Mortgage Loan Schedule...............................................................................14
SECTION 4.  Purchase Price.......................................................................................14
SECTION 5.  Examination of Mortgage Files........................................................................14
SECTION 6.  Delivery of Mortgage Loan Documents..................................................................15
   Subsection 6.01  Possession of Mortgage Files.................................................................15
   Subsection 6.02  Books and Records............................................................................15
   Subsection 6.03  Delivery of Mortgage Loan Documents..........................................................16
SECTION 7.  Representations, Warranties and Covenants; Remedies for Breach.......................................18
   Subsection 7.01  Representations and Warranties Regarding Individual Mortgage Loans...........................18
   Subsection 7.02  Seller and Servicer Representations..........................................................31
   Subsection 7.03  Remedies for Breach of Representations and Warranties........................................33
SECTION 8.  Closing Conditions...................................................................................35
SECTION 9.  Closing Documents....................................................................................36
SECTION 10.  Costs...............................................................................................36
SECTION 11.  Administration and Servicing of Mortgage Loans......................................................36
   Subsection 11.01  Servicer to Act as Servicer; Subservicing...................................................36
   Subsection 11.02  Liquidation of Mortgage Loans...............................................................39
   Subsection 11.03  Collection of Mortgage Loan Payments........................................................39
   Subsection 11.04  Establishment of Custodial Account; Deposits in Custodial Account...........................39
   Subsection 11.05  Withdrawals From the Custodial Account......................................................41
   Subsection 11.06  Establishment of Escrow Account; Deposits in Escrow Account.................................42
   Subsection 11.07  Withdrawals From Escrow Account.............................................................43
   Subsection 11.08  Payment of Taxes, Insurance and Other Charges; Collections Thereunder.......................43
   Subsection 11.09  Transfer of Accounts........................................................................44
   Subsection 11.10  Maintenance of Hazard Insurance.............................................................44
   Subsection 11.11  Maintenance of Primary Mortgage Insurance Policy; Claims....................................45
   Subsection 11.12  Fidelity Bond; Errors and Omissions Insurance...............................................45
   Subsection 11.13  Title, Management and Disposition of REO Property...........................................46
   Subsection 11.14  Servicing Compensation......................................................................47
   Subsection 11.15  Distributions...............................................................................47
   Subsection 11.16  Statements to the Purchaser.................................................................47
   Subsection 11.17  Advances by the Servicer....................................................................48
   Subsection 11.18  Assumption Agreements.......................................................................49
   Subsection 11.19  Satisfaction of Mortgages and Release of Mortgage Files.....................................49
   Subsection 11.20  Annual Statement as to Compliance...........................................................50
   Subsection 11.21  Annual Independent Public Accountants' Servicing Report.....................................50
   Subsection 11.22  Servicer Shall Provide Access and Information as Reasonably Required........................50
   Subsection 11.23  Inspections.................................................................................50
   Subsection 11.24  Restoration of Mortgaged Property...........................................................51
SECTION 12.  The Servicer........................................................................................51
   Subsection 12.01  Indemnification; Third Party Claims.........................................................51
   Subsection 12.02  Merger or Consolidation of the Servicer.....................................................52
   Subsection 12.03  Limitation on Liability of the Servicer and Others..........................................52
   Subsection 12.04  Seller and Servicer Not to Resign...........................................................52
</Table>

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<Table>
<Caption>
                                                                                                               Page
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<S>         <C>                                                                                                <C>
SECTION 13.  Default.............................................................................................53
   Subsection 13.01  Events of Default...........................................................................53
   Subsection 13.02  Waiver of Default...........................................................................54
SECTION 14.  Termination.........................................................................................54
   Subsection 14.01  Termination.................................................................................54
   Subsection 14.02  Successors to the Servicer..................................................................55
SECTION 15.  Notices.............................................................................................56
SECTION 16.  Severability Clause.................................................................................56
SECTION 17.  No Partnership......................................................................................57
SECTION 18.  Counterparts........................................................................................57
SECTION 19.  Governing Law.......................................................................................57
SECTION 20.  Intention of the Parties............................................................................57
SECTION 21.  Waivers.............................................................................................58
SECTION 22.  Exhibits............................................................................................58
SECTION 23.  General Interpretive Principles.....................................................................58
SECTION 24.  Reproduction of Documents...........................................................................58
SECTION 25.  Amendment...........................................................................................59
SECTION 26.  Confidentiality.....................................................................................59
SECTION 27.  Entire Agreement....................................................................................59
SECTION 28.  Further Agreements; Securitization..................................................................59
SECTION 29.  Successors and Assigns..............................................................................61
SECTION 30.  Non-Solicitation....................................................................................62
SECTION 31.  Protection of Consumer Information..................................................................63
</Table>

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<PAGE>

                                    EXHIBITS

EXHIBIT 1         MORTGAGE LOAN DOCUMENTS
EXHIBIT 2         CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 3         [RESERVED]
EXHIBIT 4         FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 5         FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 6         SELLER'S UNDERWRITING GUIDELINES
EXHIBIT 7         FORM OF LOST NOTE AFFIDAVIT
EXHIBIT 8         FORM OF MONTHLY REMITTANCE REPORT
EXHIBIT 9         FORM OF TERM SHEET
EXHIBIT 10        FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 11        FORM OF OPINION OF COUNSEL TO SELLER
EXHIBIT 12        FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION
                  AGREEMENT
EXHIBIT 13        FORM OF ANNUAL CERTIFICATION

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<PAGE>

                 FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT

THIS FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT (the "Agreement"), dated
October 1, 2003, is hereby executed by and between MORGAN STANLEY MORTGAGE
CAPITAL INC., a New York corporation, as purchaser (the "Purchaser"), and Bank
of America, N.A., a national banking association, as seller (the "Seller") and
as servicer (the "Servicer").

                                   WITNESSETH:

         WHEREAS, the Seller has agreed to sell from time to time to the
Purchaser, and the Purchaser has agreed to purchase from time to time from the
Seller, certain fixed and adjustable rate, residential, first-lien mortgage
loans (the "Mortgage Loans") as described herein on a servicing-retained basis,
and which shall be delivered as whole loans as provided herein; and

         WHEREAS, the Mortgage Loans will be sold by the Seller and purchased by
the Purchaser as pools or groups of whole loans, servicing retained (each, a
"Mortgage Loan Package") on the various Closing Dates as provided herein; and

         WHEREAS, each of the Mortgage Loans will be secured by a mortgage, deed
of trust or other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the related Mortgage Loan
Schedule which will be annexed to a Term Sheet (as defined herein) on the
related Closing Date; and

         WHEREAS, the Purchaser, the Seller and the Servicer wish to prescribe
the manner of the conveyance, servicing and control of the Mortgage Loans; and

         WHEREAS, following its purchase of the Mortgage Loans from the Seller,
the Purchaser desires to sell some or all of the Mortgage Loans to one or more
purchasers as a whole loan transfer or a public or private, rated or unrated
mortgage pass-through transaction.

         NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser, the Seller and the
Servicer agree as follows:

         SECTION 1. Definitions.

         For purposes of this Agreement, the following capitalized terms shall
have the respective meanings set forth below.

         Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to
this Agreement, the Mortgage Interest Rate of which is adjusted from time to
time in accordance with the terms of the related Mortgage Note.

         Adjustment Date: As to each Adjustable Rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.

         Agency Transfer: A Fannie Mae Transfer or a Freddie Mac Transfer.

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         Agreement: This Flow Mortgage Loan Sale and Servicing Agreement
including all exhibits, schedules, amendments and supplements hereto.

         ALTA: The American Land Title Association or any successor thereto.

         Appraised Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by a Qualified
Appraiser, and (ii) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan; provided, however, that
in the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property
is based solely upon the value determined by an appraisal made for the
originator of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by a Qualified Appraiser.

         Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form, sufficient under
the laws of the jurisdiction in which the related Mortgaged Property is located
to give record notice of the sale of the Mortgage to the Purchaser.

         Business Day: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the States of New York,
California or Virginia are authorized or obligated by law or executive order to
be closed.

         Closing Date: The date or dates, set forth in the related Term Sheet,
on which the Purchaser from time to time shall purchase and the Seller from time
to time shall sell the Mortgage Loans identified on the related Mortgage Loan
Schedule therein.

         CLTA: The California Land Title Association or any other successor
thereto.

         Closing Documents: The documents required to be delivered on each
Closing Date pursuant to Section 9.

         Code: The Internal Revenue Code of 1986, as amended, or any successor
statute thereto.

         Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking (whether permanent or temporary) of all or part of a
Mortgaged Property by exercise of the power of condemnation or the right of
eminent domain, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.

         Consumer Information: Information including, but not limited to, all
personal information about the Mortgagors that is supplied to the Seller by or
on behalf of the Mortgagors.

         Conventional Mortgage Loan: Any Mortgage Loan that is not a FHA
Mortgage Loan or VA Mortgage Loan.

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         Convertible Mortgage Loan: An Adjustable Rate Mortgage Loan that by its
terms and subject to certain conditions allows the Mortgagor to convert the
adjustable Mortgage Interest Rate thereon to a fixed Mortgage Interest Rate.

         Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.

         Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.

         Cooperative Loan Documents: With respect to any Cooperative Loan, (i)
the Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon, which
has been filed in all places required to perfect the security interest in the
Cooperative Shares and the Proprietary Lease; and (vi) the Seller's executed
UCC-3 financing statements (or copies thereof) or other appropriate UCC
financing statements required by state law, evidencing a complete and unbroken
chain of title from the mortgagee to the Seller with evidence of recording
thereon (or in a form suitable for recordation).

         Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.

         Cooperative Shares: Shares issued by a Cooperative Corporation.

         Cooperative Unit: A single family dwelling located in a Cooperative
Property.

         Custodial Account: As defined in Subsection 11.04.

         Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."

         Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest, or any successor to the Custodian
under the Custodial Agreement as therein provided.

         Customary Servicing Procedures: Procedures (including collection
procedures) that the Servicer customarily employs and exercises in servicing and
administering mortgage loans for its own account and which are in accordance
with accepted mortgage servicing practices of prudent

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lending institutions, the Fannie Mae Guides and, with respect to the
Non-Conventional Mortgage Loans, FHA or VA regulations, as applicable.

         Cut-off Date: With respect to each Mortgage Loan, the first day of the
month of the related Closing Date as set forth in the related Term Sheet.

         Cut-off Date Principal Balance: The aggregate Stated Principal Balance
of the Mortgage Loans, set forth in the related Term Sheet, as of the related
Cut-off Date which is determined after the application, to the reduction of
principal, of payments of principal due on or before the related Cut-off Date,
whether or not collected, and of Principal Prepayments received before the
related Cut-off Date.

         Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with
a Substitute Mortgage Loan in accordance with this Agreement.

         Determination Date: With respect to each Remittance Date, the 15th day
(or, if such 15th day is not a Business Day, the following Business Day) of the
month in which such Remittance Date occurs.

         Due Date: With respect to each Remittance Date, the first day of the
calendar month in which such Remittance Date occurs, which is the day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.

         Due Period: With respect to each Remittance Date and any Mortgage Loan,
the period beginning on the second day of the month preceding such Remittance
Date, and ending on the first day of the month in which such Remittance Date
occurs.

         Eligible Investments: Any one or more of the following obligations or
securities:

(i) direct obligations of, and obligations fully guaranteed by the United States
of America or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America;

(ii) (a) demand or time deposits, federal funds or bankers' acceptances issued
by any depository institution or trust company 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 banking authorities, provided that the
commercial paper and/or the short-term deposit rating and/or the long-term
unsecured debt obligations or deposits of such depository institution or trust
company at the time of such investment or contractual commitment providing for
such investment are rated in one of the two highest rating categories by each
Rating Agency and (b) any other demand or time deposit or certificate of deposit
that is fully insured by the FDIC;

(iii) repurchase obligations with a term not to exceed thirty (30) days and with
respect to (a) any security described in clause (i) above and entered into with
a depository institution or trust company (acting as principal) described in
clause (ii)(a) above;

(iv) securities bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state thereof
that are rated in one of the two

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<PAGE>

highest rating categories by each Rating Agency at the time of such investment
or contractual commitment providing for such investment; provided, however, that
securities issued by any particular corporation will not be Eligible Investments
to the extent that investments therein will cause the then outstanding principal
amount of securities issued by such corporation and held as Eligible Investments
to exceed 10% of the aggregate outstanding principal balances of all of the
Mortgage Loans and Eligible Investments;

(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 one year after the date of issuance thereof) which are rated
in one of the two highest rating categories by each Rating Agency at the time of
such investment;

(vi) any other demand, money market or time deposit, obligation, security or
investment as may be acceptable to each Rating Agency as evidenced in writing by
each Rating Agency; and

(vii) any money market funds the collateral of which consists of obligations
fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (which may
include repurchase obligations secured by collateral described in clause (i))
and other securities and which money market funds are rated in one of the two
highest rating categories by each Rating Agency;

provided, however, that no instrument or security shall be an Eligible
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.

         Escrow Account: As defined in Subsection 11.06.

         Escrow Payments: The amounts constituting ground rents, taxes,
assessments, Primary Mortgage Insurance Policy premiums, fire and hazard
insurance premiums, flood insurance premiums, condominium charges and other
payments as may be required to be escrowed by the Mortgagor with the Mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.

         Event of Default: Any one of the conditions or circumstances enumerated
in Subsection 13.01.

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

         Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie Mae
Servicers' Guide and all amendments or additions thereto.

         Fannie Mae Transfer: As defined in Section 15.

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

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<PAGE>

         FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA regulations.

         FHA Mortgage Loan: A Mortgage Loan that has a MIC issued by HUD/FHA.

         Fidelity Bond: The fidelity bond required to be obtained by the
Servicer pursuant to Subsection 11.12.

         FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended and in effect from time to time.

         First Remittance Date: With respect to each Mortgage Loan Package, the
18th day (or if such 18th day is not a Business Day, the Business Day
immediately following such 18th day) of the month following the related Closing
Date.

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

         Freddie Mac Guide: The Freddie Mac Single Family Seller/Servicer Guide
and all amendments or additions thereto.

         Freddie Mac Transfer: As defined in Section 15.

         GAAP: Generally accepted accounting principles consistently applied.

         Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in each related Mortgage Note and Mortgage
which amount is added to the Index in order to determine on each Interest Rate
Adjustment Date the related Mortgage Interest Rate.

         HUD: The United States Department of Housing and Urban Development or
any federal agency or official thereof which may from time to time succeed to
the functions thereof with regard to FHA mortgage insurance. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.

         Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating interest thereon.

         Initial Rate Cap: As to each Adjustable Rate Mortgage Loan, the maximum
increase or decrease in the Mortgage Interest Rate on the first Adjustment Date
as provided in the related Mortgage Note.

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<PAGE>

         Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies (including, without limitation, FHA or VA mortgage insurance)
insuring the Mortgage Loan or the related Mortgaged Property.

         Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.

         LGC: A Loan Guaranty Certificate issued by the VA as a guarantee that
the federal government will repay to the lender a specified percentage of the
loan balance in the event of the borrower's default.

         Lifetime Rate Cap: As to each Adjustable Rate Mortgage Loan, the
maximum Mortgage Interest Rate which shall be as permitted in accordance with
the provisions of the related Mortgage Note. The Mortgage Interest Rate during
the term of each Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage Interest Rate at the time of origination of such Adjustable Rate
Mortgage Loan by more than the amount per annum set forth on the related
Mortgage Loan Schedule.

         Liquidation Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received following the acquisition of REO
Property, Insurance Proceeds and Condemnation Proceeds.

         Loan-to-Value Ratio: With respect to any Mortgage Loan as of any date
of determination, the ratio, expressed as a percentage, the numerator of which
is the outstanding principal balance of such Mortgage Loan and the denominator
of which is the Appraised Value of the related Mortgaged Property.

         LTV: Loan-to-Value Ratio.

         MIC: Mortgage Insurance Certificate issued by HUD/FHA as evidence that
a mortgage has been insured and that a contract of mortgage insurance exists
between HUD/FHA and the lender.

         Monthly Payment: With respect to any Mortgage Loan, the scheduled
payment of principal and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date, which such payment may change on any Adjustment
Date as provided in the related Mortgage Note and Mortgage for any Adjustable
Rate Mortgage Loan.

         Mortgage: With respect to any Mortgage Loan that is not a Cooperative
Loan, the mortgage, deed of trust or other instrument creating a first lien on
the Mortgaged Property securing the Mortgage Note and, with respect to a
Cooperative Loan, the related Security Agreement.

         Mortgage File: With respect to any Mortgage Loan, the items listed in
Exhibit 2 hereto and any additional documents required to be added to the
Mortgage File pursuant to this Agreement.

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<PAGE>

         Mortgage Interest 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, including, but not
limited to, the limitations on such interest rate imposed by the Initial Rate
Cap, the Periodic Rate Cap and the Lifetime Rate Cap, if any.

         Mortgage Loan: Each mortgage loan sold, assigned and transferred
pursuant to this Agreement and identified on the applicable Mortgage Loan
Schedule annexed to the related Term Sheet, including, without limitation, the
Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds,
and all other rights, benefits, proceeds and obligations arising from or in
connection with such mortgage loan.

         Mortgage Loan Documents: With respect to any Mortgage Loan, the
documents listed in Exhibit 1 hereto.

         Mortgage Loan Package: The pool or group of whole loans purchased on a
Closing Date, as described in the Mortgage Loan Schedule annexed to the related
Term Sheet.

         Mortgage Loan Remittance Rate: With respect to any Mortgage Loan, the
annual rate of interest payable to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the related Servicing Fee Rate.

         Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans annexed to the related Term Sheet (and delivered in
electronic format to the Purchaser), such schedule as setting forth the
following information with respect to each Mortgage Loan: (1) the Servicer's
Mortgage Loan identifying number; (2) a code indicating whether the Mortgaged
Property is owner-occupied, a second home or an investment property; (3) the
property type for each Mortgaged Property (e.g. single family residence, a two-
to four-family dwelling, condominium, planned unit development or cooperative)
(4) the original months to maturity and the remaining months to maturity from
the related Cut-off Date; (5) the Loan-to-Value Ratio at origination; (6) the
Mortgage Interest Rate as of the related Cut-off Date; (7) the date on which the
first Monthly Payment was due on the Mortgage Loan, and, if such date is not the
Due Date currently in effect, such Due Date; (8) the stated maturity date; (9)
the amount of the Monthly Payment as of the Cut-off Date; (10) the paid-through
date; (11) the original principal amount of the Mortgage Loan; (12) the Stated
Principal Balance of the Mortgage Loan as of the close of business on the
related Cut-off Date; (13) the Mortgage Loan Remittance Rate as of the Cut-off
Date; (14) a code indicating the purpose of the Mortgage Loan; (15) a code
indicating the documentation style; (16) the Appraised Value; (17) the identity
of the Seller; (18) the Mortgagor's name (19) the street address of the
Mortgaged Property, including the city, state and zip code; (20) the number of
times during the twelve (12) month period preceding the Closing Date that any
Monthly Payment has been received more than thirty (30) days after its Due Date;
(21) a code indicating whether or not the Mortgage Loan is subject to a Primary
Mortgage Insurance Policy; (22) the date on which the Mortgage Loan was
originated; (23) a code indicating whether the Mortgage contains a prepayment
penalty provision together with the type and term of such penalty; (24) a code
indicating the FICO score of the Mortgagor at the time of origination; (25) the
type of Mortgage Loan (i.e. fixed rate, adjustable rate); (26) with respect to
each Adjustable Rate Mortgage Loan, the Gross Margin; (27) with

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<PAGE>

respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap; (28) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Rate Cap; (29) with
respect to each Adjustable Rate Mortgage Loan, the Initial Rate Cap; (30) with
respect to each Adjustable Rate Mortgage Loan, the Adjustment Date; (31) with
respect to each Adjustable Rate Mortgage Loan, a code indicating the type of
Index; (32) in connection with a condominium unit, a code indicating whether the
condominium project where such unit is located is low-rise or high-rise; (33) a
code indicating whether such Mortgage is insured by the FHA or guaranteed by the
VA; and (34) with respect to any Non-Conventional Mortgage Loan, the related VA
entitlement percentage or FHA case number, as applicable. With respect to the
Mortgage Loans on the Mortgage Loan Schedule in the aggregate, the related
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (i) the number of Mortgage Loans; (ii) the Cut-off Date
Principal Balance; (iii) the weighted average Mortgage Interest Rate of the
Mortgage Loans; (iv) the weighted average months to maturity of the Mortgage
Loans; (v) with respect to each Adjustable Rate Mortgage Loan, the weighted
average Lifetime Rate Cap; and (vi) with respect to each Adjustable Rate
Mortgage Loan, the weighted average Gross Margin.

         Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor including any riders or addenda
thereto.

         Mortgaged Property: With respect to each Mortgage Loan that is not a
Cooperative Loan, the Mortgagor's real property securing repayment of a related
Mortgage Note, consisting of an unsubordinated estate in fee simple or, with
respect to real property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, a leasehold
estate, in a single parcel or multiple parcels of real property improved by a
Residential Dwelling. With respect to each Cooperative Loan, the Cooperative
Shares allocated to a Cooperative Unit in the related Cooperative Corporation
that were pledged to secure such Cooperative Loan and the related Proprietary
Lease.

         Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.

         Mortgagor: The obligor on a Mortgage Note, who is an owner of the
Mortgaged Property and the grantor or mortgagor named in the Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged Property.

         NAIC: The National Association of Insurance Commissioners or any
successor organization.

         Non-Conventional Mortgage Loans: The FHA Mortgage Loans and the VA
Mortgage Loans.

         OCC: The Office of the Comptroller of the Currency or any successor.

         Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, a President or a Vice President of the
Person on behalf of whom such certificate is being delivered.

                                       9
<PAGE>

         Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Seller or the Servicer, reasonably acceptable to the Purchaser.

         OTS: The Office of Thrift Supervision or any successor.

         P&I Advance: As defined in Subsection 11.17.

         Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate, on any Adjustment
Date as provided in the related Mortgage Note.

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

         Prepayment Penalty: With respect to each Mortgage Loan, the penalty if
the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.

         Primary Mortgage Insurance Policy: A policy of primary mortgage
guaranty insurance issued by an insurer acceptable to Fannie Mae or Freddie Mac
and qualified to do business in the jurisdiction where the Mortgaged Property is
located.

         Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date that is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.

         Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.

         Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to this Agreement in exchange for the Mortgage
Loans included in the related Mortgage Loan Package, as calculated pursuant to
Section 4 and the related Term Sheet.

         Purchase Price Percentage: For each Mortgage Loan included in a
Mortgage Loan Package, the percentage of par set forth in the related Term Sheet
that is used to calculate the Purchase Price of the Mortgage Loans included in
such Mortgage Loan Package.

         Purchaser: The Person listed as such in the initial paragraph of this
Agreement, together with its successors and assigns as permitted under the terms
of this Agreement.

         Qualification Defect: With respect to a Mortgage Loan, (a) a defective
document in the Mortgage File, (b) the absence of a document in the Mortgage
File, or (c) the breach of any representation, warranty or covenant with respect
to the Mortgage Loan made by the Seller or the Servicer, but, in each case, only
if the affected Mortgage Loan would cease to qualify as a "qualified mortgage"
for purposes of the REMIC Provisions.

                                       10
<PAGE>

         Qualified Appraiser: An appraiser of a Mortgaged Property duly
appointed by the originator of the related Mortgage Loan, who had no interest,
direct or indirect, in such Mortgaged Property or in any loan made on the
security thereof, whose compensation is not affected by the approval or
disapproval of the related Mortgage Loan and who met the qualifications of
Fannie Mae or Freddie Mac and satisfied the requirements of Title XI of FIRREA
and the regulations promulgated thereunder, all in effect on the date the
Mortgage Loan was originated.

         Rating Agency: Moody's Investors Service, Inc., Standard & Poor's
Ratings Service, a Division of The McGraw-Hill Companies, Inc., Fitch, Inc. or
any other nationally recognized statistical credit rating agency.

         Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.

         Reconstitution Agreement: As defined in Section 15.

         Record Date: The close of business of the last Business Day of the
month preceding the month of the related Remittance Date.

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

         REMIC Provisions: Provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

         Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately following such 18th day) of any month,
beginning with the First Remittance Date.

         REO Disposition: The final sale by the Servicer or the Purchaser of an
REO Property.

         REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Subsection 11.13.

         REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure, as described in Subsection 11.13.

         Repurchase Price: With respect to any Mortgage Loan, an amount equal to
(A) the Stated Principal Balance of such Mortgage Loan as of the date of
repurchase plus (B) accrued interest on such Stated Principal Balance at the
Mortgage Loan Remittance Rate from and including the last Due Date through which
interest has been paid on behalf of the Mortgagor or advanced by the Servicer to
the day prior to such date of repurchase, less amounts received in respect of
such repurchased Mortgage Loan for distribution in connection with such Mortgage
Loan; provided, however, that if at the time of repurchase the Servicer is not
the Seller or an affiliate of the

                                       11
<PAGE>

Seller, the amount described in clause (B) shall be computed at the sum of (i)
the Mortgage Loan Remittance Rate and (ii) the Servicing Fee Rate.

         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 condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a Cooperative Property (except
as set forth in the related Term Sheet), mobile home or manufactured home.

         Securities: The securities issued in connection with a Securitization
evidencing beneficial ownership interests in a trust the assets of which include
the Mortgage Loans.

         Securitization: The transfer of the Mortgage Loans to a trust formed as
part of a publicly issued and/or privately placed, rated securitization,
including the issuance of the related Securities.

         Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.

         Seller: Bank of America, N.A., a national banking association, or its
successor in interest or any successor to the Seller under this Agreement
appointed as herein provided.

         Servicer: Bank of America, N.A., a national banking association, or its
successor in interest or any successor to the Servicer under this Agreement
appointed as herein provided.

         Servicing Advances: All customary, reasonable and necessary
out-of-pocket costs and expenses incurred in the performance by the Servicer of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of the Mortgaged Property if the Mortgaged Property is acquired
in satisfaction of the Mortgage, and (d) payments made by the Servicer with
respect to a Mortgaged Property pursuant to Subsection 11.08.

         Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Servicer, which shall, for each month,
be equal to one-twelfth of the product of the applicable Servicing Fee Rate and
the Stated Principal Balance of such Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed,
and, solely in connection with any servicing transfer, shall be pro rated (based
upon the number of days of the related month the Servicer so acted as Servicer
relative to the number of days in that month) for each part thereof. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and payable
solely from, the interest portion (including recoveries with respect to interest
from Liquidation Proceeds and other proceeds, to the extent permitted by
Subsection 11.05) of related Monthly Payments collected by the Servicer, or as
otherwise provided under Subsection 11.05.

                                       12
<PAGE>

         Servicing Fee Rate: With respect to each Mortgage Loan, the per annum
rate set forth on the related Mortgage Loan Schedule or if not specified
thereon, in the related Term Sheet.

         Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished to the Purchaser by the
Servicer, as such list may be amended from time to time.

         Stated Principal Balance: As to each Mortgage Loan as to any date of
determination, (i) the principal balance of the Mortgage Loan at the related
Cut-off Date after giving effect to the principal portion of any Monthly
Payments due on or before such date, whether or not received, as well as any
Principal Prepayments received before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the Mortgage Loan
representing payments or recoveries of principal, or advances in lieu thereof.

         Substitute Mortgage Loan: A mortgage loan substituted by the Seller for
a Deleted Mortgage Loan which must, on the date of such substitution, be
approved by the Purchaser and (i) have an outstanding principal balance, after
deduction of the principal portion of the Monthly Payment due in the month of
substitution, not in excess of, and not materially greater or less than, the
outstanding principal balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Interest Rate equal to that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio not higher than that of the Deleted Mortgage Loan; (iv) have
a remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (v) comply with each representation and
warranty set forth in Subsection 7.01; (vi) be current in the payment of
principal and interest; (vii) be secured by a Mortgaged Property of the same
type and occupancy status as secured the Deleted Mortgage Loan; and (viii) have
payment terms that do not vary in any material respect from those of the Deleted
Mortgage Loan.

         Term Sheet: With respect to each Mortgage Loan and Mortgage Loan
Package, the Term Sheet, substantially in the form of Exhibit 9 attached hereto,
confirming the sale by Seller and the purchase by the Purchaser of the Mortgage
Loan Package on the related Closing Date.

         Underwriting Guidelines: The underwriting guidelines of the Seller
attached hereto as Exhibit 6, as may be updated and incorporated into Exhibit 6
from time to time by providing such updates to the Purchaser; provided, however,
any such updates shall apply only to the Mortgage Loans in the Mortgage Loan
Packages which are subject to purchases and sales occurring after such update.

         VA: The Department of Veterans Affairs, an agency of the United States
of America, or any successor thereto, including the Administrator of Veterans
Affairs.

         VA Mortgage Loan: A Mortgage Loan that has a LGC issued by the VA.

         SECTION 2. Purchase and Conveyance.

         The Seller, in exchange for the payment of the applicable Purchase
Price by the Purchaser on the related Closing Date, receipt of which is hereby
acknowledged, hereby sells, transfers, assigns, sets over and conveys to the
Purchaser, without recourse, but subject to the

                                       13
<PAGE>

terms of this Agreement, all of its rights, title and interest in and to the
Mortgage Loans in a Mortgage Loan Package having an aggregate principal balance
on the related Cut-off Date in an amount as set forth in the related Term Sheet,
or in such other amount as agreed by the Purchaser and the Seller as evidenced
by the actual aggregate principal balance of the Mortgage Loan Package accepted
by the Purchaser on the related Closing Date, together with the related Mortgage
Files and all rights and obligations arising under the documents contained
therein.

         With respect to each Mortgage Loan purchased, the Purchaser shall own
and be entitled to receive: (a) all scheduled principal due after the applicable
Cut-off Date, (b) all other payments and/or recoveries of principal collected on
or after the applicable Cut-off Date (provided, however, that all scheduled
payments of principal due on or before the applicable Cut-off Date and collected
by the Servicer after the applicable Cut-off Date shall belong to the Seller)
and (c) all payments of interest on the Mortgage Loans net of the Servicing Fee
(minus that portion of any such interest payment that is allocable to the period
prior to the applicable Cut-off Date).

         For the purposes of this Agreement, payments of scheduled principal and
interest prepaid for a Due Date beyond the related Cut-off Date shall not be
applied to reduce the Stated Principal Balance as of the related Cut-off Date.
Such prepaid amounts (minus the applicable Servicing Fee) shall be the property
of the Purchaser. The Seller shall remit to the Servicer for deposit any such
prepaid amounts into the Custodial Account, which account is established for the
benefit of the Purchaser, for remittance by the Servicer to the Purchaser on the
appropriate Remittance Date. All payments of principal and interest, less the
applicable Servicing Fee, due on a Due Date following the related Cut-off Date
shall belong to the Purchaser.

         SECTION 3. Mortgage Loan Schedule.

         The Seller shall deliver or cause to be delivered to the Purchaser at
least two (2) Business Days prior to the related Closing Date (a) the Mortgage
Loan Schedule (which will be annexed to the related Term Sheet) and (b) to the
extent necessary because of undelivered updates thereto, the Underwriting
Guidelines applicable with respect thereto.

         SECTION 4. Purchase Price.

         The Purchase Price for each Mortgage Loan Package shall be the Purchase
Price Percentage multiplied by an amount equal to the Cut-off Date Principal
Balance of the Mortgage Loans in such Mortgage Loan Package, or as otherwise
calculated pursuant to the related Term Sheet, plus accrued interest on the
Stated Principal Balance of each Mortgage Loan at the weighted average Mortgage
Loan Remittance Rate from the related Cut-off Date through the day immediately
prior to the related Closing Date, inclusive. Such payment shall be made to the
account designated by the Seller by wire transfer of immediately available funds
by 4:00 p.m. Eastern Standard Time on the related Closing Date.

         SECTION 5. Examination of Mortgage Files.

         At least ten (10) Business Days prior to the related Closing Date, the
Seller shall either (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each

                                       14
<PAGE>

Mortgage Loan to be purchased, the related Mortgage File, including a copy of
the Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
related Mortgage File available to the Purchaser for examination at such other
location as shall otherwise be acceptable to the Purchaser. Such examination may
be made by the Purchaser or its designee, at its expense, at any reasonable time
before the related Closing Date. Such underwriting by the Purchaser or its
designee shall not impair or diminish the rights of the Purchaser or any of its
successors under this Agreement with respect to a breach of the representations
and warranties contained in this Agreement. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans do not conform to any of the requirements
set forth in this Agreement or the applicable Term Sheet, or as an Exhibit
annexed thereto, the Purchaser may delete such Mortgage Loans from the related
Mortgage Loan Schedule, and such Deleted Mortgage Loan (or Deleted Mortgage
Loans) may be replaced by a Substitute Mortgage Loan (or Substitute Mortgage
Loans) acceptable to the Purchaser. The Purchaser may, at its option and without
notice to the Seller, purchase some or all of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
its designee has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the Purchaser's or any of its
successors' rights to demand repurchase or other relief or remedy provided for
in this Agreement.

         SECTION 6. Delivery of Mortgage Loan Documents.

         Subsection 6.01 Possession of Mortgage Files.

         The contents of each Mortgage File required to be retained by the
Servicer to service the Mortgage Loans pursuant to this Agreement and thus not
delivered to the Purchaser or its designee are and shall be held in trust by the
Servicer for the benefit of the Purchaser as the owner thereof. The Servicer's
possession of any portion of each such Mortgage File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the Mortgage Loans
pursuant to this Agreement, and such retention and possession by the Servicer
shall be in a custodial capacity only. The ownership of each Mortgage Note,
Mortgage and the contents of each Mortgage File is vested in the Purchaser and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Servicer at the will of the Purchaser in such custodial capacity
only. The Mortgage File retained by the Servicer with respect to each Mortgage
Loan pursuant to this Agreement shall be appropriately identified in the
Servicer's computer system to reflect clearly the ownership of such related
Mortgage Loan by the Purchaser. The Servicer shall release from its custody the
contents of any Mortgage File retained by it only in accordance with this
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 7.03 of this Agreement or if
required under applicable law or court order. The Servicer shall deliver to the
Purchaser copies of any documents in a Mortgage File reasonably requested by the
Purchaser within thirty (30) days after the date of such request, at the expense
of the Purchaser.

         Subsection 6.02 Books and Records.

         All rights arising out of the Mortgage Loans including, but not limited
to, all funds received by the Servicer after the related Cut-off Date on or in
connection with a Mortgage Loan

                                       15
<PAGE>

as provided in Section 2 shall be vested in the Purchaser; provided, however,
that all such funds received on or in connection with a Mortgage Loan as
provided in Section 2 shall be received and held by the Servicer in trust for
the benefit of the Purchaser as the owner of the Mortgage Loans pursuant to the
terms of this Agreement.

         As more fully set forth in Section 20, it is the express intention of
the parties that the transactions contemplated by this Agreement be, and be
construed as, a sale of the related Mortgage Loans by the Seller and not a
pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or
other obligation of the Seller. Consequently, the sale of each Mortgage Loan
shall be reflected as a purchase on the Purchaser's business records, tax
returns and financial statements, and as a sale of assets on the Seller's
business records, tax returns and financial statements.

         Subsection 6.03 Delivery of Mortgage Loan Documents.

         With respect to each Mortgage Loan, the Seller shall deliver and
release to the Purchaser, or its designee, under a bailee letter, (a) at least
two (2) Business Days prior to the related Closing Date (or such later date as
the Purchaser may reasonably request), the original Mortgage Note endorsed in
blank and the original Assignment of Mortgage assigned in blank and (b) the
other Mortgage Loan Documents within a reasonable time following the related
Closing Date. To the extent that any such Mortgage Loan Documents have been
delivered for recording and have not yet been returned to the Seller by the
applicable recording office, the Seller shall, promptly following receipt by it
of such Mortgage Loan Documents from the applicable recording office, deliver
such documents to the Purchaser or its designee; provided, however, that the
original recorded document or a clerk-certified copy thereof shall be delivered
to the Purchaser no later than one year following the related Closing Date,
subject to the following paragraph.

         In the event that such original or copy of any document submitted for
recordation to the appropriate public recording office is not so delivered to
the Purchaser or its designee within one year following the related Closing
Date, and in the event that the Seller does not cure such failure within sixty
(60) days after receipt of written notification of such failure from the
Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser,
be repurchased by the Seller at a price and in the manner specified in
Subsection 7.03. The foregoing repurchase obligation shall not apply in the
event the Seller cannot cause the Servicer to deliver such original or
clerk-certified copy of any document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall cause the Servicer instead to deliver a recording receipt of such
recording office or, if such recording receipt is not available, an Officer's
Certificate of a servicing officer of the Servicer, confirming that such
document has been accepted for recording and that the Servicer shall immediately
deliver such document upon receipt; and, provided further, that if the Seller
cannot cause the Servicer to deliver such original or clerk-certified copy of
any document submitted for recordation to the appropriate public recording
office within the specified time for any reason within twelve (12) months after
receipt of written notification of such failure from the Purchaser, the Seller
shall repurchase the related Mortgage Loan at the price and in the manner
specified in Subsection 7.03.

                                       16
<PAGE>

         To the extent received by it, the Servicer shall promptly forward to
the Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement.

         Within ninety (90) days after the related Closing Date, the Seller
shall, or shall cause the Servicer to, with respect to the Non-Conventional
Mortgage Loans, deliver to the Purchaser or its designee the original MIC or
LGC, or an Officer's Certificate, which shall (i) state that the MIC or LGC has
not been delivered to the Purchaser or its designee due solely to a delay by the
insuring agency, (ii) state the amount of time generally required by the
insuring agency to process the MIC or LGC and (iii) specify the date the MIC or
LGC will be delivered to the Purchaser or its designee. The Seller shall be
required to deliver the MIC or LGC to the Purchaser or its designee by the date
specified in clause (iii) above.

         If the Seller, the Purchaser or the Custodian finds any document or
documents constituting a part of a Mortgage File pertaining to a Mortgage Loan
to be defective (or missing) in any material respect, and such defect or missing
document materially and adversely affects the value of the related Mortgage Loan
or the interests of the Purchaser therein, the party discovering such defect
shall promptly so notify the Seller. The Seller shall have a period of ninety
(90) days after receipt of such written notice within which to correct or cure
any such defect. The Seller hereby covenants and agrees that, if any material
defect cannot be corrected or cured and materially and adversely affects the
value of the related Mortgage Loan or the interests of the Purchaser, the Seller
will, upon the expiration of the applicable cure period described above,
repurchase the related Mortgage Loan in the manner set forth in Subsection 7.03;
provided, however, that with respect to any Mortgage Loan, if such defect
constitutes a Qualification Defect, any such repurchase must take place within
seventy-five (75) days of the date such defect is discovered; provided, further,
that the foregoing repurchase obligation shall not apply in the event the Seller
cannot deliver such items due to a delay caused by the recording office in the
applicable jurisdiction; and provided, further, that the Seller shall deliver
instead a recording receipt of such recording office or, if such recording
receipt is not available, an Officer's Certificate from the Seller confirming
that such documents have been accepted for recording. Any such document shall be
delivered to the Purchaser or its designee promptly upon receipt thereof from
the related recording office.

         Notwithstanding the foregoing, with respect to a Mortgage Loan, if, at
the end of such 90-day period, the Seller delivers an Officer's Certificate to
the Purchaser certifying that the Seller is using good faith efforts to correct
or cure such defect and identifying progress made, then the Purchaser shall
grant the Seller an extension to correct or cure such defect. The extension
shall not extend beyond (1) if the defect is a Qualification Defect, the date
that is seventy-five (75) days after the date the defect is discovered, or, (2)
if the defect is not a Qualification Defect, the date that is thirty (30) days
beyond the original 90-day cure period. If the defect is not a Qualification
Defect, additional 30-day extensions may be obtained pursuant to the same
procedure, as long as the Seller demonstrates continued progress toward a
correction or cure; provided that no extension shall be granted beyond one
hundred eighty (180) days from the date on which the Seller received the
original notice of the defect.

         Notwithstanding the foregoing, with respect to a Mortgage Loan, the
failure of the Purchaser to notify the Seller of any defective or missing
document in a Mortgage File within

                                       17
<PAGE>

such 90-day period, or the failure of the Purchaser to require the Seller to
cure or repurchase the related Mortgage Loan upon expiration of such 90-day
period, shall not constitute a waiver of its rights hereunder, including the
rights with respect to a Mortgage Loan, to require the Seller to repurchase the
affected Mortgage Loan and the right to indemnification pursuant to Subsection
7.03 hereof.

         Notwithstanding the foregoing, to the extent that the Custodian
certifies as to any document as being delivered to it pursuant to the Custodial
Agreement in a non-defective state and such document subsequently becomes
missing or defective, the Seller shall not be obligated to repurchase the
related Mortgage Loan by reason of such missing or defective document, to
redeliver such document to the Custodian or to correct any such defect.

         All initial recording fees, if any, for the Assignments of Mortgage and
any other fees or costs in transferring all original documents to the Custodian
or, upon written request of the Purchaser, to the Purchaser or the Purchaser's
designee shall be paid by the Purchaser in accordance with the provisions of
Section 10 hereof.

         SECTION 7. Representations, Warranties and Covenants; Remedies for
Breach.

         Subsection 7.01 Representations and Warranties Regarding Individual
         Mortgage Loans.

         The Seller and, solely if specified below, the Servicer, hereby
represent and warrant to the Purchaser that, except as otherwise set forth in
the PPTA (as defined below), if any, or any Exhibit or Schedule thereto, as to
each Mortgage Loan, as of the related Closing Date or such other date specified
herein:

                  (a) The information set forth in the Mortgage Loan Schedule
         annexed to the related Term Sheet and the information contained in the
         related electronic data file delivered by the Seller to the Purchaser
         is true, correct and complete in all material respects.

                  (b) There are no defaults by the Seller, the Servicer or any
         prior originator in complying with the terms of the Mortgage, and all
         taxes, ground rents, governmental assessments, insurance premiums,
         leasehold payments, water, sewer and municipal charges which previously
         became due and owing have been paid, or escrow funds have been
         established in an amount sufficient to pay for every such escrowed item
         which remains unpaid and which has been assessed but is not yet due and
         payable. The Seller has not advanced funds, or induced, solicited or
         knowingly received any advance of funds by a party other than the
         Mortgagor, directly or indirectly, for the payment of any amount
         required under the Mortgage Loan, except for interest accruing from the
         date of the Mortgage Note or date of disbursement of the Mortgage Loan
         proceeds, whichever is earlier, to the day which precedes by one month
         the related Due Date of the first installment of principal and
         interest.

                  (c) The terms of the Mortgage Note and the Mortgage have not
         been impaired, waived, altered or modified in any respect, except by
         written instruments which have been recorded in the applicable public
         recording office required by law or if necessary to maintain the lien
         priority of the Mortgage, and which have been delivered to

                                       18
<PAGE>

         the Purchaser or such other Person as the Purchaser has designated in
         writing; the substance of any such waiver, alteration or modification
         has been approved by the insurer under the Primary Mortgage Insurance
         Policy, if any, by the title insurer, to the extent required by the
         related policy, with respect to the Non-Conventional Mortgage Loans,
         FHA or VA, as applicable, and is reflected on the related Mortgage Loan
         Schedule. No other instrument of waiver, alteration or modification has
         been executed, and no Mortgagor has been released, in whole or in part,
         except in connection with an assumption agreement approved by the
         insurer under the Primary Mortgage Insurance Policy, if any, by the
         title insurer, to the extent required by the policy, with respect to
         the Non-Conventional Mortgage Loans, FHA or VA, as applicable, and
         which assumption agreement is a part of the Mortgage File and is
         reflected on the related Mortgage Loan Schedule.

                  (d) The Mortgage Note and the Mortgage are not subject to any
         right of rescission, set-off, counterclaim or defense, including,
         without limitation, the defense of usury, nor will the operation of any
         of the terms of the Mortgage Note and the Mortgage, or the exercise of
         any right thereunder, render either the Mortgage Note or the Mortgage
         unenforceable, in whole or in part, or subject to any right of
         rescission, set-off, counterclaim or defense, including, without
         limitation, the defense of usury, and no such right of rescission,
         set-off, counterclaim or defense has been asserted with respect
         thereto; and the Mortgagor was not a debtor in any state or federal
         bankruptcy or insolvency proceeding at the time the Mortgage Loan was
         originated.

                  (e) All buildings or other customarily insured improvements
         upon the Mortgaged Property are insured by an insurer generally
         acceptable to, with respect to the Conventional Mortgage Loans, Fannie
         Mae and to prudent mortgage lending institutions, and with respect to
         the Non-Conventional Mortgage Loans, FHA, VA, Fannie Mae or prudent
         mortgage lending institutions, as applicable, against loss by fire,
         hazards of extended coverage and such other hazards as are provided for
         in the Fannie Mae Guides as well as all additional requirements set
         forth herein, pursuant to an insurance policy conforming to the
         requirements of Customary Servicing Procedures and providing coverage
         in an amount equal to the lesser of (i) the full insurable value of the
         Mortgaged Property or (ii) the outstanding principal balance owing on
         the Mortgage Loan. All such insurance policies are in full force and
         effect and contain a standard mortgagee clause naming the originator of
         the Mortgage Loan, its successors and assigns as mortgagee and all
         premiums thereon have been paid. If the Mortgaged Property is in an
         area identified on a flood hazard map or flood insurance rate map
         issued by the Federal Emergency Management Agency as having special
         flood hazards (and such flood insurance has been made available), a
         flood insurance policy meeting the requirements of the current
         guidelines of the Federal Insurance Administration is in effect which
         policy conforms to the requirements of Fannie Mae or Freddie Mac. The
         Mortgage obligates the Mortgagor thereunder to maintain all such
         insurance at the Mortgagor's cost and expense, and on the Mortgagor's
         failure to do so, authorizes the holder of the Mortgage to maintain
         such insurance at the Mortgagor's cost and expense and to seek
         reimbursement therefor from the Mortgagor. Where required by state law
         or regulation, the Mortgagor has been given an opportunity to choose
         the carrier of the required hazard insurance, provided the policy is
         not a "master" or "blanket" hazard insurance policy covering a
         condominium, or any

                                       19
<PAGE>

         hazard insurance policy covering the common facilities of a planned
         unit development. The hazard insurance policy is the valid and binding
         obligation of the insurer, is in full force and effect, and will be in
         full force and effect and inure to the benefit of the Purchaser upon
         the consummation of the transactions contemplated by this Agreement.
         The Seller has not engaged in, and has no knowledge of the Mortgagor's
         having engaged in, any act or omission which would impair the coverage
         of any such policy, the benefits of the endorsement provided for
         herein, or the validity and binding effect of either including, without
         limitation, no unlawful fee, commission, kickback or other unlawful
         compensation or value of any kind has been or will be received,
         retained or realized by any attorney, firm or other person or entity,
         and no such unlawful items have been received, retained or realized by
         the Seller.

                  (f) Any and all requirements of any federal, state or local
         law including, without limitation, usury, truth in lending, real estate
         settlement procedures, consumer credit protection, predatory or abusive
         lending, equal credit opportunity, fair housing or disclosure laws
         applicable to the origination and servicing of the Mortgage Loans,
         including, without limitation, any provisions relating to Prepayment
         Penalties, have been complied with; the consummation of the
         transactions contemplated hereby will not involve the violation of any
         such laws or regulations; the Servicer maintains, and shall maintain,
         evidence of such compliance as required by applicable law or regulation
         and shall make such evidence available for inspection at the Servicer's
         office during normal business hours upon reasonable advance notice.

                  (g) The Mortgage has not been satisfied, canceled,
         subordinated or rescinded, in whole or in part (other than as to
         Principal Prepayments in full which may have been received on or after
         the related Cut-off Date and prior to the related Closing Date), and
         the Mortgaged Property has not been released from the lien of the
         Mortgage, in whole or in part, nor has any instrument been executed
         that would effect any such satisfaction, cancellation, subordination,
         rescission or release. Neither the Seller nor the Servicer has waived
         the performance by the Mortgagor of any action, if the Mortgagor's
         failure to perform such action would cause the Mortgage Loan to be in
         default, and neither the Seller nor the Servicer has waived any default
         of the Mortgagor.

                  (h) With respect to a Mortgage Loan that is not secured by an
         interest in a leasehold estate, the Mortgaged Property is a fee simple
         estate that consists of a single parcel of real property with a
         detached single family residence erected thereon, or a two- to
         four-family dwelling, or an individual residential condominium unit in
         a condominium project, or an individual unit in a planned unit
         development, or an individual unit in a residential cooperative housing
         corporation; provided, however, that any condominium unit, planned unit
         development or residential cooperative housing corporation shall
         conform with the Underwriting Guidelines. At the date of origination of
         the related Mortgage Loan, no portion of the related Mortgaged Property
         was used for commercial purposes, and, to the Seller's knowledge, since
         the date of origination of such Mortgage Loan, no portion of the
         related Mortgaged Property has been used for commercial purposes;
         provided, that Mortgaged Properties which contain a home office shall
         not be considered as being used for commercial purposes as long as the
         Mortgaged Property has not been altered for commercial purposes and is
         not storing any chemicals or raw

                                       20
<PAGE>

         materials other than those commonly used for homeowner repair,
         maintenance and/or household purposes. None of the Mortgaged Properties
         are manufactured homes, log homes, mobile homes, geodesic domes or
         other unique property types.

                  (i) The Mortgage is a valid, existing, perfected and
         enforceable first lien on the Mortgaged Property, including all
         improvements on the Mortgaged Property, free and clear of all adverse
         claims, liens and encumbrances having priority over the lien of the
         Mortgage, subject only to (i) the lien of current real property taxes
         and assessments not yet due and payable, (ii) covenants, conditions and
         restrictions, rights of way, easements and other matters of the public
         record as of the date of recording being acceptable to mortgage lending
         institutions generally and either (A) specifically referred to in the
         lender's title insurance policy delivered to the originator of the
         Mortgage Loan or (B) which do not adversely affect the Appraised Value
         of the Mortgaged Property and (iii) other matters to which like
         properties are commonly subject which do not individually or in the
         aggregate materially interfere with the benefits of the security
         intended to be provided by the Mortgage or the use, enjoyment, value or
         marketability of the related Mortgaged Property. Any security
         agreement, chattel mortgage or equivalent document related to and
         delivered in connection with the Mortgage Loan establishes and creates
         a valid, existing and enforceable first lien and first priority
         security interest on the property described therein and the Seller has
         the full right to sell and assign the same to the Purchaser. With
         respect to any Cooperative Loan, the Security Agreement is a valid,
         subsisting and enforceable first priority security interest on the
         related Cooperative Shares securing the Mortgage Note, subject only to
         (a) liens of the related residential Cooperative Corporation for unpaid
         assessments representing the Mortgagor's pro rata share of the related
         residential Cooperative Corporation's payments for its blanket
         mortgage, current and future real property taxes, insurance premiums,
         maintenance fees and other assessments to which like collateral is
         commonly subject and (b) other matters to which like collateral is
         commonly subject which do not materially interfere with the benefits of
         the security interest intended to be provided by such Security
         Agreement.

                  (j) The Mortgage Note, the related Mortgage and, in the case
         of a Cooperative Loan, the related Security Agreement, are original and
         genuine and each is the legal, valid and binding obligation of the
         maker thereof, enforceable in all respects in accordance with its terms
         except as enforceability may be limited by (i) bankruptcy, insolvency,
         liquidation, receivership, moratorium, reorganization or other similar
         laws affecting the enforcement of the rights of creditors and (ii)
         general principles of equity, whether enforcement is sought in a
         proceeding in equity or at law and the Seller has taken all action
         necessary to transfer such rights of enforceability to the Purchaser.

                  (k) All parties to the Mortgage Note, the Mortgage and, in the
         case of a Cooperative Loan, the related Security Agreement, had the
         legal capacity to enter into the Mortgage Loan and to execute and
         deliver the Mortgage Note and the Mortgage, and the Mortgage Note and
         the Mortgage have been duly and properly executed by such parties.
         Either the Mortgagor is a natural person or the related co-borrower or
         guarantor is a natural person.

                                       21
<PAGE>

                  (l) The proceeds of the Mortgage Loan have been fully
         disbursed to or for the account of the Mortgagor and there is no
         obligation for the Mortgagee to advance additional funds thereunder and
         any and all requirements as to completion of any on-site or off-site
         improvement and as to disbursements of any escrow funds therefor have
         been complied with. All costs, fees and expenses incurred in making or
         closing the Mortgage Loan and the recording of the Mortgage have been
         paid, and the Mortgagor is not entitled to any refund of any amounts
         paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage.

                  (m) The Seller and all other parties which have had any
         interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
         or otherwise, are (or, during the period in which they held and
         disposed of such interest, were) (1) in compliance with any and all
         applicable licensing requirements of the laws of the state wherein the
         Mortgaged Property is located and any qualification requirements of,
         with respect to the Non-Conventional Mortgage Loans, FHA or VA, as
         applicable, and (2) either (i) organized under the laws of such state,
         or (ii) qualified to do business in such state, or (iii) a federal
         savings and loan association, a savings bank or a national bank having
         a principal office in such state, or (3) not doing business in such
         state.

                  (n) The Mortgage Loan is covered by an ALTA or CLTA lender's
         title insurance policy, acceptable to, with respect to the Conventional
         Mortgage Loans, Fannie Mae or Freddie Mac, and with respect to the
         Non-Conventional Mortgage Loans, FHA or VA, as applicable, issued by a
         title insurer acceptable to, with respect to the Conventional Mortgage
         Loans, Fannie Mae or Freddie Mac, and with respect to the
         Non-Conventional Mortgage Loans, FHA or VA, as applicable, and
         qualified to do business in the jurisdiction where the Mortgaged
         Property is located, insuring (subject to the exceptions contained in
         (h)(i), (ii) and (iii) above) the Seller, its successors and assigns as
         to the first priority lien of the Mortgage in the original principal
         amount of the Mortgage Loan and, with respect to any Adjustable Rate
         Mortgage Loan, against any loss by reason of the invalidity or
         unenforceability of the lien resulting from the provisions of the
         Mortgage providing for adjustment in the Mortgage Interest Rate or
         Monthly Payment. Where required by state law or regulation, the
         Mortgagor has been given the opportunity to choose the carrier of the
         required mortgage title insurance. Additionally, such lender's title
         insurance policy affirmatively insures ingress and egress, and against
         encroachments by or upon the Mortgaged Property or any interest
         therein. The Seller and its successors and assigns are the sole
         insureds of such lender's title insurance policy, and such lender's
         title insurance policy is in full force and effect and will be in full
         force and effect upon the consummation of the transactions contemplated
         by this Agreement and will inure to the benefit of the Purchaser and
         its assigns without any further act. No claims have been made under
         such lender's title insurance policy, and the Seller has not done, by
         act or omission, anything which would impair the coverage of such
         lender's title insurance policy, including without limitation, no
         unlawful fee, commission, kickback or other unlawful compensation or
         value of any kind has been or will be received, retained or realized by
         any attorney, firm or other person or entity, and no such unlawful
         items have been received, retained or realized by the Seller.

                                       22
<PAGE>

                  (o) There is no default, breach, violation or event of
         acceleration existing under the Mortgage or the Mortgage Note and no
         event which, with the passage of time or with notice and the expiration
         of any grace or cure period, would constitute a default, breach,
         violation or event permitting acceleration, and neither the Seller nor
         the Servicer has waived any default, breach, violation or event
         permitting acceleration.

                  (p) There are no mechanics' or similar liens or claims filed
         for work, labor or material (and no rights are outstanding that under
         law could give rise to such lien) affecting the related Mortgaged
         Property which are or may be liens prior to, or equal or coordinate
         with, the lien of the related Mortgage.

                  (q) All improvements which were considered in determining the
         Appraised Value of the related Mortgaged Property lay wholly within the
         boundaries and building restriction lines of the Mortgaged Property,
         and no improvements on adjoining properties encroach upon the Mortgaged
         Property.

                  (r) The Mortgage Loan was originated by a mortgagee approved
         by the Secretary of Housing and Urban Development pursuant to Sections
         203 and 211 of the National Housing Act, a savings and loan
         association, a savings bank, a commercial bank, credit union, insurance
         company or other similar institution which is supervised and examined
         by a federal or state authority.

                  (s) Principal payments on the Mortgage Loan commenced no more
         than sixty (60) days after the proceeds of the Mortgage Loan were
         disbursed. The Mortgage Loans identified on the related Mortgage Loan
         Schedule have an original term to maturity of not more than thirty (30)
         years, with interest payable in arrears on the first day of the month.
         As to each Adjustable Rate Mortgage Loan, on each applicable Adjustment
         Date, the Mortgage Interest Rate will be adjusted to equal the sum of
         the Index plus the applicable Gross Margin, rounded up or down as
         provided in the Mortgage Note; provided, however, that the Mortgage
         Interest Rate will not increase or decrease by more than the Initial
         Rate Cap on the first Adjustment Date or the Periodic Rate Cap on any
         subsequent Adjustment Date, and will in no event exceed the Lifetime
         Rate Cap. Each Mortgage Note evidencing a Mortgage Loan other than an
         Adjustable Rate Mortgage Loan requires a Monthly Payment which is
         sufficient to amortize the original principal balance fully over the
         original term thereof and to pay interest at the related Mortgage
         Interest Rate. Each Mortgage Note evidencing an Adjustable Rate
         Mortgage Loan requires a monthly payment which is sufficient (i) during
         the period prior to the first adjustment to the Mortgage Interest Rate,
         to amortize the original principal balance fully over the original term
         thereof and to pay interest at the related Mortgage Interest Rate, and
         (ii) during the period following each Adjustment Date, to amortize the
         outstanding principal balance fully as of the first day of such period
         over the then remaining term of such Mortgage Note and to pay interest
         at the related Mortgage Interest Rate. No Mortgage Note evidencing an
         Adjustable Rate Mortgage Loan permits negative amortization. Interest
         on the Mortgage Note is calculated on the basis of a 360-day year
         consisting of twelve 30-day months. Unless otherwise indicated in the
         related Term Sheet, no Mortgage Loan is a Convertible Mortgage Loan.

                                       23
<PAGE>

                  (t) There is no proceeding pending or, to the Seller's
         knowledge, threatened for the total or partial condemnation of the
         Mortgaged Property and such property is in good repair and is undamaged
         by waste, fire, earthquake or earth movement, windstorm, flood, tornado
         or other casualty, so as to affect adversely the value of the Mortgaged
         Property as security for the Mortgage Loan or the use for which the
         premises were intended.

                  (u) The Mortgage and related Mortgage Note contain customary
         and enforceable provisions such as to render the rights and remedies of
         the holder thereof adequate for the realization against the Mortgaged
         Property of the benefits of the security provided thereby, including
         (i) in the case of a Mortgage designated as a deed of trust, by
         trustee's sale, and (ii) otherwise by judicial foreclosure. At the date
         of origination of the related Mortgage Loan, the related Mortgaged
         Property was, and as of the related Closing Date the related Mortgaged
         Property is, not subject to any bankruptcy proceeding or foreclosure
         proceeding and the Mortgagor, as of the date of origination of such
         Mortgage Loan had, and as of the related Closing Date has, not filed
         for protection under applicable bankruptcy laws. There is no homestead
         or other exemption or right available to the Mortgagor or any other
         person which would interfere with the right to sell the Mortgaged
         Property at a trustee's sale or the right to foreclose the Mortgage.

                  (v) The Mortgage Note and Mortgage are on forms acceptable to,
         with respect to the Conventional Mortgage Loans, Fannie Mae or Freddie
         Mac, and with respect to the Non-Conventional Mortgage Loans, FHA or
         VA, as applicable, at the time of origination and were underwritten in
         conformance with the Underwriting Guidelines in effect at the time of
         origination with exceptions thereto exercised in a reasonable manner as
         permitted under the Underwriting Guidelines.

                  (w) The Mortgage Note is not and has not been secured by any
         collateral except the lien of the corresponding Mortgage on the
         Mortgaged Property and the security interest of any applicable security
         agreement or chattel mortgage referred to in (h) above.

                  (x) The Mortgage File contains an appraisal of the related
         Mortgaged Property, in a form acceptable to, with respect to the
         Conventional Mortgage Loans, Fannie Mae or Freddie Mac, and with
         respect to the Non-Conventional Mortgage Loans, FHA or VA, as
         applicable, and such appraisal complies with the requirements of
         FIRREA, and was made and signed, prior to the approval of the Mortgage
         Loan application, by a Qualified Appraiser.

                  (y) In the event the Mortgage constitutes a deed of trust, a
         trustee, duly qualified under applicable law to serve as such, has been
         properly designated and currently so serves and is named in the
         Mortgage, and no fees or expenses are or will become payable by the
         Purchaser to the trustee under the deed of trust, except in connection
         with a trustee's sale after default by the Mortgagor.

                                       24
<PAGE>

                  (z) The Mortgage Loan is not a graduated payment mortgage loan
         and the Mortgage Loan does not have a shared appreciation, balloon
         payment or other contingent interest feature, nor does it contain any
         "buydown" provision which is currently in effect.

                  (aa) The Mortgage contains an enforceable provision for the
         acceleration of the payment of the unpaid principal balance of the
         Mortgage Loan in the event that the Mortgaged Property is sold or
         transferred without the prior written consent of the mortgagee
         thereunder.

                  (bb) The Mortgagor has received all disclosure materials
         required by applicable law with respect to the making of mortgage loans
         of the same type as the Mortgage Loan and rescission materials required
         by applicable law if the Mortgage Loan is a Refinanced Mortgage Loan
         and has acknowledged receipt of such materials to the extent required
         by applicable law and such documents will remain in the Mortgage File.

                  (cc) No Mortgage Loan has an LTV at origination in excess of
         95%. Each Conventional Mortgage Loan with an LTV at origination in
         excess of 80% will be subject to a Primary Mortgage Insurance Policy,
         issued by an insurer acceptable to Fannie Mae or Freddie Mac at the
         time of origination, which insures that portion of the Conventional
         Mortgage Loan in excess of the portion of the Appraised Value of the
         Mortgaged Property as required by Fannie Mae. Each Non-Conventional
         Mortgage Loan with an LTV at origination in excess of 80% will be
         subject to a Primary Mortgage Insurance Policy, issued by an insurer
         acceptable to FHA or VA, as applicable, at the time of origination,
         which insures that portion of the Non-Conventional Mortgage Loan in
         excess of the portion of the Appraised Value of the Mortgaged Property
         as required by FHA or VA, as applicable. All provisions of such Primary
         Mortgage Insurance Policy have been and are being complied with, such
         policy is in full force and effect, and all premiums due thereunder
         have been paid. Any Mortgage subject to any such Primary Mortgage
         Insurance Policy obligates the Mortgagor thereunder to maintain such
         insurance and to pay all premiums and charges in connection therewith
         at least until the LTV of such Mortgage Loan is reduced to less than
         80%. The Mortgage Interest Rate for the Mortgage Loan does not include
         any such insurance premium. No Mortgage Loan requires payment of such
         premiums, in whole or in part, by the Purchaser.

                  (dd) The Mortgaged Property is lawfully occupied under
         applicable law, all inspections, licenses and certificates required to
         be made or issued with respect to all occupied portions of the
         Mortgaged Property and, with respect to the use and occupancy of the
         same, including but not limited to certificates of occupancy, have been
         made or obtained from the appropriate authorities and no improvement
         located on or part of the Mortgaged Property is in violation of any
         zoning law or regulation.

                  (ee) The Assignment of Mortgage is in recordable form and is
         acceptable for recording under the laws of the jurisdiction in which
         the Mortgaged Property is located.

                  (ff) All payments required to be made prior to the related
         Cut-off Date for such Mortgage Loan under the terms of the Mortgage
         Note have been made, the Mortgage Loan has not been dishonored, there
         are no material defaults under the terms of

                                       25
<PAGE>

         the Mortgage Loan and no Mortgage Loan has been more than thirty (30)
         days delinquent more than once in the twelve month period immediately
         prior to the related Cut-off Date.

                  (gg) None of the Seller, the Servicer or any prior originator
         or servicer has advanced funds, or induced, solicited or knowingly
         received any advance from any party other than the Mortgagor, directly
         or indirectly, for the payment of any amount due under the Mortgage
         Loan.

                  (hh) With respect to each Mortgage Loan, the Seller is in
         possession of a complete Mortgage File except for the documents which
         have been delivered to the Purchaser or which have been submitted for
         recording and not yet returned.

                  (ii) Immediately prior to the payment of the related Purchase
         Price, the Seller was the sole owner and holder of the Mortgage Loans
         and the indebtedness evidenced by the Mortgage Note. The Mortgage
         Loans, including the Mortgage Note and the Mortgage, were not assigned
         or pledged by the Seller and the Seller had good and marketable title
         thereto, and the Seller had full right to transfer and sell the
         Mortgage Loans to the Purchaser free and clear of any encumbrance,
         participation interest, lien, equity, pledge, claim or security
         interest and had full right and authority subject to no interest or
         participation in, or agreement with any other party to sell or
         otherwise transfer the Mortgage Loans. Following the sale of the
         Mortgage Loans, the Purchaser will own such Mortgage Loan free and
         clear of any encumbrance, equity, participation interest, lien, pledge,
         charge, claim or security interest. The Seller intends to relinquish
         all rights to monitor, possess and control the Mortgage Loan except in
         connection with the servicing of the Mortgage Loan by the Servicer as
         set forth in this Agreement. After the related Closing Date, neither
         the Seller nor the Servicer will have any right to modify or alter the
         terms of the sale of the Mortgage Loans and neither the Seller nor the
         Servicer will have any obligation or right to repurchase the Mortgage
         Loans, except as provided in this Agreement or as otherwise agreed to
         by the Seller, the Servicer and the Purchaser.

                  (jj) Any future advances made prior to the related Cut-off
         Date have been consolidated with the outstanding principal amount
         secured by the Mortgage, and the secured principal amount, as
         consolidated, bears a single interest rate and single repayment term.
         The lien of the Mortgage securing the consolidated principal amount is
         expressly insured as having first lien priority by a title insurance
         policy, an endorsement to the policy insuring the mortgagee's
         consolidated interest or by other title evidence acceptable to, with
         respect to the Conventional Mortgage Loans, Fannie Mae and Freddie Mac,
         and with respect to the Non-Conventional Mortgage Loans, FHA or VA, as
         applicable. The consolidated principal amount does not exceed the
         original principal amount of the Mortgage Loan.

                  (kk) The Mortgage Loan was underwritten in accordance with the
         Underwriting Guidelines in effect at the time of origination with
         exceptions thereto exercised in a reasonable manner.

                  (ll) With respect to a Mortgage Loan that is not a Cooperative
         Loan, the Mortgaged Property is located in the state identified in the
         related Mortgage Loan

                                       26
<PAGE>

         Schedule and consists of a parcel of real property with a detached
         single family residence erected thereon, or a two- to four-family
         dwelling, or an individual condominium unit, or an individual unit in a
         planned unit development; provided, however, that any condominium
         project or planned unit development generally conforms with the
         Underwriting Guidelines regarding such dwellings (or underlying
         Cooperative Property, in the case of a Cooperative Loan), and with
         respect to the Non-Conventional Mortgage Loans, the applicable HUD or
         VA requirements regarding such dwellings (or underlying Cooperative
         Property, in the case of a Cooperative Loan), and no residence or
         dwelling is a mobile home or manufactured dwelling.

                  (mm) If the Mortgaged Property is a condominium unit or a
         planned unit development (other than a de minimis planned unit
         development) such condominium or planned unit development project meets
         Fannie Mae or Freddie Mac eligibility requirements for sale to Fannie
         Mae or Freddie Mac, as the case may be, or is located in a condominium
         or planned unit development project which has received Fannie Mae or
         Freddie Mac project approval or as to which Fannie Mae's and Freddie
         Mac's eligibility requirements have been waived. With respect to the
         Non-Conventional Mortgage Loans, if the Mortgaged Property is a
         condominium or planned unit development (other than a de minimis
         planned unit development) such condominium or planned unit development
         project meets HUD or VA eligibility requirements or is located in a
         condominium or planned unit development project which has received HUD
         or VA project approval and the representations and warranties required
         by HUD or VA with respect to such condominium or planned unit
         development have been made and remain true and correct in all material
         respects

                  (nn) The Seller used no adverse selection procedures in
         selecting the Mortgage Loan from among the outstanding first-lien,
         residential mortgage loans owned by it which were available for
         inclusion in the Mortgage Loans.

                  (oo) Each Mortgage Loan is a "qualified mortgage" within
         Section 860G(a)(3) of the Code.

                  (pp) With respect to each Mortgage where a lost note affidavit
         has been delivered in place of the related Mortgage Note, the related
         Mortgage Note is no longer in existence. Each such lost note affidavit
         is substantially in the form attached hereto as Exhibit 7.

                  (qq) No fraud, error, omission, misrepresentation, negligence
         or similar occurrence with respect to the Mortgage Loan has taken place
         on the part of the Seller, the Servicer or any originator or servicer
         or the Mortgagor or on the part of any other party involved in the
         origination of the Mortgage Loan.

                  (rr) The origination practices used by the Seller and the
         collection and servicing practices used by the Servicer with respect to
         each Mortgage Loan have been in all respects legal, proper, prudent and
         customary in the mortgage origination and servicing industry and the
         collection and servicing practices used by the Servicer have

                                       27
<PAGE>

         been acceptable to Fannie Mae and Freddie Mac and with respect to the
         Non-Conventional Mortgage Loans, FHA or VA, as applicable.

                  (ss) The Mortgagor is not in bankruptcy and is not insolvent
         and neither the Seller nor the Servicer have any knowledge of any
         circumstances or condition with respect to the Mortgage, the Mortgaged
         Property, the Mortgagor or the Mortgagor's credit standing that could
         reasonably be expected to cause investors to regard the Mortgage Loan
         as an unacceptable investment, cause the Mortgage Loan to become
         delinquent or materially adversely affect the value or the
         marketability of the Mortgage Loan.

                  (tt) The Mortgagor has not notified the Seller or the
         Servicer, and neither the Seller nor the Servicer has knowledge of any
         relief requested by the Mortgagor under the Soldiers' and Sailors'
         Civil Relief Act of 1940, as amended, or other similar state statute.

                  (uu) No Mortgage Loan was made in connection with (i) the
         construction or rehabilitation of a Mortgaged Property or (ii)
         facilitating the trade-in or exchange of a Mortgaged Property.

                  (vv) There is no pending action or proceeding directly
         involving any Mortgaged Property of which the Seller or the Servicer is
         aware in which compliance with any environmental law, rule or
         regulation is an issue and nothing further remains to be done to
         satisfy in full all requirements of each such law, rule or regulation
         constituting a prerequisite to use and enjoyment of said property.

                  (ww) No action, inaction, or event has occurred and no state
         of affairs exists or has existed that has resulted or will result in
         the exclusion from, denial of, or defense to coverage under any
         applicable special hazard insurance policy, Primary Mortgage Insurance
         Policy or bankruptcy bond, irrespective of the cause of such failure of
         coverage. In connection with the placement of any such insurance, no
         commission, fee, or other compensation has been or will be received by
         the Seller or the Servicer or any designee of the Seller or the
         Servicer or any corporation in which the Seller, the Servicer or any
         officer, director, or employee of the Seller or the Servicer had a
         financial interest at the time of placement of such insurance.

                  (xx) With respect to any ground lease to which a Mortgaged
         Property may be subject: (A) the Mortgagor is the owner of a valid and
         subsisting leasehold interest under such ground lease; (B) such ground
         lease is in full force and effect, unmodified and not supplemented by
         any writing or otherwise; (C) all rent, additional rent and other
         charges reserved therein have been fully paid to the extent payable as
         of the related Closing Date; (D) the Mortgagor enjoys the quiet and
         peaceful possession of the leasehold estate; (E) the Mortgagor is not
         in default under any of the terms of such ground lease, and there are
         no circumstances which, with the passage of time or the giving of
         notice, or both, would result in a default under such ground lease; (F)
         the lessor under such ground lease is not in default under any of the
         terms or provisions of such ground lease on the part of the lessor to
         be observed or performed; (G) the lessor under such ground lease has
         satisfied any repair or construction obligations due as of the related
         Closing Date

                                       28
<PAGE>

         pursuant to the terms of such ground lease; (H) the execution, delivery
         and performance of the Mortgage do not require the consent (other than
         those consents which have been obtained and are in full force and
         effect) under, and will not contravene any provision of or cause a
         default under, such ground lease; and (I) the term of such lease does
         not terminate earlier than the maturity date of the Mortgage Note.

                  (yy) With respect to escrow deposits and payments that the
         Servicer is entitled to collect, all such payments are in the
         possession of, or under the control of the Servicer, and there exist no
         deficiencies in connection therewith for which customary arrangements
         for repayment thereof have not been made. All escrow payments have been
         collected in full compliance with state and federal law and the
         provisions of the related Mortgage Note and Mortgage. As to any
         Mortgage Loan that is the subject of an escrow, escrow of funds is not
         prohibited by applicable law and has been established in an amount
         sufficient to pay for every escrowed item that remains unpaid and has
         been assessed but is not yet due and payable. No escrow deposits or
         other charges or payments due under the Mortgage Note have been
         capitalized under any Mortgage or the related Mortgage Note.

                  (zz) The Mortgage Note, the Mortgage, the Assignment of
         Mortgage and any other documents required to be delivered under the
         Custodial Agreement for each Mortgage Loan have been delivered to the
         Custodian. The Seller is in possession of a complete, true and accurate
         Mortgage File in compliance with Exhibit 2 attached hereto, except for
         such documents the originals of which have been delivered to the
         Custodian

                  (aaa) There is no Mortgage Loan that was originated on or
         after October 1, 2002 and on or prior to March 7, 2003, which is
         secured by property located in the State of Georgia. No Mortgage Loan
         that was originated on or after March 7, 2003, is a "high cost home
         loan" as defined under the Georgia Fair Lending Act, as amended.

                  (bbb) The Assignment of Mortgage with respect to each Mortgage
         Loan is in recordable form and is acceptable for recording under the
         laws of the jurisdiction in which the Mortgaged Property is located.

                  (ccc) To the best of the Seller's knowledge, there is no
         pending action or proceeding directly involving the Mortgaged Property
         in which material compliance with any environmental law, rule or
         regulation is an issue; and, to the best of the Seller's knowledge,
         nothing further remains to be done to satisfy in full all requirements
         of each such law, rule or regulation constituting a prerequisite to use
         and enjoyment of said property.

                  (ddd) The Seller, in its capacity as servicer for each
         Mortgage Loan, has fully furnished, 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
         (three of the credit repositories), on a monthly basis.

                  (eee) Each Mortgage Loan that is subject to a Prepayment
         Penalty as provided in the related Mortgage Note is identified on the
         related Mortgage Loan Schedule. With

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<PAGE>

         respect to Mortgage Loans originated prior to October 1, 2002, no such
         Prepayment Penalty may be imposed for a term in excess of five (5)
         years following origination. With respect to Mortgage Loans originated
         on or after October 1, 2002, no such Prepayment Penalty may be imposed
         for a term in excess of three (3) years following origination.

                  (fff) No Mortgage Loan is (a) a "high cost" loan under the
         Home Ownership and Equity Protection Act of 1994 or (b) a "high cost
         home," "threshold," "covered," "high risk home," "predatory" or similar
         loan under any other applicable state, federal or local law (or a
         similarly classified loan using different terminology under a law
         imposing heightened regulatory scrutiny or additional legal liability
         for residential mortgage loans having high interest rates, points
         and/or fees); provided that any Mortgage Loan secured by a Mortgaged
         Property in Illinois characterized as a "threshold" loan shall not be a
         "high cost" loan unless it is characterized as "predatory" under
         applicable local law.

                  (ggg) No proceeds from any Mortgage Loan were used to purchase
         single-premium credit insurance policies.

                  (hhh) No Mortgage Loan is secured by the pledge of stock
         allocated to a dwelling unit in a residential cooperative housing
         corporation and a collateral assignment of the related lease.

                  (iii) With respect to a Mortgage Loan that is a Cooperative
         Loan, the Cooperative Shares that are pledged as security for the
         Mortgage Loan are held by a person as a tenant-stockholder (as defined
         in Section 216 of the Code) in a cooperative housing corporation (as
         defined in Section 216 of the Code).

                  (jjj) Each FHA Mortgage Loan was underwritten in accordance
         with FHA standards and is fully-insured by the FHA, which insurance is
         in full force and effect, and the Mortgage Loan is not subject to any
         defect which would diminish or impair the FHA insurance, and all prior
         transfers, if any, of the Mortgage Loan have been, and the transactions
         contemplated herein are, in compliance with the FHA regulations, and no
         circumstances exist with respect to the FHA Mortgage Loan which would
         permit the FHA to deny coverage under the FHA insurance.

                  (kkk) Each VA Mortgage Loan was underwritten in accordance
         with VA standards and is guaranteed by the VA, which guaranty is in
         full force and effect, and the Mortgage Loan is not subject to any
         defect which would diminish or impair the VA guaranty (other than a
         potential valuation of the related Mortgaged Property), and all prior
         transfers, if any, of the Mortgage Loan have been, and the transactions
         contemplated herein are, in compliance with VA regulations, and no
         circumstances exist with respect to the VA Mortgage Loan which would
         permit the VA to deny coverage under the FHA guaranty.

                  (lll) No Mortgage Loan is a VA Vendee Loan, Title I Loan or
         Section 325 Loan.

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<PAGE>

         Subsection 7.02 Seller and Servicer Representations.

The Seller and the Servicer hereby represent and warrant to the Purchaser that,
as to itself as of the related Closing Date:

                  (a) It is a national banking association, duly organized,
         validly existing, and in good standing under the laws of the United
         States and has all licenses necessary to carry on its business as now
         being conducted and is licensed, qualified and in good standing in the
         states where the Mortgaged Property is located if the laws of such
         state require licensing or qualification in order to conduct business
         of the type conducted by it. It is an approved seller/servicer in good
         standing of conventional residential mortgage loans for Fannie Mae or
         Freddie Mac and is a HUD-approved mortgagee under Section 203 of the
         National Housing Act. It has corporate power and authority to execute
         and deliver this Agreement and to perform in accordance herewith; the
         execution, delivery and performance of this Agreement (including all
         instruments of transfer to be delivered pursuant to this Agreement) by
         it and the consummation of the transactions contemplated hereby have
         been duly and validly authorized. This Agreement, assuming due
         authorization, execution and delivery by the Purchaser, evidences the
         legal, valid, binding and enforceable obligation of it, subject to
         applicable law except as enforceability may be limited by (i)
         bankruptcy, insolvency, liquidation, receivership, moratorium,
         reorganization or other similar laws affecting the enforcement of the
         rights of creditors and (ii) general principles of equity, whether
         enforcement is sought in a proceeding in equity or at law. All
         requisite corporate action has been taken by it to make this Agreement
         valid and binding upon it in accordance with the terms of this
         Agreement.

                  (b) No consent, approval, authorization or order of, or
         registration or filing with, or notice to any court or governmental
         agency or body including HUD, the FHA or the VA is required for the
         execution, delivery and performance by the Seller of or compliance by
         the Seller with this Agreement or the Mortgage Loans or the sale of the
         Mortgage Loans or the consummation of the transactions contemplated by
         this Agreement, or if required, such approval has been obtained prior
         to the Closing Date.

                  (c) The consummation of the transactions contemplated by this
         Agreement are in its ordinary course of business and will not result in
         the breach of any term or provision of its articles of association or
         by-laws or result in the breach of any term or provision of, or
         conflict with or constitute a default under or result in the
         acceleration of any obligation under, any agreement, indenture or loan
         or credit agreement or other instrument to which it or its property is
         subject, or result in the violation of any law, rule, regulation,
         order, judgment or decree to which it or its property is subject.

                  (d) Its transfer, assignment and conveyance of the Mortgage
         Notes and the Mortgages pursuant to this Agreement are not subject to
         the bulk transfer or any similar statutory provisions in effect in any
         applicable jurisdiction.

                  (e) There is no action, suit, proceeding or investigation
         pending or, to its best knowledge, threatened against it which, either
         individually or in the aggregate, would result in any material adverse
         change in its business, operations, financial condition,

                                       31
<PAGE>

         properties or assets, or in any material impairment of its right or
         ability to carry on its business substantially as now conducted or
         which would draw into question the validity of this Agreement or the
         Mortgage Loans or of any action taken or to be taken in connection with
         its obligations contemplated herein, or which would materially impair
         its ability to perform under the terms of this Agreement.

                  (f) It does not believe, nor does it have any reason or cause
         to believe, that it cannot perform each and every covenant contained in
         this Agreement.

                  (g) It acknowledges and agrees that the Servicing Fee shall be
         treated by the Servicer, for accounting and tax purposes, as
         compensation for the servicing and administration of the Mortgage Loans
         pursuant to this Agreement.

                  (h) It has determined that the disposition of the Mortgage
         Loans pursuant to this Agreement will be afforded sale treatment for
         accounting and tax purposes.

                  (i) It is solvent and the sale of the Mortgage Loans will not
         cause it to become insolvent. The sale of the Mortgage Loans is not
         undertaken with the intent to hinder, delay or defraud any of its
         creditors.

                  (j) It has not dealt with any broker, investment banker, agent
         or other person that may be entitled to any commission or compensation
         in connection with the sale of the Mortgage Loans.

                  (k) The Seller's decision to originate any mortgage loan or to
         deny any mortgage loan application is an independent decision based
         upon the Underwriting Guidelines in effect at the time of origination
         (with exceptions thereto exercised in a reasonable manner as permitted
         under the Underwriting Guidelines), and is in no way made as a result
         of Purchaser's decision to purchase, or not to purchase, or the price
         Purchaser may offer to pay for, any such mortgage loan, if originated.

                  (l) The Seller has complied with all applicable anti-money
         laundering laws and regulations, including without limitation the USA
         Patriot Act of 2001 (collectively, the "Anti-Money Laundering Laws");
         the Seller has established an anti-money laundering compliance program
         as required by the Anti-Money Laundering Laws, has conducted the
         requisite due diligence in connection with the origination of each
         Mortgage Loan for purposes of the Anti-Money Laundering Laws, including
         with respect to the legitimacy of the applicable Mortgagor and the
         origin of the assets used by the said Mortgagor to purchase the
         property in question, and maintains, and will maintain, sufficient
         information to identify the applicable Mortgagor for purposes of the
         Anti-Money Laundering Laws.

                  (m) Seller has the facilities, procedures, and experienced
         personnel necessary for the sound servicing of mortgage loans of the
         same type as the Mortgage Loans. The Seller is duly qualified,
         licensed, registered and otherwise authorized under all applicable
         federal, state and local laws, and regulations, if applicable, meets
         the minimum capital requirements set forth by HUD, the OTS, the OCC or
         the FDIC, if applicable, and is in

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<PAGE>

         good standing to enforce, originate, sell mortgage loans to, and
         service mortgage loans in the jurisdiction wherein the Mortgaged
         Properties are located.

                  (n) The characteristics of the related Mortgage Loan Package
         are as set forth on the description of the pool characteristics for the
         applicable Mortgage Loan Package delivered in connection with the
         related commitment letter by and between the Seller and the Purchaser
         relating to such Mortgage Loan Package.

         Subsection 7.03 Remedies for Breach of Representations and Warranties.

         It is understood and agreed that the representations and warranties set
forth in Subsections 7.01 and 7.02 shall survive the sale of the Mortgage Loans
to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or lack of examination of any Mortgage
File. Upon discovery by the Seller, the Servicer or the Purchaser of a breach of
any of the foregoing representations and warranties which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the interest of the
Purchaser in or the value of the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.

         Within sixty (60) days after the earlier of either discovery by or
notice to either the Seller or the Servicer of any breach of a representation or
warranty which materially and adversely affects the value of a Mortgage Loan or
the Mortgage Loans or the interest of the Purchaser therein, the Seller or the
Servicer, as the case may be, shall use its best efforts promptly to cure such
breach in all material respects and, if such breach cannot be cured, the Seller
shall repurchase such Mortgage Loan or Mortgage Loans at the Repurchase Price.
Notwithstanding the above sentence, within 60 days after the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in clauses (oo), (zz), (aaa), (ddd), (eee), (ggg), (hhh) or
(iii) of Subsection 7.01, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price unless, in the case of clause (oo), such breach was cured.
However, the Seller may, at its option, with the Purchaser's prior approval,
such approval not to be withheld unreasonably, and assuming that the Seller has
a Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided
above, remove such Mortgage Loan and substitute in its place a Substitute
Mortgage Loan or Substitute Mortgage Loans; provided, however, that any such
substitution shall be effected within ninety (90) days after the related Closing
Date. If the Seller has no Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage Loan pursuant to the
foregoing provisions of this Subsection 7.03 shall occur on a date designated by
the Purchaser and shall be accomplished by the Seller remitting by wire transfer
to the Purchaser the amount of the related Repurchase Price.

         At the time of repurchase of any deficient Mortgage Loan (or removal of
any Deleted Mortgage Loan), the Purchaser and the Seller shall arrange for the
assignment of the repurchased Mortgage Loan (or Deleted Mortgage Loan) to the
Seller or its designee and the delivery to the Seller of any documents held by
the Purchaser relating to the repurchased Mortgage Loan in the manner required
by this Agreement with respect to the purchase and sale of such Mortgage Loan on
the related Closing Date. In the event a deficient Mortgage Loan is repurchased,
the Seller

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<PAGE>

shall, simultaneously with its remittance to the Purchaser of such related
Repurchase Price, give written notice to the Purchaser that such repurchase has
taken place. Upon such repurchase, the related Mortgage Loan Schedule shall
simultaneously be amended to reflect the withdrawal of the repurchased Mortgage
Loan from this Agreement.

         As to any Deleted Mortgage Loan for which the Seller substitutes one or
more Substitute Mortgage Loans, the Seller shall effect such substitution by
delivering to the Purchaser for each Substitute Mortgage Loan the Mortgage Note,
the Mortgage, the Assignment of Mortgage and such other documents and agreements
as are required by Subsection 6.03. The Seller shall remit to the Servicer for
distribution the Monthly Payment due on each Substitute Mortgage Loan in the
month following the date of such substitution. Monthly Payments due with respect
to Substitute Mortgage Loans in the month of substitution will be retained by
the Seller. For the month of substitution, distributions to the Purchaser will
include the Monthly Payment due on such Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by it in respect of such Deleted Mortgage Loan. The Seller
shall give written notice to the Purchaser that such substitution has taken
place and shall amend the related Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Substitute Mortgage Loan. Upon such substitution, each
Substitute Mortgage Loan shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to such
Substitute Mortgage Loan, as of the date of substitution, the covenants,
representations and warranties set forth in Subsections 7.01 and 7.02.

         For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall, plus an amount equal to the aggregate of any
Monthly Advances made with respect to such Deleted Mortgage Loans, shall be
remitted to the Servicer by the Seller for distribution by the Servicer in the
month of substitution. Accordingly, on the date of such substitution, the Seller
will remit to the Servicer from its own funds for deposit into the Custodial
Account an amount equal to the amount of such shortfall plus one month's
interest thereon at the Mortgage Loan Remittance Rate.

         In addition to such cure, repurchase and substitution obligations, the
Seller or the Servicer shall indemnify the Purchaser and its present and former
directors, officers, employees and agents, and hold such parties harmless
against any out-of-pocket losses, penalties, fines, forfeitures, reasonable and
necessary legal fees and expenses and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion by any third
party that is based on or grounded upon, or resulting from, a breach of the
Seller or the Servicer, as applicable, representations and warranties contained
in this Agreement; provided, however, indemnification shall not be available for
any economic losses of the Purchaser due to reinvestment losses, loss of
investment income or any other special, indirect or consequential losses or
damages. For purposes of the previous sentence, "Purchaser" shall mean the
Person then acting as the Purchaser under this Agreement and any and all Persons
who previously were "Purchasers" under this Agreement in accordance with the
provisions of Section 29 hereof.

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<PAGE>

         No action may be brought against the Seller or the Servicer, as
applicable, relating to or arising out of the breach of any representations and
warranties made in Subsections 7.01 or 7.02 with respect to any Mortgage Loan
unless and until (i) discovery of such breach by the Purchaser or notice thereof
by the Seller or the Servicer to Purchaser, (ii) failure by the Seller or the
Servicer, as applicable, to cure such breach, repurchase such Mortgage Loan as
specified above, substitute a Substitute Mortgage Loan for such Mortgage Loan as
specified above and/or indemnify the Purchaser and (iii) demand upon the Seller
or the Servicer, as applicable, by the Purchaser for compliance with the terms
of this Agreement.

         It is understood and agreed that the obligations of the Seller or the
Servicer, as applicable, set forth in this Subsection 7.03 to cure, repurchase
or substitute for a defective Mortgage Loan and/or to indemnify the Purchaser
constitute the sole remedies of the Purchaser respecting a breach of the
representations and warranties set forth in Subsections 7.01 and 7.02.

         SECTION 8. Closing Conditions.

         The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the respective Closing Date. The closing shall be either by
telephone, confirmed by letter or wire as the parties hereto shall agree, or
conducted in person, at such place as the parties hereto shall agree.

         The closing for each Mortgage Loan Package shall be subject to the
satisfaction of each of the following conditions:

         (a) the Seller shall have delivered to the Purchaser the related
Mortgage Loan Schedule and an electronic data file containing information on a
loan-level basis;

         (b) all of the representations and warranties of the Seller under this
Agreement shall be true and correct as of the related Closing Date (or, with
respect to Subsection 7.01, such other date specified therein) in all material
respects and no default shall have occurred hereunder which, with notice or the
passage of time or both, would constitute an Event of Default hereunder;

         (c) the Purchaser shall have received from the custodian an initial
certification with respect to its receipt of the Mortgage Loan Documents for the
related Mortgage Loans;

         (d) the Purchaser shall have received originals of the related Term
Sheet executed by the Seller and a funding memorandum setting forth the Purchase
Price(s), and the accrued interest thereon, for the Mortgage Loan Package; and

         (e) all other terms and conditions of this Agreement and the related
Term Sheet to be satisfied by the Seller shall have been complied with in all
material respects.

         Upon satisfaction of the foregoing conditions, the Purchaser shall pay
to the Seller on such Closing Date the Purchase Price for the related Mortgage
Loan Package, plus accrued interest pursuant to Section 4 of this Agreement.

                                       35
<PAGE>

         SECTION 9. Closing Documents.

         On the related Closing Date, the Seller shall deliver to the
Purchaser's attorneys in escrow fully executed originals of:

         (a) this Agreement (to be executed and delivered only for the initial
Closing Date);

         (b) the Term Sheet, executed in two (2) counterparts;

         (c) with respect to the initial Closing Date, the Custodial Agreement,
dated as of the initial Cut-off Date;

         (d) with respect to the initial Closing Date, a Custodial Account
Certification in the form attached as Exhibit 4 hereto;

         (e) with respect to the initial Closing Date, an Escrow Account
Certification in the form attached as Exhibit 5 hereto;

         (f) the related Mortgage Loan Schedule, segregated by Mortgage Loan
Package, with respect to the initial Closing Date, one copy to be attached
hereto, and with respect to all Closing Dates, one copy to be attached to the
Custodian's counterpart of the Custodial Agreement, and one copy to be attached
to the related Term Sheet as the Mortgage Loan Schedule thereto;

         (g) with respect to the initial Closing Date, an Officer's Certificate,
in the form of Exhibit 10 hereto with respect to the Seller, including all
attachments thereto; and

         (h) with respect to the initial Closing Date, an Opinion of Counsel of
the Seller (who may be an employee of the Seller), in the form of Exhibit 11
hereto.

         SECTION 10. Costs.

         The Seller and the Servicer shall pay any commissions due their
salesmen and the legal fees and expenses of their attorneys. The Purchaser shall
pay the cost of delivering the Mortgage Files to the Purchaser or its designee,
the cost of recording the Assignments of Mortgage, any custodial fees incurred
in connection with the release of any Mortgage Loan Documents as may be required
by the servicing activities hereunder and all other costs and expenses incurred
in connection with the sale of the Mortgage Loans by the Seller to the
Purchaser, including without limitation the Purchaser's attorneys' fees.

         SECTION 11. Administration and Servicing of Mortgage Loans.

         Subsection 11.01 Servicer to Act as Servicer; Subservicing.

         The Servicer, as an independent contractor, shall service and
administer the Mortgage Loans in accordance with this Agreement and Customary
Servicing Procedures and the terms of the Mortgage Notes and Mortgages, and
shall have full power and authority, acting alone or through subservicers or
agents, to do or cause to be done any and all things in connection with such
servicing and administration which the Servicer may deem necessary or desirable
and

                                       36
<PAGE>

consistent with the terms of this Agreement. The Servicer shall service the
Mortgage Loans in accordance with the guidelines of the applicable governing
agency, including, with respect to the Non-Conventional Mortgage Loans, FHA or
VA, as applicable, and shall comply with all of the rules and regulations as set
forth by each applicable agency. The Servicer may perform its servicing
responsibilities through agents or independent contractors, but shall not
thereby be released from any of its responsibilities hereunder. Notwithstanding
anything to the contrary, the Servicer may delegate any of its duties under this
Agreement to one or more of its affiliates without regard to any of the
requirements of this section; provided, however, that the Servicer shall not be
released from any of its responsibilities hereunder by virtue of such
delegation. The Mortgage Loans may be subserviced by one or more unaffiliated
subservicers on behalf of the Servicer provided (i) with respect to the
Conventional Mortgage Loans, each subservicer is a Fannie Mae approved
seller/servicer or a Freddie Mac approved seller/servicer in good standing, and
no event has occurred, including but not limited to a change in insurance
coverage, that would make it unable to comply with the eligibility for
seller/servicers imposed by Fannie Mae or Freddie Mac, or which would require
notification to Fannie Mae or Freddie Mac and, (ii) with respect to the
Non-Conventional Mortgage Loans, each subservicer is an eligible FHA and VA
servicer in good standing, and no event has occurred, including but not limited
to a change in insurance coverage, that would make it unable to comply with the
eligibility for imposed by FHA or VA, or which would require notification to FHA
or VA. The Servicer shall pay all fees and expenses of the subservicer from its
own funds (provided that any such expenditures that would constitute Servicing
Advances if made by the Servicer hereunder shall be reimbursable to the Servicer
as Servicing Advances), and the subservicer's fee shall not exceed the Servicing
Fee.

         At the cost and expense of the Servicer, without any right of
reimbursement from the Custodial Account, the Servicer shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer meeting
the requirements in the preceding paragraph; provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Servicer, at the
Servicer's option, from electing to service the related Mortgage Loans itself.
If the Servicer's responsibilities and duties under this Agreement are
terminated and if requested to do so by the Purchaser, the Servicer shall at its
own cost and expense terminate the rights and responsibilities of the
subservicer as soon as is reasonably possible. The Servicer shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of the subservicer from the Servicer's own funds without
reimbursement from the Purchaser.

         The Servicer shall be entitled to enter into an agreement with the
subservicer for indemnification of the Servicer by the subservicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.

         Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving the subservicer shall be deemed to be
between the subservicer and Servicer alone, and the Purchaser shall have no
obligations, duties or liabilities with respect to the subservicer including no
obligation, duty or liability of Purchaser to pay the subservicer's fees and
expenses. For purposes of distributions and advances by the Servicer pursuant to
this Agreement, the Servicer shall be deemed to have received a payment on a
Mortgage Loan when the subservicer has received such payment.

                                       37
<PAGE>

         Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor; provided, however, that (unless the Mortgagor is in default with
respect to the Mortgage Loan, or such default is, in the judgment of the
Servicer, imminent, and the Servicer has the consent of the Purchaser) the
Servicer shall not enter into any payment plan or agreement to modify payments
with a Mortgagor resulting in the impairment of coverage under the MIC or LCG,
as applicable, lasting more than six (6) months or permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate, the
Lifetime Rate Cap (if applicable), the Initial Rate Cap (if applicable), the
Periodic Rate Cap (if applicable) or the Gross Margin (if applicable), defer or
forgive the payment of any principal or interest, change the outstanding
principal amount (except for actual payments of principal), make any future
advances or extend the final maturity date, as the case may be, with respect to
such Mortgage Loan. Without limiting the generality of the foregoing, the
Servicer in its own name or acting through subservicers or agents is hereby
authorized and empowered by the Purchaser when the Servicer believes it
appropriate and reasonable in its best judgment, to execute and deliver, on
behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and the 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 Purchaser pursuant to the provisions
of Subsection 11.13.

         The Servicer shall notify the Purchaser of its intention to institute
any foreclosure proceeding no fewer than ten (10) days prior to initiating such
proceeding. The Servicer shall notify the Purchaser of its intention to accept a
deed-in-lieu of foreclosure or a partial release of any of the Mortgaged
Property subject to the lien of the Mortgage no fewer than ten (10) days prior
to accepting such deed-in-lieu or partial release and shall only accept such
deed-in-lieu or grant such partial release if the Purchaser has not objected
before the end of the tenth day after delivery of such notice. In connection
with any foreclosure sale, the Servicer shall consult with the Purchaser with
regard to a bid price for the related Mortgaged Property and shall set such bid
price in accordance with the Purchaser's instructions. The Servicer shall make
all required Servicing Advances and shall service and administer the Mortgage
Loans in accordance with all applicable laws, rules and regulations and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Purchaser shall furnish to the Servicer any powers of attorney and other
documents reasonably necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement.

         Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed-in-lieu of foreclosure, if
the Servicer has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or waste, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector at the Purchaser's expense, provided that the Purchaser has provided
consent (not to be unreasonably withheld) to such inspection prior thereto. Upon
completion of the inspection, the Servicer shall promptly provide the Purchaser
with a written report of the environmental inspection. After reviewing the
inspection, the Purchaser shall determine how the Servicer shall proceed with
respect to the Mortgaged Property.

                                       38
<PAGE>

         Subsection 11.02 Liquidation of Mortgage Loans.

         In the event that any payment due under any Mortgage Loan is not paid
when the same becomes due and payable, or in the event the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as it shall deem to be in the best interest of the Purchaser. In the
event that any payment due under any Mortgage Loan remains delinquent for a
period of ninety (90) days or more, the Servicer shall commence foreclosure
proceedings in accordance with Customary Servicing Procedures and the guidelines
set forth by Fannie Mae or Freddie Mac and FHA or VA, as applicable. In such
connection, the Servicer shall from its own funds make all necessary and proper
Servicing Advances. If the portion of any Liquidation Proceeds allocable as a
recovery of interest on any Mortgage Loan is less than the full amount of
accrued and unpaid interest on such Mortgage Loan as of the date such proceeds
are received, then the applicable Servicing Fees with respect to such Mortgage
Loan shall be paid first and any amounts remaining thereafter shall be
distributed to the Purchaser.

         Subsection 11.03 Collection of Mortgage Loan Payments.

         Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Servicer will proceed diligently, in
accordance with this Agreement, to collect all payments due under each of the
Mortgage Loans when the same shall become due and payable. Further, the Servicer
will in accordance with Customary Servicing Procedures ascertain and estimate
taxes, assessments, fire and hazard insurance premiums, premiums for Primary
Mortgage Insurance Policies, and all other charges that, as provided in any
Mortgage, will become due and payable to the end that the installments payable
by the Mortgagors will be sufficient to pay such charges as and when they become
due and payable.

         Subsection 11.04 Establishment of Custodial Account; Deposits in
         Custodial Account.

         The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts
(collectively, the "Custodial Account"), titled "Bank of America, N.A., in trust
for Morgan Stanley Mortgage Capital Inc. as Purchaser of Mortgage Loans and
various Mortgagors." Such Custodial Account shall be established with a
commercial bank, a savings bank or a savings and loan association (which may be
a depository affiliate of the Servicer) which meets the guidelines set forth by
Fannie Mae or Freddie Mac as an eligible depository institution for custodial
accounts. The Custodial Account shall initially be established and maintained at
Bank of America, N.A., or any successor thereto, and shall not be transferred to
any other depository institution without the Purchaser's approval, which shall
not unreasonably be withheld. In any case, the Custodial Account shall be
insured by the FDIC in a manner which shall provide maximum available insurance
thereunder and which may be drawn on by the Servicer. The creation of any
Custodial Account shall be evidenced by a certification in the form of Exhibit 4
hereto.

         The Servicer shall deposit in the Custodial Account on a daily basis,
and retain therein the following payments and collections received or made by it
subsequent to the related Cut-off

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<PAGE>

Date (other than in respect of principal and interest on the Mortgage Loans due
on or before the related Cut-off Date):

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

                  (b) all payments on account of interest on the Mortgage Loans
         adjusted to the related Mortgage Loan Remittance Rate;

                  (c) all Liquidation Proceeds;

                  (d) all proceeds received by the Servicer under any title
         insurance policy, hazard insurance policy, Primary Mortgage Insurance
         Policy or other insurance policy other than proceeds to be held in the
         Escrow Account and applied to the restoration or repair of the
         Mortgaged Property or released to the Mortgagor in accordance with
         Customary Servicing Procedures;

                  (e) all awards or settlements in respect of condemnation
         proceedings or eminent domain affecting any Mortgaged Property which
         are not released to the Mortgagor in accordance with Customary
         Servicing Procedures;

                  (f) any amount required to be deposited in the Custodial
         Account pursuant to Subsections 11.15, 11.17 and 11.19;

                  (g) any amount required to be deposited by the Servicer in
         connection with any REO Property pursuant to Subsection 11.13;

                  (h) any amounts payable in connection with the repurchase of
         any Mortgage Loan pursuant to the provisions of Subsection 7.03 and all
         amounts required to be deposited by the Servicer in connection with
         shortfalls in principal amount of Substitute Mortgage Loans pursuant to
         Subsection 7.03;

                  (i) with respect to each Principal Prepayment in full, an
         amount (to be paid by the Servicer out of its own funds) which, when
         added to all amounts allocable to interest received in connection with
         the Principal Prepayment in full, equals one month's interest on the
         amount of principal so prepaid for the month of prepayment at the
         applicable Mortgage Loan Remittance Rate; provided, however, that the
         Servicer's aggregate obligations under this paragraph for any month
         shall be limited to the total amount of Servicing Fees actually
         received with respect to the Mortgage Loans by the Servicer during such
         month; and

                  (j) amounts required to be deposited by the Servicer in
         connection with the deductible clause of any hazard insurance policy.

         The foregoing requirements for deposit in the Custodial 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 and other ancillary fees need not be deposited by the Servicer
in the Custodial Account.

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<PAGE>

         The Servicer may invest the funds in the Custodial Account in Eligible
Investments designated in the name of the Servicer for the benefit of the
Purchaser, which shall mature not later than the Business Day next preceding the
Remittance Date next following the date of such investment (except that (A) any
investment in the institution with which the Custodial Account is maintained may
mature on such Remittance Date and (B) any other investment may mature on such
Remittance Date if the Servicer shall advance funds on such Remittance Date,
pending receipt thereof to the extent necessary to make distributions to the
Purchaser) and shall not be sold or disposed of prior to maturity.
Notwithstanding anything to the contrary herein and above, all income and gain
realized from any such investment shall be for the benefit of the Servicer and
shall be subject to withdrawal by the Servicer. The amount of any losses
incurred in respect of any such investments shall be deposited in the Custodial
Account by the Servicer out of its own funds immediately as realized.

         Subsection 11.05 Withdrawals From the Custodial Account.

         The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:

                  (a) to make payments to the Purchaser in the amounts and in
         the manner provided for in Subsection 11.15;

                  (b) to reimburse itself for P&I Advances, the Servicer's right
         to reimburse itself pursuant to this subclause (b) with respect to any
         Mortgage Loan being limited to related Liquidation Proceeds,
         Condemnation Proceeds, Insurance Proceeds and such other amounts as may
         be collected by the Servicer from the Mortgagor or otherwise relating
         to the Mortgage Loan, it being understood that, in the case of any such
         reimbursement, the Servicer's right thereto shall be prior to the
         rights of the Purchaser with respect to such Mortgage Loan, except
         that, where the Seller is required to repurchase a Mortgage Loan,
         pursuant to Subsection 7.03, the Servicer's right to such reimbursement
         shall be subsequent to the payment to the Purchaser of the Repurchase
         Price pursuant to Subsection 7.03, and all other amounts required to be
         paid to the Purchaser with respect to such Mortgage Loan;

                  (c) to reimburse itself for any unpaid Servicing Fees and for
         unreimbursed Servicing Advances, the Servicer's right to reimburse
         itself pursuant to this subclause (c) with respect to any Mortgage Loan
         being limited to related Liquidation Proceeds, Condemnation Proceeds,
         Insurance Proceeds and such other amounts as may be collected by the
         Servicer from the Mortgagor or otherwise relating to the Mortgage Loan,
         it being understood that, in the case of any such reimbursement, the
         Servicer's right thereto shall be prior to the rights of the Purchaser
         unless the Seller is required to repurchase a Mortgage Loan pursuant to
         Subsection 7.03, in which case the Servicer's right to such
         reimbursement shall be subsequent to the payment to the Purchaser of
         the related Repurchase Price pursuant to Subsection 7.03 and all other
         amounts required to be paid to the Purchaser with respect to such
         Mortgage Loan;

                  (d) to reimburse itself for unreimbursed Servicing Advances
         and for unreimbursed P&I Advances, to the extent that such amounts are
         nonrecoverable (as

                                       41
<PAGE>

         certified by the Servicer to the Purchaser in an Officer's Certificate)
         by the Servicer pursuant to subclause (b) or (c) above, provided that
         the Mortgage Loan for which such advances were made is not required to
         be repurchased by a Seller pursuant to Subsection 7.03;

                  (e) to reimburse itself for expenses incurred by and
         reimbursable to it pursuant to Subsection 12.01;

                  (f) to withdraw amounts to make P&I Advances in accordance
         with Subsection 11.17;

                  (g) to pay to itself any interest earned or any investment
         earnings on funds deposited in the Custodial Account, net of any losses
         on such investments;

                  (h) to withdraw any amounts inadvertently deposited in the
         Custodial Account; and

                  (i) to clear and terminate the Custodial Account upon the
         termination of this Agreement.

         Upon request, the Servicer will provide the Purchaser with copies of
reasonably acceptable invoices or other documentation relating to Servicing
Advances that have been reimbursed from the Custodial Account.

         Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow
         Account.

         The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts (collectively, the "Escrow Account"),
titled "Bank of America, N.A., in trust for Morgan Stanley Mortgage Capital Inc.
as Purchaser of Mortgage Loans and various Mortgagors." The Escrow Account shall
be established with a commercial bank, a savings bank or a savings and loan
association (which may be a depository affiliate of Servicer), which meets the
guidelines set forth by Fannie Mae or Freddie Mac as an eligible institution for
escrow accounts. The Escrow Account shall initially be established and
maintained at Bank of America, N.A., or any successor thereto, and shall not be
transferred to any other depository institution without the Purchaser's
approval, which shall not unreasonably be withheld. In any case, the Escrow
Account shall be insured by the FDIC in a manner which shall provide maximum
available insurance thereunder and which may be drawn on by the Servicer. The
creation of any Escrow Account shall be evidenced by a certification in the form
of Exhibit 5 hereto.

         The Servicer shall deposit in the Escrow Account on a daily basis, and
retain therein: (a) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement and (b) all amounts representing proceeds of
any hazard insurance policy which are to be applied to the restoration or repair
of any Mortgaged Property. The Servicer shall make withdrawals therefrom only in
accordance with Subsection 11.07 hereof. As part of its servicing duties, the

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<PAGE>

Servicer shall pay to the Mortgagors interest on funds in the Escrow Account, to
the extent required by law.

         Subsection 11.07 Withdrawals From Escrow Account.

         Withdrawals from the Escrow Account shall be made by the Servicer only
(a) to effect timely payments of ground rents, taxes, assessments, premiums for
Primary Mortgage Insurance Policies, fire and hazard insurance premiums or other
items constituting Escrow Payments for the related Mortgage, (b) to reimburse
the Servicer for any Servicing Advance made by Servicer pursuant to Subsection
11.08 hereof with respect to a related Mortgage Loan, (c) to refund to any
Mortgagor any funds found to be in excess of the amounts required under the
terms of the related Mortgage Loan, (d) for transfer to the Custodial Account
upon default of a Mortgagor or in accordance with the terms of the related
Mortgage Loan and if permitted by applicable law, (e) for application to restore
or repair of the Mortgaged Property, (f) to pay to the Mortgagor, to the extent
required by law, any interest paid on the funds deposited in the Escrow Account,
(g) to pay to itself any interest earned on funds deposited in the Escrow
Account (and not required to be paid to the Mortgagor), (h) to the extent
permitted under the terms of the related Mortgage Note and applicable law, to
pay late fees with respect to any Monthly Payment which is received after the
applicable grace period, (i) to withdraw suspense payments that are deposited
into the Escrow Account, (j) to withdraw any amounts inadvertently deposited in
the Escrow Account or (k) to clear and terminate the Escrow Account upon the
termination of this Agreement.

         Subsection 11.08 Payment of Taxes, Insurance and Other Charges;
         Collections Thereunder.

         With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments and
other charges which are or may become a lien upon the Mortgaged Property and the
status of premiums for Primary Mortgage Insurance Policies and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage. To the extent that a Mortgage does not
provide for Escrow Payments, the Servicer shall determine that any such payments
are made by the Mortgagor. The Servicer assumes full responsibility for the
timely payment of all such bills and shall effect timely payments of all such
bills irrespective of each 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 ability to recover such Servicing Advances
pursuant to Subsections 11.05(c), 11.05(d) and 11.07(b). No costs incurred by
the Servicer or subservicers in effecting the payment of taxes and assessments
on the Mortgaged Properties shall, for the purpose of calculating remittances to
the Purchaser, be added to the amount owing under the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit.

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<PAGE>

         Subsection 11.09 Transfer of Accounts.

         The Servicer may transfer the Custodial Account or the Escrow Account
to a different depository institution. Such transfer shall be made only upon
obtaining the prior written consent of the Purchaser, such consent not to be
unreasonably withheld.

         Subsection 11.10 Maintenance of Hazard Insurance.

         The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage customary in the area where the
Mortgaged Property is located by an insurer acceptable to Fannie Mae or Freddie
Mac and FHA or VA, as applicable, in an amount which is at least equal to the
lesser of (a) the full insurable value of the Mortgaged Property or (b) the
greater of (i) the outstanding principal balance owing on the Mortgage Loan and
(ii) an amount such that the proceeds of such insurance shall be sufficient to
avoid the application to the Mortgagor or loss payee of any coinsurance clause
under the policy. If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as a special flood
hazard area (and such flood insurance has been made available) the Servicer will
cause to be maintained a flood insurance policy meeting the requirements of the
National Flood Insurance Program, in an amount representing coverage not less
than the lesser of (A) the minimum amount required under the terms of the
coverage to compensate for any damage or loss to the Mortgaged Property on a
replacement-cost basis (or the outstanding principal balance of the Mortgage
Loan if replacement-cost basis is not available) or (B) the maximum amount of
insurance available under the National Flood Insurance Program. The Servicer
shall also maintain on REO Property fire and hazard insurance with extended
coverage in an amount which is at least equal to the maximum insurable value of
the improvements which are a part of such property, liability insurance and, to
the extent required and available under the National Flood Insurance Program,
flood insurance in an amount required above. Any amounts collected by the
Servicer under any such policies (other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the property subject
to the related Mortgage or property acquired in liquidation of the Mortgage
Loan, or to be released to the Mortgagor in accordance with Customary Servicing
Procedures) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Subsection 11.05. It is understood and agreed that no earthquake or
other additional insurance need be required by the Servicer of any Mortgagor or
maintained on REO Property other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to Servicer, and shall provide for
at least thirty (30) days prior written notice of any cancellation, reduction in
amount or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either its
insurance carrier or agent; provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies are acceptable to Fannie Mae or Freddie Mac and FHA or VA, as
applicable, and are licensed to do business in the state wherein the property
subject to the policy is located.

         The hazard insurance policies for each Mortgage Loan secured by a unit
in a condominium development or planned unit development shall be maintained
with respect to such

                                       44
<PAGE>

Mortgage Loan and the related development in a manner which is consistent with
Fannie Mae or Freddie Mac requirements and FHA or VA requirements, as
applicable.

         Subsection 11.11 Maintenance of Primary Mortgage Insurance Policy;
         Claims.

         With respect to each Mortgage Loan with a LTV in excess of 80%, the
Servicer shall, without any cost to the Purchaser, maintain or cause the
Mortgagor to maintain in full force and effect a Primary Mortgage Insurance
Policy insuring that portion of the Mortgage Loan in excess of a percentage in
conformance with Fannie Mae and FHA or VA requirements, as applicable. The
Servicer shall pay or shall cause the Mortgagor to pay the premium thereon on a
timely basis, at least until the LTV of such Mortgage Loan is reduced to 80%. In
the event that such Primary Mortgage Insurance Policy shall be terminated, the
Servicer shall obtain from another insurer a comparable replacement policy, with
a total coverage equal to the remaining coverage of such terminated Primary
Mortgage Insurance Policy. If the insurer shall cease to be a qualified insurer,
the Servicer shall obtain from another qualified insurer a replacement Primary
Mortgage Insurance Policy. The Servicer shall not take any action which would
result in noncoverage under any applicable Primary Mortgage Insurance Policy of
any loss which, but for the actions of the Servicer would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Subsection 11.18, the Servicer shall
promptly notify the insurer under the related Primary Mortgage Insurance Policy,
if any, of such assumption or substitution of liability in accordance with the
terms of such Primary Mortgage Insurance Policy and shall take all actions which
may be required by such insurer as a condition to the continuation of coverage
under such Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance
Policy is terminated as a result of such assumption or substitution of
liability, the Servicer shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.

         In connection with its activities as servicer, the Servicer agrees to
prepare and present or to assist the Purchaser in preparing and presenting, on
behalf of itself and the Purchaser, claims to the insurer under any Primary
Mortgage Insurance Policy in a timely fashion in accordance with the terms of
such Primary Mortgage Insurance Policy and, in this regard, to take such action
as shall be necessary to permit recovery under any Primary Mortgage Insurance
Policy respecting a defaulted Mortgage Loan. Pursuant to Subsection 11.06, any
amounts collected by the Servicer under any Primary Mortgage Insurance Policy
shall be deposited in the Escrow Account, subject to withdrawal pursuant to
Subsection 11.07.

         Subsection 11.12 Fidelity Bond; Errors and Omissions Insurance.

         The Servicer shall maintain, at its own expense, a blanket Fidelity
Bond and an errors and omissions insurance policy, with broad coverage on all
officers, employees or other persons acting in any capacity requiring such
persons to handle funds, money, documents or papers relating to the Mortgage
Loans. These policies must insure the Servicer against losses resulting from
fraud, theft, errors, omissions, negligence, dishonest or fraudulent acts
committed by the Servicer's personnel, any employees of outside firms that
provide data processing services for the Servicer, and temporary contract
employees or student interns. The Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby.

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<PAGE>

No provision of this Subsection 11.12 requiring such Fidelity Bond and errors
and omissions insurance shall diminish or relieve the Servicer from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such Fidelity Bond and insurance policy shall be at least equal to the
corresponding amounts required by FHA or VA, Fannie Mae in the Fannie Mae
Servicing Guide or by Freddie Mac in the Freddie Mac Guide, as amended or
restated from time to time, as applicable, or in an amount as may be permitted
to the Servicer by express waiver of FHA or VA and Fannie Mae or Freddie Mac, as
applicable. Upon request of the Purchaser, the Servicer shall cause to be
delivered to the Purchaser a certified true copy of such Fidelity Bond or a
certificate evidencing the same with a statement that the Servicer shall
endeavor to provide written notice to the Purchaser thirty (30) days prior to
modification or any material change.

         Subsection 11.13 Title, Management and Disposition of REO Property.

         (a) In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser or its nominee.

         (b) The Purchaser, by giving notice to the Servicer, may elect to
manage and dispose of all REO Property acquired pursuant to this Agreement by
itself. If the Purchaser so elects, the Purchaser shall assume control of REO
Property at the time of its acquisition and the Servicer shall forward the
related Mortgage File to the Purchaser as soon as is practicable. Promptly upon
assumption of control of any REO Property, the Purchaser shall reimburse any
related Servicing Advances or other expenses incurred by the Servicer with
respect to that REO Property.

         (c) If the Purchaser has not informed the Servicer that it will manage
REO Property, the provisions of this Subsection 11.13(c) shall apply. The
Servicer shall cause to be deposited on a daily basis in the Custodial Account
all revenues received with respect to the conservation of the related REO
Property. The Servicer shall make distributions as required on each Remittance
Date to the Purchaser of the net cash flow from the REO Property (which shall
equal the revenues from such REO Property net of the expenses described above
and of any reserves reasonably required from time to time to be maintained to
satisfy anticipated liabilities for such expenses).

         The disposition of REO Property shall be carried out by the Servicer.
Upon the request of the Purchaser, and at the Purchaser's expense, the Servicer
shall cause an appraisal of the REO Property to be performed for the Purchaser.

         The Servicer shall either itself or through an agent selected by the
Servicer, manage, conserve, protect and operate the REO Property in the same
manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. Any disbursement in excess of
$5,000 shall be made only with the written approval of the Purchaser. The
Servicer shall bill the Purchaser for such costs upon the sale of the REO
Property and shall not withdraw funds to cover such costs from the Custodial
Account.

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<PAGE>

         If a REMIC election is or is to be made with respect to the arrangement
under which the Mortgage Loans and any REO Property are held, the Servicer shall
manage, conserve, protect and operate each REO Property 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 such
REMIC 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" within
the meaning of Section 860G(c)(2) of the Code.

         Subsection 11.14 Servicing Compensation.

         As compensation for its services hereunder, the Servicer shall be
entitled to retain the Servicing Fee from interest payments actually collected
on the Mortgage Loans. Additional servicing compensation in the form of
assumption fees, late payment charges, prepayment penalties and other ancillary
income shall be retained by the Servicer to the extent not required to be
deposited in the Custodial Account. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement therefor except as specifically
provided for herein. The Servicing Fee shall not be reduced by the amount of any
guaranty fee payable to FHA or VA.

         Subsection 11.15 Distributions.

         On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the account designated in writing by the
Purchaser of record on the preceding Record Date (a) all amounts credited to the
Custodial Account at the close of business on the related Determination Date,
net of charges against or withdrawals from the Custodial Account pursuant to
Subsection 11.05(b) through (h), plus (b) all amounts, if any, which the
Servicer is obligated to distribute pursuant to Subsection 11.17, minus (c) any
amounts attributable to Principal Prepayments received after the end of the
calendar month preceding the month in which the Remittance Date occurs, minus
(d) any amounts attributable to Monthly Payments collected but due on a Due Date
or Due Dates subsequent to the related Due Date.

         With respect to any remittance received by the Purchaser after the
Business Day on which such payment was due, the Servicer shall pay to the
Purchaser interest on any such late payment at an annual rate equal to the rate
of interest as is publicly announced from time to time at its principal office
by Bank of America, N.A., or its successor, as its prime lending rate, adjusted
as of the date of each change, plus two percent (2%), but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be paid
by the Servicer to the Purchaser on the date such late payment is made and shall
cover the period commencing with the Business Day on which such payment was due
and ending with the Business Day immediately preceding the Business Day on which
such payment is made, both inclusive. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of any
Event of Default by the Servicer.

         Subsection 11.16 Statements to the Purchaser.

         Not later than five (5) days prior to each related Remittance Date, the
Servicer shall forward to the Purchaser a statement, substantially in the form
of Exhibit 8 and certified by a

                                       47
<PAGE>

Servicing Officer, setting forth on a loan-by-loan basis: (a) the amount of the
distribution made on such Remittance Date which is allocable to principal and
allocable to interest; (b) the amount of servicing compensation received by the
Servicer during the prior calendar month; and (c) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the preceding month. Such
statement shall also include information regarding delinquencies on Mortgage
Loans, indicating the number and aggregate principal amount of Mortgage Loans
which are either one (1), two (2) or three (3) or more months delinquent and the
book value of any REO Property. The Servicer shall submit to the Purchaser
monthly a liquidation report with respect to each Mortgaged Property sold in a
foreclosure sale as of the related Record Date and not previously reported. Such
liquidation report shall be incorporated into the remittance report delivered to
Purchaser in the form of Exhibit 8 hereto. The Servicer shall also provide such
information as set forth above to the Purchaser in electronic form in the
Servicer's standard format, a copy of which has been provided by the Servicer.

         In addition, within a reasonable period of time after the end of each
calendar year, the Servicer will furnish a report to each Person that was a
Purchaser at any time during such calendar year. Such report shall state the
aggregate of amounts distributed to the Purchaser for such calendar year. Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Code.

         The Servicer shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority, the Mortgagor or to the Purchaser pursuant to any
applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby. In addition, the Servicer shall provide the Purchaser with
such information concerning the Mortgage Loans as is necessary for such
Purchaser to prepare federal income tax returns as the Purchaser may reasonably
request from time to time.

         Subsection 11.17 Advances by the Servicer.

         On the Business Day immediately preceding each related Remittance Date,
the Servicer shall either (a) deposit in the Custodial Account from its own
funds an amount equal to the aggregate amount of all Monthly Payments (with
interest adjusted to the Mortgage Loan Remittance Rate) which were due on the
Mortgage Loans during the applicable Due Period and which were delinquent at the
close of business on the immediately preceding Determination Date (each such
advance, a "P&I Advance"), (b) cause to be made an appropriate entry in the
records of the Custodial Account that amounts held for future distribution have
been, as permitted by this Subsection 11.17, used by the Servicer in discharge
of any such P&I Advance or (c) make P&I Advances in the form of any combination
of (a) or (b) aggregating the total amount of advances to be made. Any amounts
held for future distribution and so used shall be replaced by the Servicer by
deposit in the Custodial Account on or before any future Remittance Date if
funds in the Custodial Account on such Remittance Date shall be less than
payments to the Purchaser required to be made on such Remittance Date. The
Servicer's obligation to make P&I Advances as to any Mortgage Loan will continue
through the last Monthly Payment due prior to the payment in full of a Mortgage
Loan, or through the last related Remittance Date prior to the Remittance Date
for the distribution of all other payments or recoveries (including proceeds
under any title, hazard or other insurance policy, or condemnation awards) with
respect to a

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<PAGE>

Mortgage Loan; provided, however, that such obligation shall cease if the
Servicer, in its good faith judgment, determines that such P&I Advances would
not be recoverable pursuant to Subsection 11.05(d). The determination by the
Servicer that a P&I Advance, if made, would be nonrecoverable, shall be
evidenced by an Officer's Certificate of the Servicer, delivered to the
Purchaser, which details the reasons for such determination.

         Subsection 11.18 Assumption Agreements.

         The Servicer will use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note; provided that, subject to
the Purchaser's prior approval, the Servicer shall permit such assumption if so
required in accordance with the terms of the Mortgage or the Mortgage Note. When
the Mortgaged Property has been conveyed by the Mortgagor, the Servicer will, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto; provided, however, the Servicer will not exercise such
rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related Primary
Mortgage Insurance Policy, if any, or if the exercise of such rights would
impair or threaten to impair any recovery under the related MIC or LGC. In
connection with any such assumption, the outstanding principal amount, the
Monthly Payment, the Mortgage Interest Rate, the Lifetime Rate Cap (if
applicable), the Gross Margin (if applicable), the Initial Rate Cap (if
applicable) or the Periodic Rate Cap (if applicable) of the related Mortgage
Note shall not be changed, and the term of the Mortgage Loan will not be
increased or decreased. If an assumption is allowed pursuant to this Subsection
11.18, the Servicer, with the prior consent of the issuer of the Primary
Mortgage Insurance Policy, if any, is authorized to enter into a substitution of
liability agreement with the purchaser of the Mortgaged Property pursuant to
which the original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note.

         Subsection 11.19 Satisfaction of Mortgages and Release of Mortgage
         Files.

         Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will obtain the portion of the
Mortgage File that is in the possession of the Purchaser or its designee,
prepare and process any required satisfaction or release of the Mortgage and
notify the Purchaser in accordance with the provisions of this Agreement. The
Purchaser agrees to deliver to the Servicer (or cause to be delivered to the
Servicer) the original Mortgage Note for any Mortgage Loan not later than five
(5) Business Days following its receipt of a notice from the Servicer that such
a payment in full has been received or that a notification has been received
that such a payment in full shall be made. Such Mortgage Note shall be held by
the Servicer, in trust, for the purpose of canceling such Mortgage Note and
delivering the canceled Mortgage Note to the Mortgagor in a timely manner as and
to the extent provided under any applicable federal or state law.

         In the event the Servicer grants a satisfaction or release of a
Mortgage without having obtained payment in full of the indebtedness secured by
the Mortgage or should the Servicer otherwise prejudice any right the Purchaser
may have under the mortgage instruments, the

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<PAGE>

Servicer shall remit to the Purchaser the Stated Principal Balance of the
related Mortgage Loan by deposit thereof in the Custodial Account. The Fidelity
Bond shall insure the Servicer against any loss it may sustain with respect to
any Mortgage Loan not satisfied in accordance with the procedures set forth
herein.

         Subsection 11.20 Annual Statement as to Compliance.

         Within seventy-five (75) days after the Servicer's fiscal year end,
beginning with the fiscal year end 2003, the Servicer will deliver to the
Purchaser an Officer's Certificate stating that (a) a review of the activities
of the Servicer during the preceding calendar year and if performance under this
Agreement has been made under such officer's supervision, and (b) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year, or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and the action
being taken by the Servicer to cure such default.

         Subsection 11.21 Annual Independent Public Accountants' Servicing
         Report.

         Within seventy-five (75) days after the Servicer's fiscal year end,
beginning with the fiscal year end 2003, the Servicer at its expense shall cause
a firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement to the
Purchaser to the effect that such firm has, with respect to the Servicer's
overall servicing operations, examined such operations in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers,
stating such firm's conclusions relating thereto.

         Subsection 11.22 Servicer Shall Provide Access and Information as
         Reasonably Required.

         The Servicer shall provide to the Purchaser, and for any Purchaser
insured by FDIC or NAIC, the supervisory agents and examiners of FDIC and OTS or
NAIC, access to any documentation regarding the Mortgage Loans which may be
required by applicable regulations. Such access shall be afforded without
charge, but only upon reasonable request, during normal business hours and at
the offices of the Servicer.

         In addition, the Servicer shall furnish upon request by the Purchaser,
during the term of this Agreement, such periodic, special or other reports or
information, whether or not provided for herein, as shall be necessary,
reasonable and appropriate with respect to the purposes of this Agreement and
applicable regulations. All such reports or information shall be provided by and
in accordance with all reasonable instructions and directions the Purchaser may
require. The Servicer agrees to execute and deliver all such instruments and
take all such action as the Purchaser, from time to time, may reasonably request
in order to effectuate the purposes and to carry out the terms of this
Agreement.

         Subsection 11.23 Inspections.

         The Servicer shall inspect the Mortgaged Property as often deemed
necessary by the Servicer to assure itself that the value of the Mortgaged
Property is being preserved. In addition,

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<PAGE>

if any Mortgage Loan is more than sixty (60) days delinquent, the Servicer
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Customary Servicing Procedures or as may be
required by the primary mortgage guaranty insurer. The Servicer shall keep
written report of each such inspection and shall provide a copy of such
inspection to the Purchaser upon the request of the Purchaser.

         Subsection 11.24 Restoration of Mortgaged Property.

         The Servicer need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Customary Servicing Procedures. At a minimum, the Servicer
shall comply with the following conditions in connection with any such release
of Insurance Proceeds or Condemnation Proceeds:

                  (a) the Servicer shall receive satisfactory independent
         verification of completion of repairs and issuance of any required
         approvals with respect thereto;

                  (b) the Servicer shall take all steps necessary to preserve
         the priority of the lien of the Mortgage, including, but not limited to
         requiring waivers with respect to mechanics' and materialmen's liens;

                  (c) the Servicer shall verify that the Mortgage Loan is not in
         default; and

                  (d) pending repairs or restoration, the Servicer shall place
         the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

         If the Purchaser is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.

         SECTION 12. The Servicer.

         Subsection 12.01 Indemnification; Third Party Claims.

         (a) The Servicer agrees to indemnify and hold harmless the Purchaser,
any successor servicer and their respective present and former directors,
officers, employees and agents harmless from any and all claims, losses,
penalties, fines, forfeitures, legal fees and expenses, related costs,
judgments, and any other costs, fees and expenses that such parties may sustain
in any way related to the failure of the Servicer to service the Mortgage Loans
in compliance with the terms of this Agreement.

         (b) The Servicer shall immediately notify the Purchaser if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans, and
the Servicer shall assume (with the written consent of the Purchaser) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees. If the Servicer has assumed the defense of the
Purchaser, the Servicer shall provide the Purchaser with a written report of all
expenses and advances incurred by the Servicer pursuant to this Subsection 12.01
and the Purchaser shall promptly reimburse the Servicer for all amounts advanced
by it pursuant to the preceding

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<PAGE>

sentence except when the claim in any way relates to the failure of the Servicer
to service the Mortgage Loans in accordance with the terms of this Agreement.

         For purposes of this Subsection 12.01, "Purchaser" shall mean the
Person then acting as the Purchaser under this Agreement and any and all Persons
who previously were "Purchasers" under Section 29 of this Agreement.

         Subsection 12.02 Merger or Consolidation of the Servicer.

         The Servicer will keep in full effect its existence, rights and
franchises as a national banking association, and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.

         Any Person into which the Servicer may be merged or consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to substantially all of the
business of the Servicer (whether or not related to loan servicing), shall be
the successor of the Servicer 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.

         Subsection 12.03 Limitation on Liability of the Servicer and Others.

         The duties and obligations of the Servicer shall be determined solely
by the express provisions of this Agreement, the Servicer shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Servicer. Neither the Servicer nor any of
the directors, officers, employees or agents of the Servicer shall be under any
liability to the Purchaser for any action taken or for refraining from the
taking of any action in accordance with Customary Servicing Procedures and
otherwise in good faith pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer against
any liability resulting from any breach of any representation or warranty made
herein, or from any liability specifically imposed on the Servicer herein; and,
provided further, that this provision shall not protect the Servicer against any
liability that would otherwise be imposed by reason of the willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of the obligations or duties hereunder. The Servicer and any
director, officer, employee or agent of the Servicer may rely on any document of
any kind which it in good faith reasonably believes to be genuine and to have
been adopted or signed by the proper authorities respecting any matters arising
hereunder. Subject to the terms of Subsection 12.01, the Servicer shall have no
obligation to appear with respect to, prosecute or defend any legal action which
is not incidental to the Servicer's duty to service the Mortgage Loans in
accordance with this Agreement.

         Subsection 12.04 Seller and Servicer Not to Resign.

         Neither the Seller nor the Servicer shall assign this Agreement or
resign from the obligations and duties hereby imposed on it except by mutual
consent of the Servicer or the

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<PAGE>

Seller, as the case may be, and the Purchaser or upon the determination that the
Servicer's duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the unilateral resignation of the Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser, which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation or assignment shall become effective until a successor has assumed
the Servicer's responsibilities and obligations hereunder in accordance with
Subsection 14.02.

         SECTION 13. Default.

         Subsection 13.01 Events of Default.

         In case one or more of the following Events of Default by the Servicer
shall occur and be continuing:

                  (a) any failure by the Servicer to remit to the Purchaser any
         payment required to be made under the terms of this Agreement which
         continues unremedied for a period of two (2) Business Days after the
         date upon which written notice of such failure, requiring the same to
         be remedied, shall have been given to the Servicer by the Purchaser;

                  (b) failure by the Servicer to duly observe or perform, in any
         material respect, any other covenants, obligations or agreements of the
         Servicer as set forth in this Agreement which failure continues
         unremedied for a period of thirty (30) days after the date on which
         written notice of such failure, requiring the same to be remedied,
         shall have been given to the Servicer by the Purchaser;

                  (c) a decree or order of a court or agency or supervisory
         authority having jurisdiction for the appointment of a conservator or
         receiver or liquidator in any insolvency, bankruptcy, readjustment of
         debt, marshalling of assets and liabilities or similar proceedings, or
         for the winding-up or liquidation of its affairs, shall have been
         entered against the Servicer and such decree or order shall have
         remained in force, undischarged or unstayed for a period of sixty (60)
         days;

                  (d) the Servicer shall consent to the appointment of a
         conservator or receiver or liquidator in any insolvency, bankruptcy,
         readjustment of debt, marshalling of assets and liabilities or similar
         proceedings of or relating to the Servicer or relating to all or
         substantially all of the Servicer's property;

                  (e) the Servicer shall admit in writing its inability to pay
         its debts 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;

                  (f) the Servicer shall cease to be qualified to do business
         under the laws of any state in which a Mortgaged Property is located,
         but only to the extent such qualification is necessary to ensure the
         enforceability of each Mortgage Loan and to perform the Servicer's
         obligations under this Agreement; or

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<PAGE>

                  (g) the Servicer shall fail to meet the servicer eligibility
         qualifications of Fannie Mae or the Servicer shall fail to meet the
         servicer eligibility qualifications of Freddie Mac;

then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Servicer, may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, commence termination of
all the rights and obligations of the Servicer under this Agreement and in and
to the Mortgage Loans and the proceeds thereof. Upon receipt by the Servicer of
such written notice from the Purchaser stating that they intend to terminate the
Servicer as a result of such Event of Default, all authority and power of the
Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant to
Subsection 14.02. Upon written request from the Purchaser, the Servicer shall
prepare, execute and deliver to a successor any and all documents and other
instruments, place in such successor's possession all Mortgage Files and do or
cause to be done all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, including, but not limited to, the
transfer and endorsement or assignment of the Mortgage Loans and related
documents to the successor at the Servicer's sole expense. The Servicer agrees
to cooperate with the Purchaser and such successor in effecting the termination
of the Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to such successor for administration by it of all
amounts which shall at the time be credited by the Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.

         Subsection 13.02 Waiver of Default.

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

         SECTION 14. Termination.

         Subsection 14.01 Termination.

         The respective obligations and responsibilities of the Servicer, as
servicer, shall terminate upon (a) the distribution to the Purchaser of the
final payment or liquidation with respect to the last Mortgage Loan (or advances
of same by the Servicer), (b) the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure with respect to the last Mortgage
Loan and the remittance of all funds due hereunder or (c) by mutual consent of
the Servicer and the Purchaser in writing. Upon written request from the
Purchaser in connection with any such termination, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in the
Purchaser's possession all Mortgage Files, and do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at the Purchaser's sole
expense. The Servicer agrees to

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<PAGE>

cooperate with the Purchaser and such successor in effecting the termination of
the Servicer's responsibilities and rights hereunder as servicer, including,F
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.

         Subsection 14.02 Successors to the Servicer.

         Prior to the termination of the Servicer's responsibilities and duties
under this Agreement pursuant to Subsections 12.04, 13.01 or 14.01, the
Purchaser shall, (a) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement or (b)
appoint a successor which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
upon such termination. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree. In the event
that the Servicer's duties, responsibilities and liabilities under this
Agreement shall be terminated pursuant to the aforementioned Subsections, the
Servicer shall discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of its successor. The
resignation or removal of the Servicer pursuant to the aforementioned
Subsections shall not become effective until a successor shall be appointed
pursuant to this Subsection and shall in no event relieve the Seller of the
representations and warranties made pursuant to Subsections 7.01 and 7.02 and
the remedies available to the Purchaser under Subsection 7.03, it being
understood and agreed that the provisions of such Subsections 7.01 and 7.02
shall be applicable to the Seller notwithstanding any such resignation or
termination of the Servicer, or the termination of this Agreement.

         Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or this Agreement pursuant to
Subsections 12.04, 13.01 or 14.01 shall not affect any claims that the Purchaser
may have against the Servicer arising prior to any such termination or
resignation.

         The Servicer shall promptly deliver to the successor the funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Servicer shall account for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.

         Upon a successor's acceptance of appointment as such, the Servicer
shall notify by mail the Purchaser of such appointment.

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<PAGE>

         SECTION 15. Notices.

         All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:

         (a)      if to the Purchaser:

                  Morgan Stanley Mortgage Capital Inc.
                  1633 Broadway
                  New York, New York  10019
                  Attention:  Whole Loan Operations Manager

         (b)      if to the Seller:

                  Bank of America, N.A.
                  201 North Tryon Street
                  Charlotte, North Carolina 28255
                  Attention:  Secondary Marketing Manager

         (c)      if to the Servicer:

                  Bank of America, N.A.
                  475 Crosspoint Parkway
                  Getzville, New York  14068-9000
                  Attention:  Servicing Manager

or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).

         SECTION 16. Severability Clause.

         Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop

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<PAGE>

a structure the economic effect of which is nearly as possible the same as the
economic effect of this Agreement without regard to such invalidity.

         SECTION 17. No Partnership.

         Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
the Purchaser.

         SECTION 18. Counterparts.

         This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.

         SECTION 19. Governing Law.

EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW, THE 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 THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PROVISIONS OF NEW YORK OR ANY OTHER JURISDICTION.

         SECTION 20. Intention of the Parties.

         It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling, the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which shall affect the federal income
tax consequences of owning the Mortgage Loans and the Seller shall cooperate
with all reasonable requests made by the Purchaser in the course of such review.

         It is not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Seller or if for any
other reason this Agreement is held or deemed to create a security interest in
either such assets, then (a) this Agreement shall be deemed to be a security
agreement within the meaning of the Uniform Commercial Code of the State of New
York and (b) the conveyances provided for in this Agreement shall be deemed to
be an assignment and a grant by the Seller to the Purchaser of a security
interest in all of the assets transferred, whether now owned or hereafter
acquired.

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<PAGE>

         SECTION 21. Waivers.

         No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.

         SECTION 22. Exhibits.

         The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.

         SECTION 23. General Interpretive Principles.

         For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

                  (a) the terms defined in this Agreement have the meanings
         assigned to them in this Agreement and include the plural as well as
         the singular, and the use of any gender herein shall be deemed to
         include the other gender;

                  (b) accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles;

                  (c) references herein to "Articles," "Sections,"
         "Subsections," "Paragraphs" and other subdivisions without reference to
         a document are to designated Articles, Sections, Subsections,
         Paragraphs and other subdivisions of this Agreement;

                  (d) reference to a Subsection without further reference to a
         Section is a reference to such Subsection as contained in the same
         Section in which the reference appears, and this rule shall also apply
         to Paragraphs and other subdivisions;

                  (e) the words "herein," "hereof," "hereunder" and other words
         of similar import refer to this Agreement as a whole and not to any
         particular provision; and

                  (f) the term "include" or "including" shall mean without
         limitation by reason of enumeration.

         SECTION 24. Reproduction of Documents.

         This Agreement and all documents relating thereto, including, without
limitation (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
agree that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party hereto
in the regular course of business, and that

                                       58
<PAGE>

any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

         SECTION 25. Amendment.

         This Agreement may be amended from time to time by the Purchaser, the
Seller and the Servicer by written agreement signed by the parties hereto.

         SECTION 26. Confidentiality.

         Each of the Purchaser, the Seller and the Servicer shall employ proper
procedures and standards designed to maintain the confidential nature of the
terms of this Agreement, except to the extent (a) the disclosure of which is
reasonably believed by such party to be required in connection with regulatory
requirements or other legal requirements relating to its affairs; (b) disclosed
to any one or more of such party's employees, officers, directors, agents,
attorneys or accountants who would have access to the contents of this Agreement
and such data and information in the normal course of the performance of such
person's duties for such party, to the extent such party has procedures in
effect to inform such person of the confidential nature thereof; (c) that is
disclosed in a prospectus, prospectus supplement or private placement memorandum
relating to a Securitization of the Mortgage Loans by the Purchaser (or an
affiliate assignee thereof) or to any person in connection with the resale or
proposed resale of all or a portion of the Mortgage Loans by such party in
accordance with the terms of this Agreement; and (d) that is reasonably believed
by such party to be necessary for the enforcement of such party's rights under
this Agreement.

         Notwithstanding any other express or implied agreement to the contrary,
each of the Purchaser and the Seller agree and acknowledge that each of them and
each of their employees, representatives, and other agents may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure, except to the extent that confidentiality is
reasonably necessary to comply with U.S. federal or state securities laws. For
purposes of this paragraph, the terms "tax treatment" and "tax structure" have
the meanings specified in Treasury Regulation section 1.6011-4(c).

         SECTION 27. Entire Agreement.

         This Agreement constitutes the entire agreement and understanding
relating to the subject matter hereof between the parties hereto and any prior
oral or written agreements between them shall be deemed to have merged herewith.

         SECTION 28. Further Agreements; Securitization.

         The Seller and the Purchaser agree that with respect to some or all of
the Mortgage Loans, after the related Closing Date, on one or more dates (each,
a "Reconstitution Date") at the Purchaser's sole option, the Purchaser may
effect a sale (each, a "Reconstitution") of some or all of the Mortgage Loans
then subject to this Agreement, without recourse, to:

                                       59
<PAGE>

         (a) Fannie Mae under its Cash Purchase Program or MBS Program (Special
Servicing Option) (each, a "Fannie Mae Transfer"); or

         (b) Freddie Mac (the "Freddie Mac Transfer"); or

         (c) one or more third party purchasers in one or more Whole Loan
Transfers;

         (d) or one or more trusts or other entities to be formed as part of one
or more Securitizations.

         The Seller, the Servicer and the Purchaser each agree to execute and
deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate the
purposes of this Agreement.

         The Seller and the Servicer each agree to enter into additional
documents, instruments or agreements as may be necessary to effect one or more
Whole Loan Transfers, Agency Transfers or Securitizations of the Mortgage Loans,
including without limitation documents which contain representations to the
Purchaser and the applicable depositor, trustee and initial purchaser of the
Securities in the Securitization (1) that the Seller has serviced the Mortgage
Loans in accordance with the terms of the Agreement, and otherwise complied with
all covenants and obligations thereunder, and (2) that the Seller has taken no
action nor omitted to take any required action the omission of which would have
the effect of impairing any mortgage insurance or guarantee on the Mortgage
Loans. The parties also agree that the provisions of this Agreement may be
altered in a manner reasonably acceptable to the Servicer if necessary to effect
a Securitization (including, but not limited to, any changes required (i) to
satisfy rating agency requirements or (ii) to qualify for treatment as one or
more real estate mortgage investment conduits) or an Agency Transfer. The Seller
agrees to restate to the Purchaser, the applicable depositor and trustee the
representations and warranties contained in Subsection 7.01 of this Agreement as
of the applicable Closing Date and in Subsection 7.02 of this Agreement as of
the closing date of the applicable Securitization if required by the Purchaser.
In addition, the Seller shall indemnify the Purchaser, each affiliate of the
Purchaser participating in the Reconstitution and each Person who controls the
Purchaser or such affiliate, and hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses arising
out of any material misstatements or omissions contained in any information
provided to the Purchaser and included in any disclosure statements distributed
by the Purchaser; provided, however, that the Purchaser shall indemnify the
Seller, its successors and assigns and each Person who controls the Seller, and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses arising out of any material
misstatements or omissions contained in all other information the Purchaser may
disclose in connection with the Reconstitution. For purposes of the preceding
sentence, "Purchaser" shall mean the Person then acting as Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under Section
29 of this Agreement. With respect to each Agency Transfer by the Purchaser, the
Seller and the Servicer agree to cooperate with the Purchaser as may be
necessary to effect such Agency Transfer, including, without limitation,
entering into additional agreements whereby the Servicer shall service the
Mortgage Loans in accordance with either the Fannie Mae Guides or the Freddie
Mac Guide, as applicable.

                                       60
<PAGE>

         With respect to any Mortgage Loans sold in a Securitization Transfer
where the Servicer is the servicer, the Servicer agrees that on or before March
15th of each year beginning March 15, 2004, the Servicer shall deliver to the
depositor, the master servicer (if any) and the trustee for the securitization
trust in the Securitization Transfer, and their officers, directors and
affiliates, a certification in the form attached as Exhibit 13 hereto, executed
by an officer of the Servicer for use in connection with any Form 10-K to be
filed with the Securities and Exchange Commission with respect to the
securitization trust. The Servicer shall indemnify and hold harmless the
depositor, the master servicer (if any) and the trustee, and their respective
officers, directors and Affiliates, from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments and other costs and expenses arising out of or based upon any breach
of the Servicer's obligations under this paragraph or any material misstatement
or omission, negligence, bad faith or willful misconduct of the Servicer in
connection therewith. If the indemnification provided for in the preceding
sentence is unavailable or insufficient to hold harmless any indemnified party,
then the Servicer agrees that it shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims, damages or
liabilities of such indemnified party in such proportion as is appropriate to
reflect the relative fault of such indemnified party, on the one hand, and the
Servicer, on the other, in connection with a breach of the Servicer's
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of the Servicer in connection
therewith.

         The parties also agree that the provisions of this Agreement may be
altered in a manner reasonably acceptable to the Servicer if necessary to effect
a Securitization (including, but not limited to, any changes required (i) to
satisfy Rating Agency requirements or (ii) to qualify for treatment as one or
more real estate mortgage investment conduits).

         All reasonable out of pocket costs actually incurred by the Seller and
the Servicer, including reasonable attorney's fees and accountant's fees, in
connection with performing its obligations under this Section 28 with respect to
a Reconstitution shall be paid or reimbursed by the Purchaser upon demand
therefor.

         SECTION 29. Successors and Assigns.

         This Agreement shall bind and inure to the benefit of and be
enforceable by the initial Purchaser, the Seller and the Servicer, and the
respective successors and assigns of the Purchaser, the Seller and the Servicer.
The initial Purchaser and any subsequent purchasers may assign this Agreement to
any Person to whom any Mortgage Loan is transferred pursuant to a sale or
financing upon prior written notice to the Servicer in accordance with the
following paragraph; provided, however, that the Servicer shall not be required
to service the Mortgage Loans for more than three (3) Persons for assignees of
Morgan Stanley Mortgage Capital Inc. or its respective affiliates at any time
and shall not recognize any assignment of this Agreement to the extent that
following such assignment more than such number of Persons would be purchasers
hereunder. As used herein, the trust formed in connection with a Securitization
shall be deemed to constitute a single "Person." Upon any such assignment and
written notice thereof to the Servicer, the Person to whom such assignment is
made shall succeed to all rights and obligations of the Purchaser under this
Agreement to the extent of the related Mortgage Loan or Mortgage Loans and this
Agreement, to the extent of the related Mortgage Loan or Mortgage

                                       61
<PAGE>

Loans, shall be deemed to be a separate and distinct agreement between the
Servicer and such purchaser, and a separate and distinct agreement between the
Servicer and each other purchaser to the extent of the other related Mortgage
Loan or Mortgage Loans.

         At least five (5) Business Days prior to the end of the month preceding
the date upon which the first remittance is to be made to an assignee of the
Purchaser, the Purchaser shall provide to the Servicer written notice of any
assignment setting forth: (a) the Servicer's applicable Mortgage Loan
identifying number for each of the Mortgage Loans affected by such assignment;
(b) the aggregate scheduled transfer balance of such Mortgage Loans; and (c) the
full name, address and wiring instructions of the assignee and the name and
telephone number of an individual representative for such assignee, to whom the
Servicer should: (i) send remittances; (ii) send any notices required by or
provided for in this Agreement; and (iii) deliver any legal documents relating
to the Mortgage Loans (including, but not limited to, contents of any Mortgage
File obtained after the effective date of any assignment).

         If the Purchaser has not provided the notice of assignment required by
this Section 29, the Servicer shall not be required to treat any other Person as
a "Purchaser" hereunder and may continue to treat the Purchaser which purports
to assign the Agreement as the "Purchaser" for all purposes of this Agreement.

         SECTION 30. Non-Solicitation.

         From and after the Closing Date, the Seller, the Servicer and any of
their respective affiliates hereby agrees that it will not take any action or
permit or cause any action to be taken by any of its agents or affiliates, or by
any independent contractors on its behalf, to personally, by telephone or mail,
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. It is understood and agreed that all rights and benefits relating to
the solicitation of any Mortgagors and the attendant rights, title and interest
in and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the Closing Date and none of the Seller, the Servicer or any
of their respective affiliates shall take any action to undermine these rights
and benefits.

         Notwithstanding the foregoing, it is understood and agreed that the
Seller, the Servicer or any of their respective affiliates:

                  (a) may advertise its availability for handling refinancings
         of mortgages in its portfolio, including the promotion of terms it has
         available for such refinancings, through the sending of letters or
         promotional material, so long as it does not specifically target
         Mortgagors and so long as such promotional material either is sent to
         the mortgagors for all of the mortgages in the A-quality servicing
         portfolio of the Seller, the Servicer and any of their affiliates
         (those it owns as well as those serviced for others) or sent to all of
         the mortgagors who have specific types of mortgages (such as FHA, VA,
         conventional fixed-rate or conventional adjustable-rate, or sent to
         those mortgagors whose mortgages fall within specific interest rate
         ranges;

                                       62
<PAGE>

                  (b) may provide pay-off information and otherwise cooperate
         with individual mortgagors who contact it about prepaying their
         mortgages by advising them of refinancing terms and streamlined
         origination arrangements that are available; and

                  (c) may offer to refinance a Mortgage Loan made within thirty
         (30) days following receipt by it of a pay-off request from the related
         Mortgagor.

         Promotions undertaken by the Seller or the Servicer or by any affiliate
of the Seller or the Servicer which are directed to the general public at large
(including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements), shall not
constitute solicitation under this Section 30.

         SECTION 31. Protection of Consumer Information.

         The Purchaser agrees that the Purchaser (i) shall comply with any
applicable laws and regulations regarding the privacy and security of Consumer
Information, (ii) shall not use Consumer Information in any manner inconsistent
with any applicable laws and regulations regarding the privacy and security of
Consumer Information, (iii) shall not disclose Consumer Information to third
parties except at the specific written direction of the Seller or the Servicer,
(iv) shall maintain adequate physical, technical and administrative safeguards
to protect Consumer Information from unauthorized access and (v) shall
immediately notify the Seller of any actual or suspected breach of the
confidentiality of Consumer Information.

         The Purchaser agrees that the Purchaser shall indemnify, defend and
hold the Seller and the Servicer harmless from and against any loss, claim or
liability the Seller or the Servicer may suffer by reason of the Purchaser's
failure to perform the obligations set forth in this Section 31.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       63
<PAGE>

         IN WITNESS WHEREOF, the Purchaser, the Seller and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized on the date first above written.

                                   MORGAN STANLEY MORTGAGE CAPITAL INC.,

                                   as Purchaser

                                   By:      /s/ Kevin G. Chavers
                                            ------------------------------------
                                   Name:    Kevin G. Chavers
                                            ------------------------------------
                                   Title:   Vice President
                                            ------------------------------------

                                   BANK OF AMERICA, N.A.,

                                   as Seller and as Servicer

                                   By:      /s/ Jill E. Payne
                                            ------------------------------------
                                   Name:    Jill E. Payne
                                            ------------------------------------
                                   Title:   Vice President
                                            ------------------------------------

       [Signature Page to Flow Mortgage Loan Sale and Servicing Agreement,
                          dated as of October 1, 2003]

<PAGE>

                                    EXHIBIT 1

                             MORTGAGE LOAN DOCUMENTS

With respect to each Mortgage Loan, the Mortgage Loan Documents shall consist of
the following:

                  (a) the original Mortgage Note bearing all intervening
         endorsements, endorsed in blank and signed in the name of the Seller by
         an officer thereof or, if the original Mortgage Note has been lost or
         destroyed, a lost note affidavit substantially in the form of Exhibit 7
         hereto;

                  (a) the original Assignment of Mortgage with assignee's name
         left blank;

                  (b) the original of any guarantee executed in connection with
         the Mortgage Note;

                  (c) the original Mortgage with evidence of recording thereon,
         or if any such mortgage has not been returned from the applicable
         recording office or has been lost, or if such public recording office
         retains the original recorded mortgage, a photocopy of such mortgage
         certified by the Seller to be a true and complete copy of the original
         recorded mortgage;

                  (d) the originals of all assumption, modification,
         consolidation or extension agreements, if any, with evidence of
         recording thereon;

                  (e) the originals of all intervening assignments of mortgage
         with evidence of recording thereon, or if any such intervening
         assignment of mortgage has not been returned from the applicable
         recording office or has been lost or if such public recording office
         retains the original recorded assignments of mortgage, a photocopy of
         such intervening assignment of mortgage, certified by the Seller to be
         a true and complete copy of the original recorded intervening
         assignment of mortgage;

                  (f) the original mortgagee title insurance policy including an
         Environmental Protection Agency Endorsement and, with respect to any
         Adjustable Rate Mortgage Loan, an adjustable-rate endorsement;

                  (g) the original of any security agreement, chattel mortgage
         or equivalent document executed in connection with the Mortgage;

                  (h) a copy of any applicable power of attorney;

                  (i) with respect to any Cooperative Loan, the applicable
         Cooperative Loan Documents; and

                                      1-1
<PAGE>

(j)      with respect to the Non-Conventional Mortgage Loans, the MIC or LGC, as
         applicable, or any other evidence of FHA insurance coverage or VA
         guaranty, as the case may be.

                                      1-2
<PAGE>

                                    EXHIBIT 2

                         CONTENTS OF EACH MORTGAGE FILE

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, unless otherwise disclosed to the Purchaser on the
data tape, which shall be available for inspection by the Purchaser and which
shall be retained by the Servicer or delivered to the Purchaser:

                  (a) Copies of the Mortgage Loan Documents.

                  (b) Residential loan application.

                  (c) Mortgage Loan closing statement.

                  (d) Verification of employment and income, if required.

                  (e) Verification of acceptable evidence of source and amount
         of down payment.

                  (f) Credit report on Mortgagor, in a form acceptable to either
         Fannie Mae or Freddie Mac.

                  (g) Residential appraisal report.

                  (h) Photograph of the Mortgaged Property.

                  (i) Survey of the Mortgaged Property, unless a survey is not
         required by the title insurer.

                  (j) Copy of each instrument necessary to complete
         identification of any exception set forth in the exception schedule in
         the title policy, i.e., map or plat, restrictions, easements, home
         owner association declarations, etc.

                  (k) Copies of all required disclosure statements.

                  (l) If applicable, termite report, structural engineer's
         report, water potability and septic certification.

                  (m) Sales contract, if applicable.

                  (n) The Primary Mortgage Insurance policy or certificate of
         insurance or electronic notation of the existence of such policy, where
         required pursuant to the Agreement.

                  (o) Evidence of electronic notation of the hazard insurance
         policy, and, if required by law, evidence of the flood insurance
         policy.

                                      2-1
<PAGE>

                                    EXHIBIT 3

                                    RESERVED

                                      3-1
<PAGE>

                                    EXHIBIT 4

                     FORM OF CUSTODIAL ACCOUNT CERTIFICATION

                                                              _________ __, 2003

Bank of America, N.A. hereby certifies that it has established the account
described below as a Custodial Account pursuant to Subsection 11.04 of the Flow
Mortgage Loan Sale and Servicing Agreement, dated October 1, 2003, Residential
Mortgage Loans.

Title of Account: "Bank of America, N.A., in trust for Morgan Stanley Mortgage
Capital Inc., as Purchaser of Mortgage Loans and various Mortgagors."

Account Number:
                  --------------------------

Address of office or branch of
Bank of America, N.A. at which
the Custodial Account is maintained:    475 Crosspoint Parkway
                                        Getzville, New York  14068-9000

                                        BANK OF AMERICA, N.A.

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

                                      4-1

<PAGE>

                                    EXHIBIT 5

                          ESCROW ACCOUNT CERTIFICATION

                                                              _________ __, 2003

Bank of America, N.A. hereby certifies that it has established the account
described below as an Escrow Account pursuant to Subsection 11.06 of the Flow
Mortgage Loan Sale and Servicing Agreement, dated October 1, 2003, Residential
Mortgage Loans.

Title of Account: "Bank of America, N.A., in trust for Morgan Stanley Mortgage
Capital Inc., as Purchaser of Mortgage Loans and various Mortgagors."

Account Number:
                  --------------------------

Address of office or branch of
Bank of America, N.A. at which
the Escrow Account is maintained:       475 Crosspoint Parkway
                                        Getzville, New York  14068-9000

                                        BANK OF AMERICA, N.A.

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

                                      5-1
<PAGE>

                                    EXHIBIT 6

                             UNDERWRITING GUIDELINES

                          [ON FILE WITH THE PURCHASER]

                                      6-1
<PAGE>

                                    EXHIBIT 7

                           FORM OF LOST NOTE AFFIDAVIT

         ________________________________________, being first duly sworn upon
oath deposes and states:

         That he/she is authorized by Bank of America, N.A. ("B of A") to
execute this Lost Note Affidavit on behalf of B of A. Notwithstanding anything
contained herein, he/she shall have no personal liability pursuant to this Lost
Note Affidavit.

         That the note dated ______________, executed by _______________ in the
original principal sum of $____________, payable to the order of
__________________ and secured by a mortgage (or deed of trust or other
instrument creating a lien securing the Note (as defined below)) of even date on
premises commonly known as ________________________________
____________________________, a copy of which is attached hereto as Exhibit A
(the "Note") was lost and /or destroyed and the affiant herein has no knowledge
of the location or whereabouts of said Note and said Note has not been paid,
satisfied, transferred, assigned, pledged, or hypothecated in any way.

         NOW THEREFORE, for and in consideration of _______________and its
successors and/or assigns, accepting a certified copy of the Note identified on
Exhibit "A" in lieu of the original Note, B of A does hereby agree to defend,
indemnify and hold harmless __________ _______________ its respective
transferees, and their respective assigns (the "Indemnified") from and against
any and all loss or damage, together with all reasonable costs, charges and
expenses (whether or not a lawsuit is filed) (collectively, the "Loss") incurred
as a result of the inability to enforce the Note in accordance with its terms
due to the lack of an original Note or incurred by reason of any claim, demand,
suit, cause of action or proceeding by a third party arising out of the
Indemnified's inability to enforce the Note according to its terms or the
inability to receive any related insurance proceeds due to the lack of an
original Note by a third party. B of A shall pay any such Loss upon demand
provided that B of A is notified of any such Loss in writing, after __________
or transferee becomes aware of same, at the following address: Bank of America,
201 North Tryon Street, 5th Floor, Charlotte, North Carolina 28255; Attention:
Secondary Marketing Manager; with copy to _______________________; Attention:
________________. B of A does hereby further agree that should the original Note
ever be found by it, it will promptly notify _________________ or its respective
transferees, or their respective assigns, as applicable, and upon receipt by B
of A of the original Note, will endorse to _______________ or its designee or
transferee, as applicable, without recourse, such original Note and promptly
forward said Note to_______________ or its designee or transferee, as
applicable. Upon receipt to the original Note by __________________ this
indemnification agreement shall become null and void as to any loss accruing
subsequent to _____________ ___________'s receipt of such original Note,
however, B of A shall remain liable as to any loss accruing on or prior to
__________________'s receipt of such original Note.

                                      7-1
<PAGE>

         Executed this _______day of _________________, 200__.

                                          BANK OF AMERICA, N.A.

                                          By:
                                              ----------------------------------
                                          Witness:
                                                   -----------------------------

         Subscribed and sworn to before me this _______ day of_________________,
200__.

-----------------------------------
Notary Public

                                      7-2
<PAGE>

                                    EXHIBIT 8

                        FORM OF MONTHLY REMITTANCE REPORT

                               [SELLER TO PROVIDE]

                                      8-1
<PAGE>

                                    EXHIBIT 9

                               FORM OF TERM SHEET

                  CLOSING DATE:
                                -----------------

         This Term Sheet (together with the PPTA (as defined below), if any,
this "Term Sheet"), dated as of _______ (the "Closing Date"), together with the
related Purchase Price and Terms Agreement, if any, executed in connection with
this Term Sheet by and between Bank of America, N.A. (the "Seller") and Morgan
Stanley Mortgage Capital Inc. (the "Purchaser") (the "PPTA"), confirms the sale
by the Seller to the Purchaser, and the purchase by the Purchaser from the
Seller, of the first lien residential mortgage loans on a servicing retained
basis described on the Mortgage Loan Schedule attached as Schedule I hereto (the
"Mortgage Loans"), pursuant to the terms of the Flow Mortgage Loan Sale and
Servicing Agreement (the "Flow Sale and Servicing Agreement"), dated as of
October 1, 2003, by and between the Purchaser and the Seller. Capitalized terms
that are used herein but are not defined herein shall have the respective
meanings set forth in the Flow Sale and Servicing Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Seller does hereby bargain, sell, convey,
assign and transfer to Purchaser without recourse, except as provided in the
Flow Sale and Servicing Agreement, and on a servicing retained basis, all right,
title and interest of the Seller in and to each of the Mortgage Loans, together
with all documents maintained as part of the related Mortgage Files, all
Mortgaged Properties which secure any Mortgage Loan but are acquired by
foreclosure, deed in lieu of foreclosure after the Cut-off Date or otherwise,
all payments of principal and interest received on the Mortgage Loans after the
Cut-off Date, all other unscheduled collections collected in respect of the
Mortgage Loans after the Cut-off Date, and all proceeds of the foregoing,
subject, however, to the rights of the Seller under the Flow Sale and Servicing
Agreement.

         To the extent of any inconsistency or conflict between or among the
provisions of the related PPTA and the provisions hereof and of the Flow Sale
and Servicing Agreement, the provisions of such PPTA shall govern and control.
To the extent the provisions of the related PPTA are not inconsistent or do not
conflict with the provisions hereof and of the Flow Sale and Servicing
Agreement, the provisions hereof and of the Flow Sale and Servicing Agreement
shall govern and control.

         The Seller has delivered to the Purchaser or its designee prior to the
date hereof the documents with respect to each Mortgage Loan required to be
delivered under the Flow Sale and Servicing Agreement.

         For purposes of the Mortgage Loans sold pursuant to this Term Sheet,
certain terms shall be as set forth below:

                                      9-1
<PAGE>

        Cut-off Date Principal Balance:    $
                                            ----------------------
        Closing Date:
                                            ----------------------
        Cut-off Date:
                                            ----------------------
        Purchase Price Percentage:                   %
                                            ---------
        Servicing Fee Rate:                          %
                                            ---------

                         [SIGNATURES ON FOLLOWING PAGE]

                                      9-2
<PAGE>

         In WITNESS WHEREOF, the parties hereto, by the hands of their duly
authorized officers, execute this Term Sheet as of the Closing Date referred to
above.

MORGAN STANLEY MORTGAGE CAPITAL INC.       BANK OF AMERICA, N.A.
                                           as Seller
as Purchaser

By:                                        By:
    ---------------------------------          ---------------------------------
Name:                                      Name:
      -------------------------------            -------------------------------
Its:                                       Its:
     --------------------------------           --------------------------------
By:
    ---------------------------------
Name:
      -------------------------------
Its:
     --------------------------------

                                      9-3
<PAGE>

                                   EXHIBIT 10

                     FORM OF SELLER'S OFFICER'S CERTIFICATE

                  I, [_____________], hereby certify that I am a duly elected
[_____________] of Bank of America, N.A., a national banking association (the
"Bank"), and further certify, on behalf of the Bank as follows:

                  1. Attached hereto as Attachment I are a true and correct copy
of the Articles of Association and by-laws of the Bank as are in full force and
effect on the date hereof. No event has occurred which has affected the good
standing of the Bank under the laws of the United States.

                  2. No proceedings looking toward liquidation, dissolution or
bankruptcy of the Bank or a merger pursuant to which the Bank would not be the
surviving entity are pending or contemplated.

                  3. Each person who, as an officer or attorney-in-fact of the
Bank, signed (a) the Flow Mortgage Loan Sale and Servicing Agreement (the "Sale
Agreement"), dated October 1, 2003, by and between the Bank, as seller and as
servicer, Morgan Stanley Mortgage Capital Inc., as purchaser, and (b) any other
document delivered prior hereto or on the date hereof in connection with the
sale and servicing of the Mortgage Loans in accordance with the Sale Agreement
was, at the respective times of such signing and delivery, and is, as of the
date hereof, duly elected or appointed, qualified and acting as such officer or
attorney-in-fact, and the signatures of such persons appearing on such documents
are their genuine signatures.

                  4. All of the representations and warranties of the Bank
contained in Subsections 7.01 and 7.02 of the Sale Agreement were true and
correct in all material respects as of the Closing Date.

                  5. The Bank has performed all of its duties and has satisfied
all the material conditions on its part to be performed or satisfied prior to
the Closing Date pursuant to the Sale Agreement.

                  All capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Sale Agreement.

                                      10-1
<PAGE>

                  IN WITNESS WHEREOF, I have hereunto signed my name on this
____ day of _______, 2003.

                                        BANK OF AMERICA, N.A.

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

I, _________________________, a ____________________ of Bank of America, N.A.,
hereby certify that __________________________ is a duly elected, qualified and
acting _______________________ of the Seller and the Servicer and that the
signature appearing above is such person's genuine signature.

IN WITNESS WHEREOF, I have hereunto signed my name on this ____ day of ____,
2003.

                                        BANK OF AMERICA, N.A.

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

                                      10-2
<PAGE>

                                   EXHIBIT 11

                    FORM OF OPINION OF COUNSEL TO THE SELLER

October __, 2003

Morgan Stanley Mortgage Capital Inc.
1633 Broadway
New York, New York 10019

Ladies and Gentlemen:

                  I am Assistant General Counsel to Bank of America Corporation
and have acted as special counsel to Bank of America, N.A. (the "Bank") in
connection with the transactions referred to herein. In that capacity, I am
familiar with the sale by the Bank of the Mortgage Loans pursuant to that
certain Flow Mortgage Loan Sale and Servicing Agreement by and between the Bank,
as Seller and as Servicer, and Morgan Stanley Mortgage Capital Inc., as
Purchaser, dated as of October 1, 2003 (the "Sale Agreement") and that certain
Custodial Agreement by and between the Bank and Deutsche Bank Trust Company
Americas, dated as of October 1, 2003 (the "Custodial Agreement" and, together
with the Sale Agreement, the "Agreements"). Capitalized terms not otherwise
defined herein have the meanings set forth in the Sale Agreement.

                  In connection with rendering this opinion letter, I have
examined the Agreements and such other records and other documents as I have
deemed necessary and relevant. As to matters of fact, I have examined and relied
upon representations of the parties contained in the Agreements and, where I
have deemed appropriate, representations and certifications of officers of the
Bank or public officials. I have assumed the authenticity of all documents
submitted to me as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all documents
submitted to me as copies. I have assumed that all parties, except for the Bank,
had the corporate power and authority to enter into and perform all obligations
under such documents, and, as to such parties, I also have assumed the due
authorization by all requisite corporate action, the due execution and delivery
and the validity, binding effect and enforceability of such documents. I have
not examined the Mortgages, the Mortgage Loan Documents or other documents in
the Mortgage Files (such documents, collectively, the "Mortgage Documents"), and
I express no opinion concerning the conformity of any of the Mortgage Documents
to the requirements of the Agreements.

                  The opinions set forth herein are limited to matters governed
by the laws of the State of North Carolina and the federal laws of the United
States of America, and no opinion is expressed herein as to the laws of any
other jurisdiction. For purposes of these opinions, I have disregarded the
choice of law provision in the Agreements and, instead, have assumed that the
Agreements are governed exclusively by the internal, substantive laws and
judicial interpretation of the State of North Carolina. I assume no obligation
to supplement this opinion if any applicable laws change after the date of this
opinion, or if I become aware of any facts that might change the opinions
expressed herein after the date of this opinion. I do not express any opinion,
either implicitly or otherwise, on any issue not expressly addressed below.

                                      11-1
<PAGE>

                  Based upon the foregoing, I am of the opinion that:

                  1. The Bank is duly organized and validly existing as a
national banking association in good standing under the federal laws of the
United States and has the requisite power and authority, corporate or other, to
own its own properties and conduct its own business, as presently conducted by
it, and to enter into and perform its obligations under the Agreements.

                  2. The Bank has authorized the execution, delivery and
performance of the Agreements by all necessary corporate action and the
Agreements have been duly executed and delivered by the Bank.

                  3. No consent, approval, authorization or order of any State
of North Carolina or federal court or governmental agency or body is required
for the execution, delivery and performance by the Bank of the Agreements or the
consummation by the Bank of the transactions contemplated by the terms of the
Agreements, except for those consents, approvals, authorizations or orders which
previously have been obtained.

                  4. The Agreements constitute the legal, valid and binding
obligations of the Bank, enforceable against the Bank in accordance with their
terms, subject to the following:

                  (a) This opinion is subject to the effect of applicable
                  bankruptcy, insolvency, receivership, reorganization,
                  fraudulent conveyance, moratorium and similar laws affecting
                  the enforcement of creditors' rights generally.

                  (b) The opinion is subject to the effect of general principles
                  of equity (regardless of whether considered in a proceeding in
                  equity or at law), which may, among other things, deny rights
                  of specific performance.

                  5. The consummation of the transactions contemplated by, and
the performance by the Bank of any other of the terms of, the Agreements, will
not result in a breach of any term or provision of the articles of association
or by-laws of the Bank or, to the best of my knowledge, conflict with, result in
a breach, violation or acceleration of, or constitute a default under, the terms
of any material indenture or other material agreement or instrument to which the
Bank is a party or by which it is bound or any order of any State of North
Carolina or federal court, regulatory body, administrative agency or
governmental body having jurisdiction over the Bank.

                  6. To the best of my knowledge, there are no actions,
proceedings or investigations pending or threatened before any court,
administrative agency or other tribunal (a) asserting the invalidity of the
Agreements or (b) seeking to prevent the consummation of any of the transactions
contemplated by the Agreements, which might materially and adversely affect the
performance by the Bank of its obligations under, or the validity or
enforceability of, the Agreements.

                  This opinion letter is rendered for the sole benefit of the
persons or entities to which it is addressed, and no other person or entity is
entitled to rely hereon without my prior written consent. Copies of this opinion
letter may not be furnished to any other person or entity,

                                      11-2
<PAGE>

nor may any portion of this opinion letter be quoted, circulated or referred to
in any other document without my prior written consent.

                                  Very truly yours,

                                  Mark T. Cain
                                  Assistant General Counsel

                                      11-3
<PAGE>

                                   EXHIBIT 12

            FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this "Agreement") made this
_____ day of __________________, 200_, among BANK OF AMERICA, N.A., a national
banking association (the "Servicer"), _________________________ a
________________________ (the "Assignee"), and MORGAN STANLEY MORTGAGE CAPITAL
INC., a New York corporation (the "Assignor").

                  WHEREAS, the Assignor and the Servicer have entered into a
certain Flow Mortgage Loan Sale and Servicing Agreement dated as of October 1,
2003 (the "Sale and Servicing Agreement"), pursuant to which the Servicer sold
certain mortgage loans listed on the mortgage loan schedule attached as an
exhibit to the related Term Sheet, dated as of [____ __], 200_ (the "Term Sheet"
and, together with the Sale and Servicing Agreement, the "Assigned Agreements");

                  WHEREAS, the Assignee has agreed on certain terms and
conditions to purchase from the Assignor certain mortgage loans (the "Mortgage
Loans"), which Mortgage Loans are subject to the provisions of the Assigned
Agreements and are listed on the mortgage loan schedule attached as Exhibit 1
hereto (the "Mortgage Loan Schedule");

                  NOW THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

         1. Assignment and Assumption.

                           (a) The Assignor hereby assigns to the Assignee all
                  of its right, title and interest in and to the Mortgage Loans
                  and the Assigned Agreements, to the extent relating to the
                  Mortgage Loans (other than the rights of the Assignor to
                  indemnification thereunder), and the Assignee hereby assumes
                  all of the Assignor's obligations under the Assigned
                  Agreements, to the extent relating to the Mortgage Loans from
                  and after the date hereof, and the Servicer hereby
                  acknowledges such assignment and assumption and hereby agrees
                  to the release of the Assignor from any obligations under the
                  Assigned Agreements from and after the date hereof, to the
                  extent relating to the Mortgage Loans.

                           (b) The Assignor represents and warrants to the
                  Assignee that the Assignor has not taken any action which
                  would serve to impair or encumber the Assignor's ownership
                  interest in the Mortgage Loans since the date of the related
                  Term Sheet.

                           (c) The Servicer and the Assignor shall have the
                  right to amend, modify or terminate the Sale and Servicing
                  Agreement without the joinder of the Assignee with respect to
                  mortgage loans not conveyed to the Assignee hereunder,

                                      12-1
<PAGE>

                  provided, however, that such amendment, modification or
                  termination shall not affect or be binding on the Assignee.

                  2. Accuracy of Servicing Agreement.

                  The Servicer and the Assignor represent and warrant to the
Assignee that (i) attached hereto as Exhibit 2 are true, accurate and complete
copies of the Assigned Agreements, (ii) the Assigned Agreements are in full
force and effect as of the date hereof, (iii) the Assigned Agreements have not
been amended or modified in any respect and (iv) no notice of termination has
been given to the Servicer under the Sale and Servicing Agreement.

                  3. Recognition of Purchaser.

                  From and after the date hereof, the Servicer shall note the
transfer of the Mortgage Loans to the Assignee in its books and records, shall
recognize the Assignee as the owner of the Mortgage Loans and shall service the
Mortgage Loans for the benefit of the Assignee pursuant to the Sale and
Servicing Agreement, the terms of which are incorporated herein by reference. It
is the intention of the Assignor, Servicer and Assignee that the Assigned
Agreements shall be binding upon and inure to the benefit of the Servicer and
the Assignee and their successors and assigns.

                  4. Representations and Warranties of the Assignee.

                           (a) Decision to Purchase. The Assignee represents and
                  warrants that it is a sophisticated investor able to evaluate
                  the risks and merits of the transactions contemplated hereby,
                  and that it has not relied in connection therewith upon any
                  statements or representations of the Assignor or the Servicer
                  other than those contained in the Assigned Agreements or this
                  Agreement.

                           (b) Authority. The Assignee hereto represents and
                  warrants that it is duly and legally authorized to enter into
                  this Agreement and to perform its obligations hereunder and
                  under the Sale and Servicing Agreement.

                           (c) Enforceability. The Assignee hereto represents
                  and warrants that this Agreement has been duly authorized,
                  executed and delivered by it and (assuming due authorization,
                  execution and delivery thereof by each of the other parties
                  hereto) constitutes its legal, valid and binding obligation,
                  enforceable in accordance with its terms, except as such
                  enforcement may be limited by bankruptcy, insolvency,
                  reorganization or other similar laws affecting the enforcement
                  of creditors' rights generally and by general equitable
                  principles (regardless of whether such enforcement is
                  considered in a proceeding in equity or at law).

                  5. Representations and Warranties of the Assignor. The
Assignor hereby represents and warrants to the Assignee as follows:

                           (a) The Assignor has been duly organized and is a
                  validly existing New York corporation with full corporate
                  power and authority to enter into

                                      12-2
<PAGE>

                  and perform its obligations under the Assigned Agreements and
                  this Assignment Agreement.

                           (b) This Agreement has been duly executed and
                  delivered by the Assignor, and, assuming due authorization,
                  execution and delivery by each of the other parties hereto,
                  constitutes a legal, valid, and binding agreement of the
                  Assignor, enforceable against it in accordance with its terms,
                  subject to bankruptcy, insolvency, reorganization, moratorium,
                  or other similar laws affecting creditors' rights generally
                  and to general principles of equity regardless of whether
                  enforcement is sought in a proceeding in equity or at law.

                           (c) The execution, delivery and performance by the
                  Assignor of this Agreement and the consummation of the
                  transactions contemplated thereby do not require the consent
                  or approval of, the giving of notice to, the registration
                  with, or the taking of any other action in respect of, any
                  state, federal or other governmental authority or agency,
                  except such as has been obtained, given, effected or taken
                  prior to the date thereof.

                           (d) The execution and delivery of this Agreement have
                  been duly authorized by all necessary corporate action on the
                  part of the Assignor; neither the execution and delivery by
                  the Assignor of this Agreement, nor the consummation by the
                  Assignor of the transactions therein contemplated, nor
                  compliance by the Assignor with the provisions thereof, will
                  conflict with or result in a breach of, or constitute a
                  default under, any of the provisions of the governing
                  documents of the Assignor or any law, governmental rule or
                  regulation or any material judgment, decree or order binding
                  on the Assignor or any of its properties, or any of the
                  provisions of any material indenture, mortgage, deed of trust,
                  contract or other instrument to which the Assignor is a party
                  or by which it is bound.

                           (e) There are no actions, suits or proceedings
                  pending or, to the knowledge of the Assignor, threatened,
                  before or by any court, administrative agency, arbitrator or
                  governmental body (A) with respect to any of the transactions
                  contemplated by this Agreement or (B) with respect to any
                  other matter that in the judgment of the Assignor will be
                  determined adversely to the Assignor and will if determined
                  adversely to the Assignor materially adversely affect its
                  ability to perform its obligations under this Agreement.

                           (f) Except for the sale to the Assignee, the Assignor
                  has not assigned or pledged any Mortgage Note or the related
                  Mortgage or any interest or participation therein.

                           (g) The Assignor has not satisfied, canceled, or
                  subordinated in whole or in part, or rescinded the Mortgage,
                  and the Assignor has not released the Mortgaged Property from
                  the lien of the Mortgage, in whole or in part, nor has the
                  Assignor executed an instrument that would effect any such
                  release, cancellation, subordination, or rescission. The
                  Assignor has not released any Mortgagor, in

                                      12-3
<PAGE>

                  whole or in part, except in connection with an assumption
                  agreement or other agreement approved by the related Federal
                  Insurer, to the extent such approval was required.

                  It is understood and agreed that the representations and
warranties set forth in this Section 5 shall survive delivery of the respective
Mortgage Files to the Custodian and shall inure to the benefit of the Assignee
and its assigns notwithstanding any restrictive or qualified endorsement or
assignment. Upon the discovery by the Assignor or the Assignee and its assigns
of a breach of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other parties to
this Agreement, and in no event later than two (2) Business Days from the date
of such discovery. It is understood and agreed that the obligations of the
Assignor set forth in Section 6 to repurchase a Mortgage Loan constitute the
sole remedies available to the Assignee and its assigns on their behalf
respecting a breach of the representations and warranties contained in this
Section 5. It is further understood and agreed that the Assignor shall be deemed
not to have made the representations and warranties in this Section 5 with
respect to, and to the extent of, representations and warranties made, as to the
matters covered in this Section 5, by the Servicer in the Sale and Servicing
Agreement (or any officer's certificate delivered pursuant thereto).

                  It is understood and agreed that the Assignor has made no
representations or warranties to the Assignee other than those contained in this
Section 5, and no other affiliate of the Assignor has made any representations
or warranties of any kind to the Assignee.

                  6. Repurchase of Mortgage Loans.

                  Upon discovery or notice of any breach by the Assignor of any
representation, warranty, or covenant under this Agreement that materially and
adversely affects the value of any Mortgage Loan or the interest of the Assignee
therein (it being understood that any such defect or breach shall be deemed to
have materially and adversely affected the value of the related Mortgage Loan or
the interest of the Assignee therein if the Assignee incurs a loss as a result
of such defect or breach), the Assignee promptly shall request that the Assignor
cure such breach and, if the Assignor does not cure such breach in all material
respects within 60 days from the date on which it is notified of the breach, the
Assignee may enforce the Assignor's obligation hereunder to purchase such
Mortgage Loan from the Assignee.

                  In the event the Servicer has breached a representation or
warranty under the Sale and Servicing Agreement that is substantially identical
to a representation or warranty breached by the Assignor hereunder, the Assignee
shall first proceed against the Servicer. If the Servicer does not within 60
days after notification of the breach, take steps to cure such breach (which may
include certifying to progress made and requesting an extension of the time to
cure such breach, as permitted under the Sale and Servicing Agreement) or
purchase for the Mortgage Loan, the Assignee shall be entitled to enforce the
obligations of the Assignor hereunder to cure such breach or to repurchase the
Mortgage Loan. In such event, the Assignor shall succeed to the rights of the
Assignee to enforce the obligations of the Servicer to cure such breach or
repurchase such Mortgage Loan under the terms of the Sale and Servicing
Agreement.

                                      12-4
<PAGE>

                  Except as specifically set forth herein, the Assignee shall
have no responsibility to enforce any provision of this Agreement, to oversee
compliance hereof, or to take notice of any breach or default thereof.

                  7. Representations and Warranties of the Servicer.

                  The Servicer hereby represents and warrants, for the benefit
of the Assignor and the Assignee, that the representations and warranties set
forth in Section 7.02 of the Sale and Servicing Agreement, are true and correct
on the date hereof as if such representations and warranties were made on the
date hereof, and that the representations and warranties set forth in Section
7.01 of the Sale and Servicing Agreement were true and correct as of the
underlying Closing Date.

                  The Servicer hereby acknowledges and agrees that the remedies
available to the Assignor and the Assignee in connection with any breach of the
representations and warranties made by the Servicer set forth in Section 7
hereof shall be as set forth in Subsection 7.03 of the Sale and Servicing
Agreement as if they were set forth herein (including without limitation the
repurchase and indemnity obligations set forth therein).

                  8. Continuing Effect.

                  Except as contemplated hereby, the Sale and Servicing
Agreement shall remain in full force and effect in accordance with its terms.

                  9. Governing Law.

                  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS).

                  10. Notices.

                  Any notices or other communications permitted or required
hereunder or under the Sale and Servicing Agreement shall be in writing and
shall be deemed conclusively to have been given if personally delivered at or
mailed by registered mail, postage prepaid, and return receipt requested or
transmitted by telex, telegraph or telecopier and confirmed by a similar mailed
writing, to: (i) in the case of the Servicer, [______________________,
_____________________] or such address as may hereafter be furnished by the
Servicer; (ii) in the case of the Assignee, _________________,
_________________, Attention: ________________________, or such other address as
may hereafter be furnished by the Assignee, and (iii) in the case of the
Assignor, __________________, Attention: _________________, or such other
address as may hereafter be furnished by the Assignor.

                                      12-5
<PAGE>

                  11. Counterparts.

                  This Agreement may be executed in counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same instrument.

                  12. Definitions.

                  Any capitalized term used but not defined in this Agreement
has the same meaning as in the Sale and Servicing Agreement.

                        [Signatures follow on next page.]

                                      12-6
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.

                                        ASSIGNEE:

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

                                        ASSIGNOR:

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

Acknowledged by:

SERVICER:

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

                                      12-7
<PAGE>

                                   EXHIBIT 13

                          FORM OF ANNUAL CERTIFICATION

                  I, [identify the certifying individual], certify to
_______________, and its officers, directors, agents 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 by the Servicer to the
Master Servicer taken as a whole (and as amended or corrected in writing to the
Master Servicer), does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the month covered by such servicing reports;

                  2. The servicing information required to be provided to the
Master Servicer by the Servicer under the Servicing Agreement has been provided
to the Master Servicer;

                  3. I am responsible for reviewing the activities performed by
the Servicer under the Servicing Agreement and based upon the review required by
the Servicing Agreement, and except as disclosed in the Annual Statement of
Compliance or the Annual independent Public Accountant's Servicing Report, the
Servicer has, for the period covered by the Form 10-K fulfilled its obligation
under the Servicing Agreement; and

                  4. The Servicer has disclosed to the Servicer's Certified
Public Accountants 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 of similar standard as set forth in the Servicing Agreement.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Flow Mortgage Loan Sale and Servicing
Agreement, dated as of October 1, 2003 (the "Servicing Agreement"), between Bank
of America, N.A. and Morgan Stanley Mortgage Capital Inc.

                                            BANK OF AMERICA, N.A.

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

                                      13-1<PAGE>
                                                                   EXHIBIT 10.23

             MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT

                          dated as of November 13, 2003

                                     between

                 MORGAN STANLEY MORTGAGE CAPITAL INC., Purchaser

                                       and

                        CENDANT MORTGAGE CORPORATION and

                    BISHOP'S GATE RESIDENTIAL MORTGAGE TRUST
             (formerly known as CENDANT RESIDENTIAL MORTGAGE TRUST),
                                     Sellers

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                PAGE
<S>                                                                                                             <C>

ARTICLE I: DEFINITIONS...........................................................................................2

         Section 1.01          Defined Terms.....................................................................2

ARTICLE II: SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
            BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS..............................................18

         Section 2.01          Sale and Conveyance of Mortgage Loans............................................18

         Section 2.02          Possession of Mortgage Files.....................................................19

         Section 2.03          Books and Records................................................................19

         Section 2.04          Defective Documents; Delivery of Mortgage Loan Documents.........................20

         Section 2.05          Transfer of Mortgage Loans.......................................................21

ARTICLE III: REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REPURCHASE
             AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS.........................................................23

         Section 3.01          Representations and Warranties of each Seller....................................23

         Section 3.02          Representations and Warranties of the Servicer...................................25

         Section 3.03          Representations and Warranties as to Individual Mortgage Loans...................26

         Section 3.04          Repurchase and Substitution......................................................37

         Section 3.05          Removal of Mortgage Loans from Inclusion Under this
                               Agreement Upon an Agency Transfer, Whole-Loan Transfer or a
                               Pass-Through Transfer on One or More Reconstitution Dates........................40

         Section 3.06          Review of Mortgage Loans.........................................................42

         Section 3.07          Repurchase of Mortgage Loans that Prepay in Full ERROR! BOOKMARK NOT DEFINED.

ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND CONDITIONS PRECEDENT TO FUNDING.................43

         Section 4.01          Representations and Warranties...................................................43

         Section 4.02          Conditions Precedent to Closing..................................................45

ARTICLE V: ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................47

         Section 5.01          Cendant Mortgage to Act as Servicer; Servicing
                               Standards; Additional Documents; Consent of the Purchaser........................47

         Section 5.02          Collection of Mortgage Loan Payments.............................................49
</Table>

                                       -i-
<PAGE>

<Table>
<S>                                                                                                             <C>

         Section 5.03          Notice of Specially Serviced Mortgage Loans and Foreclosure Sale.................50

         Section 5.04          Establishment of Collection Account; Deposits in Collection Account..............50

         Section 5.05          Permitted Withdrawals from the Collection Account................................51

         Section 5.06          Establishment of Escrow Accounts; Deposits in Escrow.............................52

         Section 5.07          Permitted Withdrawals From Escrow Accounts.......................................53

         Section 5.08          Payment of Taxes, Insurance and Other Charges;
                               Maintenance of Primary Insurance Policies; Collections Thereunder................53

         Section 5.09          Transfer of Accounts.............................................................54

         Section 5.10          Maintenance of Hazard Insurance..................................................55

         Section 5.11          Maintenance of Mortgage Impairment Insurance Policy..............................56

         Section 5.12          Fidelity Bond; Errors and Omissions Insurance....................................57

         Section 5.13          Management of REO Properties.....................................................57

         Section 5.14          Sale of Specially Serviced Mortgage Loans and REO Properties.....................59

         Section 5.15          Realization Upon Specially Serviced Mortgage Loans and REO Properties............59

         Section 5.16          Investment of Funds in the Collection Account....................................62

         Section 5.17          MERS.............................................................................62

         Section 5.18          Pledged Asset Mortgage Loans.....................................................63

         Section 5.19          Inspections......................................................................67

         Section 5.20          Transfer of Servicing............................................................67

         Section 5.21          Fair Credit Reporting Act........................................................69

ARTICLE VI: REPORTS; REMITTANCES; ADVANCES......................................................................69

         Section 6.01          Remittances......................................................................69

         Section 6.02          Reporting........................................................................70

         Section 6.03          Monthly Advances by the Servicer.................................................71

         Section 6.04          Non-recoverable Advances.........................................................72

         Section 6.05          Itemization of Servicing Advances................................................72

         Section 6.06          Officers' Certificate............................................................72

ARTICLE VII: GENERAL SERVICING PROCEDURES.......................................................................72

         Section 7.01          Enforcement of Due-on-Sale Clauses, Assumption Agreements........................72
</Table>

                                      -ii-
<PAGE>

<Table>
<S>                                                                                                             <C>

         Section 7.02          Satisfaction of Mortgages and Release of Mortgage Files..........................73

         Section 7.03          Servicing Compensation...........................................................74

         Section 7.04          Annual Statement as to Compliance................................................74

         Section 7.05          Annual Independent Certified Public Accountants' Servicing Report................75

         Section 7.06          Purchaser's Right to Examine Servicer Records....................................75

ARTICLE VIII: REPORTS TO BE PREPARED BY THE SERVICER............................................................76

         Section 8.01          The Servicer's Reporting Requirements............................................76

         Section 8.02          Financial Statements.............................................................76

ARTICLE IX: THE SELLERS.........................................................................................76

         Section 9.01          Indemnification; Third Party Claims..............................................76

         Section 9.02          Merger or Consolidation of the Seller............................................77

         Section 9.03          Limitation on Liability of the Sellers and Others................................78

         Section 9.04          Servicer Not to Resign...........................................................78

ARTICLE X: DEFAULT..............................................................................................79

         Section 10.01         Events of Default................................................................79

ARTICLE XI: TERMINATION.........................................................................................81

         Section 11.01         Term and Termination.............................................................81

         Section 11.02         Survival.........................................................................81

ARTICLE XII: GENERAL PROVISIONS.................................................................................82

         Section 12.01         Successor to the Servicer........................................................82

         Section 12.02         Governing Law; Jurisdiction; Consent to Service of Process.......................82

         Section 12.03         Notices..........................................................................83

         Section 12.04         Severability of Provisions.......................................................83

         Section 12.05         Schedules and Exhibits...........................................................83

         Section 12.06         General Interpretive Principles..................................................83

         Section 12.07         Waivers and Amendments, Noncontractual Remedies; Preservation of Remedies........84

         Section 12.08         Captions.........................................................................84

         Section 12.09         Counterparts; Effectiveness......................................................84

         Section 12.10         Entire Agreement; Amendment......................................................85

         Section 12.11         Further Assurances...............................................................85
</Table>

                                      -iii-
<PAGE>

<Table>
<S>                                                                                                             <C>

         Section 12.12         Intention of the Seller..........................................................85

         Section 12.13         Waiver of Trial by Jury..........................................................85
</Table>

Schedule B-1          6

                                      -iv-
<PAGE>

                                    Schedules

A.       Mortgage Loan Schedule
B.       Contents of Mortgage File
         B-1  Collateral File
         B-2  Credit Documents
C.       Cendant Guide

                                    Exhibits

<Table>
<S>                        <C>
Exhibit 2.05               Form of Assignment, Assumption and Recognition Agreement
Exhibit 5.01               Workout Compensation
Exhibit 5.03(a)            Report P4DL - Notice for Specially Serviced Mortgage Loans
Exhibit 5.03(b)            Form of Notice of Foreclosure
Exhibit 5.04-1             Form of Collection Account Certification
Exhibit 5.04-2             Form of Collection Account Letter Agreement
Exhibit 5.06-1             Form of Escrow Account Certification
Exhibit 5.06-2             Form of Escrow Account Letter Agreement
Exhibit 6.02(a)            Report P-139 - Monthly Statement of Mortgage Accounts
Exhibit 6.02(b)            Report S-50Y - Private Pool Detail Report
Exhibit 6.02(c)            Report S-213 - Summary of Curtailments Made Remittance Report
Exhibit 6.02(d)            Report S-214 - Summary of Paid in Full Remittance Report
Exhibit 6.02(e)            Report S-215 - Consolidation of Remittance Report
Exhibit 6.02(f)            Report T-62C - Monthly Accounting Report
Exhibit 6.02(g)            Report T-62E - Liquidation Report
Exhibit 8.01               Report P-195 - Delinquency Report
Exhibit 9                  Form of Officer's Certificate
Exhibit 10                 Form of Warranty Bill of Sale
Exhibit 11                 Form of Sarbanes-Oxley Certification
Exhibit 12                 Process Guidelines
</Table>

<PAGE>

             MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT

         This Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as
of November 13, 2003, among Morgan Stanley Mortgage Capital Inc., (the
"Purchaser"), Cendant Mortgage Corporation ("Cendant Mortgage") and Bishop's
Gate Residential Mortgage Trust (formerly known as Cendant Residential Mortgage
Trust) (the "Trust," together with Cendant Mortgage, the "Sellers" and
individually, each a "Seller").

                              PRELIMINARY STATEMENT

1. Cendant Mortgage is engaged in the business, inter alia, of making loans to
individuals, the repayment of which is secured by a first lien mortgage on such
individuals' residences (each, a "Mortgage Loan"). The Trust is engaged in the
business of purchasing such Mortgage Loans from Cendant Mortgage and selling
same to investors.

2. Purchaser is engaged in the business, inter alia, of purchasing Mortgage
Loans for its own account.

3. Cendant Mortgage has established certain terms, conditions and loan programs,
as described in the Cendant Investor Manual (the "Cendant Guide") and Purchaser
is willing to purchase Mortgage Loans that comply with the terms of such terms,
conditions and loan programs. The applicable provisions of the Cendant Guide are
attached hereto as Schedule C.

4. Purchaser and Sellers desire to establish a flow program whereby Cendant
Mortgage will originate certain Mortgage Loans which meet the applicable
provisions of the Cendant Guide, and Purchaser will, on a regular basis,
purchase such Mortgage Loans from Cendant Mortgage or the Trust, as applicable,
provided the parties agree on the price, date and other conditions or
considerations as set forth in this Agreement.

5. Purchaser and Sellers wish to prescribe the terms and manner of purchase by
the Purchaser and sale by the Sellers of the Mortgage Loans, and the management
and servicing of the Mortgage Loans by Cendant Mortgage, as the Servicer (the
"Servicer"), in this Agreement.

6. Following its purchase of the Mortgage Loans from the Sellers, the Purchaser
may determine to sell some or all of the Mortgage Loans to one or more
purchasers as whole loan transfers, agency transfers or public or private, rated
or unrated mortgage pass-through transactions.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
the Purchaser and the Sellers agree as follows:

                                      -1-
<PAGE>

                                   ARTICLE I:
                                   DEFINITIONS

         Section 1.01 Defined Terms. Whenever used in this Agreement, the
following words and phrases shall have the following meaning specified in this
Article:

         "Acceptance of Assignment and Assumption of Lease Agreement": The
specific agreement creating a first lien on and pledge of the Cooperative Shares
and the appurtenant Proprietary Lease securing a Cooperative Loan.

          "Accepted Servicing Practices": With respect to any Mortgage Loan,
those customary mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.

          "Affiliate": When used with reference to a specified Person, any
Person that (i) directly or indirectly controls or is controlled by or is under
common control with the specified Person, (ii) is an officer of, partner in or
trustee of, or serves in a similar capacity with respect to, the specified
person or of which the specified Person is an officer, partner or trustee, or
with respect to which the specified Person serves in a similar capacity, or
(iii) directly or indirectly is the beneficial owner of 10% or more of any class
of equity securities of the specified Person or of which the specified person is
directly or indirectly the owner of 10% or more of any class of equity
securities.

         "Agency Transfer": The sale or transfer by Purchaser of some or all of
the Mortgage Loans to FNMA under its "Cash Purchase Program" or its "MBS Swap
Program" (Special Servicing Option) or to FHLMC under its "FHLMC Cash Program"
or "Gold PC Program", retaining the Servicer as "servicer thereunder."

         "Agreement": This Mortgage Loan Flow Purchase, Sale & Servicing
Agreement between the Purchaser and the Sellers.

         "ALTA": The American Land Title Association.

         "Appraised Value": With respect to any Mortgaged Property, the lesser
of: (i) the value thereof as determined by an appraisal or a Cendant approved
AVM (as defined in the Cendant Guide) made for the originator of the Mortgage
Loan at the time of origination of the Mortgage Loan by an appraiser who met the
minimum requirements of FNMA and FHLMC; or (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan; provided that, in the case of a Refinanced Mortgage Loan, such value of
the Mortgaged Property shall be based solely upon the value determined by an
appraisal made for the originator of such Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of FNMA and FHLMC.

                                      -2-
<PAGE>

         "ARM Loan": An "adjustable rate" Mortgage Loan, the Note Rate of which
is subject to periodic adjustment in accordance with the terms of the Mortgage
Note.

         "Assignment": An individual assignment of a Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
of record the sale or transfer of the Mortgage Loan to the Purchaser or, in the
case of a MERS Mortgage Loan, an electronic transmission to MERS, identifying a
transfer of ownership of the related Mortgage to the Purchaser or its designee.

         "Assignment of Proprietary Lease": With respect to a Cooperative Loan,
an assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease.

         "Assignment of Recognition Agreement": With respect to a Cooperative
Loan, an assignment of the Recognition Agreement sufficient under the laws of
the jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Recognition Agreement.

         "AVM": Automated Value Model. Electronic system to calculate the
property value from a provider that has been approved by the Seller.

         "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (11 U.S.C.
Sections 101-1330), as amended, modified, or supplemented from time to time, and
any successor statute, and all rules and regulations issued or promulgated in
connection therewith.

         "BPO": A broker's price opinion with respect to a Mortgaged Property.

         "Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a
day on which the Federal Reserve is closed.

         "Cendant Guide": Shall have the meaning set forth in paragraph 3 of the
Preliminary Statement to this Agreement.

         "Code": The Internal Revenue Code of 1986, as amended.

         "Collection Account": The separate trust account or accounts created
and maintained pursuant to Section 5.04 which shall be entitled "Cendant
Mortgage Corporation, as servicer and custodian for the Purchaser of Mortgage
Loans under the Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated
as of November 13, 2003."

         "Condemnation Proceeds": All awards or settlements in respect of a
taking of an entire Mortgaged Property or a part thereof by exercise of the
power of eminent domain or condemnation.

         "Consent": A document executed by the Cooperative Corporation (i)
consenting to the sale of the Cooperative Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative Unit have
been paid.

                                      -3-
<PAGE>

         "Control Agreement": With respect to each Pledged Asset Mortgage Loan,
the Pledged Collateral Account Control Agreement between the guarantor or
mortgagor, as applicable, and the related Pledged Asset Servicer, pursuant to
which the guarantor or mortgagor, as applicable, has granted a security interest
in a Securities Account.

         "Convertible Mortgage Loan": Any ARM Loan purchased pursuant to this
Agreement as to which the related Mortgage Note permits the Mortgagor to convert
the Note Rate on such Mortgage Loan to a fixed note rate.

         "Cooperative Corporation": With respect to any Cooperative Loan, the
cooperative apartment corporation that holds legal title to the related
Cooperative Project and grants occupancy rights to units therein to stockholders
through Proprietary Leases or similar arrangements.

         "Cooperative Lien Search": A search for (a) federal tax liens,
mechanics' liens, lis pendens, judgments of record or otherwise against (i) the
Cooperative Corporation and (ii) the seller of the Cooperative Unit, (b) filings
of Financing Statements and (c) the deed of the Cooperative Project into the
Cooperative Corporation.

         "Cooperative Loan": A Mortgage Loan that is secured by a first lien on
and a perfected security interest in Cooperative Shares and the related
Proprietary Lease granting exclusive rights to occupy the related Cooperative
Unit in the building owned by the related Cooperative Corporation.

         "Cooperative Project": With respect to any Cooperative Loan, all real
property and improvements thereto and rights therein and thereto owned by a
Cooperative Corporation including without limitation the land, separate dwelling
units and all common elements.

         "Cooperative Shares": With respect to any Cooperative Loan, the shares
of stock issued by a Cooperative Corporation and allocated to a Cooperative Unit
and represented by a stock certificates.

         "Cooperative Unit": With respect to any Cooperative Loan, a specific
unit in a Cooperative Project.

         "Credit Documents": Those documents, comprising part of the Mortgage
File, required of the Mortgagor, as described in Section 2 (Specific Loan
Program Guidelines) of the Cendant Guide. The Credit Documents are specified on
Schedule B-2 hereto.

         "Custodial Agreement": With respect to each Mortgage Loan purchase
hereunder, the applicable Custodial Agreement, among the Purchaser, the Servicer
and the Custodian.

         "Custodian": With respect to each Mortgage Loan purchase, the Custodian
named in the applicable Custodial Agreement, or its successor in interest or
assigns or any successor to the Custodian under such Custodial Agreement as
provided therein.

                                      -4-
<PAGE>

         "Cut-off Date": The first day of the month in which the respective
Funding Date occurs.

         "Defect": Shall have the meaning set forth in Section 2.04.

         "Defective Mortgage Loan": Shall have the meaning set forth in Section
3.04.

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

         "Delinquent Mortgage Loan": Shall have the meaning set forth in Section
11.01.

         "Determination Date": The 15th day of each calendar month, commencing
on the 15th day of the month following the Funding Date, or, if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day.

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

         "Due Period": With respect to each Remittance Date, the period
commencing on the second day of the month immediately preceding the month of
such Remittance Date and ending on the first day of the month of such Remittance
Date.

         "Eligible Account": One or more accounts (i) that are maintained with a
depository institution the long-term unsecured debt obligations of which have
been rated by each Rating Agency in one of its two highest rating categories at
the time of any deposit therein, (ii) that are trust accounts with any
depository institution held by the depository institution in its capacity as a
corporate trustee, the deposits in which are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which are otherwise
secured such that the Purchaser has a claim with respect to the funds in such
accounts or a perfected first security interest against any collateral securing
such funds that is superior to claims of any other depositors or creditors of
the depository institution with which such accounts are maintained. In addition,
solely with respect to Mortgage Loans which are not part of a Pass-Through
Transfer, "Eligible Account" shall include any accounts that meet the standards
established from time to time by FNMA or FHLMC, as applicable, for eligible
custodial depositories. In the event that the Mortgage Loans are subject to a
Pass-Through Transfer, the Servicer agrees that the definition of Eligible
Account shall satisfy the rating requirements established by each Rating Agency
which rates any of the securities issued as part of such Pass-Through Transfer.

         "Environmental Assessment": A "Phase I" environmental assessment of a
Mortgaged Property prepared by an Independent Person who regularly conducts
environmental assessments and who has any necessary license(s) required by
applicable law and has at least five years experience conducting environmental
assessments.

         "Environmental Conditions Precedent to Foreclosure": Shall have the
meaning set forth in Section 5.15.

                                      -5-
<PAGE>

         "Environmental Laws": All federal, state, and local statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees or other governmental
restrictions relating to the environment or to emissions, discharges or releases
of pollutants, contaminants or industrial, toxic or hazardous substances or
wastes into the environment, including ambient air, surface water, ground water,
or land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants or industrial, toxic or hazardous substances or wastes or the
cleanup or other remediation thereof.

         "Escrow Account": The separate trust account or accounts created and
maintained pursuant to Section 5.06 which shall be entitled "Cendant Mortgage
Corporation, as servicer for the Purchaser under the Mortgage Loan Flow
Purchase, Sale & Servicing Agreement, dated as of November 13, 2003 (as
amended), and various mortgagors."

         "Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.

         "Estoppel Letter": A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant Proprietary
Lease will be in full force and effect as of the date of issuance thereof, (ii)
the related Stock Certificate was registered in the Mortgagor's name and the
Cooperative Corporation has not been notified of any lien upon, pledge of, levy
of execution on or disposition of such Stock Certificate, and (iii) the
Mortgagor is not in default under the appurtenant Proprietary Lease and all
charges due the Cooperative Corporation have been paid.

         "Event of Default": Any one of the conditions or circumstances
enumerated in Section 10.01.

         "FDIC": The Federal Deposit Insurance Corporation or any successor
organization.

         "FHLMC": The Federal Home Loan Mortgage Corporation (also known as
"Freddie Mac") or any successor organization. "FHLMC Servicing Guide": The
FHLMC/ Freddie Mac Sellers' and Servicers' Guide in effect on and after the
Funding Date.

         "Fidelity Bond": A fidelity bond to be maintained by the Servicer
pursuant to Section 5.12.

         "Financing Statement": A financing statement in the form of a UCC-1
filed pursuant to the relevant state Uniform Commercial Code to perfect a
security interest in the Cooperative Shares and Pledge Instruments.

         "Financing Statement Change": A financing statement in the form of a
UCC-3 filed to continue, terminate, release, assign or amend an existing
Financing Statement.

         "FNMA": The Federal National Mortgage Association (also known as
"Fannie Mae") or any successor organization.

                                      -6-
<PAGE>

         "FNMA Guide": The FNMA/Fannie Mae Selling Guide and the Servicing
Guide, collectively, in effect on and after the Funding Date.

         "Foreclosure Profits": As to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and proceeds from any REO Disposition (net of all
amounts reimbursable therefrom pursuant to Section 5.13, Section 5.14 and
Section 5.15) in respect of each Mortgage Loan or REO Property for which a Cash
Liquidation or REO Disposition occurred in the related prepayment period over
the sum of the unpaid principal balance of such Mortgage Loan or REO Property
(determined, in the case of an REO Disposition, in accordance with Section 5.13,
Section 5.14 and Section 5.15) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.

         "Funding Date": Each date (up to four per month) that Purchaser
purchases Mortgage Loans from the Sellers hereunder.

          "Gross Margin": With respect to each ARM Loan, the fixed percentage
added to the Index on each Rate Adjustment Date, as specified in each related
Mortgage Note and listed in the Mortgage Loan Schedule.

         "Indemnified Party": Shall have the meaning set forth in Section 9.01.

         "Independent": With respect to any specified Person, such Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in the applicable Mortgagor, the Sellers, the Purchaser, or
their Affiliates; and (b) is not connected with the applicable Mortgagor, the
Sellers, the Purchaser, or their respective Affiliates as an officer, employee,
promoter, underwriter, trustee, member, partner, shareholder, director, or
Person performing similar functions.

         "Index": With respect to each ARM Loan, the applicable rate index set
forth on the related Mortgage Note.

         "Insolvency Proceeding": With respect to any Person: (i) any case,
action, or proceeding with respect to such Person before any court or other
governmental authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up, or relief of debtors; or
(ii) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other, similar arrangement in respect of
the creditors generally of such Person or any substantial portion of such
Person's creditors; in any case undertaken under federal, state or foreign law,
including the Bankruptcy Code.

         "Insurance Proceeds": Proceeds of any Primary Insurance Policy, title
policy, hazard policy or other insurance policy insuring a Mortgage Loan or the
related Mortgaged Property.

         "Legal Documents": Those documents, comprising part of the Mortgage
File, set forth in Schedule B-1 of this Agreement.

                                      -7-
<PAGE>

         "Lender-Paid Mortgage Insurance Rate": With respect to any Mortgage
Loan, the Lender-Paid Mortgage Insurance Rate for any "lender-paid" Primary
Insurance Policy shall be a per annum rate equal to the percentage indicated on
the Mortgage Loan Schedule.

         "Liquidation Proceeds": Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received by the Servicer in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received following the acquisition of an
REO Property in accordance with the provisions hereof.

         "Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan, the
original principal balance of such Mortgage Loan divided by the lesser of the
Appraised Value of the related Mortgaged Property or the purchase price. The
Loan-to-Value Ratio of any Pledged Asset Mortgage Loan shall be calculated by
reducing the principal balance of such Pledged Asset Mortgage Loan by the amount
of the Original Pledged Asset Requirement with respect to such Mortgage Loan.
This is referred to in the Cendant Guide as the effective loan-to-value.

         "Losses": Shall have the meaning set forth in Section 9.01.

         "MAI Appraiser": With respect to any real property, a member of the
American Institute of Real Estate Appraisers with a minimum of 5 years of
experience appraising real property of a type similar to the real property being
appraised and located in the same geographical area as the real property being
appraised.

         "MERS": Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.

         "MERS Eligible Mortgage Loan": Any Mortgage Loan that under applicable
law and investor requirements is recordable in the name of MERS in the
jurisdiction in which the related Mortgaged Property is located.

         "MERS Mortgage Loan": Any Mortgage Loan as to which the related
Mortgage, or an Assignment, has been recorded in the name of MERS, as agent for
the holder from time to time of the Mortgage Note.

         "Maximum Rate": With respect to each ARM Loan, the rate per annum set
forth in the related Mortgage Note as the maximum Note Rate thereunder. The
Maximum Rate as to each ARM Loan is set forth on the related Mortgage Loan
Schedule.

         "Minimum Rate": With respect to each ARM Loan, the rate per annum set
forth in the related Mortgage Note as the minimum Note Rate thereunder. The
Minimum Rate as to each ARM Loan is set forth on the related Mortgage Loan
Schedule.

         "Monthly Advance": The aggregate amount of the advances made by the
Servicer on any Remittance Date pursuant to and as more fully described in
Section 6.03.

         "Monthly Payment": The scheduled monthly payment of principal and
interest on a Mortgage Loan which is payable by a Mortgagor under the related
Mortgage Note.

                                      -8-
<PAGE>

         "Monthly Period": Initially, the period from the Funding Date through
to and including the first Record Date during the term hereof, and, thereafter,
the period commencing on the day after each Record Date during the term hereof
and ending on the next succeeding Record Date during the term hereof (or, if
earlier, the date on which this Agreement terminates).

          "Mortgage": The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on either (i) with respect to a
Mortgage Loan other than a Cooperative Loan, an unsubordinated estate in fee
simple in real property or (ii) with respect to a Cooperative Loan, the
Proprietary Lease and related Cooperative Shares, which in either case secures
the Mortgage Note.

          "Mortgage File": With respect to a particular Mortgage Loan, those
origination and servicing documents, escrow documents, and other documents as
are specified on Schedule B-1 and B-2 to this Agreement and any additional
documents required to be added to the Mortgage File pursuant to the related
Purchase Price and Terms Letter. These documents shall be stored in a secure
manner using paper or electronic storage.

         "Mortgage Loan": Each individual mortgage loan or Cooperative Loan
(including all documents included in the Mortgage File evidencing the same, all
Monthly Payments, Principal Prepayments, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds, and other proceeds relating thereto, and any and
all rights, benefits, proceeds and obligations arising therefrom or in
connection therewith) which is the subject of this Agreement and the related
Purchase Price and Terms Letter. The Mortgage Loans subject to this Agreement
shall be identified on Mortgage Loan Schedules prepared in connection with each
Funding Date.

         "Mortgage Loan Schedule": The list of Mortgage Loans identified on each
Funding Date that sets forth the information with respect to each Mortgage Loan
that is specified on Schedule A hereto (as amended from time to time to reflect
the addition of any Qualified Substitute Mortgage Loans and the withdrawal of
any Deleted Mortgage Loans). A Mortgage Loan Schedule will be prepared for each
Funding Date.

         "Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.

         "Mortgaged Property": With respect to a Mortgage Loan, the underlying
real property securing repayment of a Mortgage Note, consisting of a fee simple
estate.

         "Mortgagor": The obligor on a Mortgage Note.

         "Negative Amortization": That portion of interest accrued at the Note
Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan
for such month and which, pursuant to the terms of the Mortgage Note, is added
to the principal balance of the Mortgage Loan.

         "Non-recoverable Advance": As of any date of determination, any Monthly
Advance or Servicing Advance previously made or any Monthly Advance or Servicing
Advance proposed to be made in respect of a Mortgage Loan which, in the good
faith judgment of the Servicer and in accordance with the servicing standard set
forth in Section 5.01, will not or, in the case of a

                                      -9-
<PAGE>

proposed advance, would not be ultimately recoverable pursuant to Section 5.05
(3) or (4) hereof. The determination by the Servicer that it has made a
Non-recoverable Advance or that any proposed advance would constitute a
Non-recoverable Advance shall be evidenced by an Officers' Certificate
satisfying the requirements of Section 6.04 hereof and delivered to the
Purchaser on or before the Determination Date in any month.

         "Note Rate": With respect to any Mortgage Loan at any time any
determination thereof is to be made, the annual rate at which interest accrues
thereon.

         "Offering Materials": All documents, tapes, or other materials relating
to the Mortgage Loans provided by Seller to Purchaser prior to Purchaser
submitting its bid to purchase the Mortgage loans.

         "Officers' Certificate": A certificate signed by (i) the President or a
Vice President and (ii) the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered by the
Servicer to the Purchaser as required by this Agreement.

         "Original Pledged Asset Requirement": With respect to any Pledged Asset
Mortgage Loan, an amount equal to the Pledged Assets required at the time of the
origination of such Pledged Asset Mortgage Loan. Even though for other purposes
the Original Pledged Asset Requirement may actually exceed thirty percent (30%)
of the original principal balance of a Pledged Asset Mortgage Loan, solely for
purposes of the Required Surety Payment, the Original Pledged Asset Requirement
for a Pledged Asset Mortgage Loan will be deemed not to exceed thirty percent
(30%) of its original principal balance.

         "Pass-Through Transfer": The sale or transfer of some or all of the
Mortgage Loans to a special purpose entity or trust to be formed as part of a
publicly-issued and/or privately placed, rated or unrated, mortgage backed
securities transaction.

         "Payment Adjustment Date": The date on which Monthly Payments shall be
adjusted. Payment Adjustment Date shall occur on the date which is eleven months
from the first payment date for the Mortgage Loan, unless otherwise specified in
the Mortgage Note, and on each anniversary of such first Payment Adjustment
Date.

         "Payoff": With respect to any Mortgage Loan, any payment or recovery
received in advance of the last scheduled Due Date of such Mortgage Loan, which
payment or recovery consists of principal in an amount equal to the outstanding
principal balance of such Mortgage Loan, all accrued and unpaid prepayment
penalties, premiums, and/or interest with respect thereto, and all other unpaid
sums due with respect to such Mortgage Loan.

         "Periodic Rate Cap": With respect to each ARM Loan and any Rate
Adjustment Date therefor, the number of basis points that is set forth in the
related Mortgage Loan Schedule and in the related Mortgage Note, which is the
maximum amount by which the Note Rate for such Mortgage Loan may increase or
decrease on such Rate Adjustment Date.

                                      -10-
<PAGE>

         "Permitted Investments": Investments that mature, unless payable on
demand, not later than the Business Day preceding the related Remittance Date;
provided that such investments shall only consist of the following:

                           (i) direct obligations of, or obligations fully
                  guaranteed as to 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) repurchase obligations (the collateral for which
                  is held by a third party) with respect to any security
                  described in clause (i) above, provided that the long-term
                  unsecured obligations of the party agreeing to repurchase such
                  obligations are at the time rated by each Rating Agency in one
                  of its two highest rating categories;

                           (iii) certificates of deposit, time deposits and
                  bankers' acceptances of any bank or trust company incorporated
                  under the laws of the United States or any state, provided
                  that the long-term unsecured debt obligations of such bank or
                  trust company (or, in the case of the principal depository
                  institution of a depository institution holding company, the
                  long-term unsecured debt obligations of the depository
                  institution holding company) at the date of acquisition
                  thereof have been rated by each Rating Agency in one of its
                  two highest rating categories;

                           (iv) commercial paper (having original maturities of
                  not more than 365 days) of any corporation incorporated under
                  the laws of the United States or any state thereof which on
                  the date of acquisition has been rated by each Rating Agency
                  in its highest rating category; and

                           (v) any other demand, money market or time deposit
                  account or obligation, or interest-bearing or other security
                  or investment, acceptable to the Purchaser (such acceptance
                  evidenced in writing);

provided further that "Permitted Investments" shall not include any instrument
described hereunder which evidences 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.

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

         "Pledge Agreements": Each Control Agreement and Pledged Asset Agreement
for each Pledged Asset Mortgage Loan.

         "Pledged Assets": With respect to any Pledged Asset Mortgage Loan, the
related Securities Account and the financial assets held therein subject to a
security interest pursuant to the related Pledged Asset Agreement.

                                      -11-
<PAGE>

         "Pledged Asset Agreement": With respect to each Pledged Asset Mortgage
Loan, the Pledge Agreement for Securities Account between the related mortgagor
and the related Pledged Asset Servicer pursuant to which such mortgagor granted
a security interest in the related securities and other financial assets held
therein.

          "Pledged Asset Mortgage Loan": Each Mortgage Loan as to which Pledged
Assets, in the form of a security interest in the Securities Account and the
financial assets held therein and having a value, as of the date of origination
of such Mortgage Loan, of at least equal to the related Original Pledged Asset
Requirement, were required to be provided at the closing thereof, which is
subject to the terms of this Agreement from time to time.

         "Pledged Asset Servicer": The entity responsible for administering and
servicing the Pledged Assets with respect to a Pledged Asset Mortgage Loan.

         "Pledged Asset Servicing Agreement": With respect to each Pledged Asset
Mortgage Loan, the Agreement between the related Pledged Asset Servicer and
Cendant, including any exhibits thereto, pursuant to which such Pledged Asset
Servicer shall service and administer the related Pledged Assets.

         "Pledge Instruments": With respect to each Cooperative Loan, the Stock
Power, the Assignment of the Proprietary Lease, the Assignment of the Mortgage
Note and the Acceptance of Assignment and Assumption of Lease Agreement.

         "PUD": Shall have the meaning set forth in Section 3.03.

         "Prepaid Monthly Payment": Any Monthly Payment received prior to its
scheduled Due Date and which is intended to be applied to a Mortgage Loan on its
scheduled Due Date.

         "Prepayment Interest Shortfall Amount": With respect to any Mortgage
Loan that was subject to a voluntary (not including discounted payoffs)
Principal Prepayment in full or in part during any Due Period, which Principal
Prepayment was applied to such Mortgage Loan prior to such Mortgage Loan's Due
Date in such Due Period, the amount of interest (net of the related Servicing
Fee for Principal Prepayments in full only) that would have accrued on the
amount of such Principal Prepayment during the period commencing on the date as
of which such Principal Prepayment was applied to such Mortgage Loan and ending
on the day immediately preceding such Due Date, inclusive.

         "Primary Insurance Policy": Each primary policy of mortgage insurance
in effect with respect to a Mortgage Loan and as so indicated on the Mortgage
Loan Schedule, or any replacement policy therefor obtained by the Servicer
pursuant to Section 5.08.

         "Principal Prepayment": Any payment or other recovery of principal on a
Mortgage Loan (including a Payoff), other than a Monthly Payment or a Prepaid
Monthly Payment which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, which is not accompanied by
an amount of interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment and which is
intended to reduce the principal balance of the Mortgage Loan.

                                      -12-
<PAGE>

         "Principal Prepayment Period": The Due Period preceding the related
Remittance Date occurs.

         "Proprietary Lease": The lease on a Cooperative Unit evidencing the
possessory interest of the owner of the Cooperative Shares in such Cooperative
Unit.

         "Purchase Price and Terms Letter": With respect to any pool of Mortgage
Loans purchased and sold on any Funding Date, the letter agreement or the
electronic loan confirmation between the Purchaser and Seller (including any
exhibits, schedules and attachments thereto), setting forth the terms and
conditions of such transaction and describing the Mortgage Loans to be purchased
by the Purchaser on such Funding Date. A Purchase Price and Terms Letter may
relate to more than one pool of Mortgage Loans to be purchased on one or more
Funding Dates hereunder.

         "Purchase Price Percentage": Shall have the meaning set forth in the
related Purchase Price and Terms Letter.

         "Purchaser": Morgan Stanley Mortgage Capital Inc., or its successor in
interest or any successor under this Agreement appointed as herein provided.

         "Purchaser's Account": The account of the Purchaser at a bank or other
entity most recently designated in a written notice by the Purchaser to the
Sellers as the "Purchaser's Account."

         "Purchase Price": As to each Mortgage Loan to be sold hereunder, the
price set forth in the Mortgage Loan Schedule and the related Purchase Price and
Terms Letter.

         "Qualified Mortgage Insurer": American Guaranty Corporation,
Commonwealth Mortgage Assurance Company, General Electric Mortgage Insurance
Companies, Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance
Company, Republic Mortgage Insurance Company or United Guaranty Residential
Insurance Corporation.

         "Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by a
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
(i) have an outstanding principal balance, after deduction of all scheduled
payments due and received in the month of substitution (or in the case of a
substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Unpaid Principal Balance of
the Deleted Mortgage Loan and not less than ninety percent (90%) of the Unpaid
Principal Balance of the Deleted Mortgage Loan (the amount of any shortfall to
be distributed by the applicable Seller to the Purchaser in the month of
substitution), (ii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (iii) have a
Note Rate not less than (and not more than one percentage point greater than)
the Note Rate of the Deleted Mortgage Loan, (iv) with respect to each ARM Loan,
have a Minimum Rate not less than that of the Deleted Mortgage Loan, (v) with
respect to each ARM Loan, have a Maximum Rate not less than that of the Deleted
Mortgage Loan and not more than two (2) percentage points above that of the
Deleted Mortgage Loan, (vi) with respect to each ARM Loan, have a Gross Margin
not less than that of the Deleted Mortgage Loan, (vii) with

                                      -13-
<PAGE>

respect to each ARM Loan, have a Periodic Rate Cap equal to that of the Deleted
Mortgage Loan, (viii) have a Loan-to-Value Ratio at the time of substitution
equal to or less than the Loan-to-Value Ratio of the Deleted Mortgage Loan at
the time of substitution, (ix) with respect to each ARM Loan, have the same Rate
Adjustment Date as that of the Deleted Mortgage Loan, (x) with respect to each
ARM Loan, have an Index as provided herein for all ARM Loans subject to this
Agreement, (xi) comply as of the date of substitution with each representation
and warranty set forth in Sections 3.01, 3.02 and 3.03, (xii) be in the same
credit grade category as the Deleted Mortgage Loan and (xiii) have the same
prepayment penalty term.

         "Rate Adjustment Date": With respect to each ARM Loan, the date on
which the Note Rate adjusts.

         "Rating Agency": Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Moody's Investors Service, Inc., and Fitch, Inc.

         "Recognition Agreement": An agreement among a Cooperative Corporation,
a lender and a Mortgagor with respect to a Cooperative Loan whereby such parties
(i) acknowledge that such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such Cooperative Loan.

         "Reconstitution Agreements": The agreement or agreements entered into
by the Purchaser, the Servicer, and/or certain third parties on any
Reconstitution Date with respect to any or all of the Mortgage Loans in
connection with a Pass-Through Transfer, Whole-Loan Transfer or an Agency
Transfer, including, but not limited to, (i) an Assignment, Assumption and
Recognition Agreement in substantially the form of Exhibit 2.05 hereof, (ii) a
FNMA Mortgage Selling and Servicing Contract, a Pool Purchase Contract, and any
and all servicing agreements and tri-party agreements reasonably required by
FNMA with respect to a FNMA Transfer, (iii) a Purchase Contract and all purchase
documents associated therewith as set forth in the FHLMC Sellers' & Servicers'
Guide, and any and all servicing agreements and tri-party agreements reasonably
required by FHLMC with respect to a FHLMC Transfer, and (iv) a Pooling and
Servicing Agreement, trust agreement, assignment and assumption agreements,
and/or a subservicing/master servicing agreement and any related custodial
agreement, officers' certificates, and correspondence and related documents
related to a Pass-Through Transfer.

         "Reconstitution Date": The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be subject to an Agency
Transfer, Whole Loan Transfer or a Pass-Through Transfer.

         "Record Date": The close of business of the first Business Day of the
month of the related Remittance Date.

         "Refinanced Mortgage Loan": A Mortgage Loan that was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy an
existing mortgage.

                                      -14-
<PAGE>

         "REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Internal Revenue Code or any similar tax vehicle
providing for the pooling of assets (such as a Financial Asset Security
Investment Trust).

         "Remittance Date": The 18th day of each calendar month, commencing on
the 18th day of the month following the Funding Date, or, if such 18th day is
not a Business Day, then the next Business Day immediately preceding such 18th
day.

         "Remittance Rate": With respect to each Mortgage Loan, the related Note
Rate minus the Servicing Fee Rate.

         "REO Disposition": The final sale by the Servicer of any REO Property.

         "REO Disposition Proceeds": All amounts received with respect to any
REO Disposition.

         "REO Property": A Mortgaged Property acquired by the Servicer on behalf
of the Purchaser as described in Section 5.13.

         "Repurchase Price": With respect to any Defective Mortgage Loan, the
price for such repurchase shall be calculated as follows: (a) during the first
year immediately following the Closing Date, an amount equal to the sum of (i)
the product of (x) the Purchase Price Percentage (as adjusted pursuant the
Purchase Price and Terms Letter) and (y) the then outstanding principal balance
of such Defective Mortgage Loan as of the date of such repurchase, plus (ii)
accrued interest on such Defective Mortgage Loan at the applicable mortgage
interest rate from the date to which interest had last been paid through the
date of such repurchase, plus (iii) the amount of any outstanding advances owed
to the Servicer, and (b) thereafter, an amount equal to the sum of (i) then
outstanding principal balance of such Defective Mortgage Loan as of the date of
such repurchase plus (ii) accrued interest thereon at the mortgage interest rate
from the date to which interest had last been paid through the date of such
repurchase, plus (iii) the amount of any outstanding advances owed to the
Servicer. In the event the Purchaser has securitized or sold the Mortgage Loans,
the price for such repurchase shall be as set forth in clause (b) hereof.

         "Required Surety Payment": With respect to any defaulted Pledged Asset
Mortgage Loan for which a claim is payable under the related Surety Bond under
the procedures referred to herein, the lesser of (i) the principal portion of
the realized loss with respect to such Mortgage Loan and (ii) the excess, if
any, of (a) the amount of Pledged Assets required at origination with respect to
such Mortgage Loan (but not more than 30% of the original principal balance of
such Mortgage Loan) over (b) the net proceeds realized by the related Pledged
Asset Servicer from the related Pledged Assets.

         "Scheduled Principal Balance": With respect to any Mortgage Loan, (i)
the outstanding principal balance as of the Funding Date after application of
principal payments due on or before such date whether or not received, minus
(ii) all amounts previously remitted to the Purchaser with respect to such
Mortgage Loan representing (a) payments or other recoveries of principal, or (b)
advances of principal made pursuant to Section 6.03.

                                      -15-
<PAGE>

         "Securities Account": With respect to any Pledged Asset Mortgage Loans,
the account, together with the financial assets held therein, that is the
subject of the related Pledged Asset Agreement.

         "Sellers": Cendant Mortgage Corporation, a New Jersey corporation and
Bishop's Gate Residential Mortgage Trust (formerly known as Cendant Residential
Mortgage Trust), a Delaware business trust, or their successors in interest or
any successor under this Agreement appointed as herein provided.

         "Servicer": Cendant Mortgage Corporation, a New Jersey corporation.

         "Servicing Advances": All "out of pocket" costs and expenses that are
customary, reasonable and necessary which are incurred by the Servicer in the
performance of its servicing obligations hereunder, including (without
duplication) (i) reasonable attorneys' fees and (ii) the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the servicing,
management and liquidation of any Specially Serviced Mortgaged Loans and/or any
REO Property, and (d) compliance with the Servicer's obligations under Section
5.08.

         "Servicing Event": Any of the following events with respect to any
Mortgage Loan: (i) any Monthly Payment being more than 60 days delinquent; (ii)
any filing of an Insolvency Proceeding by or on behalf of the related Mortgagor,
any consent by or on behalf of the related Mortgagor to the filing of an
Insolvency Proceeding against such Mortgagor, or any admission by or on behalf
of such Mortgagor of its inability to pay such Person's debts generally as the
same become due; (iii) any filing of an Insolvency Proceeding against the
related Mortgagor that remains undismissed or unstayed for a period of 60 days
after the filing thereof; (iv) any issuance of any attachment or execution
against, or any appointment of a conservator, receiver or liquidator with
respect to, all or substantially all of the assets of the related Mortgagor or
with respect to any Mortgaged Property; (v) any receipt by the Servicer of
notice of the foreclosure or proposed foreclosure of any other lien on the
related Mortgaged Property; (vi) any proposal of a material modification (as
reasonably determined by the Seller) to such Mortgage Loan due to a default or
imminent default under such Mortgage Loan; or (vii) in the reasonable judgment
of the Servicer, the occurrence, or likely occurrence within 60 days, of a
payment default with respect to such Mortgage Loan that is likely to remain
uncured by the related Mortgagor within 60 days thereafter.

         "Servicing Fee": The annual fee, payable monthly to the Servicer out of
the interest portion of the Monthly Payment actually received on each Mortgage
Loan. The Servicing Fee with respect to each Mortgage Loan for any calendar
month (or a portion thereof) shall be 1/12 of the product of (i) the Unpaid
Principal Balance of the Mortgage Loan and (ii) the Servicing Fee Rate
applicable to such Mortgage Loan.

         "Servicing Fee Rate": Unless otherwise specified on the Mortgage Loan
Schedule, (i) with respect to any ARM Loan, 0.375% per annum; provided that,
prior to the first Rate Adjustment Date with respect to any such Mortgage Loan,
such rate may be, at the Servicer's option, not less than 0.25% per annum; and
(ii) with respect to any Mortgage Loan other than an ARM Loan, 0.25% per annum.

                                      -16-
<PAGE>

         "Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a written list of servicing officers furnished by the Servicer
to the Purchaser upon request therefor by the Purchaser, as such list may from
time to time be amended.

         "Specially Serviced Mortgage Loan": A Mortgage Loan as to which a
Servicing Event has occurred and is continuing.

         "Stock Certificate": With respect to a Cooperative Loan, the
certificates evidencing ownership of the Cooperative Shares issued by the
Cooperative Corporation.

         "Stock Power": With respect to a Cooperative Loan, an assignment of the
Stock Certificate or an assignment of the Cooperative Shares issued by the
Cooperative Corporation.

         "Surety Bond": With respect to each Pledged Asset Mortgage Loan, the
surety bond issued by the related Surety Bond Issuer covering such Pledged Asset
Mortgage Loan.

         "Surety Bond Issuer": With respect to each Pledged Asset Mortgage Loan,
the surety bond issuer for the related Surety Bond covering such Pledged Asset
Mortgage Loan.

         "Transfer Date": In the event the Servicer is terminated as servicer of
a Mortgage Loan, the date on which the Purchaser, or its designee, shall receive
the transfer of servicing responsibilities with respect to such Mortgage Loan
and begin to perform the servicing of such Mortgage Loans and the Servicer shall
cease all servicing responsibilities.

          "Trust Financials": Shall have the meaning set forth in Section 3.01

         "Uniform Commercial Code": The Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

         "Unpaid Principal Balance": With respect to any Mortgage Loan, at any
time, the actual outstanding principal balance then payable by the Mortgagor
under the terms of the related Mortgage Note including any cumulative Negative
Amortization.

          "Warranty Bill of Sale": A warranty bill of sale with respect to the
Mortgage Loans purchased on a Funding Date in the form annexed hereto as Exhibit
10.

         "Whole Loan Transfer": The sale or transfer by the Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.

                                      -17-
<PAGE>

                                   ARTICLE II:
 SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND
                  RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS

Section 2.01 Sale and Conveyance of Mortgage Loans.

         Seller agrees to sell and Purchaser agrees to purchase, from time to
time, those certain Mortgage Loans identified in a Mortgage Loan Schedule, at
the price and on the terms set forth herein and in the related Purchase Price
and Terms Letter. Purchaser, on any Funding Date, shall be obligated to purchase
only such Mortgage Loans set forth in the applicable Mortgage Loan Schedule,
subject to the terms and conditions of this Agreement and the related Purchase
Price and Terms Letter.

         Purchaser will purchase Mortgage Loan(s) from Seller, up to four (4)
times per month on such Funding Dates as may be agreed upon by Purchaser and
Seller. The closing shall, at Purchaser's option be either: by telephone,
confirmed by letter or wire as the parties shall agree, or conducted in person
at such place as the parties shall agree. On the Funding Date and subject to the
terms and conditions of this Agreement, each Seller will sell, transfer, assign,
set over and convey to the Purchaser, without recourse except as set forth in
this Agreement, and the Purchaser will purchase, all of the right, title and
interest of the applicable Seller in and to the Mortgage Loans being conveyed by
it hereunder, as identified on the Mortgage Loan Schedule.

         Examination of the Mortgage Files may be made by Purchaser or its
designee as follows. No later than 5 Business Days prior to the Funding Date,
Seller will deliver to Purchaser or its custodian, Legal Documents required
pursuant to Schedule B-1. Upon Purchaser's request, Seller shall make the Credit
Documents available in either original paper form or electronic imaged format to
Purchaser for review, at Seller's place of business and during reasonable
business hours. If Purchaser makes such examination prior to the Funding Date
and identifies any Mortgage Loans that do not conform to the Cendant Guide, such
Mortgage Loans will be deleted from the Mortgage Loan Schedule at Purchaser's
discretion. Purchaser may, at its option and without notice to Seller, purchase
all or part of the Mortgage Loans without conducting any partial or complete
examination. The fact that Purchaser has conducted or has failed to conduct any
partial or complete examination of the Mortgage Loan files shall not affect
Purchaser's rights to demand repurchase, substitution or other relief as
provided herein.

         On the Funding Date and in accordance with the terms herein, Purchaser
will pay to Seller by 2:00 p.m. Eastern Standard Time, by wire transfer of
immediately available funds, the Purchase Price for the Mortgage Loans, which
shall be calculated in accordance with the terms of the related Purchase Price
and Terms Letter and paid by the Purchaser to the Sellers in accordance with the
instructions to be provided, respectively, by Cendant Mortgage and the Trust.
Seller, simultaneously with the payment of the Purchase Price, shall execute and
deliver to Purchaser a Warranty Bill of Sale with respect to the Mortgage Loans
in the form annexed hereto as Exhibit 10.

         Purchaser shall be entitled to all scheduled principal due on and after
the Cut-off Date, all other recoveries of principal collected after the Cut-off
Date and all payments of interest on the Mortgage Loans (minus that portion of
any such payment which is allocable to the period prior to

                                      -18-
<PAGE>

the Cut-off Date). Notwithstanding the foregoing, on the first Remittance Date
after the Funding Date the Purchaser shall be entitled to receive the interest
accrued from and including the Cut-off Date through and including the day
immediately preceding the Funding Date. The principal balance of each Mortgage
Loan as of the Cut-off Date is determined after application of payments of
principal due on or before the Cut-off Date whether or not collected. Therefore,
payments of scheduled principal and interest prepaid for a due date beyond the
Cut-off Date shall not be applied to the principal balance as of the Cut-off
Date. Such prepaid amounts shall be the property of Purchaser. Seller shall hold
any such prepaid amounts for the benefit of Purchaser for subsequent remittance
by Seller to Purchaser. All scheduled payments of principal due on or before the
Cut-off Date and collected by Servicer after the Cut-off Date shall belong to
Seller.

         Section 2.02 Possession of Mortgage Files.

         Upon the sale of any Mortgage Loan, the ownership of such Mortgage
Loan, including the Mortgage Note, the Mortgage, the contents of the related
Mortgage File and all rights, benefits, payments, proceeds and obligations
arising therefrom or in connection therewith, shall then be vested in the
Purchaser, and the ownership of all records and documents with respect to such
Mortgage Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and, to the extent retained by the Seller,
shall be retained and maintained, in trust, by the Seller at the will of the
Purchaser in a custodial capacity only. The contents of such Mortgage File not
delivered to the Purchaser are and shall be held in trust by the Seller for the
benefit of the Purchaser as the owner thereof and the Sellers' possession of the
contents of each Mortgage File so retained is at the will of the Purchaser for
the sole purpose of servicing the related Mortgage Loan, and such retention and
possession by the Seller shall be in a custodial capacity only. Mortgage Files
shall be maintained by the Seller and shall be marked to clearly reflect the
sale of the related Mortgage Loan to the Purchaser. Each Seller shall release
from its custody of the contents of any Mortgage File only in accordance with
written instructions from the Purchaser, except where such release is required
as incidental to the Servicer's servicing of the Mortgage Loans or is in
connection with a repurchase or substitution of any such Mortgage Loan pursuant
to Section 3.04.

         Any documents released to a Seller or the Servicer in connection with
the foreclosure or servicing of any Mortgage Loan shall be held by such Person
in trust for the benefit of the Purchaser in accordance with this Section 2.02.
Such Person shall return to the Purchaser such documents when such Person's need
therefor in connection with such foreclosure or servicing no longer exists
(unless sooner requested by the Purchaser); provided that, if such Mortgage Loan
is liquidated, then, upon the delivery by a Seller or the Servicer to the
Purchaser of a request for the release of such documents and a certificate
certifying as to such liquidation, the Purchaser shall promptly release and, to
the extent necessary, deliver to such Person such documents.

         Section 2.03 Books and Records.

         The sale of each of its Mortgage Loans shall be reflected on the
applicable Seller's balance sheet and other financial statements as a sale of
assets by the applicable Seller. Each Seller shall be responsible for
maintaining, and shall maintain, a complete set of books and records for the
Mortgage Loans it conveyed to the Purchaser which shall be clearly marked to

                                      -19-
<PAGE>

reflect the sale of each Mortgage Loan to the Purchaser and the ownership of
each Mortgage Loan by the Purchaser.

         Section 2.04 Defective Documents; Delivery of Mortgage Loan Documents.

                  If, subsequent to the related Funding Date, the Purchaser or
either Seller finds any document or documents constituting a part of a Mortgage
File to be defective or missing in any material respect (in this Section 2.04, a
"Defect"), the party discovering such Defect shall promptly so notify the other
parties. If the Defect pertains to the Mortgage Note or the Mortgage, then the
applicable Seller shall have a period of 60 days within which to correct or cure
any such defect after the earlier of such Seller's discovery of same or such
Seller being notified of same. If such Defect can ultimately be cured but is not
reasonably expected to be cured within such 60-day period, such Seller shall
have such additional time as is reasonably determined by the Purchaser to cure
or correct such Defect, provided that such Seller has commenced curing or
correcting such Defect and is diligently pursuing same; and provided, however,
that in no event shall the cure period be extended beyond 90 days after notice
or discovery of such Defect. If the Defect pertains to any other document
constituting a part of a Mortgage File, then such Seller shall have a period of
60 days within which to correct or cure any such Defect after the earlier of
such Seller's discovery of same or such Seller being notified of same. If such
Defect can ultimately be cured but is not reasonably expected to be cured within
the 60-day period, then such Seller shall have such additional time as is
reasonably determined by the Purchaser to cure or correct such Defect provided
such Seller has commenced curing or correcting such Defect and is diligently
pursuing same; and provided, however, that in no event shall the cure period be
extended beyond 90 days after notice or discovery of such Defect. Cendant
Mortgage hereby covenants and agrees that, if any material Defect cannot be
corrected or cured, the related Mortgage Loan shall automatically constitute,
upon the expiration of the applicable cure period described above and without
any further action by any other party, a Defective Mortgage Loan, whereupon
Cendant Mortgage shall repurchase such Mortgage Loan by paying to the Purchaser
the Repurchase Price therefor in accordance with Section 3.04.

                  The applicable Seller will, with respect to each Mortgage Loan
to be purchased by the Purchaser, deliver and release to the Purchaser on the
related Funding Date (or on such earlier date as may be specified in the related
Purchase Price and Terms Letter), the Legal Documents as set forth in Section
2.01. If the applicable Seller cannot deliver an original Mortgage with evidence
of recording thereon, original assumption, modification and substitution
agreements with evidence of recording thereon or an original intervening
assignment with evidence of recording thereon within the time periods specified
in the preceding sentence, then such Seller shall promptly deliver to the
Purchaser such original Mortgages and original intervening assignments with
evidence of recording indicated thereon upon receipt thereof from the public
recording official, except in cases where the original Mortgage or original
intervening assignments are retained permanently by the recording office, in
which case, such Seller shall deliver a copy of such Mortgage or intervening
assignment, as the case may be, certified to be a true and complete copy of the
recorded original thereof. If the applicable Seller cannot deliver the original
security instrument or if an original intervening assignment has been lost, then
the applicable Seller will deliver a copy of such security instrument or
intervening assignment, certified by the local public recording official. If the
original title policy has been lost, the applicable Seller will deliver a
duplicate original title policy.

                                      -20-
<PAGE>

                  If the original Mortgage was not delivered pursuant to the
preceding paragraph, then the applicable Seller shall use its best efforts to
promptly secure the delivery of such originals and shall cause such originals to
be delivered to the Purchaser promptly upon receipt thereof. Notwithstanding the
foregoing, if the original Mortgage, original assumption, modification, and
substitution agreements, the original of any intervening assignment or the
original policy of title insurance is not so delivered to the Purchaser within
180 days following the Funding Date, then, upon written notice by the Purchaser
to Cendant Mortgage, the Purchaser may, in its sole discretion, then elect (by
providing written notice to Cendant Mortgage) to treat such Mortgage Loan as a
Defective Mortgage Loan, whereupon Cendant Mortgage shall repurchase such
Mortgage Loan by paying to the Purchaser the Repurchase Price therefor in
accordance with Section 3.04. It is understood that from time to time certain
local recorder offices become backlogged with document volume. It is agreed that
the Seller will provide an Officers' Certificate to document that the Seller has
performed all necessary tasks to ensure delivery of the required documentation
within 180 days and the delay beyond 180 is caused by the backlog. If the delay
exceeds 240 days, regardless of the backlog the Purchaser may elect to collect
the documents with its own resources with the reasonable cost and expense to be
borne by the Seller. The fact that the Purchaser has conducted or failed to
conduct any partial or complete examination of the Mortgage Files shall not
affect its right to demand repurchase or any other remedies provided in this
Agreement.

                  At the Purchaser's request, the Assignments shall be promptly
recorded in the name of the Purchaser or in the name of a Person designated by
the Purchaser in all appropriate public offices for real property records. If
any such Assignment is lost or returned unrecorded because of a defect therein,
then the applicable Seller shall promptly prepare a substitute Assignment to
cure such defect and thereafter cause each such Assignment to be duly recorded.
All recording fees related to such a one-time recordation of the Assignments to
or by a Seller shall be paid by the applicable Seller.

         Section 2.05 Transfer of Mortgage Loans.

         Subject to the provisions of this Section 2.05, the Purchaser shall
have the right, without the consent of the Sellers, at any time and from time to
time, to assign any of the Mortgage Loans and all or any part of its interest in
this Agreement and designate any person to exercise any rights of the Purchaser
hereunder, and the assignees or designees shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans. The
Sellers recognize that the Mortgage Loans may be divided into "packages" for
resale.

         All of the provisions of this Agreement shall inure to the benefit of
the Purchaser and any of its assignees or designees. All references to the
Purchaser shall be deemed to include its assignees or designees. Utilizing
resources reasonably available to the Seller without incurring any cost except
the Seller's overhead and employees' salaries, the applicable Seller shall
cooperate in any such assignment of the Mortgage Loans and this Agreement;
provided that the Purchaser shall bear all costs associated with any such
assignment of the Mortgage Loans and this Agreement other than such Seller's
overhead or employees' salaries.

         The Servicer and Purchaser agree that the Servicer shall continue to
remit funds and make available via Servicer's website remittance reports to no
more than four (4) Persons (not

                                      -21-
<PAGE>

including the Servicer or any Affiliate or transferee thereof) at any given time
with respect to any Mortgage Loans sold on a particular Funding Date.

         The Servicer and the Purchaser acknowledge that the Servicer shall
continue to remit payments to the Purchaser on the Remittance Date after the
transfer of the Mortgage Loans, unless the Servicer was notified in writing of
the new record owner of the Mortgage Loans prior to the immediately preceding
Record Date, in which case, the Servicer shall remit to the new record owner (or
trustee or master servicer, as the case may be) of the Mortgage Loans.

         Any prospective assignees of the Purchaser who have entered into a
commitment to purchase any of the Mortgage Loans may review and underwrite the
Servicer's servicing and origination operations, upon reasonable prior notice to
the Servicer, and the Servicer shall cooperate with such review and underwriting
to the extent such prospective assignees request information or documents that
are reasonably available and can be produced without unreasonable expense or
effort. The Servicer shall make the Mortgage Files related to the Mortgage Loans
held by the Servicer available at the Servicer's principal operations center for
review by any such prospective assignees during normal business hours upon
reasonable prior notice to the Servicer (in no event less than 10 Business Days
prior notice). The Servicer may, in its sole discretion, require that such
prospective assignees sign a confidentiality agreement with respect to such
information disclosed to the prospective assignee which is not available to the
public at large and a release agreement with respect to its activities on the
Servicer's premises.

         The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Servicer
shall note transfers of Mortgage Loans. The Purchaser may, subject to the terms
of this Agreement, sell and transfer, in whole or in part, any or all of the
Mortgage Loans; provided that no such sale and transfer shall be binding upon
the Servicer unless such transferee shall agree in writing to an Assignment,
Assumption and Recognition Agreement, in substantially the form of Exhibit 2.05
attached hereto, and an executed copy of such Assignment, Assumption and
Recognition Agreement shall have been delivered to the Servicer. The Servicer
shall evidence its acknowledgment of any transfers of the Mortgage Loans to any
assignees of the Purchaser by executing such Assignment, Assumption and
Recognition Agreement. The Servicer shall mark its books and records to reflect
the ownership of the Mortgage Loans by any such assignees, and the previous
Purchaser shall be released from its obligations hereunder accruing after the
date of transfer to the extent such obligations relate to Mortgage Loans sold by
the Purchaser. This Agreement shall be binding upon and inure to the benefit of
the Purchaser and the Servicer and their permitted successors, assignees and
designees.

                                      -22-
<PAGE>

                                  ARTICLE III:
            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
              REPURCHASE AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS

         Section 3.01 Representations and Warranties of each Seller.

         Each Seller, as to itself, represents, warrants and covenants to the
Purchaser that as of each Funding Date or as of such date specifically provided
herein:

(1) Due Organization. The Seller is an entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, and has
all licenses necessary to carry on its business now being conducted and is
licensed, qualified and in good standing under the laws of each state where a
Mortgaged Property is located or is otherwise exempt under applicable law from
such qualification or is otherwise not required under applicable law to effect
such qualification; no demand for such qualification has been made upon the
Seller by any state having jurisdiction and in any event the Seller is or will
be in compliance with the laws of any such state to the extent necessary to
enforce each Mortgage Loan and with respect to Cendant Mortgage, service each
Mortgage Loan in accordance with the terms of this Agreement.

(2) Due Authority. The Seller had the full power and authority and legal right
to originate the Mortgage Loans that it originated, if any, and to acquire the
Mortgage Loans that it acquired. The Seller has the full power and authority to
hold each Mortgage Loan, to sell each Mortgage Loan and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by this
Agreement. The Seller 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
Purchaser, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, receivership, conservatorship, insolvency,
moratorium and other laws relating to or affecting creditors' rights generally
or the rights of creditors of banks and to the general principles of equity
(whether such enforceability is considered in a proceeding in equity or at law).

(3) No Conflict. The execution and delivery of this Agreement, the acquisition
or origination, as applicable, of the Mortgage Loans by the Seller, the sale of
the Mortgage Loans, the consummation of the transactions contemplated hereby, or
the fulfillment of or compliance with the terms and conditions of this
Agreement, will not conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's organizational documents and bylaws or
any legal restriction or any agreement or instrument to which the Seller is now
a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or impair the ability of the Purchaser to realize on the Mortgage
Loans;

(4) Ability to Perform. The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;

(5) No Material Default. Neither the Seller nor any of its Affiliates is in
material default under any agreement, contract, instrument or indenture of any
nature whatsoever to which the Seller or

                                      -23-
<PAGE>

any of its Affiliates is a party or by which it (or any of its assets) is bound,
which default would have a material adverse effect on the ability of the Seller
to perform under this Agreement, nor, to the best of the Seller's knowledge, has
any event occurred which, with notice, lapse of time or both, would constitute a
default under any such agreement, contract, instrument or indenture and have a
material adverse effect on the ability of the Seller to perform its obligations
under this Agreement;

(6) Financial Statements. Cendant Mortgage has delivered to the Purchaser
financial statements as to its immediately preceeding fiscal year. Except as has
previously been disclosed to the Purchaser in writing: (a) such financial
statements fairly present the results of operations and changes in financial
position for such period and the financial position at the end of such period of
Cendant Mortgage and its subsidiaries; and (b) such financial statements are
true, correct and complete as of their respective dates and have been prepared
in accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth in the notes thereto. The
Trust has delivered to the Purchaser financial statements dated as of December
31, 2002 (the "Trust Financials") and such Trust Financials fairly present the
results of operations and changes in financial position for such period and the
financial position at the end of such period of the Trust. Except as has
previously been disclosed to the Purchaser in writing, there has been no change
in such Trust Financials since their date and the Trust is not aware of any
errors or omissions therein;

(7) No Change in Business. There has been no change in the business, operations,
financial condition, properties or assets of the applicable Seller since (i) in
the case of Cendant Mortgage, the date of its financial statements and (ii) in
the case of the Trust, the date of delivery of the Trust Financials, that would
have a material adverse effect on the ability of the applicable Seller to
perform its obligations under this Agreement; (8) No Litigation Pending. There
is no action, suit, proceeding or investigation pending or, to the best of the
Seller's knowledge, threatened, against the Seller, which, either in any one
instance or in the aggregate, if determined adversely to the Seller would (i)
adversely affect the sale of the Mortgage Loans to the Purchaser or the
execution, delivery or enforceability of this Agreement, (ii) result in any
material liability of the Seller, (iii) be likely to impair the ability of the
Seller to perform its obligations hereunder, or (iv) have a material adverse
effect on the business, operations, financial condition, properties or assets of
the Seller;

(9) No Consent Required. No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement,
the delivery of the Mortgage Files to the Purchaser, the sale of the Mortgage
Loans to the Purchaser or the consummation of the transactions contemplated by
this Agreement or, if required, such approval has been obtained prior to the
Funding Date;

(10) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement is in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;

                                      -24-
<PAGE>

(11) No Broker. The Seller has not dealt with any broker or agent or anyone else
who might be entitled to a fee or commission in connection with this
transaction;

(12) No Untrue Information. Neither this Agreement nor any statement, report or
other agreement, document or instrument furnished or to be furnished pursuant to
this Agreement contains or will contain any materially untrue statement of fact
or omits or will omit to state a fact necessary to make the statements contained
therein not misleading;

(13) Non-solicitation. The Seller agrees that it shall not solicit any
Mortgagors (in writing or otherwise) to refinance any of the Mortgage Loans;
provided that mass advertising or mailings (such as placing advertisements on
television, on radio, in magazines or in newspapers or including messages in
billing statements) that are not exclusively directed towards the Mortgagors
shall not constitute solicitation and shall not violate this covenant;

(14) Privacy. The Seller agrees and acknowledges that as to all nonpublic
personal information received or obtained by it with respect to any Mortgagor:
(a) such information is and shall be held by Seller in accordance with all
applicable law, including but not limited to the privacy provisions of the
Gramm-Leach Bliley Act; (b) such information is in connection with a proposed or
actual secondary market sale related to a transaction of the Mortgagor for
purposes of 16 C.F.R. Section 313.14(a)(3); and (c) Seller is hereby prohibited
from disclosing or using any such information other than to carry out the
express provisions of this Agreement, or as otherwise permitted by applicable
law;

(15) Origination. Unless otherwise agreed by the Purchaser and the Seller, the
Seller's decision to originate any Mortgage Loan or to deny any Mortgage Loan
application is an independent decision based upon the Cendant Guide, and is in
no way made as a result of Purchaser's decision to purchase, or not to purchase,
or the price Purchaser may offer to pay for, any such Mortgage Loan, if
originated;

(16) Fair Consideration. The consideration received by the Seller upon the sale
of the Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans; and

(17) Solvency. The Seller is not the subject of any Insolvency Proceeding and
will not be rendered insolvent by the consummation of the transactions
contemplated hereby. The sale of the Mortgage Loans is not undertaken to hinder,
delay or defraud any of the Seller's creditors.

         Section 3.02 Representations and Warranties of the Servicer.

         The Servicer represents, warrants and covenants to the Purchaser that
as of the Funding Date or as of such date specifically provided herein:

(1) Ability to Service. The Servicer is an approved seller/servicer for FNMA and
FHLMC and is a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Section 203 of the National Housing Act, with
facilities, procedures and experienced personnel necessary for the servicing of
mortgage loans of the same type as the Mortgage Loans. No event has occurred
that would make the Servicer unable to comply with FNMA or FHLMC eligibility
requirements or that would require notification to either FNMA or FHLMC;

                                      -25-
<PAGE>

(2) No Litigation Pending. There is no action, suit, proceeding or investigation
pending or, to the best of the Servicer's knowledge, threatened, against the
Servicer which, either in any one instance or in the aggregate, if determined
adversely to the Servicer would adversely affect the ability of the Servicer to
service the Mortgage Loans hereunder in accordance with the terms hereof or have
a material adverse effect on the financial condition of the Servicer; and

(3) Collection Practices. The collection practices used by the Servicer with
respect to each Mortgage Note and Mortgage have been in all respects legal,
proper and prudent in the mortgage servicing business.

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

(5) Non-solicitation. The Servicer agrees that it shall not solicit any
Mortgagors (in writing or otherwise) to refinance any of the Mortgage Loans;
provided that mass advertising or mailings (such as placing advertisements on
television, on radio, in magazines or in newspapers or including messages in
billing statements) that are not exclusively directed towards the Mortgagors
shall not constitute solicitation and shall not violate this covenant;

(6) Privacy. The Servicer agrees and acknowledges that as to all nonpublic
personal information received or obtained by it with respect to any Mortgagor:
(a) such information is and shall be held by Servicer in accordance with all
applicable law, including but not limited to the privacy provisions of the
Gramm-Leach Bliley Act; (b) such information is in connection with a proposed or
actual secondary market sale related to a transaction of the Mortgagor for
purposes of 16 C.F.R. Section 313.14(a)(3); and (c) Servicer is hereby
prohibited from disclosing or using any such information other than to carry out
the express provisions of this Agreement, or as otherwise permitted by
applicable law; and

(7) Reasonable Servicing Fee. The Servicer acknowledges and agrees that the
Servicing Fee and other amounts collected by the Servicer hereunder and in
accordance with the Cendant Servicing Guide represent reasonable compensation
for performing such services and that the entire Servicing Fee and other related
amounts collected by the Servicer shall be treated by the Servicer, for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement.

         Section 3.03 Representations and Warranties as to Individual Mortgage
Loans.

         With respect to each Mortgage Loan, the applicable Seller hereby makes
the following representations and warranties to the Purchaser on which the
Purchaser specifically relies in purchasing such Mortgage Loan. Such
representations and warranties speak as of the Funding Date unless otherwise
indicated, but shall survive any subsequent transfer, assignment or conveyance
of such Mortgage Loans:

(1) Mortgage Loan as Described. Such Mortgage Loan complies with the terms and
conditions set forth herein, and all of the information set forth with respect
thereto on the Mortgage Loan Schedule is true and correct in all material
respects;

                                      -26-
<PAGE>

(2) Complete Mortgage Files. The instruments and documents specified in Section
2.02 with respect to such Mortgage Loan have been delivered to the Purchaser in
compliance with the requirements of Article II. The Seller is in possession of a
Mortgage File respecting such Mortgage Loan, except for such documents as have
been previously delivered to the Purchaser;

(3) Owner of Record. The original Mortgage and all subsequent assignments of the
original Mortgage (other than the assignment to the Purchaser) relating to each
Mortgage Loan has been duly recorded in (or sent for recording to) the
appropriate recording office wherein such recordation is necessary to perfect
the lien thereof as against creditors of the Seller, and the applicable Seller
or Servicer is the owner of record of such Mortgage Loan and the indebtedness
evidenced by the related Mortgage Note;

(4) Payments Current. All payments required to be made up to and including the
Funding Date for such Mortgage Loan under the terms of the Mortgage Note have
been made, such that such Mortgage Loan is not delinquent 30 days or more on the
Funding Date; and, if the Mortgage Loan is a Pledged Asset Mortgage Loan,
neither the Mortgage Loan nor the related Pledged Assets has been dishonored.
Unless otherwise disclosed in the Offering Materials or the Mortgage Loan
Schedule, there has been no delinquency, exclusive of any period of grace, in
any payment by the Mortgagor thereunder during the twelve months preceding the
Funding Date; and, if the Mortgage Loan is a Cooperative Loan, no foreclosure
action or private or public sale under the Uniform Commercial Code has ever been
threatened or commenced with respect to the Cooperative Loan;

(5) No Outstanding Charges. There are no defaults in complying with the terms of
the Mortgages, and all taxes, governmental assessments, insurance premiums,
ground rents, leasehold payments, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid,
or an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is not yet
due and payable. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is greater, to
the day which precedes by one month the Due Date of the first installment of
principal and interest;

(6) Original Terms Unmodified. The terms of the Mortgage Note and the Mortgage
related to such Mortgage Loan (and the Proprietary Lease and the Pledge
Instruments with respect to each Cooperative Loan, and the Pledged Assets with
respect to each Pledged Asset Mortgage Loan) have not been impaired, waived,
altered or modified in any material respect, except by a written instrument
which has been recorded, if necessary to protect the interests of the Purchaser
and which has been delivered to the Purchaser;

(7) No Defenses. The Mortgage Note and the Mortgage related to such Mortgage
Loan (and the Acceptance of Assignment and Assumption of Lease Agreement related
to each Cooperative Loan, and the related Pledge Agreement with respect to each
Pledged Asset Mortgage Loan) are not subject to any right of rescission, set-off
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of such Mortgage Note and such Mortgage (or

                                      -27-
<PAGE>

the related Pledge Agreement with respect to each Pledged Asset Mortgage Loan),
or the exercise of any right thereunder, render such Mortgage (or the related
Pledge Agreement with respect to each Pledged Asset Mortgage Loan)
unenforceable, in whole or in part, or subject to any right of rescission,
set-off or defense, including the defense of usury and no such right of
rescission, set-off or defense has been asserted with respect thereto;

(8) Hazard Insurance. (a) All buildings upon the Mortgaged Property related to
such Mortgage Loan are insured by an insurer acceptable to FNMA or FHLMC against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where such Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of either Section 5.10 or
Section 5.11. If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance
policy meeting the requirements of the current guidelines of the Federal Flood
Insurance Administration is in effect which policy conforms to the requirements
of Section 5.10 or Section 5.11. All such insurance policies (collectively, the
"hazard insurance policy") contain a standard mortgagee clause naming the
originator of such Mortgage Loan, its successors and assigns, as mortgagee. Such
policies are the valid and binding obligations of the insurer, and all premiums
thereon due to date have been paid. The related Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at such Mortgagor's cost and expense,
and on such Mortgagor's failure to do so, authorizes the holder of such Mortgage
to maintain such insurance at such Mortgagor's cost and expense and to seek
reimbursement therefor from such Mortgagor; or (b) in the case of a condominium
or unit in a planned unit development ("PUD") project that is not covered by an
individual policy, the condominium or PUD project is covered by a "master" or
"blanket" policy and there exists and is in the Mortgage File a certificate of
insurance showing that the individual unit that secures the first mortgage is
covered under such policy. The insurance policy contains a standard mortgagee
clause naming the originator of such Mortgage Loan (and its successors and
assigns), as insured mortgagee. Such policies are the valid and binding
obligations of the insurer, and all premiums thereon have been paid. The
insurance policy provides for advance notice to the Seller or Servicer if the
policy is canceled or not renewed, or if any other change that adversely affects
the Seller's interests is made; the certificate includes the types and amounts
of coverage provided, describes any endorsements that are part of the "master"
policy and would be acceptable pursuant to the FNMA Guide;

(9) Compliance With Applicable Laws. All requirements of any federal, state or
local law (including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer protection, equal opportunity, predatory lending
or disclosure laws) applicable to the origination and servicing of such Mortgage
Loan have been complied with in all material respects and the Seller shall
maintain in its possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with all such
requirements, to the extent the maintenance of such records is required by law
or is customarily maintained in accordance with Accepted Servicing Practices;

(10) No Fraud. No error or omission, misrepresentation, negligence or fraud in
respect of such Mortgage Loan has taken place on the part of any Person in
connection with the origination and servicing of such Mortgage Loan.

                                      -28-
<PAGE>

(11) No Satisfaction of Mortgage. The Mortgage related to such Mortgage Loan has
not been satisfied, canceled, or subordinated, in whole or in part, or
rescinded, and the related Mortgaged Property has not been released from the
lien of such Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or rescission;

(12) Valid First Lien. The Mortgage including any Negative Amortization, related
to such Mortgage Loan is a valid, subsisting and enforceable perfected first
lien on the related Mortgaged Property, including all improvements on the
related Mortgaged Property, which Mortgaged Property is free and clear of any
encumbrances and liens having priority over the first lien of the Mortgage
subject only to (a) the lien of current real estate taxes and special
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording of such Mortgage which are acceptable to mortgage lending
institutions generally, are referred to in the lender's title insurance policy
and do not adversely affect the market value set forth in the related appraisal
or intended use of the related Mortgaged Property, and (c) other matters to
which like properties are commonly subject which do not individually or in the
aggregate materially interfere with the benefits of the security intended to be
provided by such Mortgage or the use, enjoyment, or market value of the related
Mortgaged Property; with respect to each Cooperative Loan, each Acceptance of
Assignment and Assumption of Lease Agreement creates a valid, enforceable and
subsisting first security interest in the collateral securing the related
Mortgage Note subject only to (a) the lien of the related Cooperative
Corporation for unpaid assessments representing the obligor's pro rata share of
the Cooperative Corporation's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Acceptance of
Assignment and Assumption of Lease Agreement; provided, however, that the
appurtenant Proprietary Lease may be subordinated or otherwise subject to the
lien of any mortgage on the Cooperative Project. In addition, any security
agreement, chattel mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid, subsisting
and enforceable first lien and first priority security interest on the property
described therein and the Seller has full right to sell and assign the same to
the Purchaser;

(13) Validity of Documents. The Mortgage Note and the Mortgage related to such
Mortgage Loan (and the Acceptance of Assignment and Assumption of Lease
Agreement with respect to each Cooperative Loan) are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
(regardless whether such enforcement is considered in a proceeding in equity or
at law);

(14) Valid Execution of Documents. All parties to the Mortgage Note and the
Mortgage related to such Mortgage Loan had legal capacity to enter into such
Mortgage Loan and to execute and deliver the related Mortgage Note and the
related Mortgage and the related Mortgage Note and the related Mortgage have
been duly and properly executed by such parties; with respect to each
Cooperative Loan, all parties to the Mortgage Note and the Mortgage Loan had
legal capacity to

                                      -29-
<PAGE>

execute and deliver the Mortgage Note, the Acceptance of Assignment and
Assumption of Lease Agreement, the Proprietary Lease, the Stock Power, the
Recognition Agreement, the Financing Statement and the Assignment of Proprietary
Lease and such documents have been duly and properly executed by such parties;
each Stock Power (i) has all signatures guaranteed or (ii) if all signatures are
not guaranteed, then such Cooperative Shares will be transferred by the stock
transfer agent of the Cooperative Corporation if the Seller undertakes to
convert the ownership of the collateral securing the related Cooperative Loan;

(15) Full Disbursement of Proceeds. Such Mortgage Loan has closed and the
proceeds of such Mortgage Loan have been fully disbursed prior to the Funding
Date; provided that, with respect to any Mortgage Loan originated within the
previous 120 days, alterations and repairs with respect to the related Mortgaged
Property or any part thereof may have required an escrow of funds in an amount
sufficient to pay for all outstanding work within 120 days of the origination of
such Mortgage Loan, and, if so, such funds are held in escrow by the Seller, a
title company or other escrow agent. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and the recording of the Mortgage were paid,
and the Mortgagor is not entitled to any refund of any amounts paid or due under
the Mortgage Note or Mortgage;

(16) Ownership. The Mortgage Note and the Mortgage related to such Mortgage Loan
have not been assigned, pledged or otherwise transferred by the applicable
Seller, in whole or in part, and the Seller has good and marketable title
thereto, and the Seller is the sole owner thereof (and with respect to any
Cooperative Loan, the sole owner of the related Acceptance of Assignment and
Assumption of Lease Agreement) and has full right and authority to transfer and
sell such Mortgage Loan, and is transferring such Mortgage Loan to the Purchaser
free and clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest;

(17) Doing Business. All parties that have had any interest in such Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in compliance
with any and all applicable organizational and licensing requirements of the
laws of the state wherein the related Mortgaged Property is located;

(18) Title Insurance. (a) Such Mortgage Loan is covered by an ALTA lender's
title insurance policy or short form title policy acceptable to FNMA and FHLMC
(or, in jurisdictions where ALTA policies are not generally approved for use, a
lender's title insurance policy acceptable to FNMA and FHLMC), issued by a title
insurer acceptable to FNMA and FHLMC and qualified to do business in the
jurisdiction where the related Mortgaged Property is located, insuring (subject
to the exceptions contained in clauses (12)(a) and (b) above) the Seller or
Servicer, its successors and assigns as to the first priority lien of the
related Mortgage in the original principal amount of such Mortgage Loan
including any Negative Amortization and in the case of ARM Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of such Mortgage providing for adjustment to the applicable Note
Rate and Monthly Payment. Additionally, either such lender's title insurance
policy affirmatively insures that there is ingress and egress to and from the
Mortgaged Property or the Seller warrants that there is ingress and egress to
and from the Mortgaged Property and the lender's title insurance policy
affirmatively insures against encroachments by or upon the related Mortgaged
Property or any interest therein or any other adverse circumstance that either
is disclosed or would have been disclosed by an accurate survey. The Seller or
Servicer is the sole insured of such lender's title

                                      -30-
<PAGE>

insurance policy, and such lender's title insurance policy is in full force and
effect and will be in full force and effect upon the consummation of the
transactions contemplated by this Agreement and will inure to the benefit of the
Purchaser without any further act. No claims have been made under such lender's
title insurance policy, neither the Seller, nor to the best of Seller's
knowledge, any prior holder of the related Mortgage has done, by act or
omission, anything that would impair the coverage of such lender's insurance
policy, and there is no act, omission, condition, or information that would
impair the coverage of such lender's insurance policy; (b) The mortgage title
insurance policy covering each unit mortgage in a condominium or PUD project
related to such Mortgage Loan meets all requirements of FNMA and FHLMC;

(19) No Defaults. (a) There is no default, breach, violation or event of
acceleration existing under the Mortgage, the Mortgage Note (or the related
Pledge Agreement with respect to each Pledged Asset Mortgage Loan), or any other
agreements, documents, or instruments related to such Mortgage Loan; (b) to the
best of the Seller's knowledge, there is no event that, with the lapse of time,
the giving of notice, or both, would constitute such a default, breach,
violation or event of acceleration; (c) the Mortgagor(s) with respect to such
Mortgage Loan is (1) not in default under any other Mortgage Loan or (2) the
subject of an Insolvency Proceeding; (d) no event of acceleration has previously
occurred, and no notice of default has been sent, with respect to such Mortgage
Loan; (e) in no event has the Seller waived any of its rights or remedies in
respect of any default, breach, violation or event of acceleration under the
Mortgage, the Mortgage Note (or the related Pledge Agreement with respect to
each Pledged Asset Mortgage Loan), or any other agreements, documents, or
instruments related to such Mortgage Loan; and (f) with respect to each
Cooperative Loan, there is no default in complying with the terms of the
Mortgage Note, the Acceptance of Assignment and Assumption of Lease Agreement
and the Proprietary Lease and all maintenance charges and assessments (including
assessments payable in the future installments, which previously became due and
owing) have been paid, and the Seller has the right under the terms of the
Mortgage Note, Acceptance of Assignment and Assumption of Lease Agreement and
Recognition Agreement to pay any maintenance charges or assessments owed by the
Mortgagor;

(20) No Mechanics' Liens. As of the date of origination of such Mortgage Loan,
there were no mechanics' or similar liens, except such liens as are expressly
insured against by a title insurance policy, or claims that have been filed for
work, labor or material (and no rights are outstanding that under law could give
rise to such lien) affecting the related Mortgaged Property that are or may be
liens prior to, or equal or coordinate with, the lien of the related Mortgage;

(21) Location of Improvements; No Encroachments. As of the date of origination
of such Mortgage Loan, to the best of the Seller's knowledge, all improvements
that were considered in determining the Appraised Value of the related Mortgaged
Property lay wholly within the boundaries and building restriction lines of such
Mortgaged Property, and no improvements on adjoining properties encroach upon
such Mortgaged Property except as permitted under the terms of the FNMA Guide
and the FHLMC Selling Guide; to the best of the Seller's knowledge, no
improvement located on or part of any Mortgaged Property is in violation of any
applicable zoning law or regulation, and all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of such Mortgaged Property, and with respect to the use and occupancy of the
same, including certificates of occupancy, have been made or obtained from the
appropriate authorities;

                                      -31-
<PAGE>

(22) Origination; Payment Terms. Principal payments on such Mortgage Loan
commenced or will commence no more than 60 days after funds were disbursed in
connection with such Mortgage Loan. If the interest rate on the related Mortgage
Note is adjustable, the adjustment is based on the Index set forth on the
related Mortgage Loan Schedule and the amount of any related installment payment
with respect to such Loans will be subject to change due to the adjustments to
the Mortgage Interest Rate on each Rate Adjustment Date. The related Mortgage
Note is payable on the first day of each month in arrears, in accordance with
the payment terms described on the related Mortgage Loan Schedule. With respect
to any Mortgage Loan subject to Negative Amortization, the Monthly Payments are
sufficient during the period following each Payment Adjustment Date to fully
amortize the outstanding principal balance as of the first day of such period
(including any Negative Amortization) over the original term thereof in
accordance with the terms and conditions set forth in the Mortgage Note;

(23) Due On Sale. Except as noted otherwise on the Mortgage Loan Schedule, the
related Mortgage contains the usual and customary "due-on-sale" clause or other
similar provision for the acceleration of the payment of the Unpaid Principal
Balance of such Mortgage Loan if the related Mortgaged Property or any interest
therein is sold or transferred without the prior consent of the mortgagee
thereunder;

(24) Prepayment Penalty. No Mortgage Loan is subject to any prepayment penalty;

(25) Mortgaged Property Undamaged; No Condemnation. To the best of the Seller's
knowledge, as of the Funding Date, the related Mortgaged Property (and with
respect to a Cooperative Loan, the related Cooperative Project and Cooperative
Unit) is free of material damage and waste and there is no proceeding pending
for the total or partial condemnation thereof;

(26) Customary Provisions. The related Mortgage contains customary and
enforceable provisions that render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) in the case
of a Mortgage, otherwise by judicial foreclosure. Upon default by a Mortgagor on
a Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged Property
pursuant to the proper procedures, the holder of the Mortgage Loan will be able
to deliver good and merchantable title to the Mortgaged Property. There is no
homestead or other exemption available to a Mortgagor which would interfere with
the right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage;

(27) Conformance With Underwriting Standards. Such Mortgage Loan was
underwritten in accordance with the Cendant Guide;

(28) Appraisal. The Mortgage File contains an appraisal of the related Mortgaged
Property on forms and with riders approved by FNMA and FHLMC, signed prior to
the approval of such Mortgage Loan application by an appraiser, duly appointed
by the originator of such Mortgage Loan, whose compensation is not affected by
the approval or disapproval of such Mortgage Loan and who met the minimum
qualifications of FNMA and FHLMC for appraisers. Each appraisal of the Mortgage
Loan was made in accordance with the relevant provisions of the Financial

                                      -32-
<PAGE>

Institutions Reform, Recovery, and Enforcement Act of 1989. If otherwise
disclosed in the Mortgage File, the Seller may utilize an approved AVM in lieu
of an appraisal in accordance with specified programs;

(29) Deeds of Trust. If the related Mortgage constitutes a deed of trust, then a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under such
deed of trust, except in connection with a trustee's sale after default by the
related Mortgagor;

(30) LTV; Primary Mortgage Insurance Policy. Except with respect to Pledged
Asset Mortgage Loans and any loan program as defined in the Cendant Guide not
requiring Primary Mortgage Insurance, if such Mortgage Loan had a Loan-to-Value
Ratio of more than 80% at origination, such Mortgage Loan is and will be subject
to a Primary Insurance Policy issued by a Qualified Mortgage Insurer, which
insures the Seller or Servicer, its successors and assigns and insureds in the
amount set forth on the Mortgage Loan Schedule; provided that, a Primary
Mortgage Insurance Policy will not be required for any Cooperative Loan if (i)
the proceeds of such Cooperative Loan were used to purchase a Cooperative Unit
at the "insider's price" when the building was converted to a Cooperative
Corporation, (ii) the value of the Cooperative Unit for purposes of establishing
the LTV at origination was such "insider's price," (iii) the principal amount of
the Cooperative Loan at origination was not more than 100% of such "insider's
price" and (iv) the LTV at origination, as calculated using the Appraised Value
at origination, was less than or equal to 80%. All provisions of such Primary
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. Any related
Mortgage subject to any such Primary Insurance Policy (other than a
"lender-paid" Primary Insurance Policy) obligates the Mortgagor thereunder to
maintain such insurance for the time period required by law and to pay all
premiums and charges in connection therewith. As of the date of origination, the
Loan-to-Value Ratio of such Mortgage Loan is as specified in the applicable
Mortgage Loan Schedule;

(31) Occupancy. As of the related date of origination of such Mortgage Loan, to
the best of the Seller's knowledge, the related Mortgaged Property (or with
respect to a Cooperative Loan, the related Cooperative Unit) is lawfully
occupied under applicable law and all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property (or with respect to a Cooperative Loan, the related
Cooperative Unit) and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities;

(32) Supervision and Examination by a Federal or State Authority. Each Mortgage
Loan either was (a) closed in the name of the Cendant Mortgage, or (b) closed in
the name of another entity that is either a savings and loan association, a
savings bank, a commercial bank, credit union, insurance company or an
institution which is supervised and examined by a federal or state authority, or
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act (a "HUD Approved
Mortgagee"), and was so at the time such Mortgage Loan was originated (Cendant
Mortgage or such other entity, the "Originator") or (c) closed in the name of a
loan broker under the circumstances described in the following sentence. If such
Mortgage Loan was originated through a loan

                                      -33-
<PAGE>

broker, such Mortgage Loan met the Originator's underwriting criteria at the
time of origination and was originated in accordance with the Originator's
policies and procedures and the Originator acquired such Mortgage Loan from the
loan broker contemporaneously with the origination thereof. The Mortgage Loans
that the Trust is selling to Purchaser were originated by or on behalf of
Cendant Mortgage and subsequently assigned to the Trust.

(33) Adjustments. All of the terms of the related Mortgage Note pertaining to
interest rate adjustments, payment adjustments and adjustments of the
outstanding principal balance, if any, are enforceable and such adjustments will
not affect the priority of the lien of the related Mortgage; all such
adjustments on such Mortgage Loan have been made properly and in accordance with
the provisions of such Mortgage Loan;

(34) Insolvency Proceedings; Soldiers' and Sailors' Relief Act. To the best of
the Seller's knowledge, the related Mortgagor (1) is not the subject of any
Insolvency Proceeding; and (2) has not requested any relief allowed to such
Mortgagor under the Soldiers' and Sailors' Civil Relief Act of 1940 or any
similar state law;

(35) FNMA/FHLMC Documents. Such Mortgage Loan was closed on standard FNMA or
FHLMC documents or on such documents otherwise acceptable to them;

(36) Payments. Unless otherwise disclosed in the Offering Materials or the
Mortgage Loan Schedule, no Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;

(37) The Assignment of Mortgage. The Assignment is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

(38) No Advances. Any principal advances made to the Mortgagor prior to the
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan plus any Negative Amortization;

(39) Balloon Loans. Unless otherwise disclosed in the Offering Materials or the
Mortgage Loan Schedule, no Mortgage Loan has a balloon payment feature. With
respect to any Mortgage Loan with a balloon payment feature, the Mortgage Note
is payable in Monthly Payments based on a thirty year amortization schedule and
has a final Monthly Payment substantially greater than the proceeding Monthly
Payment which is sufficient to amortize the remaining principal balance of the
Mortgage Loan;

(40) Condominium Units/PUDs. If the residential dwelling on the Mortgaged
Property is a condominium unit or a unit in a planned unit development (other
than a de minimis planned unit

                                      -34-
<PAGE>

development) such condominium or planned unit development project meets the
eligibility requirements of the Cendant Guide;

(41) High Cost Mortgage Loans. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay or the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan. At the time of origination, no Mortgage Loan was classified as a
"high cost," "threshold," "covered," or "predatory" loan (or a similarly
classified loan using different terminology under a law imposing legal liability
for residential mortgage loans having high interest rates, points and/or fees or
which are originated using practices deemed to be unlawful) under the Home
Ownership and Equity Protection Act of 1994, as amended, or any similar state or
local law. None of the proceeds of the Mortgage Loan were used to finance
single-premium credit life insurance policies;

(42) No Rehabilitation Loan. Unless otherwise disclosed in the Offering
Materials or the Mortgage Loan Schedule, no Mortgage Loan was made in connection
with (a) the construction or rehabilitation of a Mortgaged Property or (b)
facilitating the trade-in or exchange of a Mortgaged Property;

(43) No Adverse Conditions. The Seller has no knowledge of any circumstances or
condition with respect to the Mortgage, the Mortgage Property (or with respect
to a Cooperative Loan, the Acceptance of Assignment and Assumption of Lease
Agreement, the Cooperative Unit or the Cooperative Project), the Mortgagor or
the Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan;

(44) Scheduled Interest. Interest on each Mortgage Loan is calculated on the
basis of a 360-day year consisting of twelve 30-day months;

(45) Environmental Laws. To the best of Seller's knowledge, the Mortgaged
Property is in material compliance with all applicable environmental laws
pertaining to environmental hazards including, without limitation, asbestos, and
neither the Seller nor, to the Seller's knowledge, the related Mortgagor, has
received any notice of any violation or potential violation of such law;

(46) Negative Amortization. Unless otherwise disclosed in the Offering Materials
or the Mortgage Loan Schedule, no Mortgage Loan is subject to negative
amortization;

(47) Cooperative Lien Search. With respect to each Cooperative Loan, a
Cooperative Lien Search has been made by a company competent to make the same
which company is acceptable to FNMA and qualified to do business in the
jurisdiction where the Cooperative Unit is located;

(48) Cooperative Loan - Proprietary Lease. With respect to each Cooperative
Loan, (i) the terms of the related Proprietary Lease is longer than the terms of
the Cooperative Loan, (ii) there is no provision in any Proprietary Lease which
requires the Mortgagor to offer for sale the Cooperative Shares owned by such
Mortgagor first to the Cooperative Corporation, (iii) there is no prohibition in
any Proprietary Lease against pledging the Cooperative Shares or assigning the
Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement
published by

                                      -35-
<PAGE>

the Aztech Document Systems, Inc. or includes provisions which are no less
favorable to the lender than those contained in such agreement;

(49) Cooperative Loan - UCC Financing Statement. With respect to each
Cooperative Loan, each original UCC financing statement, continuation statement
or other governmental filing or recordation necessary to create or preserve the
perfection and priority of the first priority lien and security interest in the
Cooperative Shares and Proprietary Lease has been timely and properly made. Any
security agreement, chattel mortgage or equivalent document related to the
Cooperative Loan and delivered to the Mortgagor or its designee establishes in
the Mortgagor a valid and subsisting perfected first lien on and security
interest in the Mortgaged Property described therein, and the Mortgagor has full
right to sell and assign the same;

(50) Cooperative Loan- Acceptance of Assignment and Assumption of Lease
Agreement. With respect to each Cooperative Loan, each Acceptance of Assignment
and Assumption of Lease Agreement contains enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization of the benefits of the security provided thereby. The Acceptance of
Assignment and Assumption of Lease Agreement contains an enforceable provision
for the acceleration of the payment of the unpaid principal balance of the
Mortgage Note in the event the Cooperative Unit is transferred or sold without
the consent of the holder thereof;

(51) Imaging. Each imaged document represents a true, complete, and correct copy
of the original document in all respects, including, but not limited to, all
signatures conforming with signatures contained in the original document, no
information having been added or deleted, and no imaged document having been
manipulated or altered in any manner. Each imaged document is clear and legible,
including, but not limited to, accurate reproductions of photographs. No
original documents have been or will be altered in any manner;

(52) Qualified Mortgage. The Mortgage Loan is a qualified mortgage under Section
860G(a)(3) of the Code;

(53) No Adverse Selection. The Seller used no adverse selection procedures in
selecting the Mortgage Loans among the outstanding first lien residential
mortgagee loans owned by it which were available for inclusion in the Mortgage
Loans;

(54) Leaseholds. If the Mortgage Loan is secured by a long-term residential
lease, (1) the lessor under the lease holds a fee simple interest in the land;
(2) the terms of such lease expressly permit the mortgaging of the leasehold
estate, the assignment of the lease without the lessor's consent and the
acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not

                                      -36-
<PAGE>

less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;

(56) Assumability. With respect to each ARM Loan, the Mortgage Loan Documents
provide that the related Mortgage Loan may only be assumed if the party assuming
such Mortgage Loan meets certain credit requirements stated in the Mortgage Loan
Documents;

(57) Disclosure Materials. The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by applicable
law with respect to the making of the Mortgage Loans. The Seller shall maintain
such statement in the Mortgage File;

(58) No Defense to Insurance Coverage. No action has been taken or failed to be
taken, no event has occurred and no state of facts exists or has existed on or
prior to the related Funding Date (whether or not known to the Seller on or
prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured), provided this shall not include
the failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;

(59) Prior Servicing. Each Mortgage Loan has been serviced in compliance with
Accepted Servicing Practices;

(60) Credit Information. As to each consumer report (as defined in the Fair
Credit Reporting Act, Public Law 91-508) or other credit information furnished
by the Seller to the Purchaser, that Seller has full right and authority and is
not precluded by law or contract from furnishing such information to the
Purchaser;

(61) Fair Credit Reporting Act. The Servicer, in its capacity as servicer, has
fully furnished, for each Mortgage Loan, 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 the successors
to such credit repositories), on a monthly basis; and

(62) Convertible Loans. With respect to ARM Loans, unless otherwise set forth in
the Mortgage Loan Schedule, the Mortgage Loan is not a Convertible Mortgage
Loan.

         Section 3.04 Repurchase and Substitution.

         It is understood and agreed that the representations and warranties set
forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment or the examination of any Mortgage File.

                                      -37-
<PAGE>

         Upon discovery by either of the Sellers or the Purchaser of a breach of
any of the representations and warranties contained in Sections 3.01, 3.02 or
3.03 that materially and adversely affects the interest of the Purchaser (or
that materially and adversely affects the interests of the Purchaser in the
related Mortgage Loan, in the case of a representation or warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other.

         Unless permitted a greater period of time to cure as set forth in
Section 2.04, the applicable Seller shall have a period of 60 days from the
earlier of either discovery by or receipt of written notice from the Purchaser
to the Seller of any breach of any of the representations and warranties
contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects
the interest of the Purchaser (or that materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan, in the case of a
representation or warranty relating to a particular Mortgage Loan) (a "Defective
Mortgage Loan"; provided that "Defective Mortgage Loan" shall also include (a)
any Mortgage Loan treated or designated as such in accordance with Section 2.04
and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first
regularly scheduled payment of principal and interest within 30 days of its Due
Date) within which to correct or cure such breach. If such breach can ultimately
be cured but is not reasonably expected to be cured within the 60-day period,
then the applicable Seller shall have such additional time, if any, as is
reasonably determined by the Purchaser to cure such breach, provided that the
Seller has commenced curing or correcting such breach and is diligently pursuing
same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan
conveyed by it that, if any breach relating thereto cannot be corrected or cured
within the applicable cure period or such additional time, if any, as is
reasonably determined by the Purchaser, then such Seller shall, at the direction
of the Purchaser, repurchase the Defective Mortgage Loan at the applicable
Repurchase Price. Notwithstanding anything to the contrary contained herein, if
the first regularly scheduled payment of principal and interest due under any
Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by
written notice to the applicable Seller, require that the Seller repurchase the
related Mortgage Loan. However, if the Seller provides evidence that the
delinquency was due to a servicing setup error, no repurchase shall be required.
Within 10 Business Days following the delivery of any such written notice from
the Purchaser, the applicable Seller shall repurchase the specified Mortgage
Loan by paying the Repurchase Price therefor by wire transfer of immediately
available funds directly to the Purchaser's Account.

         Notwithstanding the previous paragraph, the applicable Seller may, at
its option and assuming that such Seller has a Qualified Substitute Mortgage
Loan or Loans, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan ("Deleted Mortgage Loan") and substitute in its place
a Qualified Substitute Mortgage Loan or Loans, provided that no such
substitution shall be effected after the Mortgage Loan has been conveyed as part
of a Sale transaction as described in Section 3.05 hereof and no such
substitution shall be effected more than 180 days after the related Funding
Date. If the applicable Seller has no Qualified Substitute Mortgage Loan, it
shall repurchase the Defective Mortgage Loan.

         As to any Deleted Mortgage Loan for which the applicable Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller
shall effect such substitution by delivering to the Purchaser or its designee
for such Qualified Substitute Mortgage Loan or Loans

                                      -38-
<PAGE>

the Legal Documents as are required by Section 2. In the event of a repurchase
or substitution, the Seller shall, simultaneously with such reassignment, give
written notice (by telecopier, electronically or otherwise) to the Purchaser
that such repurchase or substitution has taken place, amend the related Mortgage
Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of substitution, identify the Qualified Substitute
Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan(s) to this Agreement. Upon
such substitution, such Qualified Substitute Mortgage Loan or Loans shall be
subject to the terms of this Agreement in all respects, and the applicable
Seller shall be deemed to have made with respect to such Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the covenants,
representations and warranties set forth in Sections 3.01, 3.02 and 3.03. The
Seller shall effect such substitution by delivering to the Custodian for such
Qualified Substitute Mortgage Loan the documents required by Section 2.03, with
the Mortgage Note endorsed as required by Section 2.03. No substitution will be
made in any calendar month after the Determination Date for such month.

         For any month in which the applicable Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
applicable Seller will determine the amount (if any) by which the aggregate
principal balance of all such Qualified Substitute Mortgage Loans as of the date
of substitution (after application of scheduled principal payments due in the
month of substitution which have been received or as to which an advance has
been made) is less than the aggregate outstanding principal balance of all such
Deleted Mortgage Loans. The amount of such shortfall shall be paid by the
applicable Seller on the date of such substitution) by wire transfer of
immediately available funds directly to the Purchaser's Account.

         Any repurchase of a Defective Mortgage Loan required hereunder shall be
accomplished by payment of the applicable Repurchase Price within 3 Business
Days of expiration of the applicable time period referred to above in paragraph
3.04 by wire transfer of immediately available funds directly to the Purchaser's
Account. It is understood and agreed that the obligations of a Seller (a) set
forth in this Section 3.04 to cure any breach of such Seller's representations
and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the
Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the
Purchaser in connection with any breach of a Seller's representations and
warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole
remedies of the Purchaser respecting a breach of such representations and
warranties.

         The parties further agree that, in recognition of the Trust's rights
against Cendant Mortgage with respect to the Mortgage Loans acquired by it from
Cendant Mortgage and conveyed to the Purchaser hereunder, the Purchaser shall
have the right to cause Cendant Mortgage to repurchase directly any Defective
Mortgage Loan (other than as a result of a breach by the Trust of Section
3.03(3) or 3.03(16) hereof, in which case the Purchaser shall have the right to
cause the Trust to repurchase directly the Defective Mortgage Loan) acquired
hereunder by the Purchaser from the Trust.

                                      -39-
<PAGE>

         Section 3.05 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon an Agency Transfer, Whole-Loan Transfer or a Pass-Through
Transfer on One or More Reconstitution Dates.

         Without incurring undue effort or any cost except the Seller's overhead
or employees' salaries, each Seller shall take reasonable steps to assist the
Purchaser, if the Purchaser so requests by 15 days' advance written notice to
the related Seller or Sellers (it is agreed that electronic mail shall be
considered valid notification if not followed by verbal communication by the
Purchaser to the related Seller or Sellers), in re-selling the Mortgage Loans in
(i) an Agency Transfer, (ii) a Whole Loan Transfer or (iii) a Pass-Through
Transfer (each, a "Sale") in each case retaining the Servicer as the servicer or
subservicer thereof, or as applicable the "seller/servicer."

         Unless otherwise agreed to between the Purchaser and the Servicer, the
Purchaser shall give the Servicer 15 days notice of any Sale. The Servicer shall
cooperate with the Purchaser in connection with each Sale in accordance with
this Section. In connection therewith the Servicer shall:

         (1) negotiate in good faith and timely execute any Reconstitution
Agreements, required by Purchaser to effectuate the foregoing; provided such
agreements create no materially greater obligation or cost on the part of the
Servicer than otherwise set forth in this Agreement;

         (2) represent to the Purchaser, the depositor, the trustee, and the
initial purchaser of the securities issued in connection with any Sale that: (1)
that the Servicer has serviced the Mortgage Loans in accordance with the terms
of this Agreement, and has otherwise complied with all covenants and obligations
hereunder, and (2) that the Servicer has taken no action that would, nor omitted
to take any required action the omission of which would, have the effect of
impairing any mortgage insurance or guarantee on the Mortgage Loans. The
Servicer also agrees to represent the accuracy of any information provided to
the Purchaser by the Servicer for inclusion in any prospectus supplement,
offering memorandum or term sheet prepared in connection with any Sale;

         (3) provide as applicable:

                  (a) any and all information regarding delinquencies and
         defaults with respect to Servicer's Mortgage Loan portfolio and
         appropriate verification of information which may be reasonably
         available to the Servicer, whether through letters of its auditors and
         counsel or otherwise, as the Purchaser shall request;

                  (b) such additional statements, certificates or other similar
         documents of the Servicer or reports from the Servicer's accountants in
         connection with a Pass-Through Transfer and in substance as required by
         applicable law; and

                  (c) such additional representations, warranties, covenants,
         opinions of counsel, letters from auditors, financial description of
         the Servicer as servicer for

                                      -40-
<PAGE>

         inclusion in any offering documents to be distributed to potential
         investors in connection with a Sale with respect to the Mortgage Loans,
         and certificates of public officials or officers of the Servicer as are
         reasonably believed necessary by the trustee, any Rating Agency, the
         Purchaser, as the case may be, in connection with such Sale. The
         Purchaser shall pay all third party costs associated with the
         preparation of such information;

         (4) enter into any other servicing, custodial or other similar
agreements, that are consistent with the provisions of this Agreement, and which
contain such provisions as are customary in securitizations rated "AAA"
(including a securitization involving a REMIC);

         (5) restate the representations and warranties contained in Article III
hereof as of the closing date of such Sale; provided, however, that with respect
to the representations and warranties set forth in Section 3.03 (4), (20), (21),
(25), (31), and (58), the Seller or Servicer may make such additional
qualifications as are reasonably necessary to make such representations and
warranties accurate at the time of such restatement;

         (6) provide such opinions of counsel as are customary in such
transactions, provided, however, that any opinion of outside counsel shall be
provided at Purchaser's expense; and

         (7) provide Sarbanes-Oxley certification in the form of Exhibit 11.

         In connection with a Pass-Through Transfer, the Purchaser may be
required to engage a master servicer or trustee to determine the allocation of
payments to and make remittances to the certificateholders, at the Purchaser's
sole cost and expense. In the event that a master servicer or trustee is
requested by the Purchaser to determine the allocation of payments and to make
remittances to the certificateholders, the Servicer agrees to service the
Mortgage Loans in accordance with the reasonable and customary requirements of
such Pass-Through Transfer, which may include the Servicer's acting as a
subservicer in a master servicing arrangement. With respect to the then owners
of the Mortgage Loans, the Servicer shall thereafter deal solely with such
master servicer or trustee, as the case may be with respect to such Mortgage
Loans which are subject to the Pass-Through Transfer and shall not be required
to deal with any other party with respect to such Mortgage Loans. The cost of
such Pass-Through Transfer shall be borne by the Purchaser, other than the
Seller's overhead or employees' salaries.

         The Servicer shall indemnify the Purchaser, each Affiliate of the
Purchaser and each Person who controls the Purchaser or such Affiliate and hold
each of them harmless from and against any losses, damages, liabilities,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain arising from any false statements or omissions with respect to
information provided by or on behalf of the Servicer in connection with any
Sale.

         In the event the Purchaser has elected to have the Servicer hold record
title to the Mortgages, prior to a Reconstitution Date the Servicer or its
designee shall prepare an Assignment of the Mortgage in blank from the Servicer,
acceptable to FNMA or FHLMC, as applicable, the trustee or such third party, as
the case may be, for each Mortgage Loan that is part of a Sale and shall pay all
preparation and recording costs associated therewith. The Servicer

                                      -41-
<PAGE>

shall execute each Assignment of the Mortgage, track such Assignments of the
Mortgage to ensure they have been recorded and deliver them as required by FNMA
or FHLMC, as applicable, the trustee or such third party, as the case may be,
upon the Servicer's receipt thereof. Additionally, the Servicer shall prepare
and execute, at the direction of the Purchaser, any note endorsements in
connection with any and all Reconstitution Agreements.

         All Mortgage Loans not sold or transferred pursuant to a Sale shall
remain subject to this Agreement.

         With respect to any Mortgage Loans sold in a Pass-Through Transfer
where the Servicer remains as the servicer, the Servicer agrees that on or
before March 1st each year following the year such Pass-Through Transfer occurs,
the Servicer shall deliver to the depositor and the trustee, a certification in
the form attached as Exhibit 11 hereto, executed by a senior officer of the
Servicer in charge of servicing for use in connection with any Form 10-K to be
filed with the Securities and Exchange Commission with respect to the
securitization trust. The obligation to provide such certification will
terminate to the extent the related securitization trust's obligation to file
reports under the Securities Exchange Act of 1934, as amended, terminates. The
Servicer shall indemnify and hold harmless the depositor, the trustee and their
respective officers, members, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon any breach of the Servicer's obligations under this paragraph or the
Servicer's material misstatement or omission, bad faith or willful misconduct in
connection therewith.

         Notwithstanding any provisions of this Agreement to the contrary, all
Mortgage Loans sold or transferred to FNMA or FHLMC shall be serviced in
accordance with the FNMA Guide or the FHLMC Servicing Guide, as applicable, as
the same may be amended from time to time. The Servicer further agrees that it
will service the related Mortgage Loans in accordance with the terms of any FNMA
or FHLMC requirements which are in addition to those set forth in the FNMA Guide
or the FHLMC Servicing Guide. The Servicer acknowledges that the Purchaser may
from to time sell or transfer certain of the Mortgage Loans to FNMA and/ or
FHLMC or deliver certain securities secured by the Mortgage Loans to FNMA or
FHLMC to be guaranteed. In the event such sale or delivery occurs, the Servicer
agrees that it shall deliver to FNMA or FHLMC, all reports, certificates, and
other documentation required by each such agency and that it shall remit to FNMA
or FHLMC, as applicable, all amounts required to be remitted in accordance with
such agency's guaranty program. The Purchaser and the Servicer agree that any
Mortgage Loans sold by the Purchaser to FNMA, will be managed in accordance with
the Process Guidelines set forth in Exhibit 12 hereto. The Servicer acknowledges
that the requirements of the Process Guidelines are in addition to the
Servicer's obligations to service the Loans in accordance with the FNMA Guide
and Accepted Servicing Practices.

         Section 3.06 Review of Mortgage Loans.

         From the related Funding Date until the date 30 days after the related
Funding Date, the Purchaser shall have the right to review the Mortgage Files
and obtain BPOs on the Mortgaged

                                      -42-
<PAGE>

Properties relating to the Mortgage Loans purchased on the related Funding Date,
with the results of such BPO reviews to be communicated to the Seller for a
period up to 30 days after the related Funding Date. In addition, the Purchaser
shall have the right to reject any Mortgage Loan which in the Purchaser's sole
determination (i) fails to conform to the Cendant Guide, (ii) is not an
acceptable credit risk, or (iii) the value which based on the related BPO varies
by more than plus or minus 15% from the lesser of (A) the original appraised
value of the Mortgaged Property or (B) the purchase price of the Mortgaged
Property. In the event the Purchaser so rejects any Mortgage Loan, the Seller
shall repurchase the rejected Mortgage Loan at the Repurchase Price in the
manner prescribed in Section 3.04 upon receipt of notice from the Purchaser of
the rejection of such Mortgage Loan. Any rejected Mortgage Loan shall be removed
from the related Mortgage Loan Schedule. The Seller shall make available all
files required by Purchaser in order to complete its review. To the extent that
during the course of the Purchaser's initial review, the Purchaser discovers
that the Mortgage Loans do not otherwise comport with the terms of the Cendant
Guide or this Agreement, the Purchaser shall have the right to carry out
additional due diligence reviews, which additional due diligence shall be at the
expense of the Seller. Purchaser's decision to increase its level of due
diligence review or obtain additional BPO's or other property evaluations is at
its sole discretion. The additional reviews may be for any reason including but
not limited to credit quality, property valuations, and data integrity. Any
review performed by the Purchaser prior to the related Funding Date shall not
limit the Purchaser's rights or the Seller's obligations under this Section.

                                   ARTICLE IV:
               REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND
                         CONDITIONS PRECEDENT TO FUNDING

         Section 4.01 Representations and Warranties.

         The Purchaser represents, warrants and covenants to the Seller that as
of each Funding Date or as of such date specifically provided herein:

(1) Due Organization. The Purchaser is an entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and has all licenses necessary to carry on its business now being
conducted and is licensed, qualified and in good standing under the laws of each
state where a Mortgaged Property is located or is otherwise exempt under
applicable law from such qualification or is otherwise not required under
applicable law to effect such qualification; no demand for such qualification
has been made upon the Purchaser by any state having jurisdiction and in any
event the Purchaser is or will be in compliance with the laws of any such state
to the extent necessary to enforce each Mortgage Loan.

(2) Due Authority. The Purchaser had the full power and authority and legal
right to acquire the Mortgage Loans that it acquired. The Purchaser has the full
power and authority to hold each Mortgage Loan, to sell each Mortgage Loan and
to execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Purchaser 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

                                      -43-
<PAGE>

delivery by the Seller, constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, receivership, conservatorship,
insolvency, moratorium and other laws relating to or affecting creditors' rights
generally or the rights of creditors of banks and to the general principles of
equity (whether such enforceability is considered in a proceeding in equity or
at law);

(3) No Conflict. None of the execution and delivery of this Agreement, the
acquisition or origination, as applicable, of the Mortgage Loans by the
Purchaser, the purchase of the Mortgage Loans, the consummation of the
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Purchaser's organizational
documents and bylaws or any legal restriction or any agreement or instrument to
which the Purchaser is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in
the violation of any law, rule, regulation, order, judgment or decree to which
the Purchaser or its property is subject, or impair the ability of the Purchaser
to realize on the Mortgage Loans, or impair the value of the Mortgage Loans;

(4) Ability to Perform. The Purchaser does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;

(5) No Material Default. The Purchaser is not in material default under any
agreement, contract, instrument or indenture of any nature whatsoever to which
the Purchaser is a party or by which it (or any of its assets) is bound, which
default would have a material adverse effect on the ability of the Purchaser to
perform under this Agreement, nor, to the best of the Purchaser's knowledge, has
any event occurred which, with notice, lapse of time or both would constitute a
default under any such agreement, contract, instrument or indenture and have a
material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement;

(6) No Change in Business. There has been no change in the business, operations,
financial condition, properties or assets of the Purchaser since the date of the
Purchaser's financial statements that would have a material adverse effect on
the ability of the Purchaser to perform its obligations under this Agreement;

(7) Litigation Pending. There is no action, suit, proceeding or investigation
pending against the Purchaser, which, either in any one instance or in the
aggregate, if determined adversely to the Purchaser would adversely affect the
Purchaser's ability to purchase the Mortgage Loans;

(8) Broker. The Purchaser has not dealt with any broker or agent or anyone else
who might be entitled to a fee or commission in connection with this
transaction.

(9) No Consent Required. No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Purchaser of or compliance by the Purchaser with this
Agreement, the purchase of the Mortgage Loans from the Seller or the
consummation of the transactions contemplated by this Agreement or, if required,
such approval has been obtained prior to the Funding Date;

                                      -44-
<PAGE>

(10) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement is in the ordinary course of business of the
Purchaser;

(11) Non-Petition Agreement. The Purchaser covenants and agrees that it shall
not, prior to the date which is one year and one day (or if longer, the
applicable preference period then in effect) after the payment in full of all
rated obligations of Bishop's Gate Residential Mortgage Trust, acquiesce,
petition or otherwise, directly or indirectly, invoke or cause Bishop's Gate
Residential Mortgage Trust to invoke the process of any governmental authority
for the purpose of commencing or sustaining a case against Bishop's Gate
Residential Mortgage Trust under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official of Bishop's Gate Residential Mortgage
Trust. This covenant and agreement shall be binding upon the Purchaser and any
assignee or transferee of the Purchaser;

(12) No Untrue Information. Neither this Agreement nor any statement or
instrument furnished or to be furnished pursuant to this Agreement contains or
will contain any materially untrue statement of fact or omits or will omit to
state a fact necessary to make the statements contained therein not misleading;

(13) Non-solicitation. The Purchaser agrees that it shall not solicit any
Mortgagors (in writing or otherwise) to refinance any of the Mortgage Loans;
provided that mass advertising or mailings (such as placing advertisements on
television, on radio, in magazines or in newspapers or including messages in
billing statements) that are not exclusively directed towards the Mortgagors
shall not constitute solicitation and shall not violate this covenant;

(14) Privacy. Purchaser agrees and acknowledges that as to all nonpublic
personal information received or obtained by it with respect to any Mortgagor:
(a) such information is and shall be held by Purchaser in accordance with all
applicable law, including but not limited to the privacy provisions of the
Gramm-Leach Bliley Act; (b) such information is in connection with a proposed or
actual secondary market sale related to a transaction of the Mortgagor for
purposes of 16 C.F.R. Section 313.14(a)(3); and (c) Purchaser is hereby
prohibited from disclosing or using any such information other than to carry out
the express provisions of this Agreement, or as otherwise permitted by
applicable law; and

(15) MERS. The Purchaser 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 Purchaser's performance of its obligations under this Agreement with
respect to the Mortgage Loans, for as long as such Mortgage Loans are registered
with MERS.

         Section 4.02 Conditions Precedent to Closing.

         Each purchase of Mortgage Loans hereunder shall be subject to each of
the following conditions:

                  (a)      All of the representations and warranties of the
                           Seller under the Cendant Guide, and of the Sellers
                           and Purchaser under this Agreement shall be true and
                           correct as of the related Funding Date, and no event
                           shall have

                                      -45-
<PAGE>

                           occurred which, with notice or the passage of time,
                           would constitute an Event of Default under this
                           Agreement or under the Cendant Guide;

                  (b)      On or before the each Funding Date, the Seller shall
                           submit to the Purchaser fully executed originals of
                           the following documents:

                           (i)      this Agreement, in four counterparts;

                           (ii)     the Custodial Agreement, in four
                                    counterparts;

                           (iii)    an Officers' Certificate, in the form of
                                    Exhibit 9 hereto, including all attachments
                                    thereto;

                           (iv)     an Opinion of Counsel to the Seller;

                           (v)      a certificate or other evidence of merger or
                                    change of name, signed or stamped by the
                                    applicable regulatory authority, if any,
                                    which states that the Mortgage Loans were
                                    acquired by the Seller by merger or acquired
                                    or originated by the Seller while conducting
                                    business under a name other than its present
                                    name, if applicable;

                           (vi)     the Purchase Price and Terms letter, dated
                                    as of September 24, 2003 together with the
                                    related Mortgage Loan Schedule;

                  (c)      The closing documents for the Mortgage Loans to be
                           purchased on each Funding Date shall consist of fully
                           executed originals of the following documents:

                           (i)      the related Purchase Price and Terms Letter
                                    together with the related Mortgage Loan
                                    Schedule;

                           (ii)     this Agreement, as originally executed
                                    (subject to amendments), in four
                                    counterparts;

                           (iii)    the Custodial Agreement, as originally
                                    executed (subject to amendments), in four
                                    counterparts;

                           (iv)     an Officers' Certificate, in the form of
                                    Exhibit 9 hereto, as originally executed
                                    (subject to amendments), including all
                                    attachments thereto;

                           (v)      an Opinion of Counsel to the Seller (to the
                                    extent requested by the Seller with respect
                                    to a specific sale of Mortgage Loans);

                           (vi)     the related Mortgage Loan Schedule, one copy
                                    to be attached to each counterpart of this
                                    Agreement, and to each counterpart of the
                                    related Custodial Agreement; and

                                      -46-
<PAGE>

                           (vii)    an Assignment, Assumption and Recognition
                                    Agreement, in the form of Exhibit 2.05
                                    hereto.

                  (d)      All other terms and conditions of this Agreement and
                           the Purchase Price and Terms Letter shall have been
                           complied with.

         Subject to the foregoing conditions, Purchaser shall pay to Seller on
each Funding Date the applicable Purchase Price as provided herein.

                                   ARTICLE V:
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

         Section 5.01 Cendant Mortgage to Act as Servicer; Servicing Standards;
Additional Documents; Consent of the Purchaser.

(1) The Servicer, as independent contract servicer, shall service and administer
the Mortgage Loans and REO Property from and after each Funding Date in
accordance with the terms and provisions of the Mortgage Loans, applicable law
and the terms and provisions of this Agreement for and on behalf of, and in the
best interests of, the Purchaser (without taking into account any relationship
the Servicer may have with any Mortgagor or other Person, the participation, if
any, of the Servicer in any financing provided in connection with the sale of
any Mortgaged Property, or the Servicer's obligation to advance any expenses or
incur any costs in the performance of its duties hereunder) in accordance with a
standard that is not less than the higher of (a) the same care, skill, prudence
and diligence with which it services similar assets held for its own or its
Affiliates' account and (b) the same care, skill, prudence and diligence with
which it services similar assets for third party institutional investors, in
each case giving due consideration to customary and usual standards of practice
of prudent institutional mortgage loan servicers utilized with respect to
mortgage loans comparable to the Mortgage Loans. Subject to the foregoing
standards, in connection with such servicing and administration, the Servicer
shall seek to maximize the timely recovery of principal and interest on the
Mortgage Notes; provided that nothing contained herein shall be construed as an
express or implied guarantee by the Servicer of the collectibility of payments
on the Mortgage Loans or shall be construed as impairing or adversely affecting
any rights or benefits specifically provided by this Agreement to the Seller,
including with respect to Servicing Fees.

         In the event that any of the Mortgage Loans included on the Mortgage
Loan Schedule for a particular Funding Date are Pledged Asset Mortgage Loans,
such Pledged Asset Mortgage Loans will be serviced in accordance with Section
5.18 hereof.

(2) To the extent consistent with Section 5.01(1) and further subject to any
express limitations set forth in this Agreement, the Servicer (acting alone or,
solely in the circumstances permitted hereunder, acting through a subservicer)
shall have full power and authority to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including the power and authority (a) to execute and deliver, on
behalf of the Purchaser, customary consents or waivers and other instruments and
documents (including

                                      -47-
<PAGE>

estoppel certificates), (b) to consent to transfers of any Mortgaged Property
and assumptions of the Mortgage Notes and related Mortgages, (c) to submit
claims to collect any Insurance Proceeds and Liquidation Proceeds, (d) to
consent to the application of any Insurance Proceeds or Condemnation Proceeds to
the restoration of the applicable Mortgaged Property or otherwise, (e) to bring
an action in a court of law, including an unlawful detainer action, to enforce
rights of the Purchaser with respect to any Mortgaged Property, (f) to execute
and deliver, on behalf of the Purchaser, documents relating to the management,
operation, maintenance, repair, leasing, marketing and sale of any Mortgaged
Property or any REO Property, and (g) to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage
Loan; provided that the Servicer shall not take any action not provided for in
this Agreement that is materially inconsistent with or materially prejudices the
interest of the Purchaser in any Mortgage Loan or under this Agreement. If
reasonably requested by the Servicer, the Purchaser shall furnish the Servicer
with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to service and administer the Mortgage Loans
and the REO Properties, including documents relating to the foreclosure,
receivership, management, operation, maintenance, repair, leasing, marketing and
sale (in foreclosure or otherwise) of any Mortgaged Property or any REO
Property. Nothing contained in this Agreement shall limit the ability of the
Servicer to lend money to (whether on a secured or unsecured basis), and
otherwise generally engage in any kind of business or dealings with, any
Mortgagor as though the Servicer were not a party to this Agreement or to the
transactions contemplated hereby.

(3)      Notwithstanding anything to the contrary contained herein:

                  (a)      the Servicer acknowledges that the Purchaser will
                           retain title to, and ownership of, the Mortgage Loans
                           and the REO Properties and that the Servicer does not
                           hereby acquire any title to, security interest in, or
                           other rights of any kind in or to any Mortgage Loan
                           or REO Property or any portion thereof;

                  (b)      the Servicer shall not file any lien or any other
                           encumbrance on, exercise any right of setoff against,
                           or attach or assert any claim in or on any Mortgage
                           Loan or REO Property, unless authorized pursuant to a
                           judicial or administrative proceeding or a court
                           order;

                  (c)      the Servicer shall, in servicing the Mortgage Loans,
                           follow and comply with the servicing guidelines
                           established by FNMA or FHLMC, as applicable, provided
                           that the Servicer shall specifically notify the
                           Purchaser in writing and obtain the Purchaser's
                           written consent prior to the Servicer taking any of
                           the following actions: (1) modifying, amending or
                           waiving any of the financial terms of, or making any
                           other material modifications to, a Mortgage Loan,
                           except the Servicer may be permitted to do so in the
                           event of a Specially Serviced Mortgage Loan or, upon
                           the Mortgagor's request, accept a principal
                           prepayment and re-amortize the then remaining
                           principal balance over the then remaining term of the
                           loan (resulting in a lower scheduled monthly payment
                           but no change in the maturity date); (2) selling any
                           Specially Serviced Mortgage Loan; (3)

                                      -48-
<PAGE>

                           making, with respect to any Specially Serviced
                           Mortgage Loan or REO Property, Servicing Advances
                           provided that the Servicer shall not be required to
                           so advise the Purchaser to the extent that each
                           related Servicing Advance as to the related Mortgaged
                           Property or REO Property is in the best interests of
                           the Purchaser or other owner of the Mortgage Loan and
                           that are deemed to be recoverable by the Servicer;
                           (4) forgiving principal or interest on, or permitting
                           to be satisfied at a discount, any Mortgage Loan
                           except in the event of a Specially Serviced Mortgage
                           Loan; (5) accepting substitute or additional
                           collateral, or releasing any collateral, for a
                           Mortgage Loan. If the Purchaser has not approved or
                           rejected in writing any proposed action(s)
                           recommended by the Servicer to be taken hereunder
                           within 5 Business Days of the date such
                           recommendation is made, then the Purchaser shall be
                           deemed to have rejected such recommended action(s)
                           and the Servicer shall not take any such action(s);

                  (d)      the Servicer shall notify the Purchaser of any
                           modification, waiver or amendment of any term of any
                           Mortgage Loan and the date thereof and shall deliver
                           to the Purchaser, for deposit in the related Mortgage
                           File, an original counterpart of the agreement
                           relating to such modification, waiver or amendment
                           promptly following the execution thereof;

                  (e)      in accordance with the FNMA Guide and the FHLMC
                           Servicing Guide, the Servicer shall be entitled to
                           workout compensation as it relates to repayment
                           plans, loan modifications, short-sales and deed-in
                           lieu of foreclosure as evidenced in Exhibit 5.01;

                  (f)      the Servicer shall remain primarily liable for the
                           full performance of its obligations hereunder
                           notwithstanding any appointment by the Servicer of a
                           subservicer or subservicers hereunder; and

                  (g)      the Purchaser may at any time and from time to time,
                           in its sole discretion, terminate the Servicer's
                           servicing obligations hereunder with respect to (1)
                           any REO Property upon 10 Business Days written notice
                           to the Servicer, or (2) any Mortgage Loan that, in
                           accordance with the Purchaser's internal credit
                           classification criteria, has been classified as
                           "doubtful" or a "loss," upon 30 calendar days written
                           notice to the Servicer, and Purchaser shall in each
                           case reimburse Servicer all Monthly Advances and take
                           all necessary steps to assume such servicing. Upon
                           the effectiveness of any such termination of the
                           Servicer's servicing obligations with respect to any
                           such REO Property or Mortgage Loan, the Servicer
                           shall deliver all agreements, documents, and
                           instruments related thereto to the Purchaser, in
                           accordance with applicable law.

         Section 5.02 Collection of Mortgage Loan Payments.

         Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Servicer will proceed diligently to
collect all payments due under each

                                      -49-
<PAGE>

Mortgage Loan when the same shall become due and payable and shall, to the
extent such procedures shall be consistent with this Agreement and the terms and
provisions of any related Primary Insurance Policy, follow such collection
procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans, which procedures shall in any event comply with the servicing
standards set forth in Section 5.01. Furthermore, the Servicer shall ascertain
and estimate annual ground rents, taxes, assessments, fire and hazard insurance
premiums, mortgage insurance premiums, and all other charges that, as provided
in the Mortgages, will become due and payable to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.

         Section 5.03 Notice of Specially Serviced Mortgage Loans and
Foreclosure Sale.

         (a) The Servicer shall, within five (5) calendar days following each
Record Date, deliver to the Purchaser monthly reports substantially in the form
of Exhibit 5.03(a) with respect to all Specially Serviced Mortgage Loans. The
Servicer shall, within one (1) Business Day following the occurrence of any
foreclosure sale with respect to any Mortgaged Property, deliver to the
Purchaser a notice of foreclosure sale substantially in the form of Exhibit
5.03(b).

         (b) Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.

         Section 5.04 Establishment of Collection Account; Deposits in
Collection Account.

         The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Collection Accounts,
in the form of time deposit or demand accounts. Any funds deposited in the
Collection Account shall at all times be fully insured to the full extent
permitted under applicable law. The creation of any Collection Account shall be
evidenced by a certification in the form of Exhibit 5.04-1 attached hereto, in
the case of an account established with the Servicer, or a letter agreement in
the form of Exhibit 5.04-2 attached hereto, in the case of an account held by a
depository other than the Servicer. In either case, a copy of such certification
or letter agreement shall be furnished to the Purchaser.

         The Servicer shall deposit in the Collection Account, within two
Business Days of receipt (or as otherwise required pursuant to this Agreement in
the case of clauses (8), (9) and (10) of this Section 5.04) and retain therein
the following payments and collections received or made by it subsequent to each
Funding Date, or received by it prior to the Funding Date but allocable to a
period subsequent thereto, other than in respect of principal and interest on
the Mortgage Loans due on or before the Funding Date:

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

(2) all payments on account of interest less the Servicing Fee on the Mortgage
Loans;

(3) all Liquidation Proceeds;

                                      -50-
<PAGE>

(4) all REO Proceeds;

(5) all Insurance Proceeds, including amounts required to be deposited pursuant
to Sections 5.10 and 5.11, other than proceeds to be held in the Escrow Account
and applied to the restoration or repair of the Mortgaged Properties or released
to the applicable Mortgagors in accordance with the Servicer's normal servicing
procedures, the related Mortgages or applicable law;

(6) all Condemnation Proceeds affecting any Mortgaged Property which are not
released to a Mortgagor in accordance with the Servicer's normal servicing
procedures, the related Mortgage or applicable law;

(7) any Monthly Advances in accordance with Section 6.03;

(8) any amounts required to be deposited by the Servicer pursuant to Section
5.11 in connection with the deductible clause in any blanket hazard insurance
policy, such deposit to be made from the Servicer's own funds without
reimbursement therefor;

(9) any amounts required to be deposited by the Servicer pursuant to Section
5.16 in connection with any losses on Permitted Investments; and

(10) any amounts required to be deposited in the Collection Account pursuant to
Sections 7.01 or 7.02 or otherwise pursuant to the terms hereof.

The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of servicing fees, late payment charges
and assumption fees, to the extent permitted by Section 7.01, need not be
deposited by the Servicer in the Collection Account and shall be retained by the
Servicer as additional compensation.

         Section 5.05 Permitted Withdrawals from the Collection Account.

The Servicer may, from time to time in accordance with the provisions hereof,
withdraw amounts from the Collection Account for the following purposes (without
duplication):

(1) to reimburse itself for unreimbursed Monthly Advances and Servicing Advances
that the Servicer has determined to be Non-Recoverable Advances as provided in
Section 6.04;

(2) to make payments to the Purchaser in the amounts, at the times and in the
manner provided for in Section 6.01;

(3) to reimburse itself for Monthly Advances, the Servicer's right to reimburse
itself pursuant to this Subsection (3) being limited to amounts received on the
related Mortgage Loan which represent late payments of principal and/or interest
with respect to which any such Monthly Advance was made;

(4) to reimburse itself for unreimbursed Servicing Advances and for unreimbursed
Monthly Advances, the Servicer's right to reimburse itself pursuant to this
Subsection (4) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds,

                                      -51-
<PAGE>

Insurance Proceeds and such other amounts as may be collected by the Servicer
from the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of such reimbursement, the Servicer's right thereto
shall be prior to the rights of the Purchaser, except that, where a Seller or
the Servicer is required to repurchase (or substitute a Qualified Substitute
Mortgage Loan for) a Mortgage Loan pursuant to Sections 2.04, 3.04 and/or 7.02,
the Servicer's right to such reimbursement shall be subsequent and subordinate
to the payment to the Purchaser of the applicable Repurchase Price (or delivery
of a Qualified Substitute Mortgage Loan) and all other amounts required to be
paid to the Purchaser with respect to such Mortgage Loan;

(5) to pay to itself as additional servicing compensation any interest earned on
funds in the Collection Account (all such interest to be withdrawn monthly not
later than each Remittance Date), and any prepayment penalties or premiums
relating to any Principal Prepayments; provided that no such amounts shall be
payable as servicing compensation to the extent they relate to a Mortgage Loan
with respect to which a default, breach, violation, or event of acceleration
exists or would exist but for the lapse of time, the giving of notice, or both;

(6) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Sections 2.04, 3.04 and/or 7.02 all amounts received
thereon and not distributed as of the date on which the related Repurchase Price
is determined (except to the extent that such amounts constitute part of the
Repurchase Price to be remitted to the Purchaser);

(7) to remove any amounts deposited into the Collection Account in error; and

(8) to clear and terminate the Collection Account upon the termination of this
Agreement, with any funds contained therein to be distributed in accordance with
the terms of this Agreement.

         The Servicer shall keep and maintain a separate, detailed accounting,
on a Mortgage Loan-by-Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account pursuant to this Section. All funds
required to be deposited in the Collection Account shall be held in trust for
the Purchaser until withdrawn in accordance with this Section 5.05.

         Section 5.06 Establishment of Escrow Accounts; Deposits in Escrow.

         The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts. Any funds deposited in the Escrow Accounts shall at all times be fully
insured to the full extent permitted under applicable law. The creation of any
Escrow Account shall be evidenced by a certification in the form shown on
Exhibit 5.06-1 attached hereto, in the case of an account established with the
Servicer, or a letter agreement in the form shown on Exhibit 5.06-2 attached
hereto, in the case of an account held by a depository other than the Servicer,
such depository having been consented to by the Purchaser. In either case, a
copy of such certification or letter agreement shall be furnished to the
Purchaser.

         The Servicer shall deposit in each Escrow Account within two Business
Days of receipt, and retain therein, (i) all Escrow Payments collected on
account of the related Mortgage Loans

                                      -52-
<PAGE>

for the purpose of effecting timely payment of any such items as required under
the terms of this Agreement, and (ii) all Insurance Proceeds which are to be
applied to the restoration or repair of any Mortgaged Property. The Servicer
shall make withdrawals therefrom only to effect such payments as are required
under Sections 5.07 and/or 5.08. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the Mortgagor and, to the extent required by law, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes, without any right of reimbursement therefor.

         Section 5.07 Permitted Withdrawals From Escrow Accounts.

         Withdrawals from any Escrow Account may be made by the Servicer only
(i) to effect timely payments of ground rents, taxes, assessments, hazard
insurance premiums, Primary Insurance Policy premiums, if applicable, and
comparable items constituting Escrow Payments for the related Mortgage, (ii) to
reimburse the Servicer for any Servicing Advance made by the Servicer with
respect to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan that represent late payments or collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined to
be overages, (iv) if permitted by applicable law, for transfer to the Collection
Account in accordance with the terms of this Agreement, (v) for application to
the restoration or repair of the Mortgaged Property in accordance with the terms
of the related Mortgage Loan, (vi) to pay to the Servicer, or to the Mortgagor
to the extent required by law, any interest paid on the funds deposited in the
Escrow Account, (vii) to reimburse a Mortgagor in connection with the making of
the Payoff of the related Mortgage Loan or the termination of all or part of the
escrow requirement in connection with the Mortgage Loan, (viii) to remove any
amounts deposited into the Escrow Account in error; or (ix) to clear and
terminate the Escrow Account on the termination of this Agreement.

         Section 5.08 Payment of Taxes, Insurance and Other Charges; Maintenance
of Primary Insurance Policies; Collections Thereunder.

         With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments, and
other charges which are or may become a lien upon the Mortgaged Property and the
status of Primary Insurance Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges, including renewal premiums, and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage and applicable law. If a Mortgage does not provide for
Escrow Payments, then the Servicer shall require that any such payments be made
by the Mortgagor at the time they first become due. The Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely
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
advances from its own funds to effect such payments but shall be entitled to
reimbursement thereof in accordance with the terms of this Agreement.

                                      -53-
<PAGE>

         The Servicer shall maintain in full force and effect a Primary
Insurance Policy, conforming in all respects to the description set forth in
Section 3.03(30), issued by an insurer described in that Section, with respect
to each Mortgage Loan for which such coverage is required. Such coverage will be
maintained until the Loan-to-Value Ratio of the related Mortgage Loan is reduced
to 75% or less in the case of a Mortgage Loan having a Loan-to-Value Ratio at
origination in excess of 80% or until such time, if any, as such insurance is
required to be released in accordance with the provisions of applicable law
including, but not limited to, the Homeowners Protection Act of 1998. The
Servicer shall assure that all premiums due under any Primary Insurance Policy
are paid in a timely manner, but, shall be entitled to reimbursement pursuant to
the terms of this Agreement for premiums paid by the Servicer on behalf of any
Mortgagor who is obligated to pay such premiums but fails to do so. The Servicer
shall not cancel or refuse to renew any Primary Insurance Policy in effect on
the related Funding Date that is required to be kept in force under this
Agreement unless a replacement Primary Insurance Policy for such canceled or
nonrenewed policy is obtained from and maintained with an insurer that satisfies
the standards set forth in Section 3.03(30). The Servicer shall not take any
action which would result in noncoverage under any applicable Primary Insurance
Policy of any loss which, but for the actions of the Servicer, would have been
covered thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 7.01, the Servicer shall
promptly notify the insurer under the related Primary Insurance Policy, if any,
of such assumption or substitution of liability in accordance with the terms of
such policy and shall take all actions which may be required by such insurer as
a condition to the continuation of coverage under the Primary Insurance Policy.
If such Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, then the Servicer shall obtain, and, except as
otherwise provided above, maintain, a replacement Primary Insurance Policy as
provided above.

         In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Insurance Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 5.04, any amounts
collected by the Servicer under any Primary Insurance Policy shall be deposited
in the Collection Account, subject to withdrawal in accordance with Section
5.05.

         Purchaser, in its sole discretion, at any time, may (i) either obtain
an additional Primary Insurance Policy on any Mortgage Loan which already has a
Primary Insurance Policy in place, or (ii) obtain a Primary Insurance Policy for
any Mortgage Loan which does not already have a Primary Insurance Policy in
place. Upon the mutual agreement of the Purchaser and the Servicer, such Primary
Insurance Policy will be administered by the Servicer in accordance with the
terms of this Agreement or any Reconstitution Agreement.

         Section 5.09 Transfer of Accounts.

         The Servicer may transfer the Collection Account or any Escrow Account
to a different depository institution from time to time; provided that (i) no
such transfer shall be made unless all certifications or letter agreements
required under Section 5.04 or Section 5.06, as applicable, have been executed
and delivered by the parties thereto; and (ii) concurrently upon any such

                                      -54-
<PAGE>

transfer, the Servicer shall give written notice thereof to the Purchaser.
Notwithstanding anything to the contrary contained herein, the Collection
Account and each Escrow Account shall at all times constitute Eligible Accounts.

         Section 5.10 Maintenance of Hazard Insurance.

         The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount that is at least equal to the
lesser of (a) the maximum insurable value of the improvements securing such
Mortgage Loan and (b) the greater of (1) the Unpaid Principal Balance of such
Mortgage Loan or (2) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor and/or the loss payee from becoming a
co-insurer.

         If any Mortgaged Property is in an area identified by the Federal
Emergency Management Agency as having special flood hazards and such flood
insurance has been made available, then the Servicer will cause to be maintained
a flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration with a generally acceptable insurance
carrier rated "A" or better in Best's or in accordance with then current FNMA,
FHLMC, GNMA or VA guidelines, as applicable, in an amount representing coverage
not less than the lesser of (a) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement cost basis (or
the outstanding principal balance of the related Mortgage Loan if replacement
cost coverage is not available for the type of building insured) or (b) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended (assuming that the area in which such
Mortgaged Property is located is participating in such program). If at any time
during the term of the Mortgage Loan, the Servicer determines in accordance with
applicable law and pursuant to the then current FNMA or FHLMC guidelines, as
applicable, that a Mortgaged Property is located in a special flood hazard area
and is not covered by flood insurance or is covered in an amount less than the
amount required by the Flood Disaster Protection Act of 1973, as amended, the
Servicer shall notify the related Mortgagor that the Mortgagor must obtain such
flood insurance coverage, and if said Mortgagor fails to obtain the required
flood insurance coverage within forty-five (45) days after such notification,
the Servicer shall immediately force place the required flood insurance on the
Mortgagor's behalf.

         The Servicer shall also maintain on each REO Property fire, hazard and
liability insurance, and to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance with extended
coverage in an amount which is at least equal to the lesser of (a) the maximum
insurable value of the improvements which are a part of such property and (b)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property plus accrued interest at the Note Rate and related
Servicing Advances.

         All such policies shall be endorsed with standard mortgagee clauses
with loss payable to the Servicer, or upon request to the Purchaser, and shall
provide for at least 30 days prior written notice of any cancellation, reduction
in the amount of, or material change in, coverage to the Servicer. The Servicer
shall not interfere with the Mortgagor's freedom of choice in selecting either
his insurance carrier or agent, provided that the Servicer shall not accept any
such insurance policies from insurance companies unless such companies (a)
currently reflect (1) a

                                      -55-
<PAGE>

general policyholder's rating of B+ or better and a financial size category of
III or better in Best's Key Rating Guide, or (2) a general policyholder's rating
of "A" or "A-" or better in Best's Key Rating Guide, and (b) are licensed to do
business in the state wherein the related Mortgaged Property is located.
Notwithstanding the foregoing, the Servicer may accept a policy underwritten by
Lloyd's of London or, if it is the only coverage available, coverage under a
state's Fair Access to Insurance Requirement (FAIR) Plan. If a hazard policy
becomes in danger of being terminated, or the insurer ceases to have the ratings
noted above, the Servicer shall notify the Purchaser and the related Mortgagor,
and shall use its best efforts, as permitted by applicable law, to obtain from
another qualified insurer a replacement hazard insurance policy substantially
and materially similar in all respects to the original policy. In no event,
however, shall a Mortgage Loan be without a hazard insurance policy at any time,
subject only to Section 5.11.

         Pursuant to Section 5.04, any amounts collected by the Servicer under
any such policies other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or REO Property,
or released to the Mortgagor in accordance with the Servicer's normal servicing
procedures, shall be deposited in the Collection Account within two Business
Days of receipt, subject to withdrawal in accordance with Section 5.05. Any cost
incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating remittances to the Purchaser, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.

         If a Mortgage is secured by a unit in a condominium project, the
Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with the Cendant Guide (with respect to any loans originated in
connection with Cendant's non-warrantable condominium program) or the applicable
FNMA or FHLMC guidelines, and secure from the owner's association its agreement
to notify the Servicer promptly of any change in the insurance coverage or of
any condemnation or casualty loss that may have a material effect on the value
of the Mortgaged Property as security.

         It is understood and agreed that no earthquake or other additional
insurance need be required by the Servicer of the Mortgagor or maintained on
property acquired in respect of the Mortgage 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 5.11 Maintenance of Mortgage Impairment Insurance Policy.

         If the Servicer obtains and maintains a blanket policy issued by an
issuer that has a Best's Key rating of A+ insuring against hazard losses on all
of the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 5.10 and otherwise
complies with all other requirements of Section 5.10, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 5.10, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, if there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with Section 5.10 and
there shall have been one or more losses which would have been covered by such
policy, deposit in the Collection Account the amount not otherwise payable

                                      -56-
<PAGE>

under the blanket policy because of such deductible clause; provided that the
Servicer shall not be entitled to obtain reimbursement therefor. In connection
with its activities as servicer of the Mortgage Loans, the Servicer agrees to
prepare and present, on behalf of the Purchaser, claims under any such blanket
policy in a timely fashion in accordance with the terms of such policy. Upon
request of the Purchaser, the Servicer shall cause to be delivered to the
Purchaser a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without 30 days' prior written notice to the Purchaser.

         Section 5.12 Fidelity Bond; Errors and Omissions Insurance.

         The Servicer shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA and FHLMC on all
officers, employees or other Persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in
the form of the "Mortgage Banker's Blanket Bond" and shall protect and insure
the Servicer against losses, including losses arising by virtue of any Mortgage
Loan not being satisfied in accordance with the procedures set forth in Section
7.02 and/or losses resulting from or arising in connection with forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of or by such
Persons. Such Fidelity Bond shall also protect and insure the Servicer against
losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 5.12 requiring the Fidelity Bond
and errors and omissions insurance shall diminish or relieve the Servicer from
its duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by FNMA in the FNMA Guide and by FHLMC in the
FHLMC Servicing Guide. The Servicer shall cause to be delivered to the Purchaser
upon request: (i) a certified true copy of the Fidelity Bond and insurance
policy; (ii) a written statement from the surety and the insurer that such
Fidelity Bond or insurance policy shall in no event be terminated or materially
modified without 30 days' prior written notice to the Purchaser; and (iii)
written evidence reasonably satisfactory to the Purchaser that such Fidelity
Bond or insurance policy provides that the Purchaser is a beneficiary or loss
payee thereunder.

         Section 5.13 Management of REO Properties.

         If title to any Mortgaged Property is acquired in foreclosure or by
deed in lieu of foreclosure (each, an "REO Property"), the deed or certificate
of sale shall be taken in the name of the Purchaser or the Person (which may be
the Servicer for the benefit of the Purchaser) designated by the Purchaser, or
in the event the Purchaser notifies the Servicer that the Purchaser or such
Person is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an opinion of counsel obtained by the Purchaser from an
attorney duly licensed to practice law in the state where the REO Property is
located. The Servicer (acting alone or through a subservicer), on behalf of the
Purchaser, shall, subject to

                                      -57-
<PAGE>

Section 5.01(3)(c), dispose of any REO Property pursuant to Section 5.14. Unless
an appraisal prepared by an MAI Appraiser who is Independent in accordance with
the provisions of 12 C.F.R. Section 225.65 shall have been obtained in
connection with the acquisition of such REO Property, promptly following any
acquisition by the Purchaser (through the Servicer) of an REO Property, the
Servicer shall obtain a narrative appraisal thereof (at the expense of the
Purchaser) in order to determine the fair market value of such REO Property. The
Servicer shall also cause each REO Property to be inspected promptly upon the
acquisition of title thereto and shall cause each REO Property to be inspected
at least annually thereafter, and Servicer shall be entitled to be reimbursed
for expenses in connection therewith in accordance with this Agreement. The
Servicer shall make or cause to be made a written report of each such
inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Servicer to the Purchaser. The Servicer shall
also furnish to the Purchaser the applicable reports required under Section
8.01.

         Notwithstanding anything to the contrary contained herein, if a REMIC
election has been or is to be made with respect to the arrangement under which
the Mortgage Loans and the REO Properties are held, then the Servicer shall
manage, conserve, protect and operate each REO Property in a manner that 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 such
REMIC of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) or any "net income from foreclosure property" within the meaning
of Section 860G (c)(2) of the Code (or comparable provisions of any successor or
similar legislation).

         The Servicer shall deposit and hold all revenues and funds collected
and received in connection with the operation of each REO Property in the
Collection Account, and the Servicer shall account separately for revenues and
funds received or expended with respect to each REO Property.

         The Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement (and, in particular,
Section 5.01(3)(c)), to do any and all things in connection with any REO
Property as are consistent with the servicing standards set forth in Section
5.01. In connection therewith, the Servicer shall deposit or cause to be
deposited within two (2) Business Day of receipt in the Collection Account all
revenues and collections received or collected by it with respect to each REO
Property, including all proceeds of any REO Disposition. Subject to Section
5.15, the Servicer shall withdraw (without duplication) from the Collection
Account, but solely from the revenues and collections received or collected by
it with respect to a specific REO Property, such funds necessary for the proper
operation, management and maintenance of such REO Property, including the
following:

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

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

(3) all customary and reasonable costs and expenses necessary to maintain,
repair, appraise, evaluate, manage or operate such REO Property (including the
customary and reasonable costs

                                      -58-
<PAGE>

incurred by any "managing agent" retained by the Servicer in connection with the
maintenance, management or operation of such REO Property);

(4) all reasonable costs and expenses of restoration improvements, deferred
maintenance and tenant improvements; and

(5) all other reasonable costs and expenses, including reasonable attorneys'
fees, that the Servicer may suffer or incur in connection with its performance
of its obligations under this Section (other than costs and expenses that the
Servicer is expressly obligated to bear pursuant to this Agreement).

         To the extent that amounts on deposit in the Collection Account are
insufficient for the purposes set forth in clauses (1) through (5) above, the
Servicer shall, subject to Section 6.04, advance the amount of funds required to
cover the shortfall with respect thereto. The Servicer shall promptly notify the
Purchaser in writing of any failure by the Servicer to make a Servicing Advance
of the type specified in clauses (1) or (2) above (irrespective of whether such
Servicing Advance is claimed to be non-recoverable by the Servicer pursuant to
Section 6.04).

         Following the consummation of an REO Disposition, the Servicer shall
remit to the Purchaser, in accordance with Section 6.01, any proceeds from such
REO Disposition in the Collection Account following the payment of all expenses
and Servicing Advances relating to the subject REO Property.

         Section 5.14 Sale of Specially Serviced Mortgage Loans and REO
Properties.

         The Servicer shall offer to sell any REO Property in the manner that is
in the best interests of the Purchaser or other owner of the REO, but no later
than the time determined by the Servicer to be sufficient to result in the sale
of such REO Property on or prior to the time specified in Section 5.15. In
accordance with the servicing standards set forth in Section 5.01, the Servicer
or designated agent of the Servicer shall solicit bids and offers from Persons
for the purchase of any Specially Serviced Mortgage Loan or REO Property.

         The Servicer shall act on behalf of the Purchaser in negotiating and
taking any other action necessary or appropriate in connection with the sale of
any Specially Serviced Mortgage Loan or REO Property, including the collection
of all amounts payable in connection therewith. The Servicer shall manage and
negotiate terms of sale on Specially Serviced Mortgage Loans or REO Properties
with the same care, skill, prudence and diligence with which Servicer manages
its own REO Properties. The proceeds of any sale after deduction of the expenses
of such sale incurred in connection therewith shall be promptly deposited in (a)
if such sale is an REO Disposition, in the Collection Account in accordance with
Section 5.13 and (b) in any other circumstance, the Collection Account in
accordance with Section 5.04.

         Section 5.15 Realization Upon Specially Serviced Mortgage Loans and REO
Properties.

         The Servicer shall foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Specially Serviced Mortgage Loans
as come into and continue in default and as to which (a) in the reasonable
judgment of the Servicer, no satisfactory arrangements can, in accordance with
prudent lending practices, be made for collection of

                                      -59-
<PAGE>

delinquent payments pursuant to Section 5.01 and (b) such foreclosure or other
conversion is otherwise in accordance with Section 5.01. Prior to commencing
foreclosure proceedings, the Servicer shall notify the Purchaser in writing of
the Servicer's intention to do so. The Servicer shall not be required to expend
its own funds in connection with any foreclosure or towards the restoration,
repair, protection or maintenance of any property unless it shall determine that
such expenses will be recoverable to it as Servicing Advances either through
Liquidation Proceeds or through Insurance Proceeds (in accordance with Section
5.05) or from any other source relating to the Specially Serviced Mortgage Loan.
The Servicer shall be required to advance funds for all other costs and expenses
incurred by it in any such foreclosure proceedings; provided that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated by Section 5.05.

         Upon any Mortgaged Property becoming an REO Property, the Servicer
shall promptly notify the Purchaser thereof, specifying the date on which such
Mortgaged Property became an REO Property. Pursuant to its efforts to sell such
REO Property, the Servicer shall, either itself or through an agent selected by
it, protect and conserve such REO Property in accordance with the servicing
standards set forth in Section 5.01 and may, subject to Section 5.01(3)(c) and
incident to its conservation and protection of the interests of the Purchaser,
rent the same, or any part thereof, for the period to the sale of such REO
Property.

         Notwithstanding anything to the contrary contained herein, the
Purchaser shall not, and the Servicer shall not on the Purchaser's behalf,
acquire any real property (or personal property incident to such real property)
except in connection with a default or a default that is imminent on a Mortgage
Loan. If the Purchaser acquires any real property (or personal property incident
to such real property) in connection with such a default, then such property
shall be disposed of by the Servicer in accordance with this Section and Section
5.14 as soon as possible but in no event later than 3 years after its
acquisition by the Servicer on behalf of the Purchaser, unless the Servicer
obtains, at the expense of the Purchaser, in a timely fashion an extension from
the Internal Revenue Service for an additional specified period.

         Any recommendation of the Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Servicer that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. If the Servicer determines that the proceeds of such foreclosure
would not exceed the costs and expenses of bringing such a proceeding, the
Servicer will request the Purchaser to allow Servicer to pursue a Deed in Lieu
of Foreclosure or recommend to the Purchaser to perform a charge-off of the
remaining principal balance, delinquent interest and any and all fees and/or
expenses the Servicer has advanced or incurred through Customary Servicing
Procedures. The income earned from the management of any REO Property, net of
reimbursement to the Servicer for Servicing Advances, incurred with respect to
such REO Property under Section 5.13, shall be applied to the payment of the
costs and expenses set forth in Section 5.13(4), with any remaining amounts to
be promptly deposited in the Collection Account in accordance with Section 5.13.

         If, in the exercise of its servicing obligations with respect to any
Mortgaged Property hereunder, the Servicer deems it is necessary or advisable to
obtain an Environmental Assessment, then the Servicer shall so obtain an
Environmental Assessment, it being understood that all reasonable costs and
expenses incurred by the Servicer in connection with any such

                                      -60-
<PAGE>

Environmental Assessment (including the cost thereof) shall be deemed to be
Servicing Advances recoverable by the Servicer pursuant to Section 5.13(4). Upon
completion of the inspection, the Seller shall promptly provide a written
Environmental Assessment report to the Purchaser. Such Environmental Assessment
shall (a) assess whether (1) such Mortgaged Property is in material violation of
applicable Environmental Laws or (2) after consultation with an environmental
expert, taking the actions necessary to comply with applicable Environmental
Laws is reasonably likely to produce a greater recovery on a net present value
basis than not taking such actions, and (b) identify whether (1) any
circumstances are present at such Mortgaged Property relating to the use,
management or disposal of any hazardous materials for which investigation,
testing, monitoring, containment, clean-up or re mediation could be required
under any federal, state or local law or regulation, or (2) if such
circumstances exist, after consultation with an environmental expert, taking
such actions is reasonably likely to produce a greater recovery on a present
value basis than not taking such actions. (The conditions described in the
immediately preceding clauses (a) and (b) shall be referred to herein as
"Environmental Conditions Precedent to Foreclosure.") If any such Environmental
Assessment so warrants, the Servicer is hereby authorized to and shall perform
such additional environmental testing as it deems necessary and prudent to
establish the satisfaction of the foregoing Environmental Conditions Precedent
to Foreclosure or to proceed as set forth below (such additional testing
thereafter being included in the term "Environmental Assessment").

         If an Environmental Assessment deemed necessary or advisable by the
Servicer in accordance with this Section 5.15 establishes that any of the
Environmental Conditions Precedent to Foreclosure is not satisfied with respect
to any Mortgaged Property, but the Servicer in good faith reasonably believes
that it is in the best economic interest of the Purchaser to proceed against
such Mortgaged Property and, if title thereto is acquired, to take such
remedial, corrective or other action with respect to the unsatisfied condition
or conditions as may be prescribed by applicable law to satisfy such condition
or conditions, then the Servicer shall so notify the Purchaser. If, pursuant to
Section 5.01(3)(c), the Purchaser has notified the Servicer in writing to
proceed against such Mortgaged Property, then the Servicer shall so proceed. The
cost of any remedial, corrective or other action contemplated by the preceding
sentence in respect of any of the Environmental Conditions Precedent to
Foreclosure that is not satisfied shall not be an expense of the Servicer and
the Servicer shall not be required to expend or risk its own funds or otherwise
incur any financial liability in connection with any such action.

         If an Environmental Assessment deemed necessary or advisable by the
Servicer in accordance with this Section 5.15 establishes that any of the
Environmental Conditions Precedent to Foreclosure is not satisfied with respect
to any Mortgaged Property and, in accordance with Section 5.01(3)(c), the
Purchaser elects or is deemed to have elected not to proceed against such
Mortgaged Property, then the Servicer shall, subject to Section 5.01(3)(c), take
such action as it deems to be in the best economic interest of the Purchaser
(other than proceeding against the Mortgaged Property or directly or indirectly
becoming the owner or operator thereof) as determined in accordance with the
servicing standard set forth in Section 5.01 and is hereby authorized at such
time as it deems appropriate to release such Mortgaged Property from the lien of
the related Mortgage.

         Prior to the Servicer taking any action with respect to the use,
management or disposal of any hazardous materials on any Mortgaged Property, the
Servicer shall request the approval of

                                      -61-
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the Purchaser in accordance with Section 5.01(3)(c) and, if such action is
approved by the Purchaser, (a) keep the Purchaser apprised of the progress of
such action; and (b) take such action in compliance with all applicable
Environmental Laws.

         Section 5.16 Investment of Funds in the Collection Account.

         The Servicer may direct any depository institution which holds the
Collection Account to invest the funds in the Collection Account in one or more
Permitted Investments bearing interest. Any such Permitted Investment shall be
made in the name of the Servicer in trust for the benefit of the Purchaser. All
such Permitted Investments shall be held to maturity, unless payable on demand.
In the event amounts on deposit in the Collection Account are at any time
invested in a Permitted Investment payable on demand, the Servicer shall:

                  (a)      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

                  (b)      demand payment of all amounts due thereunder promptly
                           upon determination by the Servicer or notice from the
                           Purchaser that such Permitted Investment would not
                           constitute a Permitted Investment in respect of funds
                           thereafter on deposit in the Collection Account.

         All income and gain realized from investment of funds deposited in the
Collection Account shall be for the benefit of the Servicer and shall be subject
to its withdrawal in accordance with Section 5.05. The Servicer shall, out of
its own funds, deposit in the Collection Account the amount of any loss incurred
in respect of any Permitted Investment immediately upon realization of such
loss.

         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 Purchaser may elect to take such action, or instruct the
Servicer to take such action, as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings, at the expense of the Servicer.

         Section 5.17 MERS.

         In the case of each MERS Mortgage Loan, the Servicer shall, as soon as
practicable after the Purchaser's request (but in no event more than 30 days
thereafter with respect to each Mortgage Loan that was a MERS Mortgage Loan as
of the Funding Date, or 90 days thereafter with respect to each Mortgage Loan
that was a MERS Eligible Mortgage Loan as of the Funding Date and subsequent to
the Funding Date becomes a MERS Mortgage Loan), the Servicer shall take such
actions as are necessary to cause the Purchaser to be clearly identified as the
owner of each MERS Mortgage Loan on the records of MERS for purposes of the
system of recording transfers of beneficial ownership of mortgages maintained by
MERS. Each of the Purchaser and

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<PAGE>

the Servicer shall maintain in good standing its membership in MERS. In
addition, each of the Purchaser and the Servicer shall comply with all rules,
policies and procedures of MERS, including the Rules of Membership, as amended,
and the MERS Procedures Manual, as amended. With respect to all MERS Mortgage
Loans serviced hereunder, the Servicer shall promptly notify MERS as to any
transfer of beneficial ownership or release of any security interest in such
Mortgage Loans. The Servicer shall cooperate with the Purchaser and any
successor owner or successor servicer to the extent necessary to ensure that any
transfer of ownership or servicing is appropriately reflected on the MERS
system.

         Section 5.18 Pledged Asset Mortgage Loans.

         (a)      Representations of Servicer:

                  (1)      Servicer hereby represents and warrants to Purchaser
                           that prior to its assignment to Purchaser of the
                           security interest in and to any Pledged Assets set
                           forth in Section 5.18(b) hereof, Servicer had a first
                           priority perfected security interest in each
                           Securities Account, and/or, if necessary to perfect a
                           first priority security interest in each asset
                           contained in such Securities Account, a first
                           priority perfected security interest in each such
                           asset contained in such Securities Account and
                           following Servicer's assignment of the Pledged Asset
                           Agreements and such security interest in and to any
                           Pledged Assets, Purchaser has a first priority
                           perfected security interest in each Securities
                           Account, and/or, if necessary to perfect a first
                           priority security interest in each asset contained in
                           such Securities Account, a perfected first priority
                           security interest in each such asset contained in
                           such Securities Account. Servicer hereby represents
                           and warrants to Purchaser that prior to the related
                           Pledged Asset Servicer's assignment to the Servicer
                           of the security interest in and to any Pledged
                           Assets, the related Pledged Asset Servicer had a
                           first priority perfected security interest in each
                           Securities Account, and/or, if necessary to perfect a
                           first priority security interest in each asset
                           contained in such Securities Account, a first
                           priority perfected security interest in each such
                           asset contained in such Securities Account and
                           following such Pledged Asset Servicer's assignment of
                           the Pledged Asset Agreements and such security
                           interest in and to any Pledged Assets, the Servicer
                           had a first priority perfected security interest in
                           each Securities Account, and/or, if necessary to
                           perfect a first priority security interest in each
                           asset contained in such Securities Account, a
                           perfected first priority security interest in each
                           such asset contained in such Securities Account.

                  (2)      Servicer represents and warrants to Purchaser that
                           each Pledged Asset Mortgage Loan is insured under the
                           terms and provisions of a Surety Bond subject to the
                           limitations set forth therein. Servicer covenants
                           that within 2 Business Days after the Funding Date
                           for any purchase of Pledged Asset Mortgage Loans,
                           Servicer will deliver to each Surety Bond Issuer any
                           instrument required to be delivered under the related
                           Surety Bond, executed by the necessary parties, and
                           that all other requirements for

                                      -63-
<PAGE>

                           transferring coverage under the related Surety Bonds
                           in respect of such Pledged Asset Mortgage Loans to
                           the Purchaser shall be complied with. Servicer shall
                           indemnify Purchaser and hold it harmless against any
                           and all claims, losses, damages, penalties, fines,
                           forfeitures, reasonable and necessary legal fees and
                           related costs, judgments, and any other costs, fees
                           and expenses that are related to or arise from the
                           non-payment of Required Surety Payments with respect
                           to the Pledged Asset Mortgage Loans purchased by
                           Purchaser from applicable Seller under this
                           Agreement. The indemnification obligation provided in
                           this subparagraph 2 with respect to each Pledged
                           Asset Mortgage Loan shall expire upon receipt by the
                           related Surety Bond Issuer of the necessary
                           documentation referred to in this paragraph, signed
                           by the appropriate parties thereto.

                  (3)      Servicer represents and warrants that the assignment
                           of rights to Purchaser under each Surety Bond, as
                           described herein, will not result in Purchaser
                           assuming any obligations or liabilities of Servicer
                           with respect thereto.

                  (4)      Servicer represents and warrants that each Pledged
                           Asset Servicing Agreement and the Pledge Agreements
                           are in full force and effect as of the Funding Date
                           and their provisions have not been waived, amended or
                           modified in any respect, nor has any notice of
                           termination been given thereunder. Servicer
                           represents to Purchaser that as of the Funding Date,
                           neither Servicer nor any Pledged Asset Servicer is in
                           default under the related Pledged Asset Servicing
                           Agreement.

         (b)      Assignment of Security Interest

                  (1)      With respect to each Pledged Asset Mortgage Loan sold
                           to Purchaser under this Agreement, the Servicer
                           hereby assigns to the Purchaser its security interest
                           in and to any related Pledged Assets, all of its
                           rights in each related Pledge Agreement, its right to
                           receive amounts due or to become due in respect of
                           any related Pledged Assets and its rights as
                           beneficiary under the related Surety Bond in respect
                           of any Pledged Asset Mortgage Loans.

         (c)      Servicing of Pledged Assets

                  (1)      The parties acknowledge that pursuant to each Pledged
                           Asset Servicing Agreement between Servicer and the
                           related Pledged Asset Servicer, the Securities
                           Accounts and other Pledged Assets in which Purchaser
                           shall (pursuant to the terms of this Agreement) have
                           a security interest, shall continue to be maintained
                           and serviced by such Pledged Asset Servicer. Servicer
                           represents and warrants that the terms of each
                           Pledged Asset Servicing Agreement are not
                           inconsistent with any of the provisions of this
                           Agreement. Subject to Subsection (c)(2) below, the
                           Servicer shall service and administer the Securities
                           Accounts and other Pledged Assets, in accordance with
                           (i) prudent business practices and procedures
                           employed in

                                      -64-
<PAGE>

                           the industry to administer securities accounts and
                           additional collateral similar to that securing the
                           Pledged Asset Mortgage Loans; (ii) the terms of the
                           related Pledge Agreements; and (iii) the terms of
                           this Agreement. Servicer's obligations under this
                           Section 5.18(c) will be subject to the provisions of
                           Section 9.04 hereof.

                  (2)      Notwithstanding any other provision of this Agreement
                           to the contrary, except as provided below in this
                           Subsection (c)(2), the Servicer shall have no duty or
                           obligation to service and administer the Pledged
                           Assets, and the Servicer shall not be deemed to be
                           the Pledged Asset Servicer with respect to any
                           Pledged Asset Mortgage Loan, unless and until the
                           related Pledged Asset Servicer's obligations to
                           administer the Pledged Asset as provided in the
                           related Pledged Asset Servicing Agreement have been
                           terminated with respect to such Pledged Asset
                           Mortgage Loans sold hereunder, in which case the
                           Servicer shall be bound to service and administer the
                           related Pledged Assets and the related Surety Bond in
                           accordance with the provisions of this Agreement and
                           the related Pledge Agreements, from the date of such
                           termination. The Servicer shall enforce the
                           obligations of each Pledged Asset Servicer to service
                           and administer the Pledged Assets as provided in the
                           related Pledged Asset Servicing Agreement, and shall
                           take appropriate action thereunder if any Pledged
                           Asset Servicer fails to substantially comply with its
                           obligations to administer the Pledged Assets. Such
                           enforcement, including without limitation, the legal
                           prosecution of claims, termination of the related
                           Pledged Asset Servicing Agreement with respect to the
                           related Pledged Asset Mortgage Loans, and the pursuit
                           of other appropriate remedies, shall be carried out
                           as the Servicer, in its good faith business judgment,
                           would require were it the owner of the related
                           Securities Accounts and other Pledged Assets. Without
                           in any way limiting any other remedies set forth
                           herein, Servicer shall indemnify Purchaser and hold
                           it harmless against any and all Losses that arise
                           with respect to Pledged Asset Mortgage Loans
                           purchased by Purchaser from Servicer hereunder,
                           provided that (i) such Losses are caused by the
                           related Pledged Asset Servicer's failure to
                           administer the Pledged Assets as provided in the
                           related Pledged Asset Servicing Agreement and in a
                           manner consistent with the standard set forth in
                           Subsection (c)(1) above, (ii) the indemnification
                           contained in this Subsection (c)(2) will in no event
                           exceed the Original Pledged Asset Requirement for the
                           related Pledged Asset Mortgage Loan, and (iii) such
                           indemnification liability shall be offset to the
                           extent that the Losses are covered by a Required
                           Surety Payment.

                  (3)      The related Pledged Asset Servicer shall use its best
                           reasonable efforts to realize upon any related
                           Pledged Assets for such of the Pledged Asset Mortgage
                           Loans as come into and continue in default and as to
                           which no satisfactory arrangements can be made for
                           collection of delinquent payments; provided that the
                           related Pledged Asset Servicer shall not obtain title
                           to any such Pledged Assets as a result of or in lieu
                           of the disposition

                                      -65-
<PAGE>

                           thereof or otherwise; and provided further that (i)
                           the related Pledged Asset Servicer shall not proceed
                           with respect to such Pledged Assets in any manner
                           that would impair the ability to recover against the
                           related Mortgaged Property, and (ii) the Servicer
                           shall proceed with any acquisition of REO Property in
                           a manner that preserves the ability to apply the
                           proceeds of such Pledged Assets against amounts owed
                           under the defaulted Mortgage Loan. Any proceeds
                           realized from such Pledged Assets (other than amounts
                           to be released to the Mortgagor or the related
                           guarantor in accordance with procedures that the
                           Servicer would follow in servicing loans held for its
                           own account, subject to the terms and conditions of
                           the related Mortgage and Mortgage Note and to the
                           terms and conditions of any security agreement,
                           guarantee agreement, mortgage or other agreement
                           governing the disposition of the proceeds of such
                           Pledged Assets) shall be deposited in the Collection
                           Account, subject to withdrawal pursuant to Section
                           5.05 hereof; provided, that such proceeds shall not
                           be so deposited if the Required Surety Payment in
                           respect of such Pledged Asset Mortgage Loan has been
                           deposited in the Collection Account or otherwise paid
                           to the Purchaser (except to the extent of any such
                           proceeds taken into account in calculating the amount
                           of the Required Surety Payment).

                  (4)      Servicer's obligations to administer the Securities
                           Accounts shall terminate upon termination of the
                           related Pledged Asset Agreement. Purchaser
                           acknowledges coverage under the terms and provisions
                           of the related Surety Bond as to any particular
                           Pledged Asset Mortgage Loan shall terminate upon
                           termination of the related Pledged Asset Agreement;
                           provided, however, that such termination shall not
                           affect claims arising under this Agreement or the
                           related Surety Bond prior to the date of termination
                           of the related Pledged Asset Agreement.

                  (5)      The Pledged Asset Servicer with respect to each
                           Pledged Asset Mortgage Loan may, without the consent
                           of the Purchaser, amend or modify a Pledged Asset
                           Agreement in any non-material respect to reflect
                           administrative or account changes, provided that the
                           same are consistent with the Cendant Guide.

         (d)      Surety Bonds

                  (1)      If a Required Surety Payment is payable pursuant to
                           the related Surety Bond with respect to any Pledged
                           Asset Mortgage Loan, as determined by the Servicer,
                           the related Pledged Asset Servicer shall so notify
                           the related Surety Bond Issuer promptly. The Servicer
                           shall cause the prompt completion of any necessary
                           documentation relating to the related Surety Bond and
                           shall cause the prompt submission of such
                           documentation to the related Surety Bond Issuer as a
                           claim for a required surety. The Purchaser shall
                           execute such documentation if requested by the
                           related Pledged Asset Servicer.

                                      -66-
<PAGE>

                  (2)      In the event that the Servicer receives a Required
                           Surety Payment from a Surety Bond Issuer on behalf of
                           the Purchaser, the Servicer shall deposit such
                           Required Surety Payment in the Collection Account and
                           shall distribute such Required Surety Payment, or the
                           proceeds thereof, in accordance with the provisions
                           hereof applicable to Insurance Proceeds.

                  (3)      Purchaser will cooperate with Servicer to transfer to
                           Purchaser the coverage of each Surety Bond in respect
                           of the related Pledged Asset Mortgage Loans.

         Section 5.19 Inspections.

         The Servicer shall inspect the Mortgaged Property as often as deemed
necessary by the Servicer to assure itself that the value of the Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than 60
days delinquent, the Servicer shall immediately inspect the Mortgaged Property
and shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage insurer or guarantor.
The Servicer shall keep a written report of each such inspection.

         Section 5.20 Transfer of Servicing.

         On the related Transfer Date, if any, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Servicer shall
cease all servicing responsibilities related to, the related Mortgage Loans
subject to the servicing transfer or such Transfer Date. On or prior to the
related Transfer Date, the Servicer shall, at its sole cost and expense, take
such steps as may be necessary or appropriate to effectuate and evidence the
transfer of the servicing of the related Mortgage Loans to the Purchaser, or its
designee, including but not limited to the following:

(1)      Notice to Mortgagors. The Servicer shall mail to the Mortgagor of each
         related Mortgage Loan a letter advising such Mortgagor of the transfer
         of the servicing of the related Mortgage Loan to the Purchaser, or its
         designee, in accordance with the Cranston Gonzales National Affordable
         Housing Act of 1990; provided, however, the content and format of the
         letter shall have the prior approval of the Purchaser. The Servicer
         shall provide the Purchaser with copies of all such related notices no
         later than the related Transfer Date.

(2)      Notice to Taxing Authorities and Insurance Companies. The Servicer
         shall transmit to the applicable taxing authorities and insurance
         companies (including primary mortgage insurance policy insurers, if
         applicable) and/or agents, notification of the transfer of the
         servicing to the Purchaser, or its designee, and instructions to
         deliver all notices, tax bills and insurance statements, as the case
         may be, to the Purchaser or its designee from and

                                      -67-
<PAGE>

         after the related Transfer Date. The Servicer shall provide the
         Purchaser with copies of all such notices no later than the related
         Transfer Date.

(3)      Delivery of Servicing Records. The Servicer shall forward to the
         Purchaser, or its designee, all servicing records and the Mortgage
         Files in the Servicer's possession relating to each related Mortgage
         Loan.

(4)      Escrow Payments. The Servicer shall provide to the Purchaser, or its
         designee, in immediately available funds by wire transfer an amount
         equal to the balance in the related Escrow Account net of all Escrow
         Payments, suspense balances, servicing advances and loss draft balances
         associated with the related Mortgage Loans. The Servicer shall provide
         the Purchaser with an accounting statement, in electronic format
         reasonably acceptable to the Purchaser, of Escrow Payments, servicing
         advances, suspense balances and loss draft balances sufficient to
         enable the Purchaser to reconcile the amount of such payment with the
         accounts related to the Mortgage Loans. Additionally, the Servicer
         shall wire transfer to the Purchaser the amount of any agency, trustee
         or prepaid Mortgage Loan payments and all other similar amounts held by
         the Servicer.

(5)      Payoffs and Assumptions. For a period of thirty days after the Transfer
         Date, the Servicer shall promptly deliver to the Purchaser, or its
         designee, within a reasonable time period, copies of all assumption and
         payoff statements generated by the Servicer on the related Mortgage
         Loans prior to the related Transfer Date.

(6)      Mortgage Payments Received Prior to Transfer Date. Prior to the related
         Transfer Date all payments received by the Servicer on each related
         Mortgage Loan shall be properly applied by the Servicer to the account
         of the each related Mortgagor.

(7)      Mortgage Payments Received after Transfer Date. For a period of sixty
         days after the Transfer Date any related Monthly Payments received by
         the Servicer shall be forwarded to the Purchaser by overnight mail on
         the date of receipt. After the initial sixty day period such payments
         may be delivered by regular mail or such other method(s) as may be
         agreed to by the parties. The Servicer shall notify the Purchaser of
         the particulars of the payments, which notification requirement shall
         be satisfied if the Servicer forwards with its payment sufficient
         information to permit appropriate processing of the payment by the
         Purchaser.

(8)      Misapplied Payments. Misapplied payments shall be processed as follows:

         i)       All parties shall cooperate in correcting misapplication
                  errors;

         ii)      The party receiving notice of a misapplied payment occurring
                  prior to the related Transfer Date and discovered after such
                  Transfer Date shall immediately notify the other party;

         iii)     If a misapplied payment received prior to the related Transfer
                  Date cannot be identified and such misapplied payment has
                  resulted in a shortage in a Collection

                                      -68-
<PAGE>

                  Account or Escrow Account, the Servicer shall be liable for
                  the amount of such shortage. The Servicer shall reimburse the
                  Purchaser for the amount of such shortage within thirty (30)
                  days after receipt of written demand therefor from the
                  Purchaser;

         iv)      If a misapplied payment received prior to the related Transfer
                  Date caused the payment to be incorrectly calculated as the
                  result of an inaccurate outstanding principal balance, a check
                  shall be issued to the party shorted by the improper payment
                  application within five (5) Business Days after notice thereof
                  by the other party; and

         (1)      Any check issued under the provisions of this Section 5.20(8)
                  shall be accompanied by a statement indicating the
                  corresponding Servicer, the Mortgage Loan identification
                  number and an explanation of the allocation of any such
                  payments.

(9)      Books and Records. On the related Transfer Date, the books, records and
         accounts of the Servicer with respect to the related Mortgage Loans
         shall be delivered in accordance with all applicable Purchaser
         requirements.

(10)     Reconciliation. The Servicer shall, on or before the related Transfer
         Date, reconcile principal balances and make any monetary adjustments
         required by the Purchaser. Any such monetary adjustments will be
         transferred between the Servicer and the Purchaser as appropriate.

(11)     IRS Forms. The Servicer shall or shall file all IRS forms 1099, 1099A,
         1098 or 1041 and K-1 which are required to be filed on or before the
         related Transfer Date in relation to the servicing and ownership of the
         related Mortgage Loans. The Servicer shall provide copies of such forms
         to the Purchaser upon request and shall reimburse the Purchaser for any
         costs or penalties incurred by the Purchaser due to the Servicer's
         failure to comply with this paragraph.

         Section 5.21 Fair Credit Reporting Act.

For each Mortgage Loan, the Servicer shall 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. The Servicer shall provide evidence of such
monthly reporting to the Purchaser upon request.

                                   ARTICLE VI:
                         REPORTS; REMITTANCES; ADVANCES

         Section 6.01 Remittances.

(1) On each Remittance Date, the Servicer shall remit to the Purchaser (a) all
amounts credited to the Collection Account as of the close of business on the
last day of the related Due Period

                                      -69-
<PAGE>

(including (1) the amount of any Principal Prepayment, together with interest
thereon at the related Remittance Rate to the end of the month in which
prepayment of the related Mortgage Loan occurs except when such Principal
Prepayment is received on the last day of the related Due Period in which case
interest calculated at the related Remittance Rate to the end of the month in
which prepayment of the related Mortgage Loan occurs shall not be remitted, (2)
all proceeds of any REO Disposition net of amounts payable to the Servicer
pursuant to Section 5.13, (3) prior to the occurrence of any Pass-Through
Transfer with respect to the Mortgage Loans, any Foreclosure Profits and (4)
after the occurrence of a Pass-Through Transfer, Foreclosure Profits shall be
distributed to the related trustee or as otherwise directed in the related
Reconstitution Agreements), net of charges against or withdrawals from the
Collection Account in accordance with Section 5.05, which charges against or
withdrawals from the Collection Account the Servicer shall make solely on such
Remittance Date, plus (b) all Monthly Advances, if any, which the Servicer is
obligated to remit pursuant to Section 6.03; provided that the Servicer shall
not be required to remit, until the next following Remittance Date, any amounts
attributable to Monthly Payments collected but due on a Due Date or Dates
subsequent to the related Due Period.

(2) All remittances made to the Purchaser on each Remittance Date will be made
to the Purchaser by wire transfer of immediately available funds accordingly to
the instructions that will be provided by Purchaser to the Servicer.

(3) With respect to any remittance received by the Purchaser after the Business
Day on which such payment was due, the Servicer shall pay to the Purchaser
interest on any such late payment at an annual rate equal to One-month LIBOR (as
published in the Wall Street Journal) plus 200 basis points, but in no event
greater than the maximum amount permitted by applicable law. Such interest shall
be paid by the Servicer to the Purchaser on the date such late payment is made
and shall cover the period commencing with the Business Day on which such
payment was due and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with such late payment.
Neither the payment by the Servicer nor the acceptance by the Purchaser of any
such interest shall be deemed an extension of time for payment or a waiver by
the Purchaser of any Event of Default.

         Section 6.02 Reporting.

         On or before the 5th Business Day of each month during the term hereof,
the Servicer shall deliver to the Purchaser monthly accounting reports in the
form of Exhibits 6.02(a) through 6.02(g) attached hereto with respect to the
most recently ended Due Period. Such monthly accounting reports shall include
information as to the aggregate Unpaid Principal Balance of all Mortgage Loans,
the scheduled amortization of all Mortgage Loans, any delinquencies and the
amount of any Principal Prepayments as of the most recently ended Record Date.
Such monthly reports shall be available by the Servicer for the Purchaser on
Servicer's secured web site. The Servicer shall provide training, secured access
and password(s) to the Purchaser on the operation of the website.

         Utilizing resources reasonably available to the Servicer and to the
extent the requested data is contained within the Servicer's electronic systems
without incurring any cost except the Servicer's overhead and employees'
salaries, the Servicer shall furnish to the Purchaser during

                                      -70-
<PAGE>

the term of this Agreement such periodic, special or other reports, information
or documentation, whether or not provided for herein, as shall be reasonably
requested by the Purchaser with respect to Mortgage Loans or REO Properties
(provided, the Purchaser shall have given the Servicer reasonable notice and
opportunity to prepare such reports, information or documentation), including
any reports, information or documentation reasonably required to comply with any
regulations of any governmental agency or body having jurisdiction over the
Purchaser, all such reports or information to be as provided by and in
accordance with such applicable instructions and directions as the Purchaser may
reasonably request. If any of such reports are not customarily prepared by the
Servicer or require that the Servicer program data processing systems to create
the reports, then the Purchaser shall pay to the Servicer a fee mutually agreed
to by the Purchaser and the Servicer taking into account the Servicer's actual
time and cost in preparing such reports. The Servicer agrees to execute and
deliver all such instruments and take all such action as the Purchaser, from
time to time, may reasonably request in order to effectuate the purposes and to
carry out the terms of this Agreement.

         Section 6.03 Monthly Advances by the Servicer.

(1) Not later than the close of business on the Business Day immediately
preceding each Remittance Date, the Servicer shall deposit in the Collection
Account an amount equal to all Monthly Payments not previously advanced by the
Servicer (with interest adjusted to the Remittance Rate) that were due on a
Mortgage Loan and delinquent at the close of business on the related
Determination Date. The Servicer may reduce the total amount to be deposited in
the Collection Account as required by the foregoing sentence by the amount of
funds in the Collection Account which represent Prepaid Monthly Payments;
provided, however, that after any Pass-Through Transfer, the Servicer or its
parent must meet the criteria of the Rating Agencies at the time that the
Servicer proposes to use Prepaid Monthly Payments for the making of any Monthly
Advances from such funds.

(2) The Servicer's obligations to make Monthly Advances as to any Mortgage Loan
will continue through the last Monthly Payment due prior to the payment in full
of the Mortgage Loan, or through the Remittance Date prior to the Remittance
Date for the remittance of all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds or Condemnation Proceeds) with respect
to the Mortgage Loan; provided that such obligation shall cease if the Servicer
furnishes to the Purchaser an Officers' Certificate evidencing the determination
by the Servicer in accordance with Section 6.04 that an advance with respect to
such Mortgage Loan would constitute a Non-recoverable Advance.

(3) On the Business Day prior to the Remittance Date, the Servicer shall deposit
into the Collection Account payments on account of Prepayment Interest Shortfall
Amount in an aggregate amount equal to the lesser of (i) the aggregate amount of
Prepayment Interest Shortfall Amount for the related Remittance Date resulting
solely from Principal Prepayments during the related Due Period, and (ii) the
total amount of the servicing compensation that would be payable to the Servicer
if no Principal Prepayment was made during the Due Period related to such
Remittance Date. Such payments shall be deposited into the Collection Account.

                                      -71-
<PAGE>

         Section 6.04 Non-recoverable Advances.

         The determination by the Servicer that it has made a Non-recoverable
Advance or that any Monthly Advance or Servicing Advance, if made, would
constitute a Non-recoverable Advance shall be evidenced by an Officers'
Certificate delivered to the Purchaser detailing the reasons for such
determination.

         Section 6.05 Itemization of Servicing Advances.

         The Servicer shall provide the Purchaser with an itemization of all
Servicing Advances incurred or made by the Servicer hereunder as the Purchaser
may from time to time reasonably request.

         Section 6.06 Officers' Certificate.

         The Seller shall deliver to the Purchaser an Officers' Certificate in
the form attached hereto as Exhibit 9 on the Initial Funding Date and upon
Purchaser's reasonable request thereafter.

         Section 6.07 Compliance with REMIC Provisions.

         If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Servicer shall not take
any action, cause the REMIC 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 (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited
to the tax on "prohibited transactions" as defined in Section 860(a)(2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860(D) of
the Code) unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
tax on the REMIC.

                                  ARTICLE VII:
                          GENERAL SERVICING PROCEDURES

         Section 7.01 Enforcement of Due-on-Sale Clauses, Assumption Agreements.

(1) The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (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 any
"due-on-sale" clause applicable thereto; provided that the Servicer shall not
exercise any such rights if prohibited by law from doing so or if the exercise
of such rights would impair or threaten to impair any recovery under the related
Primary Insurance Policy, if any.

(2) If the Servicer is prohibited from enforcing such "due-on-sale" clause, then
the Servicer will attempt to enter into an assumption agreement with the Person
to whom the Mortgaged Property

                                      -72-
<PAGE>

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. (For purposes of
this Section 7.01, 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.)

(3) If the Servicer receives a request for any Mortgage Loan to be assumed, then
the Servicer shall inquire into the creditworthiness of the proposed transferee
and shall use the same underwriting criteria for approving the credit of the
proposed transferee that are used with respect to underwriting mortgage loans of
the same type as the Mortgage Loans. Where an assumption is allowed, the
Servicer, with the prior written consent of the primary mortgage insurer, if
any, and subject to the conditions of Section 7.01(3), shall, and is hereby
authorized to, enter into a substitution of liability agreement with the Person
to whom the Mortgaged Property is proposed to be conveyed pursuant to which the
original mortgagor is released from liability and such Person is substituted as
mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption agreement.
In no event shall the Note Rate, the amount of the Monthly Payment or the final
maturity date be changed. The Servicer shall notify the Purchaser that any such
substitution of liability or assumption agreement has been completed by
forwarding to the Purchaser the original of any such substitution of liability
or assumption agreement, which document shall be added to the related
Purchaser's Mortgage File and shall, for all purposes, be considered a part of
such Purchaser's Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Any fee collected by the Servicer for
entering into an assumption or substitution of liability agreement shall be
retained by the Servicer as additional compensation for servicing the Mortgage
Loans.

         If the credit of the proposed transferee does not meet such
underwriting criteria, then the Servicer shall, to the extent permitted by the
Mortgage or the Mortgage Note and by applicable law, accelerate the maturity of
the Mortgage Loan.

         Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files.

         Upon the payment in full of any Mortgage Loan, the Servicer will
immediately notify the Purchaser by a certification of a Servicing Officer,
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 5.04 have been or
will be so deposited and shall request delivery to it of the Purchaser's
Mortgage File held by the Purchaser. Upon receipt of such certification and
request, the Purchaser shall promptly release the related mortgage documents to
the Servicer and the Servicer shall promptly prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.

         If the Servicer satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage, or should
it otherwise take such action which results in a reduction of the coverage under
the Primary Insurance Policy, if any, then the Servicer shall promptly give
written notice thereof to the Purchaser, and, within 10 Business Days following
written demand therefor from the Purchaser to the Servicer, the Servicer shall
repurchase the

                                      -73-
<PAGE>

related Mortgage Loan by paying to the Purchaser the Repurchase Price therefor
by wire transfer of immediately available funds directly to the Purchaser's
Account.

         From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loan, including for this purpose collection under any Primary
Insurance Policy, the Purchaser shall, upon request of the Servicer and delivery
to the Purchaser of a servicing receipt signed by a Servicing Officer, release
the Purchaser's Mortgage File held by the Purchaser to the Servicer. Such
servicing receipt shall obligate the Servicer to return the related mortgage
documents to the Purchaser when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Purchaser's Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or nonjudicially, and
the Servicer has delivered to the Purchaser a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Purchaser's
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer stating that such
Mortgage Loan was liquidated and the Liquidation Proceeds were deposited in the
Collection Account, the servicing receipt shall be released by the Purchaser to
the Servicer.

         Section 7.03 Servicing Compensation.

         As compensation for its services hereunder, the Servicer shall be
entitled to retain from interest payments on the Mortgage Loans the amount
provided for as the Servicing Fee. The Servicing Fee in respect of a Mortgage
Loan for a particular month shall become payable only upon the receipt by the
Servicer from the Mortgagor of the full Monthly Payment in respect of such
Mortgage Loan. Additional servicing compensation in the form of assumption fees,
as provided in Section 7.01, late payment charges and other servicer
compensation for modifications, short sales as provided in Section 5.01(e), and
other shall be retained by the Servicer to the extent not required to be
deposited in the Collection Account. In the event that Liquidation Proceeds,
Insurance Proceeds and proceeds from any REO Disposition exceeds the unpaid
principal balance of such Mortgage Loan plus unpaid interest accrued thereon at
a per annum rate equal to the related Remittance Rate, the Servicer shall be
entitled to retain therefrom and pay to itself any Servicing Fee, Monthly
Advances and Servicing Advances considered to be accrued but unpaid. The
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for herein.

         Section 7.04 Annual Statement as to Compliance.

         The Servicer will deliver to the Purchaser or the Purchaser's designee
on or before March 15 of each year, beginning March 15, 2004, an Officers'
Certificate in the form of Exhibit 11 stating that (i) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officers' supervision, (ii) the
Servicer has fully complied with the provisions of this Agreement and (iii) to
the best of such officers' knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such

                                      -74-
<PAGE>

obligation, specifying each such default known to such officer and the nature
and status thereof and the action being taken by the Servicer to cure such
default.

         Section 7.05 Annual Independent Certified Public Accountants' Servicing
Report.

         On or before March 15 of each year beginning March 15, 2004, the
Servicer at its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Purchaser to the effect that such firm has examined
certain documents and records relating to the servicing of mortgage loans by the
Servicer generally that include a sampling of the Mortgage Loans, the provisions
of Article II and Article VI have been complied with and, on the basis of such
an examination conducted substantially in accordance with the Uniform Single
Attestation Program for Mortgage Bankers, such servicing has been conducted in
compliance with this Agreement, except for (i) such exceptions as such firm
shall believe to be immaterial, and (ii) such other exceptions as shall be set
forth in such statement.

         Section 7.06 Purchaser's Right to Examine Servicer Records.

         The Purchaser shall have the right to examine and audit, during
business hours or at such other times as are reasonable under applicable
circumstances, upon 10 days advance notice any and all of (i) the credit and
other loan files relating to the Mortgage Loans or the Mortgagors, (ii) any and
all books, records, documentation or other information of the Servicer (whether
held by the Servicer or by another) relating to the servicing of the Mortgage
Loans and (iii) any and all books, records, documentation or other information
of the Servicer (whether held by the Servicer or by another) that are relevant
to the performance or observance by the Servicer of the terms, covenants or
conditions of this Agreement. In particular, the Servicer shall maintain in its
possession, available for inspection by the Purchaser, or its designee and shall
deliver to the Purchaser upon demand, evidence of compliance with all federal,
state and local laws, rules and regulations, and requirements of FNMA or FHLMC,
as applicable, to the extent the Seller is required by law or Accepted Servicing
Practices to maintain such evidence. The Servicer shall be obligated to make the
foregoing information available to the Purchaser at the site where such
information is stored; provided that the Purchaser shall be required to pay all
reasonable costs and expenses incurred by the Servicer in making such
information available. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Servicer may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Servicer
complies with the requirements of the FNMA Guide, as amended from time to time.

                                      -75-
<PAGE>

                                  ARTICLE VIII:
                     REPORTS TO BE PREPARED BY THE SERVICER

         Section 8.01 The Servicer's Reporting Requirements.

         Electronic Format. If requested by the Purchaser, the Servicer shall
supply any and all information regarding the Mortgage Loans and the REO
Properties, including all reports required to be delivered pursuant to Section
5.03, Section 6.02 and this Section 8.01, to the Purchaser in electronic format
reasonably acceptable to Purchaser, unless otherwise limited by the servicing
system utilized by the Servicer.

         Section 8.02 Financial Statements.

         The Servicer understands that, in connection with marketing the
Mortgage Loans, the Purchaser may make available to any prospective purchaser of
the Mortgage Loans the Servicer's audited financial statements for the two
fiscal years immediately preceding any Sale of the Mortgage Loans, together with
any additional statements required pursuant to the next sentence. During the
term hereof, the Servicer will deliver to the Purchaser audited financial
statements for each of its fiscal years following the Funding Date and all other
financial statements prepared following the Funding Date to the extent any such
statements are available upon request to the public at large.

         The Servicer also agrees to make available upon reasonable notice and
during normal business hours to any prospective purchasers of the Mortgage Loans
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Servicer or the financial
statements of the Servicer which may affect, in any material respect, the
Servicer's ability to comply with its obligations under this Agreement, and to
permit any prospective purchasers upon reasonable notice and during normal
business hours to inspect the Servicer's servicing facilities for the purpose of
satisfying such prospective purchasers that the Servicer has the ability to
service the Mortgage Loans in accordance with this Agreement.

                                   ARTICLE IX:
                                   THE SELLERS

         Section 9.01 Indemnification; Third Party Claims.

         Each Seller and Servicer shall indemnify and hold harmless the
Purchaser and any successor servicer or purchaser and each of their present and
former directors, officers, agents, employees, affiliates and assignees (each,
an "Indemnified Party") from and against any costs, damages, expenses (including
reasonable attorneys' fees and costs, irrespective of whether or not incurred in
connection with the defense of any actual or threatened action, proceeding, or
claim), fines, forfeitures, injuries, liabilities or losses ("Losses") suffered
or sustained in any way by any such Person, no matter how or when arising
(including Losses incurred or sustained in connection with any judgment, award,
settlement or repurchase hereunder), in connection with or relating to (i) a
breach by either Seller or Servicer of any of its representations and warranties
contained in Article III or (ii) a breach by either Seller or Servicer of any of
its covenants and

                                      -76-
<PAGE>

other obligations contained herein including any failure to service the Mortgage
Loans in compliance with the terms hereof and in accordance with the standard of
care in Section 9.03, provided, however, in the case of both of the preceding
clauses (i) and (ii), Cendant Mortgage shall have no obligation to indemnify an
Indemnified Party for a breach by the Trust of the Trust's representations
contained in Sections 3.01, 3.03(3) or 3.03(16) hereof. In the event of a breach
by the Trust of the Trust's representations in Section 3.01, 3.03(3) or
3.03(16), the Indemnified Party's sole right to indemnification shall be from
the Trust. The applicable Seller shall immediately (i) notify the Purchaser if a
claim is made by a third party with respect to this Agreement, any
Reconstitution Agreement, any Mortgage Loan and/or any REO Property (and shall
promptly notify the trustee with respect to any claim made by a third party with
respect to any Reconstitution Agreement) (ii) assume (with the prior written
consent of the Purchaser) the defense of any such claim and pay all expenses in
connection therewith, including attorneys' fees, and (iii) promptly pay,
discharge and satisfy any judgment, award, or decree that may be entered against
it or the Purchaser in respect of such claim. The applicable Seller shall follow
any written instructions received from the Purchaser in connection with such
claim. Nothing contained herein shall prohibit the Purchaser, at its expense,
from retaining its own counsel to assist in any such proceedings or to observe
such proceedings; provided that neither Seller shall be obligated to pay or
comply with any settlement to which it has not consented. The Seller agrees that
it will not enter into any settlement of any such claim without the consent of
the Purchaser. In addition to the obligations of the Seller set forth in this
Section 9.01, the Purchaser may pursue any and all remedies otherwise available
at law or in equity, including, but not limited to, the right to seek damages.
The Servicer shall be reimbursed from amounts on deposit in the Collection
Account for all amounts advanced by it pursuant to the second preceding sentence
except when the claim in any way relates to the Servicer's indemnification
pursuant to this Section 9.01.

         Section 9.02 Merger or Consolidation of the Seller.

         Each Seller will keep in full effect its existence, rights and
franchises as a corporation or a Delaware business trust, as applicable, under
the laws of the state of its organization and 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 or any of the Mortgage Loans and to perform its
duties under this Agreement.

         Any Person into which a Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation (including by
means of the sale of all or substantially all of such Seller's assets to such
Person) to which the Seller shall be a party, or any Person succeeding to the
business of the Seller, shall be the successor of the Seller hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided
that, unless otherwise consented to by the Purchaser, the successor or surviving
Person, in the case of a merger or consolidation, etc. of the Servicer, shall be
an institution qualified to service mortgage loans on behalf of FNMA and FHLMC
in accordance with the requirements of Section 3.02(1), shall not cause a rating
on any security backed by a Mortgage Loan to be downgraded and shall satisfy the
requirements of Section 12.01 with respect to the qualifications of a successor
to such Seller.

                                      -77-
<PAGE>

         Section 9.03 Limitation on Liability of the Sellers and Others.

         Neither the Sellers nor any of the officers, employees or agents of the
Sellers shall be under any liability to the Purchaser for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement or pursuant to the express written instructions of the Purchaser, or
for errors in judgment made in good faith; provided that this provision shall
not protect the Sellers or any such Person against any breach of warranties or
representations made herein, or failure to perform its obligations in compliance
with any standard of care set forth in this Agreement, or any liability which
would otherwise be imposed by reasons of willful misfeasance, bad faith,
negligence or any breach in the performance of the obligations and duties
hereunder. The Sellers and any officer, employee or agent of the Sellers may
rely in good faith on any document of any kind reasonably believed by the
Sellers or such Person to be genuine and prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.

         The Sellers shall not be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to their duties hereunder and
which in their opinion may involve them in any expense or liability; provided
that the Sellers may in their discretion undertake any such action that it may
deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities for which the Sellers shall be entitled to be reimbursed therefor
out of the Collection Account. This indemnity shall survive the termination of
this Agreement.

         Section 9.04 Servicer Not to Resign.

         With respect to the retention by Cendant Mortgage of the servicing of
the Mortgage Loans and the REO Properties hereunder, Cendant Mortgage
acknowledges that the Purchaser has acted in reliance upon Cendant Mortgage's
independent status, the adequacy of its servicing facilities, plan, personnel,
records and procedures, its integrity, reputation and financial standing and the
continuance thereof. Consequently, Cendant Mortgage shall not assign the
servicing rights retained by it hereunder to any third party nor resign from the
obligations and duties hereby imposed on it except (i) with the approval of the
Purchaser, such approval not to be unreasonably withheld, or (ii) 3 Business
Days following any determination that its duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by Cendant
Mortgage. Any determination permitting the transfer of the servicing rights or
the resignation of Cendant Mortgage under Subsection (ii) hereof shall be
evidenced by an opinion of counsel to such effect delivered to the Purchaser,
which opinion of counsel shall be in form and substance reasonably acceptable to
the Purchaser.

         Without in any way limiting the generality of this Section 9.04, in the
event that the Seller either shall sell or otherwise dispose of all or
substantially all of its property or assets (including its rights hereunder),
without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld, then the Purchaser shall have the right to terminate this
Agreement upon notice given as set forth in Section 10.01, without any payment
of any penalty or damages and without any liability whatsoever to the Servicer
or any third party; provided however, that in the event a sale or merger as
described above occurs without notice to the Seller or the Purchaser,

                                      -78-
<PAGE>

the Purchaser agrees that upon its receipt of notice of such sale or merger, it
will review fully all information provided by the Purchaser regarding the
successor servicer, including information regarding the adequacy of its
servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, prior to making any determination to
terminate this Agreement. In the event that such successor servicer is not
acceptable to the Purchaser, the Purchaser shall have the right to terminate in
its sole discretion, the successor servicer's rights under this servicing
agreement.

                                   ARTICLE X:
                                     DEFAULT

         Section 10.01 Events of Default.

         In case one or more of the following events shall occur and be
continuing:

(1) any failure by the Servicer to remit to the Purchaser any payment required
to be made under the terms of this Agreement which continues unremedied for a
period of 3 Business Days unless such failure to remit is due to a cause beyond
the Servicer's control, including an act of God, act of civil, military or
governmental authority, fire, epidemic, flood, blizzard, earthquake, riot, war,
or sabotage, provided that the Servicer gives the Purchaser notice of such cause
promptly and uses its reasonable efforts to correct such failure to remit and
does so remit within 2 Business Days following the end of the duration of the
cause of such failure to remit;

(2) any failure on the part of a Seller/Servicer duly to observe or perform in
any material respect any of the covenants or agreements on the part of such
Seller/Servicer set forth in this Agreement 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 applicable
Seller/Servicer by the Purchaser; provided that such 30-day period shall not
begin with respect to any failure to cure, repurchase or substitute in
accordance with Sections 2.04 and/or 3.04 until the expiration of the cure
periods provided for in Sections 2.04 and/or 3.04, as applicable;

(3) any filing of an Insolvency Proceeding by or on behalf of a Seller/Servicer,
any consent by or on behalf of a Seller/Servicer to the filing of an Insolvency
Proceeding against it, or any admission by or on behalf of a Seller/Servicer of
its inability to pay its debts generally as the same become due, suspension of a
Seller/Servicer's payment obligations or cessation of the Servicer's normal
business operations for three Business Days (as a result of an occurrence
specific to the Servicer);

(4) any filing of an Insolvency Proceeding against a Seller/Servicer that
remains undismissed or unstayed for a period of 60 days after the filing
thereof;

(5) any issuance of any attachment or execution against, or any appointment of a
conservator, receiver or liquidator with respect to, all or substantially all of
the assets of a Seller/Servicer;

(6) any failure or inability of Cendant Mortgage to be eligible to service
Mortgage Loans for FNMA, or FHLMC;

                                      -79-
<PAGE>

(7) any sale, transfer, assignment, or other disposition by a Seller/Servicer of
all or substantially all of its property or assets to a Person who does not meet
the qualifications enumerated or incorporated by reference into Section 9.02,
any assignment by a Seller/Servicer of this Agreement or any of a
Seller's/Servicer's rights or obligations hereunder except in accordance with
Section 9.04, or any action taken or omitted to be taken by a Seller/Servicer in
contemplation or in furtherance of any of the foregoing, without the consent of
the Purchaser;

(8) any failure by the Seller to be in compliance with applicable "doing
business" or licensing laws of any jurisdiction where Mortgaged Property is
located; or

(9) the failure of the Servicer to maintain a minimum net worth of $25,000,000;

then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Sellers may, in
addition to whatever rights the Purchaser may have at law or in equity to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Sellers under this Agreement and in and to the
Mortgage Loans and the proceeds thereof subject to Section 12.01, without the
Purchaser's incurring any penalty or fee of any kind whatsoever in connection
therewith; provided that, upon the occurrence of an Event of Default under
Subsection (3), (4) or (5) of this Section 10.01, this Agreement and all
authority and power of the Sellers hereunder (whether with respect to the
Mortgage Loans, the REO Properties or otherwise) shall automatically cease. On
or after the receipt by the Sellers of such written notice, all authority and
power of the Sellers under this Agreement (whether with respect to the Mortgage
Loans or otherwise) shall cease. Notwithstanding the occurrence of an Event of
Default, the Sellers or the Servicer, as applicable, shall be entitled to all
amounts due to such party and remaining unpaid on such date of termination.

         If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Section 9.04) of the
Servicer hereunder, either (i) the successor servicer shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the MERS Mortgage Loans, or (ii) the predecessor servicer
shall cooperate with the successor servicer either (x) in causing MERS to
execute and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Purchaser and to execute and deliver such other
notices, documents and other instruments as may be necessary to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS
system to the successor servicer or (y) in causing MERS to designate on the MERS
system the successor servicer as the servicer of such Mortgage Loan.

                                   ARTICLE XI:

                                      -80-
<PAGE>

                                   TERMINATION

         Section 11.01 Term and Termination.

(1) The servicing obligations of the Servicer under this Agreement may be
terminated as provided in Section 10.01 hereof.

(2) In any case other than as provided under Subsection (1) hereof, the
respective obligations and responsibilities of the Sellers hereunder shall
terminate upon: (a) the later of the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan or the disposition of
all REO Property and the remittance of all funds due hereunder; or (b) the
mutual written consent of the Sellers and the Purchaser.

(3) Upon any termination of this Agreement or the servicing obligations of the
Servicer hereunder, then the Servicer shall prepare, execute and deliver all
agreements, documents and instruments, including all Servicer Mortgage Files,
and do or accomplish all other acts or things necessary or appropriate to effect
such termination, all at the Servicer's sole expense. In any such event, the
Servicer agrees to cooperate with the Purchaser in effecting the termination of
the Servicer's servicing responsibilities hereunder, including the transfer to
the Purchaser or its designee for administration by it of all cash amounts which
shall at the time be contained in, or credited by the Servicer to, the
Collection Account and/or the Escrow Account or thereafter received with respect
to any Mortgage Loan or REO Property.

(4) Notwithstanding and in addition to the foregoing, in the event that (i) a
Mortgage Loan becomes delinquent for a period of 91 days or more (a "Delinquent
Mortgage Loan") or (ii) a Mortgage Loan becomes an REO Property, the Purchaser
may at its election terminate this Agreement with respect to such Delinquent
Mortgage Loan or REO Property upon 30 days' written notice to the Servicer;
provided that, upon termination of the Agreement with respect to such Delinquent
Mortgage Loan or REO Property, the Purchaser shall reimburse the Servicer for
all outstanding Servicing Advances, Monthly Advances and Servicing Fees.

         Section 11.02 Survival.

         Notwithstanding anything to the contrary contained herein, the
representations and warranties of the parties contained herein and in any
certificate or other instrument delivered pursuant hereto, as well as the other
covenants hereof (including those set forth in Section 9.01) that, by their
terms, require performance after the termination by this Agreement, shall
survive the delivery and payment for the Mortgage Loans on each Funding Date as
well as the termination of this Agreement and shall inure to the benefit of the
parties, their successors and assigns. Sellers further agree that the
representations, warranties and covenants made by Sellers herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by Purchaser notwithstanding any investigation heretofore made by
Purchaser or on Purchaser's behalf.

                                      -81-
<PAGE>

                                  ARTICLE XII:
                               GENERAL PROVISIONS

         Section 12.01 Successor to the Servicer.

         Upon the termination of the Servicer's servicing responsibilities and
duties under this Agreement pursuant to Sections 9.04, 10.01, or 11.01, the
Purchaser shall (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement or (ii)
appoint a successor servicer which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Servicer under this
Agreement prior to the termination of the Servicer's responsibilities, duties
and liabilities under this Agreement. If the Servicer's duties, responsibilities
and liabilities under this Agreement should be terminated pursuant to the
aforementioned Sections, then the Servicer shall continue to discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof (if applicable)
all on the terms and conditions contained herein and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The termination of the Servicer's servicing responsibilities
pursuant to any of the aforementioned Sections shall not, among other things,
relieve the Servicer of its obligations pursuant to Section 2.04 and/or 7.02,
the representations and warranties or other obligations set forth in Sections
2.04, 3.01, 3.02 and 3.03 and the remedies available to the Purchaser under the
various provisions of this Agreement. In addition, such termination or
resignation shall not affect any claims that the Purchaser may have against the
Servicer arising prior to any such termination or resignation.

         Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.02, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement.

         The Servicer shall promptly deliver to the successor the funds in the
Collection Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Servicer shall account for
all funds. The Servicer shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liability of the Servicer. The successor shall make such
arrangements as it may deem appropriate to reimburse the Servicer for
unrecovered Servicing Advances which the successor retains hereunder and which
could otherwise have been recovered by the Servicer pursuant to this Agreement
but for the appointment of the successor Servicer.

         Section 12.02 Governing Law; Jurisdiction; Consent to Service of
Process.

         This Agreement is to be governed by, and construed in accordance with
the internal laws of the State of New York without giving effect to principals
of conflicts of laws. The obligations, rights, and remedies of the parties
hereunder shall be determined in accordance with such laws. Each of the
Purchaser and the Servicer irrevocably (i) submits to the exclusive

                                      -82-
<PAGE>

jurisdiction of the courts of the state of New York and the federal courts of
the United States of America for the Southern District of New York for the
purpose of any action or proceeding relating to this agreement; (ii) waives, to
the fullest extent permitted by law, the defense of an inconvenient forum in any
action or proceeding in any such court; and (iii) consents to service of process
upon it by mailing a copy thereof by certified mail addressed to it as provided
for notices hereunder.

         Section 12.03 Notices.

         Any notices or other communications permitted or required hereunder
shall be in writing and shall be deemed conclusively to have been given if
personally delivered, sent by courier with delivery against signature therefor,
mailed by registered mail, postage prepaid, and return receipt requested or
transmitted by telex, telegraph or telecopier and confirmed by a similar writing
mailed or sent by courier as provided above, to (i) in the case of the
Purchaser, Morgan Stanley Mortgage Capital Inc., 1633 Broadway, New York, NY
10019, Attention: Whole Loan Operations Manager, (ii) in the case of the Cendant
Mortgage, Cendant Mortgage Corporation, 6000 Atrium Way, Mt. Laurel, NJ 08054,
Attention: Peter A. Thomas, Vice President, Secondary Marketing, and (iii) in
the case of the Trust, c/o Cendant Mortgage Corporation, as Administrator, 6000
Atrium Way, Mt. Laurel, NJ 08054, Attention: Peter A. Thomas, Vice President,
Secondary Marketing, or such other address as may hereafter be furnished to the
Purchaser in writing by the applicable Seller.

         Section 12.04 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, the invalidity
of any such covenant, agreement, provision or term of this Agreement shall in no
way affect the validity or enforceability of the other provisions of this
Agreement.

         Section 12.05 Schedules and Exhibits.

         The schedules and exhibits that are attached to this Agreement are
hereby incorporated herein and made a part hereof by this reference.

         Section 12.06 General Interpretive Principles.

         For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

(1) the terms defined in this Agreement have the meanings assigned to them in
this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;

(2) any reference in this Agreement to this Agreement or any other agreement,
document, or instrument shall be a reference to this Agreement or any other such
agreement, document, or instrument as the same has been amended, modified, or
supplemented in accordance with the terms hereof and thereof (as applicable);

                                      -83-
<PAGE>

(3) accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles;

(4) references herein to "Articles," "Sections," "Subsections," "Paragraphs,"
and other subdivisions without reference to a document are to designated
articles, sections, subsections, paragraphs and other subdivisions of this
Agreement, unless the context shall otherwise require;

(5) a reference to a subsection without further reference to a section is a
reference to such Subsection as contained in the same section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

(6) a reference to a "day" shall be a reference to a calendar day;

(7) the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular provision; and

(8) the terms "include" and "including" shall mean without limitation by reason
of enumeration.

         Section 12.07 Waivers and Amendments, Noncontractual Remedies;
Preservation of Remedies.

         This Agreement may be amended, superseded, canceled, renewed or
extended and the terms hereof may be waived, only by a written instrument signed
by authorized representatives of the parties or, in the case of a waiver, by an
authorized representative of the party waiving compliance. No such written
instrument shall be effective unless it expressly recites that it is intended to
amend, supersede, cancel, renew or extend this Agreement or to waive compliance
with one or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege, or any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof or the exercise of any
other such right, power or privilege. The rights and remedies herein provided
are cumulative and are not exclusive of any rights or remedies that any party
may otherwise have at law or in equity.

         Section 12.08 Captions.

         All section titles or captions contained in this Agreement or in any
schedule or exhibit annexed hereto or referred to herein, and the table of
contents to this Agreement, are for convenience only, shall not be deemed a part
of this Agreement and shall not affect the meaning or interpretation of this
Agreement.

         Section 12.09 Counterparts; Effectiveness.

         This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
This Agreement shall become effective as of the date first set forth herein upon
the due execution and delivery of this Agreement by each of the parties hereto.

                                      -84-
<PAGE>

         Section 12.10 Entire Agreement; Amendment.

         This Agreement (including the schedules and exhibits annexed hereto or
referred to herein), together with the Cendant Guide, contains the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior agreements, written or oral, with
respect thereto. No amendment, modification or alteration of the terms or
provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the authorized representatives of the parties
hereto.

         Section 12.11 Further Assurances.

         Each party hereto shall take such additional action as may be
reasonably necessary to effectuate this Agreement and the transactions
contemplated hereby. The Sellers will promptly and duly execute and deliver to
the Purchaser such documents and assurances and take such further action as the
Purchaser may from time to time reasonably request in order to carry out more
effectively the intent and purpose of this Agreement and to establish and
protect the rights and remedies created or intended to be created in favor of
the Purchaser.

         Section 12.12 Intention of the Seller.

         Each Seller intends that the conveyance of such Seller's right, title
and interest in and to the Mortgage Loans to the Purchaser shall constitute a
sale and not a pledge of security for a loan. If such conveyance is deemed to be
a pledge of security for a loan, however, the applicable Seller intends that the
rights and obligations of the parties to such loan shall be established pursuant
to the terms of this Agreement. Each Seller also intends and agrees that, in
such event, (i) the applicable Seller shall be deemed to have granted to the
Purchaser and its assigns a first priority security interest in such Seller's
entire right, title and interest in and to the Mortgage Loans, all principal and
interest received or receivable with respect to the Mortgage Loans, all amounts
held from time to time in the accounts mentioned pursuant to this Agreement and
all reinvestment earnings on such amounts, together with all of the applicable
Seller's right, title and interest in and to the proceeds of any title, hazard
or other insurance policies related to such Mortgage Loans and (ii) this
Agreement shall constitute a security agreement under applicable law. All rights
and remedies of the Purchaser under this Agreement are distinct from, and
cumulative with, any other rights or remedies under this Agreement or afforded
by law or equity and all such rights and remedies may be exercised concurrently,
independently or successively.

         Section 12.13 Waiver of Trial by Jury.

         THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT.

                                      -85-
<PAGE>

IN WITNESS WHEREOF, the Sellers and the Purchaser have caused their names to be
signed hereto by their respective officers as of the date first written above.

MORGAN STANLEY MORTGAGE CAPITAL INC.

By: /s/ Kevin G. Chavers
   ---------------------------------------

Name: Kevin G. Chavers
Title: Vice President

CENDANT MORTGAGE CORPORATION

By: /s/ Peter A. Thomas
   ---------------------------------------

Name: Peter A. Thomas
Title: Vice President

BISHOP'S GATE RESIDENTIAL
MORTGAGE TRUST (FORMERLY KNOWN AS
CENDANT RESIDENTIAL MORTGAGE TRUST)

BY: CENDANT MORTGAGE CORPORATION, AS ADMINISTRATOR

By: /s/ Peter A. Thomas
   ---------------------------------------

Name:  Peter A. Thomas
Title: Vice President, Administrative Agent

                                      -86-
<PAGE>

                                  EXHIBIT 2.05

            FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

         THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this
"Assignment"), dated of _________ __, 2003, is entered into among
[_________________], a ___________________ (the "Assignee"),
[______________________] (the "Assignor"), [Cendant Mortgage Corporation]
[Bishop's Gate Residential Mortgage Trust] (the "Seller"), with Cendant Mortgage
Corporation, as the servicer (the "Servicer").

                                    RECITALS

         WHEREAS the Assignor, the Seller and the Servicer have entered into a
certain Mortgage Loan Flow Purchase, Sale and Servicing Agreement, dated as of
_____________, 2003 (as amended or modified to the date hereof, the
"Agreement"), pursuant to which the Assignor has acquired certain Mortgage Loans
pursuant to the terms of the Agreement and Servicer has agreed to service such
Mortgage Loans; and

         WHEREAS the Assignee has agreed, on the terms and conditions contained
herein, to purchase from the Assignor all of the Mortgage Loans (the "Specified
Mortgage Loans") which are subject to the provisions of the Agreement and are
listed on the mortgage loan schedule attached as Exhibit I hereto (the
"Specified Mortgage Loan Schedule");

         NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged), the parties agree as follows:

1. Assignment and Assumption

         (a) On and of the date hereof, the Assignor hereby sells, assigns and
transfers to the Assignee all of its right, title and interest in the Specified
Mortgage Loans and all rights related thereto as provided under the Agreement to
the extent relating to the Specified Mortgage Loans, the Assignee hereby accepts
such assignment from the Assignor and hereby agrees to the release of the
Assignor from any obligations under the Agreement, to the extent of the
Specified Mortgage Loans, from the date hereof, and the Seller hereby
acknowledges such assignment, assumption and release.

         (b) On and as of the date hereof, the Assignor represents and warrants
to the Assignee that the Assignor has not taken any action that would serve to
impair or encumber the Assignee's ownership interest in the Specified Mortgage
Loans since the date of the Assignor's acquisition of the Specified Mortgage
Loans.

                                      -87-
<PAGE>

2. Recognition of Purchaser

         From and after the date hereof, both the Assignee and the Seller shall
note the transfer of the Specified Mortgage Loans to the Assignee in their
respective books and records and shall recognize the Assignee as the owner of
the Specified Mortgage Loans, and Servicer shall service the Specified Mortgage
Loans for the benefit of the Assignee pursuant to the Agreement, the terms of
which are incorporated herein by reference. It is the intention of the Seller,
the Servicer, the Assignee and the Assignor that (a) the Assignee fully enjoy
all of the rights and benefits enjoyed by the Assignor under the Agreement as if
the Assignee were a party thereto and (b) the Assignment shall be binding upon
and inure to the benefit of the Assignee and the Assignor and their successors
and assigns.

3. Representations and Warranties

         (a) The Assignee represents and warrants that it is a sophisticated
investor able to evaluate the risks and merits of the transactions contemplated
hereby, and that it has not relied in connection therewith upon any statements
or representations of the Seller or the Assignor other than those contained in
the Agreement or this Assignment.

         (b) Each of the parties hereto represents and warrants that it is duly
and legally authorized to enter into this Assignment.

         (c) Each of the parties hereto represents and warrants that this
Assignment has been duly authorized, executed and delivered by it and (assuming
due authorization, execution and delivery thereof by each of the other parties
hereto) constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

4. Continuing Effect

         Except as contemplated hereby, the Agreement shall remain in full force
and effect in accordance with its terms.

5. Governing Law

         This Assignment and the rights and obligations hereunder shall be
governed by and construed in accordance with the internal laws of the State of
New York.

6. Notices

         Any notices or other communications permitted or required under the
Agreement to be made to the Assignee shall be made in accordance with the terms
of the Agreement and shall be sent to the Assignee as follows:
[_____________________], or to such other

                                      -88-
<PAGE>

address as may hereafter be furnished by the Assignee to the parties in
accordance with the provisions of the Agreement.

7. Counterparts

         This Assignment may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same instrument.

8. Definitions

         Any capitalized term used but not defined in this Assignment has the
same meaning as in the Agreement.

                   [Assignment continues with signature page]

                                      -89-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Assignment
the day and year first above written.

                                    ASSIGNOR:
                                    [                    ]
                                     --------------------

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

                                    SELLER:

                                    [CENDANT MORTGAGE CORPORATION]
                                    [BISHOP'S GATE RESIDENTIAL MORTGAGE TRUST]

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

                                    ASSIGNEE:

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

                                    SERVICER:

                                    CENDANT MORTGAGE CORPORATION

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

<PAGE>

                                   EXHIBIT 10

                          FORM OF WARRANTY BILL OF SALE

                  On this _______ day of ________, 200__, [Cendant Mortgage
Corporation] [Bishop's Gate Residential Mortgage Trust] ("Seller") as the Seller
under that certain Mortgage Loan Flow Purchase, Sale & Servicing Agreement,
dated as of [_____________], 2003 (the "Agreement") does hereby sell, transfer,
assign, set over and convey to [______________] as Purchaser under the
Agreement, without recourse, but subject to the terms of the Agreement, all
rights, title and interest of the Seller in and to the Mortgage Loans listed on
the Mortgage Loan Schedule attached hereto, together with the related Mortgage
Files and all rights and obligations arising under the documents contained
therein. Pursuant to Section 2.01 of the Agreement, the Seller has delivered to
the Purchaser or its custodian the Legal Documents for each Mortgage Loan to be
purchased as set forth in the Agreement. The contents of each related Mortgage
File required to be retained by Cendant Mortgage Corporation ("Cendant") to
service the Mortgage Loans pursuant to the Agreement and thus not delivered to
the Purchaser are and shall be held in trust by Cendant for the benefit of the
Purchaser as the owner thereof. Cendant's possession of any portion of each such
Mortgage File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Agreement,
and such retention and possession by Cendant shall be in a custodial capacity
only. The ownership of each Mortgage Note, Mortgage, and the contents of the
Mortgage File and Mortgage File is vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan prepared by
or which come into the possession of Cendant shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by Cendant at the will
of the Purchaser in such custodial capacity only.

                  The Seller confirms to the Purchaser that the representations
and warranties set forth in Sections 3.01, 3.02 and 3.03 of the Agreement are
true and correct as of the date hereof, and that all statements made in the
Sellers' Officer's Certificate and all attachments thereto remain complete, true
and correct in all respects as of the date hereof.

         Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.

                                    [CENDANT MORTGAGE CORPORATION]
                                    [BISHOP'S GATE RESIDENTIAL MORTGAGE TRUST]

                                    (Seller)

                                    By:

                                    Name:

                                    Title:

                                       G-1
<PAGE>

                                   EXHIBIT 11

                      FORM OF SARBANES-OXLEY CERTIFICATION

I, [Martin Foster], certify to [Master Servicer Name or other entity designated
by Purchaser], in connection with [Insert name and date of applicable contract
and/or name of securitization deal] (the "Agreement"), that I am a duly elected
Senior Vice President of Cendant Mortgage Corporation, a corporation organized
under the laws of the State of New Jersey (the "Servicer") and further as
follows:

(i) Based on my knowledge, the information in the Annual Statement of
Compliance, and 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 by the
Servicer which is used in connection with preparation of reports on Form 8-K and
the annual report on form 10-K to be filed with the SEC (with respect to each
transaction listed on the attached Exhibit A), do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading, as of the last day of the period covered by the
Annual Statement of Compliance;

(ii) Based on my knowledge, the servicing information required to be provided to
the [Master Servicer] by the Servicer under the Agreement has been provided to
the Master Servicer;

(iii) I am responsible for reviewing the activities performed by the Servicer
under this Agreement and based upon the review required by this Agreement, and
except as disclosed in the Annual Statement of Compliance, the Annual
Independent Public Accountant's Servicing Report, or otherwise disclosed in a
writing submitted to the [Master Servicer], the Servicer has, as of the last day
of the period covered by the Annual Statement of Compliance, fulfilled each of
its obligations under the Agreement; and

(iv) I have disclosed to the [Master Servicer] all significant deficiencies
relating to the Servicer's compliance with the minimum servicing standards as
determined in accordance with a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers as set forth in the Agreement.

Capitalized terms used herein and not defined shall have the meanings ascribed
to them in the Agreement.

                                    Cendant Mortgage Corporation

                                    By:
                                       ----------------------------------------
                                       [Martin Foster]
                                       [Senior Vice President]
                                       Date:

<PAGE>

                                   EXHIBIT 12

                               PROCESS GUIDELINES
I.       Contract

         The Purchaser must provide the Company with an Assignment & Assumption
Agreement or similar notice with respect to a transfer to FNMA no less than five
(5) Business Days prior to the last Business Day of the month of transfer. Such
document will confirm that the Mortgage Loans will be serviced in accordance
with the FNMA Guide. Such document must also confirm that Mortgage Loans were
sold to FNMA under the special servicing option.

II.      Requirements for FNMA sales

         A.       The Servicing Fee less the FNMA guaranty fee (the "Net
                  Servicing Fee") under the FNMA sale must be equal to or
                  greater than the current Servicing Fee being paid to the
                  Servicer by the Purchaser. Should the Net Servicing Fee exceed
                  the current Servicing Fee, any excess will be retained by the
                  Servicer.

         B.       Preparation and recording of any Assignments of Mortgage with
                  respect to the Mortgage Loans, other than as required by the
                  underlying Purchase, Sale & Servicing Agreement, will be the
                  responsibility of the Purchaser.

         C.       Information required to transfer the loans into FNMA must be
                  received no less than five (5) Business Days prior to the last
                  Business Day of the transaction month.

         D.       Information regarding the transfer of the loans must be in an
                  Excel file format with the following data fields:

                  (i) servicer number; (ii) Cendant loan number; (iii) balance
                  sold to FNMA; (iv) Pass-through rate; (v) interest rate; (vi)
                  interest rate net of the servicing fee rate and guarantee fee
                  rate; (vii) FNMA loan number; (viii) contract or pool number;
                  (ix) if the transaction is an "actual/actual" sale - contract
                  number; and (x) if the transaction is an "actual/actual"l sale
                  - date of first payment to FNMA.

         E.       Balances must be verified with the Servicer before the
                  Mortgage Loan(s) are sold to FNMA.

         F.       The servicer number used to deliver the Mortgage Loan(s) to
                  FNMA must be approved by the Servicer before the Mortgage
                  Loan(s) are sold. The Servicer will assess a $500 correction
                  penalty for each pool sold under a different seller/servicer
                  number than what was provided.

<PAGE>

         G.       Final purchase advices and/or the 2005 forms must be received
                  by the Servicer prior to the last Business Day of the
                  transaction month.

         H.       Purchaser must provide name and contact information of
                  individual authorized to discuss the sale terms. Investor name
                  and broker names need to be provided to the Servicer.

III.     FEES

         Should the Purchaser sell loans to FNMA or FHLMC (standard, not REMIC),
an additional setup fee may be charged. The Servicer will establish one investor
number on each of the Servicer's related Alltel clients for the those Mortgage
Loans sold by Purchaser to FNMA.

IV.      PROCESS GUIDELINES

         A.       Monthly reporting to the Purchaser on the status of loans will
                  be limited to existing Alltel delinquency and trial balance
                  reports. Reports will be as of each month-end and will be
                  provided to the Purchaser no later than the twenty (20) days
                  following the related month-end. The Purchaser will provide
                  contact information for monthly reporting, repurchase funding
                  and claim settlement processes.

         B.       For any Mortgage Loans required to be repurchased by the
                  Purchaser from FNMA due to mortgagor credit defaults (rather
                  than administrative, legal or documentation issues), the
                  Servicer will notify the Purchaser of the total amount due to
                  FNMA for the Mortgage Loan to be repurchased no later than the
                  3rd Business Day prior to the end of the month of repurchase.
                  The Purchaser will remit same amount, plus a $100 repurchase
                  processing fee to the Servicer no later than the last Business
                  Day of the repurchase month. A late remittance penalty of
                  prime + 2% will be assessed from the date such remittance was
                  due through the date such remittance was actually made.

         C.       Wiring instructions for repurchases by the Purchaser:

                           [                  ]
                           Account Number: [                  ]
                           Account Name: [                  ]
                           ATTN:  [                  ], FNMA
                           Telephone:  [                  ]

<PAGE>

         D.       An additional investor number will be established for Mortgage
                  Loans repurchased by the Purchaser. Such investor number will
                  be actual/actual remittance with month-end cutoff. Reports and
                  remittances will be due on the tenth calendar day of each
                  month.

<PAGE>

                                  SCHEDULE B-1

                      CONTENTS OF PURCHASER'S MORTGAGE FILE

         With respect to each Mortgage Loan, the Purchaser's Mortgage File shall
include each of the following items, which shall be available for inspection by
the Purchaser, and which shall be retained by the applicable Seller or delivered
to the Purchaser pursuant to the provisions of the Mortgage Loan Flow Purchase,
Sale & Servicing Agreement.

         TO BE DELIVERED 5 DAYS PRIOR TO FUNDING DATE:

         1.       The original Mortgage Note bearing all intervening
                  endorsements, endorsed, at the direction of the Purchaser
                  either (1) "Pay to the order of "-------," without recourse,"
                  or (2) in blank and signed in the name of the applicable
                  Seller by an authorized officer. To the extent that there is
                  no space on the face of the Mortgage Notes for endorsements,
                  the endorsement may be contained on an allonge, if state law
                  so allows and the Purchaser is so advised by the Seller that
                  state law so allows. If the Mortgage Loan was acquired by the
                  Seller in a merger, the endorsement must be by "[Seller],
                  successor by merger to [name of predecessor]." If the Mortgage
                  Loan was acquired or originated by the Seller while doing
                  business under another name, the endorsement must be by
                  "[Seller], formerly known as [previous name]."

         2.       If the Mortgage Loan is not a MERS Mortgage Loan, the original
                  Assignment of Mortgage for each Mortgage Loan, in form and
                  substance acceptable for recording. The Mortgage shall be
                  assigned, at the direction of the Purchaser either (1) to
                  "---------" or (2) with assignee's name left blank. The
                  Assignment of Mortgage must be duly recorded only on the
                  direction of the Purchaser. If the Mortgage Loan was acquired
                  by the applicable Seller in a merger, the Assignment of
                  Mortgage must be made by "Cendant Mortgage Corporation,
                  successor by merger to [name of predecessor]." If the Mortgage
                  Loan was acquired or originated by the Seller while doing
                  business under another name or under an assumed name, the
                  Assignment must be by "Cendant Mortgage Corporation formerly
                  known as [previous name] or [Cendant Mortgage Corporation dba
                  ______________, ] respectively.

         3.       With respect to each Additional Collateral Mortgage Loan, a
                  copy of the related Pledge Agreement.

         4.       With respect to each Additional Collateral Mortgage Loan, a
                  copy of the UCC-1, to the extent the additional collateral
                  servicer was required to deliver such UCC-1 to the Servicer,
                  and an original form UCC-3, if

<PAGE>

                  applicable, to the extent the additional collateral servicer
                  was required to deliver such UCC-3 to the Servicer, together
                  with a copy of the applicable notice of assignment to and
                  acknowledgment by the additional collateral servicer.

         5.       With respect to each Co-op Mortgage Loan, the original stock
                  certificate and related stock power, in blank, executed by the
                  Mortgagor with such signature guaranteed and original stock
                  power, in blank executed by the Seller provided, that if the
                  Seller delivers a certified copy, the Seller shall deliver the
                  original stock certificate and stock powers to the Custodian
                  on or prior to the date which is 120 days after the related
                  Funding Date.

         TO BE DELIVERED WITHIN 120 DAYS AFTER THE RELATED FUNDING DATE:

         1.       The original Mortgage with evidence of recording thereon. If
                  in connection with any Mortgage Loan, the applicable Seller
                  cannot deliver or cause to be delivered the original Mortgage
                  with evidence of recording thereon on or prior to the Funding
                  Date because of a delay caused by the public recording office
                  where such Mortgage has been delivered for recordation or
                  because such Mortgage has been lost or because such public
                  recording office retains the original recorded Mortgage, the
                  applicable Seller shall deliver or cause to be delivered to
                  the Custodian, a photocopy of such Mortgage, together with (i)
                  in the case of a delay caused by the public recording office,
                  an Officers' Certificate of the applicable Seller (or
                  certified by the title company, escrow agent, or closing
                  attorney) stating that such Mortgage has been dispatched to
                  the appropriate public recording office for recordation and
                  that the original recorded Mortgage or a copy of such Mortgage
                  certified by such public recording office to be a true and
                  complete copy of the original recorded Mortgage will be
                  promptly delivered to the Custodian upon receipt thereof by
                  the applicable Seller; or (ii) in the case of a Mortgage where
                  a public recording office retains the original recorded
                  Mortgage or in the case where a Mortgage is lost after
                  recordation in a public recording office, a copy of such
                  Mortgage certified by such public recording office to be a
                  true and complete copy of the original recorded Mortgage.

         2.       To the extent applicable, the original of each power of
                  attorney, surety agreement or guaranty agreement with respect
                  to such Mortgage Loan.

         3.       Originals of any executed intervening assignments of the
                  Mortgage, with evidence of recording thereon or, if the
                  original intervening assignment has not yet been returned from
                  the recording office, a copy of such assignment certified by
                  the applicable Seller to be a true copy of the original of the
                  assignment which has been sent for recording in the
                  appropriate jurisdiction in which the Mortgaged Property is
                  located.

<PAGE>

         4.       Originals of all assumption, modification and substitution
                  agreements, if any, or, if the originals of any such
                  assumption, modification and substitution agreements have not
                  yet been returned from the recording office, a copy of such
                  instruments certified by the applicable Seller to be a true
                  copy of the original of such instruments which have been sent
                  for recording in the appropriate jurisdictions in which the
                  Mortgaged Properties are located.

         5.       The original mortgagee policy of title insurance or, in the
                  event such original title policy is unavailable, a certified
                  true copy of the related policy binder or commitment for title
                  certified to be true and complete by the title insurance
                  company, in each case, including an Environmental Protection
                  Agency Endorsement and an adjustable-rate endorsement.

         6.       With respect to each Co-op Mortgage Loan, the original
                  Recognition Agreement and the original Assignment of
                  Recognition Agreement.

         7.       With respect to each Co-op Mortgage Loan, an Estoppel Letter
                  and/or Consent.

         8.       With respect to each Co-op Mortgage Loan, the Cooperative Lien
                  Search.

         9.       With respect to each Co-op Mortgage Loan, the guaranty of the
                  Mortgage Note and Cooperative Loan, if any.

         10.      With respect to each Co-op Mortgage Loan, the original of any
                  security agreement or similar document executed in connection
                  with the Cooperative Loan.

         11.      With respect to each Co-op Mortgage Loan, the original
                  Proprietary Lease and the Assignment of Proprietary Lease
                  executed by the Mortgagor in blank or if the Proprietary Lease
                  has been assigned by the Mortgagor to the Seller, then the
                  Seller must execute an assignment of the Assignment of
                  Proprietary Lease in blank.

         12.      With respect to each Co-op Mortgage Loan, the recorded state
                  and county Financing Statements and Financing Statement
                  Changes.

         From time to time, the Sellers shall forward to the Custodian
additional original documents pursuant to the Agreement or additional documents
evidencing an assumption, modification, consolidation or extension of a Mortgage
Loan approved by the Sellers, in accordance with the Agreement. All such
mortgage documents held by the Custodian as to each Mortgage Loan shall
constitute the "Custodial File."

<PAGE>

                          CENDANT MORTGAGE CORPORATION
                   MORTGAGE FILE COVER SHEET: CREDIT DOCUMENTS
                                 (SCHEDULE B-2)

PREPARED BY:_________________________                      PHONE: _____________

LOCATION: CENDANT MORTGAGE CORPORATION                     FAX: ________________

         BORROWER NAME: ___________________

         LOAN NUMBER: _____________________

       GENERAL:

                  _______  1.       Mortgage File Cover Sheet Checklist - Inside
                                    File

                  _______  2.       Borrower's Authorization to Obtain
                                    Information (Original)

                  _______  3.       FNMA 1008(original) or Underwriter's
                                    Worksheet (CUW2)

       APPLICATIONS:

                  _______  4.       Final Signed Typed Loan Application (Form
                                    1003 or personal profile)

                  _______  5.       Initial Signed Loan Application (personal
                                    profile, handwritten or typed)

      CREDIT DOCUMENTATION:

                  _______  6        Credit Report(s), Merged In-file or RMCR)
                                    (original or photocopy)

                  _______  7.       Borrower's explanations (credit, employment,
                                    etc., if applicable)

                  _______  8.       VOM(s) or other form of verification(s) on
                                    all mortgages (not required on Aus scored
                                    loans)

                  _______  9.       Separation agreement, divorce decree (if
                                    applicable)

                  _______  10.      Miscellaneous Credit Documents (if
                                    applicable)

        EMPLOYMENT/INCOME DOCUMENTATION:

                  _______  11.      Copy or Original initial VOE(s); OR

                  _______  12.      Paystubs dated with 30 days of closing; OR

                  _______  13.      IRS Form W-2's Original or Copy (for wage
                                    earner); OR

                  _______  14.      IRS Form 1040's, 1120's, 1065's, etc. (2
                                    years for self-employed);

                  _______  15.      Leases (if applicable)

                  _______  16.      All documentation required to support
                                    Borrower's cash flow for loans Originated.

        ASSET DOCUMENTATION:

                  _______  17.      Copy or Original VOD(s) or source of funds
                                    to close (if applicable)

                  _______  18.      Gift Letter (if applicable) (original)

                  _______  19.      Verification of original purchase price,
                                    real estate sales contract, or HUD-1 on
                                    first mortgage (if applicable)

       PROPERTY DOCUMENTATION:

                  _______  20.      Appraisal, including original photos of
                                    subject and comps. (original)

                  _______  21.      Review Appraisal or second full Appraisal
                                    (if required) (original)

                  _______  22.      442 Final Inspection

                  _______  23.      Copy or Original Contract of Sale

                  _______  24.      Miscellaneous

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]