Document:

RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
                                    Company,

                           GMAC MORTGAGE CORPORATION,
                                    Servicer

                                       and

                         BANK ONE, NATIONAL ASSOCIATION,
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                          Dated as of November 17, 2003

                       GMACM Mortgage Loan Trust 2003-AR2
                    Residential Asset Mortgage Products, Inc.
            GMACM Mortgage Pass-Through Certificates, Series 2003-AR2

<PAGE>

<TABLE>
<CAPTION>
<PAGE>
                               TABLE OF CONTENTS

                                                                                          PAGE

ARTICLE I         DEFINITIONS...............................................................5

<S>             <C>                                                                        <C>
        Section 1.01.     Definitions.......................................................5

        Section 1.02.     Use of Words and Phrases.........................................53

        Section 1.03.     Determination of LIBOR...........................................53

ARTICLE II        CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........54

        Section 2.01.     Conveyance of Mortgage Loans.....................................54

        Section 2.02.     Acceptance by Trustee............................................57

        Section 2.03.     Representations, Warranties and Covenants of the Servicer........58

        Section 2.04.     Representations and Warranties of the Seller.....................59

        Section 2.05.     Execution and Authentication of Certificates.....................60

        Section 2.06.     Purposes and Powers of the Trust Fund............................60

ARTICLE III       ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................61

        Section 3.01.     Servicer to Act as Servicer......................................61

        Section 3.02.     Subservicing Agreements Between Servicer and Subservicers;
                          Enforcement of Subservicers' and Seller's Obligations............62

        Section 3.03.     Successor Subservicers...........................................62

        Section 3.04.     Liability of the Servicer........................................62

        Section 3.05.     No Contractual Relationship Between Subservicer and Trustee
                          or Certificateholders............................................63

        Section 3.06.     Assumption or Termination of Subservicing Agreements by
                          Trustee..........................................................63

        Section 3.07.     Collection of Certain Mortgage Loan Payments; Deposits to
                          Custodial Account................................................63

        Section 3.08.     Subservicing Accounts; Servicing Accounts........................65

        Section 3.09.     Access to Certain Documentation and Information Regarding
                          the Mortgage Loans...............................................66

        Section 3.10.     Permitted Withdrawals from the Custodial Account.................66

        Section 3.11.     Maintenance of the Primary Insurance Policies; Collections
                          Thereunder.......................................................68

        Section 3.12.     Maintenance of Fire Insurance and Omissions and Fidelity
                          Coverage.........................................................69

        Section 3.13.     Enforcement of Due-on-Sale Clauses; Assumption and
                          Modification Agreements; Certain Assignments.....................70

                                        I

<PAGE>

        Section 3.14.     Realization Upon Defaulted Mortgage Loans........................71

        Section 3.15.     Trustee to Cooperate; Release of Mortgage Notes..................74

        Section 3.16.     Servicing and Other Compensation; Compensating Interest..........75

        Section 3.17.     Periodic Filings with the Securities and Exchange
                          Commission; Additional Information...............................76

        Section 3.18.     Annual Statement as to Compliance................................76

        Section 3.19.     Annual Independent Public Accountants' Servicing Report..........77

        Section 3.20.     Rights of the Company in Respect of the Servicer.................77

        Section 3.21.     Administration of Buydown Funds..................................77

ARTICLE IV        PAYMENTS TO CERTIFICATEHOLDERS...........................................78

        Section 4.01.     Payment Account..................................................78

        Section 4.02.     Distributions....................................................79

        Section 4.03.     Statements to Certificateholders.................................86

        Section 4.04.     Distribution of Reports to the Trustee and the Company;
                          Advances by the Servicer.........................................87

        Section 4.05.     Allocation of Realized Losses....................................88

        Section 4.06.     Reports of Foreclosures and Abandonment of Mortgaged Property....89

        Section 4.07.     Optional Purchase of Defaulted Mortgage Loans....................89

        Section 4.08.     Hedge Agreements.................................................90

        Section 4.09.     Auction Administration Agreement; Swap Agreement.................90

ARTICLE V         THE CERTIFICATES.........................................................90

        Section 5.01.     The Certificates.................................................90

        Section 5.02.     Registration of Transfer and Exchange of Certificates............92

        Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates................96

        Section 5.04.     Persons Deemed Owners............................................97

        Section 5.05.     Appointment of Paying Agent......................................97

        Section 5.06.     Optional Purchase of Certificates................................97

ARTICLE VI        THE COMPANY AND THE SERVICER.............................................98

        Section 6.01.     Respective Liabilities of the Company and the Servicer...........98

        Section 6.02.     Merger or Consolidation of the Company or the Servicer;
                          Assignment of Rights and Delegation of Duties by Servicer........99

                                        II
<PAGE>

        Section 6.03.     Limitation on Liability of the Company, the Servicer and
                          Others...........................................................99

        Section 6.04.     Company and Servicer Not to Resign..............................100

ARTICLE VII       DEFAULT.................................................................100

        Section 7.01.     Events of Default...............................................100

        Section 7.02.     Trustee to Act; Appointment of Successor........................102

        Section 7.03.     Notification to Certificateholders..............................103

        Section 7.04.     Waiver of Events of Default.....................................104

ARTICLE VIII      CONCERNING THE TRUSTEE..................................................104

        Section 8.01.     Duties of Trustee...............................................104

        Section 8.02.     Certain Matters Affecting the Trustee...........................105

        Section 8.03.     Trustee Not Liable for Certificates or Mortgage Loans...........107

        Section 8.04.     Trustee May Own Certificates....................................107

        Section 8.05.     Servicer to Pay Trustee's Fees and Expenses; Indemnification....107

        Section 8.06.     Eligibility Requirements for Trustee............................108

        Section 8.07.     Resignation and Removal of the Trustee..........................108

        Section 8.08.     Successor Trustee...............................................109

        Section 8.09.     Merger or Consolidation of Trustee..............................109

        Section 8.10.     Appointment of Co-Trustee or Separate Trustee...................110

        Section 8.11.     Appointment of Custodians.......................................110

        Section 8.12.     Appointment of Office or Agency.................................111

ARTICLE IX        TERMINATION.............................................................111

        Section 9.01.     Termination Upon Purchase by the Servicer or Liquidation of
                          All Mortgage Loans..............................................111

        Section 9.02.     Additional Termination Requirements.............................113

ARTICLE X         REMIC PROVISIONS........................................................114

        Section 10.01.    REMIC Administration............................................114

        Section 10.02.    Servicer, REMIC Administrator and Trustee Indemnification.......117

        Section 10.03.    Designation of REMIC(s).........................................117

        Section 10.04.    Distributions on REMIC I Regular Interests, REMIC II Regular
                          Interests and REMIC III Regular Interests.......................118

        Section 10.05.    Compliance with Withholding Requirements........................118

                                        III
<PAGE>

ARTICLE XI        MISCELLANEOUS PROVISIONS................................................119

        Section 11.01.    Amendment.......................................................119

        Section 11.02.    Recordation of Agreement; Counterparts..........................120

        Section 11.03.    Limitation on Rights of Certificateholders......................121

        Section 11.04.    Governing Law...................................................121

        Section 11.05.    Notices.........................................................122

        Section 11.06.    Required Notices to Rating Agency and Subservicer...............122

        Section 11.07.    Severability of Provisions......................................123

        Section 11.08.    Supplemental Provisions for Resecuritization....................123

        Section 11.09.    Allocation of Voting Rights.....................................124

        Section 11.10.    Non-Petition....................................................124

</TABLE>
                                        IV

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

EXHIBITS
Exhibit A-1: Form of Class A Certificate
Exhibit A-2: Form of Class X Certificate
Exhibit B:   Form of Class M Certificate
Exhibit C:   Form of Class B Certificate
Exhibit D:   Form of Class R Certificate
Exhibit E-1: Mortgage Loan Schedule for Loan Group 1
Exhibit E-2: Mortgage Loan Schedule for Loan Group 2
Exhibit E-3: Mortgage Loan Schedule for Loan Group 3
Exhibit E-4: Mortgage Loan Schedule for Loan Group 4
Exhibit F:   Form of Request for Release
Exhibit G-1: Form of Transfer Affidavit and Agreement
Exhibit G-2: Form of Transferor Certificate
Exhibit H:   Form of Investor Representation Letter
Exhibit I:   Form of Transferor Representation Letter
Exhibit J:   Form of Rule 144A Investment Representation Letter
Exhibit K:   Form of Lender Certification for Assignment of Mortgage Loan
Exhibit L:   Information to be Included in Monthly Distribution Date Statement
Exhibit M:   Form of Custodian Certification
Exhibit N-1  Form of Form 10-K Certification
Exhibit N-2  Form of Back-Up Certification to Form 10-K Certificate
Exhibit O    Auction Administration Agreement
Exhibit P    Swap Agreement

                                        V

<PAGE>

       This is the Pooling and  Servicing  Agreement,  dated as of November 17,
2003 (the "Pooling and Servicing  Agreement" or "Agreement"),  among RESIDENTIAL
ASSET  MORTGAGE  PRODUCTS,  INC.,  as the company  (together  with its permitted
successors and assigns, the "Company"),  GMAC MORTGAGE CORPORATION,  as servicer
(together with its permitted successors and assigns,  the "Servicer"),  and BANK
ONE, NATIONAL ASSOCIATION, a national banking association,  as Trustee (together
with its permitted successors and assigns, the "Trustee").

                             PRELIMINARY STATEMENT:

        The Company intends to sell  mortgage-backed  pass-through  certificates
(collectively,  the "Certificates"),  to be issued hereunder in sixteen Classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans (as defined herein) and certain other related assets.

                                     REMIC I

        As provided  herein,  the REMIC  Administrator  will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other  related  assets  subject  to this  Agreement  as a real  estate  mortgage
investment  conduit  (a  "REMIC")  for  federal  income tax  purposes,  and such
segregated  pool of assets will be  designated  as "REMIC I." Component I of the
Class R Certificates  will  represent the sole Class of "residual  interests" in
REMIC I for purposes of the REMIC  Provisions (as defined  herein) under federal
income tax law. The  following  table  irrevocably  sets forth the  designation,
remittance  rate (the  "Uncertificated  REMIC I Pass-Through  Rate") and initial
Uncertificated  Principal Balance for each of the "regular interests" in REMIC I
(the  "REMIC  I  Regular  Interests").   The  "latest  possible  maturity  date"
(determined  solely for  purposes  of  satisfying  Treasury  regulation  Section
1.860G-1(a)(4)(iii))  for each REMIC I Regular  Interest  shall be the  Maturity
Date. None of the REMIC I Regular Interests will be certificated.

<TABLE>
<CAPTION>

CLASS
DESIGNATION FOR
EACH REMIC I
REGULAR INTEREST
AND COMPONENT I                                         INITIAL CLASS
OF THE CLASS R        TYPE OF        CERTIFICATE          PRINCIPAL          FINAL MATURITY
CERTIFICATES          INTEREST      INTEREST RATE          BALANCE                DATE*
------------------    ---------    ----------------    ----------------    --------------------
<S>     <C>                                  <C>              <C>                      <C>
Class Y-1             Regular        Variable(1)         $     35,926.76        December 2033
Class Y-2             Regular        Variable(2)         $     95,453.75        December 2033

Class Y-3             Regular        Variable(3)         $     82,253.31        December 2033
Class Y-4             Regular        Variable(4)         $     86,341.61        December 2033
Class Z-1             Regular        Variable(1)         $ 71,817,589.87        December 2033
Class Z-2             Regular        Variable(2)         $190,812,043.58        December 2033
Class Z-3             Regular        Variable(3)         $164,448,967.77        December 2033
Class Z-4             Regular        Variable(4)         $172,622,695.04        December 2033
Component I of
the Class R+          Residual       Variable(1)         $        100.00        December 2033
</TABLE>

*   The Distribution  Date in the specified month,  which is the month following
    the month the latest  maturing  Mortgage Loan in the related Group  matures.
    For  federal  income tax  purposes,  for each  Class of REMIC I Regular  and
    Residual  Interests,  the "latest possible maturity date" shall be the Final
    Maturity Date.
+   Component  I of  the  Class  R  Certificates  is  entitled  to  receive  the
    applicable Residual Distribution Amount and any Excess Liquidation Proceeds.
(1) Interest  distributed  to the REMIC I Regular  Interests Y-1 and Z-1 and the
    Component I of the Class R Certificates on each  Distribution Date will have
    accrued at the weighted average of the Net Pass-Through  Rates for the Group
    1 Loans on the applicable Class Principal  Balance  outstanding  immediately
    before such Distribution Date.
(2) Interest  distributed  to the REMIC I Regular  Interests Y-2 and Z-2 on each
    Distribution  Date will have  accrued  at the  weighted  average  of the Net
    Pass-Through  Rates for the Group 2 Loans on the applicable  Class Principal
    Balance outstanding immediately before such Distribution Date.
(3) Interest  distributed  to the REMIC I Regular  Interests Y-3 and Z-3 on each
    Distribution  Date will have  accrued  at the  weighted  average  of the Net
    Pass-Through  Rates for the Group 3 Loans on the applicable  Class Principal
    Balance outstanding immediately before such Distribution Date.
(4) Interest  distributed  to the REMIC I Regular  Interests Y-4 and Z-4 on each
    Distribution  Date will have  accrued  at the  weighted  average  of the Net
    Pass-Through  Rates for the Group 4 Loans on the applicable  Class Principal
    Balance outstanding immediately before such Distribution Date.

                                       1
<PAGE>

                                    REMIC II

        As provided  herein,  the REMIC  Administrator  will make an election to
treat  the  segregated  pool of  assets  consisting  of the  REMIC I  Regular  I
Interests as a real estate mortgage  investment  conduit (a "REMIC") for federal
income tax purposes,  and such  segregated  pool of assets will be designated as
"REMIC II."  Component II of the Class R  Certificates  will  represent the sole
Class of "residual  interests" in REMIC II for purposes of the REMIC  Provisions
(as  defined   herein)  under  federal  income  tax  law.  The  following  table
irrevocably  sets forth the  designation,  remittance rate (the  "Uncertificated
REMIC II Pass-Through  Rate") and initial  Uncertificated  Principal Balance for
each of the "regular interests" in REMIC II (the "REMIC II Regular  Interests").
The  "latest  possible  maturity  date"  (determined   solely  for  purposes  of
satisfying  Treasury regulation Section  1.860G-1(a)(4)(iii))  for each REMIC II
Regular  Interest  shall be the  Maturity  Date.  None of the  REMIC II  Regular
Interests will be certificated.
<TABLE>
<CAPTION>

  Class Designation for
  each REMIC II Regular
  Interest and             -----------
  Component II of the        Type of       Certificate         Initial Class
  Class R Certificates      Interest      Interest Rate      Principal Balance           Final Maturity Date*
<S>         <C>                                    <C>        <C>                                     <C>
  Class A-I-1-M              Regular       Variable(1)        $ 69,769,000.00                December 2033
  Class A-II-1-M             Regular       Variable(2)        $ 83,880,000.00                December 2033
  Class A-II-2-M             Regular       Variable(2)        $ 22,155,000.00                December 2033
  Class A-II-3-M             Regular       Variable(2)        $ 19,380,000.00                December 2033
  Class A-II-4-M             Regular       Variable(2)        $ 59,956,000.00                December 2033
  Class A-III-1-M            Regular       Variable(3)        $ 73,970,000.00                December 2033
  Class A-III-2-M            Regular       Variable(3)        $ 18,215,000.00                December 2033
  Class A-III-3-M            Regular       Variable(3)        $ 15,197,000.00                December 2033
  Class A-III-4-M            Regular       Variable(3)        $ 22,014,000.00                December 2033
  Class A-III-5-M            Regular       Variable(3)        $ 30,363,000.00                December 2033
  Class A-IV-1-M             Regular       Variable(4)        $167,700,000.00                December 2033
  Class M-1-M                Regular       Variable(5)         $ 6,298,000.00                December 2033
  Class M-2-M                Regular       Variable(5)         $ 4,798,000.00                December 2033
  Class M-3-M                Regular       Variable(5)         $ 2,699,000.00                December 2033
  Class B-1-M                Regular       Variable(5)         $ 1,198,000.00                December 2033
  Class B-2-M                Regular       Variable(5)           $ 898,000.00                 December 2033
  Class B-3-M                Regular       Variable(5)         $ 1,511,217.69                December 2033
  Component II of the
  Class R (6)               Residual          -----                -----                     December 2033

</TABLE>

  *  The Distribution Date in the specified month,  which is the month following
     the month the latest  maturing  Mortgage Loan in the related Group matures.
     For  federal  income tax  purposes,  for each Class of REMIC II Regular and
     Residual Interests,  the "latest possible maturity date" shall be the Final
     Maturity Date.
  (1)Interest  distributed  to the REMIC II  Regular  Interest  A-I-1-M  on each
     Distribution  Date will have  accrued  at the  weighted  average of the Net
     Pass-Through  Rates for the Group 1 Loans on the applicable Class Principal
     Balance outstanding immediately before such Distribution Date.
  (2)Interest distributed to the REMIC II Regular Interests A-II-1-M,  A-II-2-M,
     A-II-3-M  and A-II-4-M on each  Distribution  Date will have accrued at the
     weighted average of the Net Pass-Through Rates for the Group 2 Loans on the
     applicable  Class Principal  Balance  outstanding  immediately  before such
     Distribution Date.
  (3)Interest   distributed  to  the  REMIC  II  Regular  Interests   A-III-1-M,
     A-III-2-M,  A-III-3-M,  A-III-4-M and A-III-5-M on each  Distribution  Date
     will have accrued at the weighted average of the Net Pass-Through Rates for
     the Group 3 Loans on the applicable  Class  Principal  Balance  outstanding
     immediately before such Distribution Date.
  (4)Interest  distributed  to the REMIC II Regular  Interest  A-IV-1-M  on each
     Distribution  Date will have  accrued  at the  weighted  average of the Net
     Pass-Through  Rates for the Group 4 Loans on the applicable Class Principal
     Balance outstanding immediately before such Distribution Date.
  (5)The  Certificate  Interest  Rate for each  Class of the Class B and Class M
     Certificates shall equal, on any Distribution Date, the weighted average of
     the Certificate  Interest Rates for the Class Y-1, Class Y-2, Class Y-3 and
     Class Y-4 Regular Interests.
  (6)Component II of the Class R  Certificates  shall be entitled to receive the
     applicable  Residual  Distribution  Amount.  Component  II of the  Class  R
     Certificates shall not be entitled to receive any distributions of interest
     or principal.

                                       2
<PAGE>

                                    REMIC III

        As  provided  herein,  the REMIC  Administrator  will elect to treat the
segregated  pool of assets  consisting  of the REMIC II Regular  Interests  as a
REMIC for federal income tax purposes,  and such  segregated pool of assets will
be  designated  as REMIC III.  Component  III of the Class R  Certificates  will
represent  the sole Class of "residual  interests"  in REMIC III for purposes of
the  REMIC  Provisions  under  federal  income  tax  law.  The  following  table
irrevocably sets forth the designation,  Pass-Through  Rate,  aggregate  Initial
Certificate  Principal  Balance,  certain  features and Month of Final Scheduled
Distribution  Date  for each  Class of  Certificates  comprising  the  interests
representing  "regular  interests" in REMIC III. The "latest  possible  maturity
date" (determined solely for purposes of satisfying  Treasury Regulation Section
1.860G-1(a)(4)(iii))  for each Class of REMIC III Regular  Certificates shall be
the Maturity Date.
<TABLE>
<CAPTION>

CLASS DESIGNATION
FOR EACH                                          AGGREGATE
REMIC III REGULAR                                  INITIAL
INTEREST AND                                      CERTIFICATE                          FINAL
COMPONENT III OF                                  PRINCIPAL                         SCHEDULED
THE CLASS R         TYPE OF     PASS-THROUGH  BALANCE/NOTIONAL                     DISTRIBUTION
CERTIFICATES         INTEREST       RATE           AMOUNT            FEATURES          DATE

<S>       <C>                             <C>  <C>                                          <C>
Class A-I-1          Regular    Adjustable(1)  $ 69,769,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-II-1(2)      Regular    Adjustable(3)  $ 83,880,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-II-2         Regular     3.765%(4)     $ 22,155,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-II-3         Regular     4.175%(4)     $ 19,380,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-II-4         Regular     4.115%(4)     $ 59,956,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-III-1(5)     Regular    Adjustable(6)  $ 73,970,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-III-2        Regular     3.865%(7)     $ 18,215,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-III-3        Regular     4.240%(7)     $ 15,197,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-III-4        Regular     4.397%(7)     $ 22,014,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-III-5        Regular     4.397%(7)     $ 30,363,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class A-IV-1         Regular    Adjustable(8)  $167,700,000.00   Senior/Adjustable December 2033
                                                                            Rate
Class X-II           Regular    Adjustable(9)  $185,371,000.00   Senior/Adjustable August 2008
                                                                  Rate/Interest
                                                                            Only
Class X-III          Regular    Adjustable(10) $159,759,000.00   Senior/Adjustable August 2010
                                                                  Rate/Interest
                                                                            Only
Class M-1            Regular    Adjustable(11) $ 6,298,000.00    Mezzanine/AdjustabDecember 2033
                                                                            Rate
Class M-2            Regular    Adjustable(11) $ 4,798,000.00    Mezzanine/AdjustabDecember 2033
                                                                            Rate
Class M-3            Regular    Adjustable(11) $ 2,699,000.00    Mezzanine/AdjustabDecember 2033
                                                                            Rate
Class B-1            Regular    Adjustable(11) $ 1,198,000.00    Subordinate/AdjustDecember 2033
                                                                            Rate
Class B-2            Regular    Adjustable(11) $   898,000.00    Subordinate/AdjustDecember 2033
                                                                            Rate
Class B-3            Regular    Adjustable(11) $ 1,511,217.69    Subordinate/AdjustDecember 2033
                                                                            Rate
Class SB             Not an          (12)                              Yield          February
                     Interest                                      Maintenance         2008
                                                                      Excess
Component III of
the Class R(13)      Residual       -----           -----        Senior/Residual   December 2033

</TABLE>

_______________
(1) The Class A-I-1  Certificates will accrue interest at a per annum rate equal
    the Group 1 Net WAC Cap Rate.
(2) The  Class  A-II-1  Certificates  will  represent  ownership  of a REMIC III
    Regular  Interest,  together with certain rights to payments to be made from
    amounts  received under the Class A-II-1 Hedge Agreement and the payments of
    Class  A-II-1  Carryover  Shortfall  Amounts,  which will be deemed made for
    federal income tax purposes  outside of REMIC III by the holder of the Class
    SB Certificates as the owner of the Hedge Agreements.
(3) With  respect to any  Distribution  Date on or prior to the related  Auction
    Distribution  Date, the Class A-II-1  Certificates will accrue interest at a
    per annum  rate  equal to LIBOR  plus  0.19%,  subject  to  payment  caps as
    described in the definition of "Pass-Through Rate" herein and the provisions
    for the payment of Class A-II-1  Carryover  Shortfall  Amount  herein.  With
    respect to any  Distribution  Date after the  related  Auction  Distribution
    Date, the Class A-II-1 Certificates will accrue interest at a per annum rate
    equal to the related  Group 2 Net WAC Cap Rate.  For  purposes of REMIC III,
    the  interest  will accrue on the portion of the Class  A-II-1  Certificates
    that  represent  ownership  of a regular  interest  in REMIC III at the rate
    described in the definition of "Pass-Through Rate."
(4) With  respect to any  Distribution  Date on or prior to the related  Auction
    Distribution Date, the Class A-II-2 Certificates,  Class A-II-3 Certificates
    and Class A-II-4  Certificates  are subject to a payment cap as described in
    the  definition  of  "Pass-Through   Rate"  herein.   With  respect  to  any
    Distribution  Date after the related  Auction  Distribution  Date, the Class
    A-II-2 Certificates, Class A-II-3 Certificates and Class A-II-4 Certificates
    will accrue  interest  at a per annum rate equal to the related  Group 2 Net
    WAC Cap Rate.

                                       3
<PAGE>

(5) The Class  A-III-1  Certificates  will  represent  ownership  of a REMIC III
    Regular  Interest,  together with certain rights to payments to be made from
    amounts received under the Class A-III-1 Hedge Agreement and the payments of
    Class A-III-1  Carryover  Shortfall  Amounts,  which will be deemed made for
    federal income tax purposes  outside of REMIC III by the holder of the Class
    SB Certificates as the owner of the Hedge Agreements.
(6) With  respect to any  Distribution  Date on or prior to the related  Auction
    Distribution Date, the Class A-III-1  Certificates will accrue interest at a
    per annum  rate  equal to LIBOR  plus  0.20%,  subject  to  payment  caps as
    described in the definition of "Pass-Through Rate" herein and the provisions
    for the payment of Class A-III-1  Carryover  Shortfall  Amount herein.  With
    respect to any  Distribution  Date after the  related  Auction  Distribution
    Date,  the Class A-III-1  Certificates  will accrue  interest at a per annum
    rate equal to the related  Group 3 Net WAC Cap Rate.  For  purposes of REMIC
    III,  the  interest  will  accrue  on  the  portion  of  the  Class  A-III-1
    Certificates that represent  ownership of a regular interest in REMIC III at
    the rate described in the definition of "Pass-Through Rate."
(7) With  respect to any  Distribution  Date on or prior to the related  Auction
    Distribution   Date,   the  Class   A-III-2   Certificates,   Class  A-III-3
    Certificates,  Class A-III-4 Certificates and Class A-III-5 Certificates are
    subject to a payment cap as described  in the  definition  of  "Pass-Through
    Rate"  herein.  With  respect to any  Distribution  Date  after the  related
    Auction  Distribution  Date, the Class A-III-2  Certificates,  Class A-III-3
    Certificates  and Class A-III-4  Certificates  will accrue interest at a per
    annum rate equal to the related Group 3 Net WAC Cap Rate.
(8) The Class A-IV-1 Certificates will accrue interest at a per annum rate equal
    the Group 4 Net WAC Cap Rate.
(9) With  respect to any  Distribution  Date on or prior to the related  Auction
    Distribution Date, the Class X-II Certificates will accrue interest at a per
    annum rate equal to the excess,  if any, of (i) the related  Group 2 Net WAC
    Cap Rate over (ii) the weighted  average of the  Pass-Through  Rates for the
    Class  A-II-1  Certificates  (adjusted  to reflect  an  accrual  method on a
    30/360-day basis), Class A-II-2 Certificates,  Class A-II-3 Certificates and
    Class A-II-4 Certificates.  The Class X-II Certificates will not be entitled
    to any distributions after the related Auction Distribution Date.
(10)With  respect to any  Distribution  Date on or prior to the related  Auction
    Distribution  Date, the Class X-III  Certificates  will accrue interest at a
    per annum rate equal to the excess,  if any, of (i) the related  Group 3 Net
    WAC Cap Rate over (ii) the weighted  average of the  Pass-Through  Rates for
    the Class A-III-1  Certificates  (adjusted to reflect an accrual method on a
    30/360-day basis), Class A-III-2  Certificates,  Class A-III-3 Certificates,
    Class A-III-4 Certificates and Class A-III-5  Certificates.  The Class X-III
    Certificates  will not be  entitled to any  distributions  after the related
    Auction Distribution Date.
(11)The Class M-1 Certificates,  Class M-2 Certificates, Class M-3 Certificates,
    Class B-1  Certificates,  Class B-2  Certificates and Class B-3 Certificates
    will accrue  interest at a per annum rate equal to the  weighted  average of
    (i) the Group 1 Net WAC Cap Rate, (ii) the related Group 2 Net WAC Cap Rate,
    (iii) the related  Group 3 Net WAC Cap Rate and (iv) the Group 4 Net WAC Cap
    Rate,  in each  case,  weighted  on the  basis  of the  related  Subordinate
    Component.
(12)The Holder of the Class SB  Certificates  is  entitled  to certain  payments
    from the Hedge  Agreements.  The Class SB  Certificates  do not represent an
    interest in REMIC III.
(13)Component III of the Class R  Certificates  shall be entitled to receive the
    applicable  Residual  Distribution  Amount.  Component  III of the  Class  R
    Certificates  shall not be entitled to receive any distributions of interest
    or principal.

                                       4
<PAGE>

        In consideration of the mutual agreements herein contained, the Company,
the Servicer and the Trustee agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

Section 1.01.  Definitions.

        Whenever used in this Agreement, the following words and phrases, unless
the  context  otherwise  requires,  shall have the  meanings  specified  in this
Article.

        Accrued  Certificate  Interest:  With respect to each Distribution Date,
(a) as to any  Class of  Certificates  (other  than the  Class X  Certificates),
interest  accrued  during the  related  Interest  Accrual  Period at the related
Pass-Through Rate on the Certificate Principal Balance thereof immediately prior
to  such  Distribution  Date  and  (b) in the  case of  each  Class  of  Class X
Certificates, interest accrued during the related Interest Accrual Period at the
related  Pass-Through  Rate on the Notional Amount thereof  immediately prior to
such  Distribution  Date.  Accrued   Certificate   Interest  on  each  Class  of
Certificates  (other  than the  Class  A-II-1  Certificates  and  Class  A-III-1
Certificates)  will be calculated on the basis of a 360-day year,  consisting of
twelve  30-day  months.   Accrued  Certificate  Interest  on  the  Class  A-II-1
Certificates and Class A-III-1  Certificates  will be calculated on the basis of
the actual number of days in the related  Interest  Accrual Period and a 360-day
year.

        With respect to each Distribution Date, Accrued Certificate  Interest on
any Class of Certificates will be reduced by the amount of:

(i)            Prepayment  Interest  Shortfalls  on the  Mortgage  Loans  in the
               related Loan Group prepaid  during the prior  calendar month and,
               in the case of a Principal Prepayment in Full, during the related
               Prepayment  Period (to the extent not offset by the Servicer with
               a payment of Compensating Interest),

(ii)           the interest  portion  (adjusted to the Net Mortgage Rate (or the
               Modified  Net  Mortgage  Rate in the case of a Modified  Mortgage
               Loan)) of Realized  Losses on the  Mortgage  Loans in the related
               Loan Group (including Excess Special Hazard Losses,  Excess Fraud
               Losses,  Excess Bankruptcy  Losses and Extraordinary  Losses) not
               allocated  solely to one or more specific Classes of Certificates
               pursuant to Section 4.05,

(iii)          the interest  portion of Advances  that were made with respect to
               delinquencies  related to Mortgage  Loans or REO  Property in the
               related Loan Group that were  ultimately  determined to be Excess
               Special Hazard  Losses,  Excess Fraud Losses,  Excess  Bankruptcy
               Losses or Extraordinary Losses, and

(iv)           any  other  interest  shortfalls  on the  Mortgage  Loans  in the
               related Loan Group not covered by the  subordination  provided by
               the  Class M  Certificates  and Class B  Certificates,  including
               interest that is not collectible  from the Mortgagor  pursuant to
               the Relief Act,

with the Senior  Percentage of all such  reductions with respect to the Mortgage
Loans in a Loan Group being allocated  among the related Senior  Certificates in
proportion  to the  amounts of Accrued  Certificate  Interest  payable  from the
related Loan Group on such  Distribution  Date absent such reductions,  with the
remainder  of  such  reductions  allocated  among  the  holders  of the  Class M
Certificates  and  Class B  Certificates  on the  basis of  Accrued  Certificate

                                       5
<PAGE>

Interest payable on their  Apportioned  Principal  Balances on such Distribution
Date absent such  reductions.  In  addition  to that  portion of the  reductions
described in the  preceding  sentence that are allocated to any Class of Class B
Certificates or any Class of Class M Certificates,  Accrued Certificate Interest
on such Class of Class B Certificates or such Class of Class M Certificates will
be  reduced by the  interest  portion  (adjusted  to the Net  Mortgage  Rate) of
Realized Losses that are allocated  solely to such Class of Class B Certificates
or such Class of Class M Certificates pursuant to Section 4.05.

        In addition, Accrued Certificate Interest on the Class X-II Certificates
on any Distribution Date shall be further reduced to the extent necessary to pay
the Class A-II-1 Carryover  Shortfall Amount to the Class A-II-1 Certificates on
such Distribution  Date, after application of the Class A-II-1 Yield Maintenance
Amount, if any, for such Distribution  Date. Such reduction and payment shall be
treated for federal income tax purposes as a payment outside of any REMIC by the
Class X-II  Certificateholders  pursuant  to a contract  between  the Class X-II
Certificateholders and the Class A-II-1  Certificateholders.  For such purposes,
the Class X-II  Certificateholders  shall be deemed to have  received from REMIC
III Accrued Certificate  Interest unreduced by the provisions of this paragraph.
Accrued Certificate Interest on the Class X-III Certificates on any Distribution
Date shall be further  reduced to the extent  necessary to pay the Class A-III-1
Carryover   Shortfall   Amount  to  the  Class  A-III-1   Certificates  on  such
Distribution  Date,  after  application  of the Class A-III-1 Yield  Maintenance
Amount, if any, for such Distribution  Date. Such reduction and payment shall be
treated for federal income tax purposes as a payment outside of any REMIC by the
Class X-III  Certificateholders  pursuant to a contract  between the Class X-III
Certificateholders and the Class A-III-1 Certificateholders.  For such purposes,
the Class X-III  Certificateholders  shall be deemed to have received from REMIC
III Accrued Certificate Interest unreduced by the provisions of this paragraph.

        Adjustment Date: With respect to each Mortgage Loan, each date set forth
in the related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.

     Advance:  As to any  Mortgage  Loan,  any  advance  made  by the  Servicer,
pursuant to Section 4.04.

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

        Aggregate Subordinate Percentage: With respect to any Distribution Date,
the percent  equivalent  of a fraction,  the numerator of which is the aggregate
Certificate Principal Balance of the Subordinate  Certificates immediately prior
to such  Distribution  Date and the  denominator  of  which  is the Pool  Stated
Principal Balance as of such Distribution Date.

        Amount Held for Future  Distribution:  As to any  Distribution  Date and
with respect to each Loan Group,  the total of the amounts held in the Custodial
Account at the close of business on the related Determination Date on account of
(i)  Liquidation  Proceeds,  Insurance  Proceeds,  Curtailments,  Mortgage  Loan
purchases  made  pursuant  to  Section  2.02,  2.04 or 4.07  and  Mortgage  Loan
substitutions  made  pursuant to Section  2.04  received or made in the month of
such Distribution Date (other than such Liquidation Proceeds, Insurance Proceeds
and  purchases  of  Mortgage  Loans  that the  Servicer  has deemed to have been
received  in the  preceding  month in  accordance  with  Section  3.07(b)),  and
Principal  Prepayments  in Full  received or made after the  related  Prepayment
Period, and (ii) payments which represent early receipt of scheduled payments of
principal  and  interest  due on a date or dates  subsequent  to the related Due
Date.

                                       6
<PAGE>

        Apportioned Principal Balance: For any Distribution Date, any Loan Group
and any Class of Subordinate  Certificates,  an amount equal to the  Certificate
Principal  Balance of that Class  immediately  prior to such  Distribution  Date
multiplied  by a fraction,  the  numerator  of which is the related  Subordinate
Component for such  Distribution Date and the denominator of which is the sum of
the aggregate of the Subordinate Components for such Distribution Date.

        Appraised  Value:  As to any Mortgaged  Property,  the lesser of (i) the
appraised value of such Mortgaged  Property based upon the appraisal made at the
time of the  origination of the related  Mortgage Loan, and (ii) the sales price
of the Mortgaged  Property at such time of origination,  except in the case of a
Mortgaged  Property  securing a refinanced or modified Mortgage Loan as to which
it is  either  the  appraised  value  determined  above or the  appraised  value
determined in an appraisal at the time of  refinancing or  modification,  as the
case may be, provided that if permitted by the applicable underwriting standards
of GMACM,  the Appraised  Value shall be the value of the Mortgaged  Property as
stated by the Mortgagor.

        Assignment:  An  assignment  of the  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  of the  Mortgage  Loan to the  Trustee  for  the  benefit  of
Certificateholders,   which   assignment,   notice  of  transfer  or  equivalent
instrument  may be in the  form  of one or  more  blanket  assignments  covering
Mortgages  secured  by  Mortgaged  Properties  located  in the same  county,  if
permitted by law and accompanied by an Opinion of Counsel to that effect.

        Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment of the related Cooperative Lease from the Mortgagor to the originator
of the Cooperative Loan.

        Auction  Administrator:  The Trustee,  acting solely as an  intermediary
agent for GCD and the Holders of the Auction  Certificates and not as Trustee or
on behalf of the Trust Fund.

        Auction Administration  Agreement: The Auction Administration Agreement,
dated as of November 17, 2003, between GCD and the Auction Administrator.

     Auction Certificates: Collectively, the Class A-II Auction Certificates and
the Class A-III Auction Certificates.

        Auction  Distribution  Date: With respect to the Class A-II Certificates
and Class X-II Certificates,  the Distribution Date occurring in August 2008 and
with respect to the Class A-III Certificates and Class X-III  Certificates,  the
Distribution Date occurring in August 2010.

        Available Distribution Amount: As to any Distribution Date and each Loan
Group, an amount equal to (a) the sum of (i) the amount relating to the Mortgage
Loans on deposit in the  Custodial  Account as of the close of  business  on the
immediately preceding  Determination Date and amounts deposited in the Custodial
Account in connection  with the  substitution of Qualified  Substitute  Mortgage
Loans, (ii) the amount of any Advance made on the immediately  preceding Payment
Account Deposit Date,  (iii) any amount  deposited in the Payment Account on the
related Payment Account Deposit Date pursuant to the second paragraph of Section
3.12(a),  (iv) any amount  deposited in the Payment Account  pursuant to Section
4.07, and (v) any amount that the Servicer is not permitted to withdraw from the
Custodial Account pursuant to Section 3.16(e),  reduced by (b) the sum as of the
close  of  business  on the  immediately  preceding  Determination  Date  of (w)
aggregate  Foreclosure  Profits, (x) the Amount Held for Future Distribution and
(y) amounts permitted to be withdrawn by the Servicer from the Custodial Account
in respect of the Mortgage Loans  pursuant to clauses  (ii)-(x),  inclusive,  of
Section 3.10(a). Such amount shall be determined separately for each Loan Group.
Additionally,  if  on  any  Distribution  Date  Compensating  Interest  provided

                                       7
<PAGE>

pursuant to Section 3.16(e) is less than Prepayment Interest Shortfalls incurred
on the Mortgage Loans in connection with Principal  Prepayments in Full received
during the related Prepayment Period and Curtailments made in the prior calendar
month, such  Compensating  Interest shall be allocated on such Distribution Date
to the Available  Distribution Amount for each Loan Group on a pro rata basis in
accordance with the respective  amounts of such Prepayment  Interest  Shortfalls
incurred  on  the  Mortgage  Loans  in  such  Loan  Group  in  respect  of  such
Distribution Date.

        Bankruptcy  Amount:  As of any date of determination  prior to the first
anniversary  of the Cut-off Date, an amount equal to the excess,  if any, of (A)
$125,082.54 over (B) the aggregate amount of Bankruptcy  Losses allocated solely
to one or more specific Classes of Certificates in accordance with Section 4.05.
As of any date of determination on or after the first anniversary of the Cut-off
Date, an amount equal to the excess, if any, of

               (1) the lesser of (a) the Bankruptcy  Amount calculated as of the
        close of business on the Business  Day  immediately  preceding  the most
        recent anniversary of the Cut-off Date coinciding with or preceding such
        date  of  determination  (or,  if  such  date  of  determination  is  an
        anniversary of the Cut-off Date, the Business Day immediately  preceding
        such  date of  determination)  (for  purposes  of this  definition,  the
        "Relevant Anniversary") and (b) the greater of

                      (A)  the  greater  of  (i)  0.0006  times  the   aggregate
                      principal  balance  of  all  the  Mortgage  Loans  in  the
                      Mortgage  Pool as of the  Relevant  Anniversary  having  a
                      Loan-to-Value  Ratio at origination  which exceeds 75% and
                      (ii) $100,000; and

                      (B)  (i)  if  the  aggregate   principal  balance  of  the
                      Non-Primary Residence Loans as of the Relevant Anniversary
                      is less than 10% of the  Stated  Principal  Balance of the
                      Mortgage Loans as of the Relevant  Anniversary,  $0.00, or
                      (ii) if the aggregate principal balance of the Non-Primary
                      Residence Loans as of the Relevant Anniversary is equal to
                      or greater than 10% of the Stated Principal Balance of the
                      Mortgage Loans as of the Relevant Anniversary,  the sum of
                      (I) the  aggregate  principal  balance of the  Non-Primary
                      Residence Loans with a Loan-to-Value Ratio of greater than
                      80.00%  but  less  than or  equal to  90.00%  (other  than
                      Additional   Collateral  Loans),  times  0.25%,  (II)  the
                      aggregate  principal balance of the Non-Primary  Residence
                      Loans with a  Loan-to-Value  Ratio of greater  than 90.00%
                      but less than or equal to 95.00%  (other  than  Additional
                      Collateral  Loans),  times 0.50%,  and (III) the aggregate
                      principal balance of the Non-Primary  Residence Loans with
                      a  Loan-to-Value  Ratio of greater than 95.00% (other than
                      Additional  Collateral Loans) times 0.75%, in each case as
                      of the Relevant Anniversary, over

               (2) the aggregate amount of Bankruptcy Losses allocated solely to
        one or more specific  Classes of Certificates in accordance with Section
        4.05 since the Relevant Anniversary.

        The Bankruptcy Amount may be further reduced by the Servicer  (including
accelerating  the manner in which such coverage is reduced)  provided that prior
to any such reduction,  the Servicer shall (i) obtain written  confirmation from
each Rating Agency that such reduction  shall not reduce the rating  assigned to
any  Class  of  Certificates  by such  Rating  Agency  below  the  lower  of the
then-current  rating  or the  rating  assigned  to such  Certificates  as of the
Closing  Date by such  Rating  Agency  and (ii)  provide a copy of such  written
confirmation to the Trustee.

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

                                       8
<PAGE>

        Bankruptcy  Loss:  With  respect  to  any  Mortgage  Loan,  a  Deficient
Valuation or Debt Service Reduction; provided, however, that neither a Deficient
Valuation  nor a Debt  Service  Reduction  shall  be  deemed a  Bankruptcy  Loss
hereunder  so long as the  Servicer has notified the Trustee in writing that the
Servicer is diligently  pursuing any remedies that may exist in connection  with
the  representations and warranties made regarding the related Mortgage Loan and
either (A) the related  Mortgage  Loan is not in default with regard to payments
due  thereunder or (B)  delinquent  payments of principal and interest under the
related  Mortgage  Loan  and  any  premiums  on any  applicable  primary  hazard
insurance  policy and any related  escrow  payments in respect of such  Mortgage
Loan are being advanced on a current basis by the Servicer or a Subservicer,  in
either case without giving effect to any Debt Service Reduction.

        Book-Entry  Certificate:  Any Certificate  registered in the name of the
Depository or its nominee.

        Business Day: Any day other than (i) a Saturday or a Sunday,  (ii) a day
on which banking  institutions  in the State of New York or the  Commonwealth of
Pennsylvania  (and such other state or states in which the Custodial  Account or
the Payment  Account are at the time  located) are required or authorized by law
or executive order to be closed or (iii) as used (a) for purposes of determining
the  Distribution  Dates (pursuant to the definition  thereof) in August 2008 or
August  2010  or  (b) in the  Swap  Agreement  and  the  Auction  Administration
Agreement,  also a day on which banking institutions in London are authorized or
obligated by law or executive order to be closed.

        Buydown Account:  As defined in Section 3.21(a).

        Buydown  Funds:  Any amount  contributed  by the  seller of a  Mortgaged
Property, the Company or other source in order to enable the Mortgagor to reduce
the payments  required to be made from the Mortgagor's  funds in the early years
of a  Mortgage  Loan.  Buydown  Funds  are not part of the Trust  Fund  prior to
deposit into the Custodial or Payment Account.

        Buydown  Mortgage Loan: Any Mortgage Loan as to which a specified amount
of interest is paid out of related  Buydown Funds in  accordance  with a related
buydown agreement.

        Buydown Period:  As defined in Section 3.21(b).

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

        Certificate: Any Class A, Class X, Class M, Class B, Class SB or Class R
Certificate.

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

        Certificate  Principal Balance:  With respect to each Certificate (other
than any Interest Only  Certificate),  on any date of  determination,  an amount
equal to:

(i)            the Initial Certificate  Principal Balance of such Certificate as
               specified on the face thereof, minus

                                       9
<PAGE>

(ii)           the  sum  of  (x)  the   aggregate  of  all  amounts   previously
               distributed  with respect to such Certificate (or any predecessor
               Certificate)  and  applied  to reduce the  Certificate  Principal
               Balance thereof pursuant to Section 4.02 and (y) the aggregate of
               all  reductions in Certificate  Principal  Balance deemed to have
               occurred in connection with Realized Losses which were previously
               allocated to such  Certificate (or any  predecessor  Certificate)
               pursuant to Section 4.05;

provided,  however,  that the  Certificate  Principal  Balance  of the  Class of
Subordinate  Certificates  with the Lowest  Priority  at any given time shall be
calculated to equal the Percentage  Interest evidenced by such Certificate times
the excess,  if any, of (A) the then aggregate Stated  Principal  Balance of the
Mortgage Loans over (B) the then aggregate  Certificate Principal Balance of all
other Classes of Certificates then outstanding.

        Certificate Register and Certificate Registrar:  The register maintained
and the registrar appointed pursuant to Section 5.02.

        Certificateholder  or Holder:  The Person in whose name a Certificate is
registered  in the  Certificate  Register,  except that  neither a  Disqualified
Organization  nor a  Non-United  States  Person  shall be a holder  of a Class R
Certificate  for  purposes  hereof  and,  solely  for the  purpose of giving any
consent or direction pursuant to this Agreement,  any Certificate,  other than a
Class R Certificate,  registered in the name of the Company, the Servicer or any
Subservicer or any Affiliate  thereof shall be deemed not to be outstanding  and
the Percentage  Interest or Voting Rights  evidenced  thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
or Voting  Rights  necessary to effect any such  consent or  direction  has been
obtained.  All  references  herein to  "Holders" or  "Certificateholders"  shall
reflect the rights of Certificate  Owners as they may  indirectly  exercise such
rights through the  Depository  and  participating  members  thereof,  except as
otherwise  specified  herein;  provided,  however,  that  the  Trustee  shall be
required to  recognize as a "Holder" or  "Certificateholder"  only the Person in
whose name a Certificate is registered in the Certificate Register.

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

        Class A  Certificates:  Collectively,  the  Class  A-I-1,  Class  A-II-1
Certificates, Class A-II-2 Certificates, Class A-II-3 Certificates, Class A-II-4
Certificates,  Class A-III-1  Certificates,  Class A-III-2  Certificates,  Class
A-III-3 Certificates, Class A-III-4 Certificates, Class A-III-5 Certificates and
Class A-IV-1 Certificates.

        Class  A-I-1  Certificate:  Any  one of the  Class  A-I-1  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in the form  hereto as  Exhibit  A-1,  representing  an  interest
designated  as a  "regular  interest"  in REMIC  III for  purposes  of the REMIC
Provisions.

        Class  A-II  Auction  Certificates:   Collectively,   the  Class  A-II-1
Certificates,  Class A-II-2  Certificates,  Class A-II-3  Certificates and Class
A-II-4 Certificates.

        Class  A-II-1  Carryover  Shortfall  Amount:  With  respect to the Class
A-II-1  Certificates and any  Distribution  Date, the sum of (a) with respect to
any  Distribution  Date on which the related Group 2 Net WAC Cap Rate is used to
determine  the  Pass-Through  Rate of the Class A-II-1  Certificates,  an amount
equal to the excess, if any, of (1) the amount of Accrued  Certificate  Interest
for such Class that would have been produced had the Pass-Through  Rate for such
Class been  calculated  at a per annum rate equal to the related  Formula  Rate,
over (2)  Accrued  Certificate  Interest  for such  class  calculated  using the
related  Group 2 Net WAC Cap Rate,  (b) any  shortfalls  calculated  pursuant to

                                       10
<PAGE>

clause  (a) above  remaining  unpaid  from  prior  Distribution  Dates,  and (c)
one-month's interest on the amount in clause (b) (based on the number of days in
the related  Interest  Accrual  Period) at a per annum rate equal to the related
Formula Rate.

        Class  A-II-1  Certificate:  Any one of the Class  A-II-1  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in the form hereto as Exhibit A-1,  representing  (i) an interest
designated  as a  "regular  interest"  in REMIC  III for  purposes  of the REMIC
Provisions  and (ii) the right to receive  payments under the Class A-II-1 Hedge
Agreement.

        Class A-II-1 Hedge Agreement: The confirmation,  dated as of the Closing
Date,  between  the Trustee  and the Hedge  Counterparty,  relating to the Class
A-II-1  Certificates,  or  any  replacement,  substitute,  collateral  or  other
arrangement in lieu thereof.

        Class A-II-1 Hedge Payment:  For any Distribution Date, the payment,  if
any, due from the Hedge  Counterparty  under the Class A-II-1 Hedge Agreement in
respect of such Distribution Date.

        Class A-II-1 Monthly Strike Rate: With respect to each Distribution Date
specified below, the rate set forth next to such date in the table below:

                       MONTHLY STRIKE                           MONTHLY STRIKE
 DISTRIBUTION DATE          RATE            DISTRIBUTION DATE        RATE
December 2003             3.75156%          February 2006          3.87960%
January 2004              3.87874%          March 2006             4.31566%
February 2004             3.87877%          April 2006             3.87967%
March 2004                4.15941%          May 2006               4.01536%
April 2004                3.87884%          June 2006              3.87974%
May 2004                  4.01450%          July 2006              4.01544%
June 2004                 3.87890%          August 2006            3.87982%
July 2004                 4.01456%          September 2006         3.87986%
August 2004               3.87897%          October 2006           4.01556%
September 2004            3.87900%          November 2006          3.87993%
October 2004              4.01467%          December 2006          4.01564%
November 2004             3.87907%          January 2007           3.88001%
December 2004             4.01474%          February 2007          3.88005%
January 2005              3.87913%          March 2007             4.31617%
February 2005             3.87917%          April 2007             3.88013%
March 2005                4.31519%          May 2007               4.01584%
April 2005                3.87924%          June 2007              3.88021%
May 2005                  4.01492%          July 2007              4.01593%
June 2005                 3.87931%          August 2007            3.88029%
July 2005                 4.01499%          September 2007         3.88033%
August 2005               3.87938%          October 2007           4.01605%
September 2005            3.87941%          November 2007          3.88042%
October 2005              4.01510%          December 2007          4.01614%
November 2005             3.87949%          January 2008           3.88050%
December 2005             4.01517%          February 2008          3.88054%
January 2006              3.87956%          March 2008 and
                                               thereafter          0.00000%

                                       11
<PAGE>

        Class A-II-1 Yield Maintenance  Agreement Notional Balance: With respect
to each  Distribution  Date specified  below,  the lesser of (a) the Certificate
Principal  Balance of the Class A-II-1  Certificates  immediately  prior to such
Distribution Date and (b) the amount set forth next to such Distribution Date in
the table below:

 DISTRIBUTION DATE    NOTIONAL BALANCE      DISTRIBUTION DATE  NOTIONAL BALANCE
December 2003            $83,880,000        February 2006         $34,461,822
January 2004             $81,700,440        March 2006            $32,835,018
February 2004            $79,545,184        April 2006            $31,226,480
March 2004               $77,413,967        May 2006              $29,636,011
April 2004               $75,306,526        June 2006             $28,063,411
May 2004                 $73,222,602        July 2006             $26,508,485
June 2004                $71,161,938        August 2006           $24,971,041
July 2004                $69,124,281        September 2006        $23,450,886
August 2004              $67,109,380        October 2006          $21,947,833
September 2004           $65,116,986        November 2006         $20,461,692
October 2004             $63,146,853        December 2006         $18,992,280
November 2004            $61,198,739        January 2007          $17,539,413
December 2004            $59,272,403        February 2007         $16,102,910
January 2005             $57,367,608        March 2007            $14,682,591
February 2005            $55,484,118        April 2007            $13,278,281
March 2005               $53,621,700        May 2007              $11,889,802
April 2005               $51,780,125        June 2007             $10,516,983
May 2005                 $49,959,165        July 2007            $  9,159,651
June 2005                $48,158,594        August 2007          $  7,817,636
July 2005                $46,378,190        September 2007       $  6,490,771
August 2005              $44,617,733        October 2007         $  5,178,890
September 2005           $42,877,004        November 2007        $  3,881,829
October 2005             $41,155,788        December 2007        $  2,599,424
November 2005            $39,453,872        January 2008         $  1,331,516
December 2005            $37,771,044        February 2008      $       77,946
January 2006             $36,107,097        March 2008 and     $
                                               thereafter                   0

 Class A-II-1 Yield Maintenance  Amount: With respect to the Class A-II-1
Certificates  and any Distribution  Date on or before the  Distribution  Date in
February  2008,  an amount  equal to the product of (a) the Class  A-II-1  Yield
Maintenance  Agreement  Notional  Balance for such  Distribution  Date,  (b) the
positive excess, if any, of (i) the lesser of (A) LIBOR and (B) 9.81%, over (ii)
the Class A-II-1 Monthly Strike Rate and (c) a fraction,  the numerator of which
is the actual  number of days in the  related  Interest  Accrual  Period and the
denominator of which is 360.

        Class  A-II-2  Certificate:  Any one of the Class  A-II-2  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

        Class  A-II-3  Certificate:  Any one of the Class  A-II-3  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

        Class  A-II-4  Certificate:  Any one of the Class  A-II-4  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

                                       12
<PAGE>

        Class  A-III  Auction  Certificates:  Collectively,  the  Class  A-III-1
Certificates,  Class A-III-2  Certificates,  Class A-III-3  Certificates,  Class
A-III-4 Certificates and Class A-III-5 Certificates.

        Class  A-III-1  Carryover  Shortfall  Amount:  With respect to the Class
A-III-1  Certificates and any Distribution  Date, the sum of (a) with respect to
any  Distribution  Date on which the related Group 3 Net WAC Cap Rate is used to
determine the  Pass-Through  Rate of the Class A-III-1  Certificates,  an amount
equal to the excess, if any, of (1) the amount of Accrued  Certificate  Interest
for such Class that would have been produced had the Pass-Through  Rate for such
Class been  calculated  at a per annum rate equal to the related  Formula  Rate,
over (2)  Accrued  Certificate  Interest  for such  class  calculated  using the
related  Group 3 Net WAC Cap Rate,  (b) any  shortfalls  calculated  pursuant to
clause  (a) above  remaining  unpaid  from  prior  Distribution  Dates,  and (c)
one-month's interest on the amount in clause (b) (based on the number of days in
the related  Interest  Accrual  Period) at a per annum rate equal to the related
Formula Rate.

        Class A-III-1  Certificate:  Any one of the Class A-III-1  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in the form hereto as Exhibit A-1,  representing  (i) an interest
designated  as a  "regular  interest"  in REMIC  III for  purposes  of the REMIC
Provisions and (ii) the right to receive  payments under the Class A-III-1 Hedge
Agreement.

        Class A-III-1 Hedge Agreement: The confirmation, dated as of the Closing
Date,  between  the Trustee  and the Hedge  Counterparty,  relating to the Class
A-III-1  Certificates,  or any  replacement,  substitute,  collateral  or  other
arrangement in lieu thereof.

        Class A-III-1 Hedge Payment:  For any Distribution Date, the payment, if
any, due from the Hedge  Counterparty under the Class A-III-1 Hedge Agreement in
respect of such Distribution Date.

                                       13
<PAGE>

        Class A-III-1  Monthly  Strike Rate:  With respect to each  Distribution
Date specified below, the rate set forth next to such date in the table below:

                       MONTHLY STRIKE                           MONTHLY STRIKE
 DISTRIBUTION DATE          RATE            DISTRIBUTION DATE        RATE
December 2003             3.92352%          February 2006          4.05654%
January 2004              4.05654%          March 2006             4.51259%
February 2004             4.05654%          April 2006             4.05654%
March 2004                4.35009%          May 2006               4.19842%
April 2004                4.05654%          June 2006              4.05654%
May 2004                  4.19842%          July 2006              4.19842%
June 2004                 4.05654%          August 2006            4.05654%
July 2004                 4.19842%          September 2006         4.05654%
August 2004               4.05654%          October 2006           4.19842%
September 2004            4.05654%          November 2006          4.05654%
October 2004              4.19842%          December 2006          4.19842%
November 2004             4.05654%          January 2007           4.05654%
December 2004             4.19842%          February 2007          4.05654%
January 2005              4.05654%          March 2007             4.51259%
February 2005             4.05654%          April 2007             4.05654%
March 2005                4.51259%          May 2007               4.19842%
April 2005                4.05654%          June 2007              4.05654%
May 2005                  4.19842%          July 2007              4.19842%
June 2005                 4.05654%          August 2007            4.05654%
July 2005                 4.19842%          September 2007         4.05654%
August 2005               4.05654%          October 2007           4.19842%
September 2005            4.05654%          November 2007          4.05654%
October 2005              4.19842%          December 2007          4.19842%
November 2005             4.05654%          January 2008           4.05654%
December 2005             4.19842%          February 2008
                                                and
January 2006              4.05654%              thereafter         0.00000%

                                       14
<PAGE>

        Class A-III-1 Yield Maintenance Agreement Notional Balance: With respect
to each  Distribution  Date specified  below,  the lesser of (a) the Certificate
Principal  Balance of the Class A-III-1  Certificates  immediately prior to such
Distribution Date and (b) the amount set forth next to such Distribution Date in
the table below:

 DISTRIBUTION DATE    NOTIONAL BALANCE      DISTRIBUTION DATE  NOTIONAL BALANCE
December 2003            $73,970,000        February 2006         $29,805,218
January 2004             $72,017,104        March 2006            $28,356,083
February 2004            $70,086,383        April 2006            $26,923,573
March 2004               $68,177,592        May 2006              $25,507,504
April 2004               $66,290,492        June 2006             $24,107,695
May 2004                 $64,424,843        July 2006             $22,723,965
June 2004                $62,580,409        August 2006           $21,356,138
July 2004                $60,756,956        September 2006        $20,004,038
August 2004              $58,954,255        October 2006          $18,667,490
September 2004           $57,172,076        November 2006         $17,346,323
October 2004             $55,410,193        December 2006         $16,040,367
November 2004            $53,668,383        January 2007          $14,749,454
December 2004            $51,946,424        February 2007         $13,473,417
January 2005             $50,244,099        March 2007            $12,212,092
February 2005            $48,561,191        April 2007            $10,965,316
March 2005               $46,897,486        May 2007             $  9,732,928
April 2005               $45,252,772        June 2007            $  8,514,770
May 2005                 $43,626,840        July 2007            $  7,310,683
June 2005                $42,019,484        August 2007          $  6,120,512
July 2005                $40,430,497        September 2007       $  4,944,103
August 2005              $38,859,678        October 2007         $  3,781,303
September 2005           $37,306,827        November 2007        $  2,631,962
October 2005             $35,771,744        December 2007        $  1,495,930
November 2005            $34,254,235        January 2008        $     373,061
December 2005            $32,754,105        February 2008 and
January 2006             $31,271,162            thereafter     $            0

        Class  A-III-1  Yield  Maintenance  Amount:  With  respect  to the Class
A-III-1  Certificates  and any  Distribution  Date on or before the Distribution
Date in January  2008,  an amount equal to the product of (a) the Class  A-III-1
Yield Maintenance Agreement Notional Balance for such Distribution Date, (b) the
positive excess, if any, of (i) the lesser of (A) LIBOR and (B) 9.80%, over (ii)
the Class A-III-1 Monthly Strike Rate and (c) a fraction, the numerator of which
is the actual  number of days in the  related  Interest  Accrual  Period and the
denominator of which is 360.

        Class A-III-2  Certificate:  Any one of the Class A-III-2  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

        Class A-III-3  Certificate:  Any one of the Class A-III-3  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

        Class A-III-4  Certificate:  Any one of the Class A-III-4  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

                                       15
<PAGE>

        Class A-III-5  Certificate:  Any one of the Class A-III-5  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

        Class  A-IV-1  Certificate:  Any one of the Class  A-IV-1  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-1,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

        Class B Certificate:  Any one of the Certificates  designated as a Class
B-1 Certificate, Class B-2 Certificate or Class B-3 Certificate, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit C.

        Class M Certificate:  Any one of the Certificates  designated as a Class
M-1 Certificate, Class M-2 Certificate or Class M-3 Certificate, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit B.

        Class Principal  Balance:  For any Class of REMIC I Regular Interests or
REMIC II Regular  Interests,  the  applicable  initial Class  Principal  Balance
therefor set forth in the Preliminary  Statement  hereto,  corresponding  to the
rights of such Class in payments of principal  due to be passed  through to such
Class  from  principal  payments  on the  Mortgage  Loans or the REMIC I Regular
Interests,  as applicable,  as reduced from time to time by (x) distributions of
principal to such Class and (y) the portion of Realized Losses  allocated to the
Class  Principal  Balance of such Class  pursuant to the definition of "Realized
Loss" with respect to a given  Distribution Date. For any Distribution Date, the
reduction  of the Class  Principal  Balance  of any  REMIC I  Regular  Interests
pursuant to the definition of "Realized Loss" shall be deemed  effective  before
the  determination  and  distribution of principal on such Class pursuant to the
definition  of "REMIC I  Distribution  Amount"  and the  reduction  of the Class
Principal Balance of any REMIC II Regular  Interests  pursuant to the definition
of  "Realized  Loss"  shall be  deemed  effective  after the  determination  and
distribution  of principal on such Class pursuant to the definition of "REMIC II
Distribution Amount."

        Notwithstanding  the  foregoing,  any amounts  distributed in respect of
principal  losses  pursuant to paragraph  (e)(i) of the  definition  of "REMIC I
Distribution Amount" shall not cause a reduction in the Class Principal Balances
of the REMIC I or REMIC II Regular Interests.

        Class R Certificate: Any one of the Class R Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit D and evidencing  ownership of interests designated as
"residual  interests"  in REMIC I,  REMIC II and REMIC III for  purposes  of the
REMIC  Provisions.  Component I of the Class R Certificate  is designated as the
sole  class of  "residual  interest"  in REMIC I,  Component  II of the  Class R
Certificate  is designated as the sole class of "residual  interest" in REMIC II
and Component III of the Class R Certificate  is designated as the sole class of
"residual interest" in REMIC III.

        Class SB Certificate: Any one of the Class SB Certificates,  executed by
the Trustee and authenticated by the Certificate Registrar  substantially in the
form hereto as Exhibit  A-3,  each such  Certificate  representing  the right to
receive payments under the Hedge Agreements.

                                       16
<PAGE>

        Class X Certificates:  Collectively, the Class X-II Certificates and the
Class X-III Certificates.

        Class X-II Certificate: Any one of the Class X-II Certificates, executed
by the Trustee and authenticated by the Certificate  Registrar  substantially in
the form hereto as Exhibit A-2, each such  Certificate  representing an interest
designated  as a  "regular  interest"  in REMIC  III for  purposes  of the REMIC
Provisions.

        Class  X-III  Certificate:  Any  one of the  Class  X-III  Certificates,
executed  by  the  Trustee  and  authenticated  by  the  Certificate   Registrar
substantially  in  the  form  hereto  as  Exhibit  A-2,  each  such  Certificate
representing  an interest  designated  as a "regular  interest" in REMIC III for
purposes of the REMIC Provisions.

        Class Y Principal  Reduction  Amounts:  For any  Distribution  Date, the
amounts by which the Class Principal  Balances of the Class Y Regular  Interests
will be reduced on such  Distribution  Date by the allocation of Realized Losses
and the distribution of principal, determined as described in Appendix 1.

        Class Y Regular Interests: The Class Y-1, Class Y-2, Class Y-3 and Class
Y-4 Regular Interests.

        Class Y-1 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Y-1 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Y-1 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Group 1 Loans for such Distribution Date not included in the Class Z-1 Principal
Distribution  Amount  pursuant to clause (B) of the definition  thereof and (ii)
the amount of Realized  Losses  allocated  to the Class Y-1 Regular  Interest on
previous  Distribution  Dates (the amount in this clause (B)(ii)  reduced by the
amount, if any,  calculated  pursuant to this clause (B) for prior  Distribution
Dates).

        Class Y-1 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

        Class Y-2 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Y-2 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Y-2 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
the  Group 2 Loans  for such  Distribution  Date not  included  in the Class Z-2
Principal  Distribution  Amount pursuant to clause (B) of the definition thereof
and (ii) the  amount of  Realized  Losses  allocated  to the  Class Y-2  Regular
Interest on  previous  Distribution  Dates (the  amount in this  clause  (B)(ii)
reduced by the amount, if any,  calculated pursuant to this clause (B) for prior
Distribution Dates).

        Class Y-2 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

        Class Y-3 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Y-3 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Y-3 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Group 3 Loans for such Distribution Date not included in the Class Z-3 Principal
Distribution  Amount  pursuant to clause (B) of the definition  thereof and (ii)
the amount of Realized  Losses  allocated  to the Class Y-3 Regular  Interest on
previous  Distribution  Dates (the amount in this clause (B)(ii)  reduced by the
amount, if any,  calculated  pursuant to this clause (B) for prior  Distribution
Dates).

                                       17
<PAGE>

        Class Y-3 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

        Class Y-4 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Y-4 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Y-4 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Group 4 Loans for such Distribution Date not included in the Class Z-4 Principal
Distribution  Amount  pursuant to clause (B) of the definition  thereof and (ii)
the amount of Realized  Losses  allocated  to the Class Y-4 Regular  Interest on
previous  Distribution  Dates (the amount in this clause (B)(ii)  reduced by the
amount, if any,  calculated  pursuant to this clause (B) for prior  Distribution
Dates).

        Class Y-4 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

        Class Z Principal  Reduction  Amounts:  For any  Distribution  Date, the
amounts by which the Class Principal  Balances of the Class Z Regular  Interests
will be reduced on such  Distribution  Date by the allocation of Realized Losses
and the distribution of principal, which shall be in each case the excess of (A)
the sum of (x) the excess of the REMIC I Available  Distribution  Amount for the
related Group (i.e.  the "related  Group" for the Class Z-1 Regular  Interest is
the Group 1 Loans, the "related Group" for the Class Z-2 Regular Interest is the
Group 2 Loans,  the  "related  Group" for the Class Z-3 Regular  Interest is the
Group 3 Loans and the "related Group" for the Class Z-4 Regular  Interest is the
Group 4 Loans) over the sum of the amounts thereof  distributable (i) in respect
of interest  on such Class Z Regular  Interest  and the related  Class Y Regular
Interest,  (ii) to such Class Z Regular Interest and the related Class Y Regular
Interest  pursuant to clause  (c)(ii) of the definition of "REMIC I Distribution
Amount"  and (iii) in the case of the Group 1 Loans,  to the Class R-1  Residual
Interest and (y) the amount of Realized  Losses  allocable to principal  for the
related  Group over (B) the Class Y Principal  Reduction  Amount for the related
Group.

        Class Z Regular Interests: The Class Z-1, Class Z-2, Class Z-3 and Class
Z-4 Regular Interests.

        Class Z-1 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Z-1 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Z-1 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the  Subsequent  Recoveries for the Group 1 Loans for
such  Distribution  Date and (ii) the amount of Realized Losses allocated to the
Class Z-1 Regular  Interest on previous  Distribution  Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).

        Class Z-1 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

        Class Z-2 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Z-2 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Z-2 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the  Subsequent  Recoveries for the Group 2 Loans for
such  Distribution  Date and (ii) the amount of Realized Losses allocated to the
Class Z-2 Regular  Interest on previous  Distribution  Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).

        Class Z-2 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

                                       18
<PAGE>

        Class Z-3 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Z-3 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Z-3 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the  Subsequent  Recoveries for the Group 3 Loans for
such  Distribution  Date and (ii) the amount of Realized Losses allocated to the
Class Z-3 Regular  Interest on previous  Distribution  Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).

        Class Z-3 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

        Class Z-4 Principal  Distribution Amount: For any Distribution Date, the
sum of (A) the excess,  if any, of the Class Z-4 Principal  Reduction Amount for
such  Distribution  Date over the principal portion of Realized Losses allocated
to the Class Z-4 Regular  Interest on such  Distribution  Date and (B) an amount
equal to the lesser of (i) the  Subsequent  Recoveries for the Group 4 Loans for
such  Distribution  Date and (ii) the amount of Realized Losses allocated to the
Class Z-4 Regular  Interest on previous  Distribution  Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).

        Class Z-4 Regular  Interest:  The  uncertificated  undivided  beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.

        Closing Date:  November 17, 2003.

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

        Compensating Interest:  With respect to any Distribution Date, an amount
(but not in excess of the  Servicing  Fee for such  Distribution  Date) equal to
Prepayment  Interest  Shortfalls  resulting from  Principal  Prepayments in Full
during the period from the 16th day  through the last day of the prior  calendar
month and resulting from Curtailments during the prior calendar month.

        Cooperative:  A private,  cooperative  housing corporation which owns or
leases land and all or part of a building or  buildings,  including  apartments,
spaces used for commercial  purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.

        Cooperative  Apartment:  A dwelling  unit in a  multi-dwelling  building
owned or leased by a  Cooperative,  which unit the  Mortgagor  has an  exclusive
right to  occupy  pursuant  to the  terms of a  proprietary  lease or  occupancy
agreement.

        Cooperative  Lease:  With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative  Apartment occupied
by the Mortgagor and relating to the related  Cooperative  Stock, which lease or
agreement  confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.

        Cooperative  Loans:  Any of the  Mortgage  Loans  made in  respect  of a
Cooperative  Apartment,  evidenced  by a  Mortgage  Note  and  secured  by (i) a
Security  Agreement,  (ii) the related  Cooperative Stock Certificate,  (iii) an
assignment of the Cooperative  Lease, (iv) financing  statements and (v) a stock
power (or other  similar  instrument),  and  ancillary  thereto,  a  recognition
agreement  between the Cooperative  and the originator of the Cooperative  Loan,
each of which was  transferred  and assigned to the Trustee  pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.

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<PAGE>

        Cooperative  Stock:  With  respect  to a  Cooperative  Loan,  the single
outstanding class of stock,  partnership  interest or other ownership instrument
in the related Cooperative.

        Cooperative Stock  Certificate:  With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.

        Corporate Trust Office:  The principal office of the Trustee at which at
any particular  time its corporate trust business with respect to this Agreement
shall  be  administered,  which  office  at the  date of the  execution  of this
instrument is located at 1 Bank One Plaza,  Suite  IL1-0481,  Chicago,  Illinois
60670-0481,    Attention:   Corporate   Trust,   GMACM   Mortgage   Pass-Through
Certificates, Series 2003-AR2.

        Credit Support Depletion Date: The first  Distribution Date on which the
Certificate Principal Balances of the Subordinate Certificates have been reduced
to zero.

     Curtailment:  Any Principal  Prepayment  made by a Mortgagor which is not a
Principal Prepayment in Full.

        Custodial  Account:  The  custodial  account  or  accounts  created  and
maintained pursuant to Section 3.07, into which the amounts set forth in Section
3.07 shall be deposited directly.

        Custodial  Agreement:  An  agreement  that may be entered into among the
Servicer,  the Trustee and a Custodian pursuant to which the Custodian will hold
certain documents relating to the Mortgage Loans on behalf of the Trustee.

        Custodian:  A custodian appointed pursuant to a Custodial Agreement.

        Cut-off Date:  November 1, 2003.

        Cut-off Date  Principal  Balance:  As to any Mortgage  Loan,  the unpaid
principal  balance  thereof  at the  Cut-off  Date  after  giving  effect to all
installments of principal due on or prior thereto, whether or not received.

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

        Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding  indebtedness  under the Mortgage Loan, or any reduction in
the amount of  principal to be paid in  connection  with any  scheduled  Monthly
Payment that constitutes a permanent  forgiveness of principal,  which valuation
or reduction results from a proceeding under the Bankruptcy Code.

     Definitive   Certificate:   Any   Certificate   other  than  a   Book-Entry
Certificate.

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

        Delinquent:  As used herein, a Mortgage Loan is considered to be: "30 to
59 days" or "30 or more days" delinquent when a payment due on any scheduled due
date  remains  unpaid  as of the  close of  business  on the last  business  day
immediately  prior to the next following  monthly  scheduled due date; "60 to 89
days" or "60 or more days"  delinquent  when a payment due on any  scheduled due
date  remains  unpaid  as of the  close of  business  on the last  business  day

                                       20
<PAGE>

immediately prior to the second following monthly scheduled due date; and so on.
The  determination  as to whether a Mortgage Loan falls into these categories is
made as of the close of business  on the last  business  day of each month.  For
example, a Mortgage Loan with a payment due on July 1 that remained unpaid as of
the close of  business on July 31 would then be  considered  to be 30 to 59 days
delinquent.  Delinquency  information  as of the Cut-off Date is determined  and
prepared as of the close of business on the last business day immediately  prior
to the Cut-off Date.

        Depository:  The Depository Trust Company,  or any successor  Depository
hereafter  named.  The  nominee  of  the  initial  Depository  for  purposes  of
registering those Certificates that are to be Book-Entry  Certificates is Cede &
Co. The Depository shall at all times be a "clearing  corporation" as defined in
Section  8-102(a)(5) of the Uniform Commercial Code of the State of New York and
a "clearing agency" registered  pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.

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

        Determination  Date: With respect to any Distribution Date, the 15th day
(or if such  15th  day is not a  Business  Day,  the  Business  Day  immediately
following such 15th day) of the month of the related Distribution Date.

        Disqualified  Organization:  Any organization defined as a "disqualified
organization"  under  Section  860E(e)(5)  of the  Code,  and  if not  otherwise
included,  any of the following:  (i) the United States,  any State or political
subdivision  thereof,  any  possession  of the United  States,  or any agency or
instrumentality of any of the foregoing (other than an instrumentality  which is
a  corporation  if all of its  activities  are  subject  to tax and,  except for
Freddie  Mac, a  majority  of its board of  directors  is not  selected  by such
governmental unit), (ii) a foreign government,  any international  organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives  described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated  business taxable income),  (iv)
rural electric and telephone  cooperatives described in Section 1381(a)(2)(C) of
the Code, (v) any "electing large  partnership," as defined in Section 775(a) of
the Code and (vi) any other Person so  designated  by the Trustee  based upon an
Opinion  of  Counsel  that the  holding of an  Ownership  Interest  in a Class R
Certificate  by such  Person may cause the Trust  Fund or any  Person  having an
Ownership  Interest in any Class of  Certificates  (other  than such  Person) to
incur a liability  for any  federal  tax  imposed  under the Code that would not
otherwise be imposed but for the Transfer of an Ownership  Interest in a Class R
Certificate   to  such  Person.   The  terms   "United   States",   "State"  and
"international  organization"  shall have the meanings set forth in Section 7701
of the Code or successor provisions.

        Distribution  Date:  The 19th day of any  month  beginning  in the month
immediately  following the month of the initial issuance of the Certificates or,
if such 19th day is not a Business Day, the Business Day  immediately  following
such 19th day.

        Due Date: With respect to any  Distribution  Date and any Mortgage Loan,
the day during the related Due Period on which the Monthly Payment is due.

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

                                       21
<PAGE>

        Eligible  Account:  An  account  that  is  any  of  the  following:  (i)
maintained with a federal or state chartered depository institution the accounts
of which are insured by the FDIC (to the limits established by the FDIC) and the
short-term debt ratings and the long-term  deposit ratings of which are rated in
one of the two highest rating categories by the Rating Agencies, or (ii) a trust
account or  accounts  maintained  with a federal or state  chartered  depository
institution or trust company with trust powers acting in its fiduciary  capacity
subject to regulations  regarding fiduciary funds on deposit similar to Title 12
of the Code of Federal Regulation  Section 9.10(b),  or (iii) in the case of the
Payment Account,  a trust account or accounts  maintained in the corporate trust
division  of the  Trustee,  or (iv)  an  account  or  accounts  of a  depository
institution  acceptable  to each Rating  Agency (as evidenced in writing by each
Rating  Agency  that use of any such  account  as the  Custodial  Account or the
Payment Account will not reduce the rating assigned to any Class of Certificates
by such Rating Agency below the lower of the  then-current  rating or the rating
assigned to such Certificates as of the Closing Date by such Rating Agency).

        Eligible Funds: On any  Distribution  Date and with respect to each Loan
Group, the portion,  if any, of the Available  Distribution Amount for such Loan
Group  remaining  after  reduction  by the sum of (i) the  aggregate  amount  of
Accrued  Certificate  Interest  on the  related  Senior  Certificates,  (ii) the
related  Senior  Principal  Distribution  Amount  (determined  without regard to
Section   4.02(a)(ii)(D)   hereof),   (iii)  the  aggregate  amount  of  Accrued
Certificate  Interest  on the Class M, Class B-1 Class B-2  Certificates  to the
extent such Accrued  Certificate  Interest is derived from such Loan Group,  and
(iv) the  portion  of the  payment to the  Trustee  for any  servicing  transfer
expenses  reimbursable to the Trustees  pursuant to Section 7.02(a) allocated to
such Loan  Group,  with such  allocation  being made to each Loan Group pro rata
based on the Stated Principal Balance of the Mortgage Loans in each Loan Group.

        Event of Default:  As defined in Section 7.01.

     Excess  Bankruptcy  Loss: Any Bankruptcy  Loss, or portion  thereof,  which
exceeds the then applicable Bankruptcy Amount.

     Excess Fraud Loss:  Any Fraud Loss, or portion  thereof,  which exceeds the
then applicable Fraud Loss Amount.

     Excess Special  Hazard Loss:  Any Special Hazard Loss, or portion  thereof,
that exceeds the then applicable Special Hazard Amount.

        Excess  Subordinate  Principal Amount:  With respect to any Distribution
Date on which  the  aggregate  Certificate  Principal  Balance  of the  Class of
Subordinate  Certificates  then  outstanding  with the Lowest  Priority is to be
reduced to zero and on which  Realized  Losses are to be allocated to such class
or classes,  the  excess,  if any,  of (i) the amount  that would  otherwise  be
distributable  in respect of principal on such class or classes of  Certificates
on such  Distribution  Date  over  (ii) the  excess,  if any,  of the  aggregate
Certificate   Principal  Balance  of  such  class  or  classes  of  Certificates
immediately  prior to such  Distribution  Date  over  the  aggregate  amount  of
Realized  Losses  to be  allocated  to  such  classes  of  Certificates  on such
Distribution  Date. The Excess  Subordinate  Principal  Amount will be allocated
between  each Loan  Group on a pro rata basis in  accordance  with the amount of
Realized Losses  attributable to each Loan Group and the amount allocated to the
Certificates on such Distribution Date.

        Extraordinary  Events: Any of the following conditions with respect to a
Mortgaged  Property  (or, with respect to a Cooperative  Loan,  the  Cooperative
Apartment)  or Mortgage  Loan  causing or  resulting  in a loss which causes the
liquidation of such Mortgage Loan:

                                       22
<PAGE>

               (a)  losses  that are of the type that  would be  covered  by the
        fidelity bond and the errors and omissions  insurance policy required to
        be  maintained  pursuant  to  Section  3.12(b)  but are in excess of the
        coverage maintained thereunder;

               (b)  nuclear   reaction  or  nuclear   radiation  or  radioactive
        contamination,  all whether controlled or uncontrolled, and whether such
        loss be direct  or  indirect,  proximate  or remote or be in whole or in
        part caused by,  contributed  to or aggravated by a peril covered by the
        definition of the term "Special Hazard Loss";

               (c) hostile or warlike action in time of peace or war,  including
        action in hindering, combating or defending against an actual, impending
        or expected attack:

                      1.     by any government or sovereign power, de jure or de
                             facto,  or by any  authority  maintaining  or using
                             military, naval or air forces; or

                      2. by military, naval or air forces; or

                      3. by an agent of any such government, power, authority or
forces;

               (d) any weapon of war  employing  atomic  fission or  radioactive
        force whether in time of peace or war; or

               (e) insurrection, rebellion, revolution, civil war, usurped power
        or action taken by  governmental  authority in  hindering,  combating or
        defending  against  such an  occurrence,  seizure or  destruction  under
        quarantine  or  customs  regulations,   confiscation  by  order  of  any
        government  or  public  authority;  or risks of  contraband  or  illegal
        transportation or trade.

     Extraordinary  Losses:  Any loss  incurred on a Mortgage  Loan caused by or
resulting from an Extraordinary Event.

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

        FASIT: A "financial asset  securitization  investment  trust" within the
meaning of Section 860L of the Code.

        FDIC:  Federal Deposit Insurance Corporation or any successor thereto.

        Final  Distribution  Date:  The  Distribution  Date on which  the  final
distribution  in respect of the  Certificates  will be made  pursuant to Section
9.01, which Final  Distribution  Date shall in no event be later than the end of
the 90-day liquidation period described in Section 9.02.

        Fitch:  Fitch Ratings or its successor in interest.

        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 REO Proceeds (net of all amounts  reimbursable
therefrom  pursuant to Section  3.10(a)(ii)) 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 3.14) plus accrued and unpaid  interest at the Mortgage

                                       23
<PAGE>

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.

        Formula Rate:  A per annum rate equal to:

o    with respect to the Class A-II-1 Certificates, the lesser of (i) LIBOR plus
     0.19% and (ii) 10.00%;

o       with respect to the Class A-II-2 Certificates, 3.765%;

o       with respect to the Class A-II-3 Certificates, 4.175%;

o       with respect to the Class A-II-4 Certificates, 4.115%;

o    with  respect to the Class  A-III-1  Certificates,  the lesser of (i) LIBOR
     plus 0.20% and (ii) 10.00%;

o       with respect to the Class A-III-2 Certificates, 3.865%;

o       with respect to the Class A-III-3 Certificates, 4.240%;

o       with respect to the Class A-III-4 Certificates, 4.397%; and

o       with respect to the Class A-III-5 Certificates, 4.397%.

        Fraud Loss  Amount:  As of any date of  determination  after the Cut-off
Date,  an amount  equal to: (X) prior to the second  anniversary  of the Cut-off
Date an amount equal to 1.00% of the aggregate  outstanding principal balance of
all of the Mortgage  Loans as of the Cut-off Date minus the aggregate  amount of
Fraud Losses allocated solely to one or more specific Classes of Certificates in
accordance  with  Section  4.05  since  the  Cut-off  Date  up to  such  date of
determination  and (Y) from the second to the fifth  anniversary  of the Cut-off
Date,  an amount  equal to (1) the lesser of (a) the Fraud Loss Amount as of the
most  recent  anniversary  of the  Cut-off  Date and (b) 0.50% of the  aggregate
outstanding principal balance of all of the Mortgage Loans as of the most recent
anniversary  of the Cut-off Date minus (2) the aggregate  amount of Fraud Losses
allocated  solely to one or more specific  Classes of Certificates in accordance
with  Section 4.05 since the most recent  anniversary  of the Cut-off Date up to
such date of  determination.  On and after the fifth  anniversary of the Cut-off
Date, the Fraud Loss Amount shall be zero.

        The Fraud Loss Amount may be further reduced by the Servicer  (including
accelerating  the manner in which such coverage is reduced)  provided that prior
to any such reduction,  the Servicer shall (i) obtain written  confirmation from
each Rating Agency that such reduction  shall not reduce the rating  assigned to
any  Class  of  Certificates  by such  Rating  Agency  below  the  lower  of the
then-current  rating  or the  rating  assigned  to such  Certificates  as of the
Closing  Date by such  Rating  Agency  and (ii)  provide a copy of such  written
confirmation to the Trustee.

        Fraud  Losses:  Losses on Mortgage  Loans as to which there was fraud in
the origination of such Mortgage Loan.

        Freddie Mac: Federal Home Loan Mortgage  Corporation,  or Freddie Mac, a
corporate  instrumentality of the United States created and existing under Title
III of the  Emergency  Home Finance Act of 1970,  as amended,  or any  successor
thereto.

                                       24
<PAGE>

        GCD:  Greenwich Capital Derivatives, Inc.

     GMACM:  GMAC  Mortgage  Corporation,  a  Pennsylvania  corporation,  in its
capacity  as seller of the  Mortgage  Loans to the  Company,  and any  successor
thereto.

        Group 1 Loans:  The Mortgage Loans designated in Exhibit E-1.

        Group 1 Net WAC Cap Rate: With respect to any  Distribution  Date, a per
annum  rate equal to the  weighted  average of the Net  Mortgage  Rates (or,  if
applicable,  the Modified Net Mortgage Rates) on the Group 1 Loans using the Net
Mortgage  Rates in effect for the Monthly  Payments due on such  Mortgage  Loans
during the related Due Period,  weighted on the basis of the  respective  Stated
Principal Balances immediately prior to such Distribution Date.

        Group 1 Senior  Percentage:  As of any Distribution  Date, the lesser of
(x) 100% and (y) a fraction,  expressed as a percentage,  the numerator of which
is the aggregate  Certificate  Principal Balance of the Class A-I-1 Certificates
immediately  prior to such Distribution Date and the denominator of which is the
aggregate Stated  Principal  Balance of all of the Group 1 Loans (or related REO
Properties) immediately prior to such Distribution Date; provided, however, that
on any Distribution Date on which the aggregate Certificate Principal Balance of
the  Class  A-IV-1  Certificates,  the  Group 2  Certificates  and  the  Group 3
Certificates has been reduced to zero, the Group 1 Senior  Percentage will equal
the  lesser  of  (x)  the  Certificate  Principal  Balance  of the  Class  A-I-1
Certificates  immediately  prior  to  that  Distribution  Date  divided  by  the
aggregate Stated Principal Balance of all of the Mortgage Loans in all four Loan
Groups immediately prior to that Distribution Date and (y) 100%.

        Group 1 Senior  Principal  Distribution  Amount:  As to any Distribution
Date,  the lesser of (a) the balance of the  Available  Distribution  Amount for
Loan Group 1 remaining  after the  distribution  of all  amounts  required to be
distributed therefrom pursuant to Section 4.02(a)(i)(I),  and (b) the sum of the
amounts  required  to be  distributed  therefrom  to the  holders of the Group 1
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.

     Group 2 Certificates: Collectively, the Class A-II Auction Certificates and
the Class X-II Certificates.

        Group 2 Loans:  The Mortgage Loans designated in Exhibit E-2.

        Group 2 Net WAC Cap Rate: With respect to any  Distribution  Date, a per
annum  rate equal to the  weighted  average of the Net  Mortgage  Rates (or,  if
applicable,  the Modified Net Mortgage Rates) on the Group 2 Loans using the Net
Mortgage  Rates in effect for the Monthly  Payments due on such  Mortgage  Loans
during the related Due Period,  weighted on the basis of the  respective  Stated
Principal  Balances thereof  immediately prior to such Distribution Date (and in
the  case of the  Class  A-II-1  Certificates,  multiplied  by a  fraction,  the
numerator of which is equal to 30 and the  denominator  of which is equal to the
actual number of days in the related Interest Accrual Period).

        Group 2 Senior  Percentage:  As of any Distribution  Date, the lesser of
(x) 100% and (y) a fraction,  expressed as a percentage,  the numerator of which
is the  aggregate  Certificate  Principal  Balance  of the  Class  A-II  Auction
Certificates  immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal  Balance of all of the Group 2 Loans (or
related REO Properties)  immediately prior to such Distribution Date;  provided,
however,  that on any  Distribution  Date on  which  the  aggregate  Certificate
Principal Balance of the Class A-I-1 Certificates,  the Group 3 Certificates and
the Class  A-IV-1  Certificates  has been  reduced  to zero,  the Group 2 Senior
Percentage  will equal the  lesser of (x) the  aggregate  Certificate  Principal

                                       25
<PAGE>

Balance  of the  Class  A-II  Auction  Certificates  immediately  prior  to that
Distribution  Date divided by the aggregate Stated  Principal  Balance of all of
the  Mortgage  Loans  in  all  four  Loan  Groups   immediately  prior  to  that
Distribution Date and (y) 100%.

        Group 2 Senior  Principal  Distribution  Amount:  As to any Distribution
Date,  the lesser of (a) the balance of the  Available  Distribution  Amount for
Loan Group 2 remaining  after the  distribution  of all  amounts  required to be
distributed therefrom pursuant to Section 4.02(a)(i)(II), and (b) the sum of the
amounts  required  to be  distributed  therefrom  to the  holders of the Group 2
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.

     Group 3 Certificates:  Collectively,  the Class A-III Auction  Certificates
and the Class X-III Certificates.

        Group 3 Loans:  The Mortgage Loans designated in Exhibit E-3.

        Group 3 Net WAC Cap Rate: With respect to any  Distribution  Date, a per
annum  rate equal to the  weighted  average of the Net  Mortgage  Rates (or,  if
applicable,  the Modified Net Mortgage Rates) on the Group 3 Loans using the Net
Mortgage  Rates in effect for the Monthly  Payments due on such  Mortgage  Loans
during the related Due Period,  weighted on the basis of the  respective  Stated
Principal  Balances thereof  immediately prior to such Distribution Date (and in
the case of the  Class  A-III-1  Certificates,  multiplied  by a  fraction,  the
numerator of which is equal to 30 and the  denominator  of which is equal to the
actual number of days in the related Interest Accrual Period).

        Group 3 Senior  Percentage:  As of any Distribution  Date, the lesser of
(x) 100% and (y) a fraction,  expressed as a percentage,  the numerator of which
is the  aggregate  Certificate  Principal  Balance  of the Class  A-III  Auction
Certificates  immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal  Balance of all of the Group 3 Loans (or
related REO Properties)  immediately prior to such Distribution Date;  provided,
however,  that on any  Distribution  Date on  which  the  aggregate  Certificate
Principal Balance of the Class A-I-1 Certificates,  the Group 2 Certificates and
the Class  A-IV-1  Certificates  has been  reduced  to zero,  the Group 3 Senior
Percentage  will equal the  lesser of (x) the  aggregate  Certificate  Principal
Balance  of the  Class  A-III  Auction  Certificates  immediately  prior to that
Distribution  Date divided by the aggregate Stated  Principal  Balance of all of
the  Mortgage  Loans  in  all  four  Loan  Groups   immediately  prior  to  that
Distribution Date and (y) 100%.

        Group 3 Senior  Principal  Distribution  Amount:  As to any Distribution
Date,  the lesser of (a) the balance of the  Available  Distribution  Amount for
Loan Group 3 remaining  after the  distribution  of all  amounts  required to be
distributed  therefrom pursuant to Section  4.02(a)(i)(III),  and (b) the sum of
the amounts  required to be distributed  therefrom to the holders of the Group 3
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.

        Group 4 Loans:  The Mortgage Loans designated in Exhibit E-4.

        Group 4 Net WAC Cap Rate: With respect to any  Distribution  Date, a per
annum  rate equal to the  weighted  average of the Net  Mortgage  Rates (or,  if
applicable,  the Modified Net Mortgage Rates) on the Group 4 Loans using the Net
Mortgage  Rates in effect for the Monthly  Payments due on such  Mortgage  Loans
during the related Due Period,  weighted on the basis of the  respective  Stated
Principal Balances immediately prior to such Distribution Date.

        Group 4 Senior  Percentage:  As of any Distribution  Date, the lesser of
(x) 100% and (y) a fraction,  expressed as a percentage,  the numerator of which
is the aggregate  Certificate Principal Balance of the Class A-IV-1 Certificates
immediately  prior to such Distribution Date and the denominator of which is the
aggregate Stated  Principal  Balance of all of the Group 4 Loans (or related REO
Properties) immediately prior to such Distribution Date; provided, however, that

                                       26
<PAGE>

on any Distribution Date on which the aggregate Certificate Principal Balance of
the  Class  A-I-1  Certificates,  the  Group  2  Certificates  and  the  Group 3
Certificates has been reduced to zero, the Group 4 Senior  Percentage will equal
the  lesser  of (x)  the  Certificate  Principal  Balance  of the  Class  A-IV-1
Certificates  immediately  prior  to  that  Distribution  Date  divided  by  the
aggregate Stated Principal Balance of all of the Mortgage Loans in all four Loan
Groups immediately prior to that Distribution Date and (y) 100%.

        Group 4 Senior  Principal  Distribution  Amount:  As to any Distribution
Date,  the lesser of (a) the balance of the  Available  Distribution  Amount for
Loan Group 4 remaining  after the  distribution  of all  amounts  required to be
distributed therefrom pursuant to Section 4.02(a)(i)(IV), and (b) the sum of the
amounts  required  to be  distributed  therefrom  to the  holders of the Group 4
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.

     Hedge  Agreements:  Collectively,  the Class A-II-1 Hedge Agreement and the
Class A-III-1 Hedge Agreement.

     Hedge   Counterparty:   Bear  Stearns  Financial  Products  Inc.,  and  its
successors and assigns or any party to any replacement,  substitute,  collateral
or other arrangement in lieu thereof.

        Hedge Shortfall Amount:  For any Distribution  Date, the amount, if any,
by which  the  payment  on the  Class  A-II-1  Certificates  and  Class  A-III-1
Certificates  pursuant  to Section  4.02(a)(iii)  is paid from the Class  A-II-1
Hedge  Payment  or  Class  A-III-1  Hedge   Payment,   respectively,   for  such
Distribution Date pursuant to the provisions  thereof or would have been so paid
but for the failure of the Hedge  Counterparty to make a payment  required under
the Hedge Agreements.

        Hedge Shortfall  Carry-Forward  Amount:  For any Distribution  Date, the
aggregate Hedge Shortfall Amounts for prior Distribution Dates to the extent not
reimbursed to the Class SB Certificates pursuant to Section 4.02(a)(xix).

        Highest  Priority:  As of  any  date  of  determination,  the  Class  of
Subordinate  Certificates  then  outstanding  with  the  earliest  priority  for
payments pursuant to Section 4.02(a),  in the following order:  Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.

        Independent:  When used with respect to any specified Person, means such
a Person who (i) is in fact  independent  of the  Company,  the Servicer and the
Trustee,  or any  Affiliate  thereof,  (ii) does not have any  direct  financial
interest  or any  material  indirect  financial  interest  in the  Company,  the
Servicer or the Trustee or in an Affiliate  thereof,  and (iii) is not connected
with the Company, the Servicer or the Trustee as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

        Index:  With respect to any Mortgage Loan and as to any Adjustment  Date
therefor, the related index as stated in the related Mortgage Note.

        Indirect Depository Participant: An institution that is not a Depository
Participant  but clears  through or  maintains  a  custodial  relationship  with
Participants and has access to the Depository's clearing system.

        Initial  Certificate  Principal  Balance:  With respect to each Class of
Certificates, the Certificate Principal Balance of such Class of Certificates as
of the Cut-off Date, as set forth in the Preliminary Statement hereto.

                                       27
<PAGE>

        Initial  Subordinate  Class  Percentage:  With  respect to each Class of
Subordinate  Certificates,  an amount  which is equal to the  initial  aggregate
Certificate Principal Balance of such Class of Subordinate  Certificates divided
by the aggregate  Stated  Principal  Balance of all the Mortgage Loans as of the
Cut-off Date as follows:

        Class M-1:  1.05%    Class B-1:  0.20%
        Class M-2:  0.80%    Class B-2:  0.15%
        Class M-3:  0.45%    Class B-3:  0.25%

        Insurance  Proceeds:  Proceeds  paid in  respect of the  Mortgage  Loans
pursuant to any Primary  Insurance Policy or any other related  insurance policy
covering a  Mortgage  Loan,  to the  extent  such  proceeds  are  payable to the
mortgagee under the Mortgage,  any Subservicer,  the Servicer or the Trustee and
are not applied to the restoration of the related  Mortgaged  Property (or, with
respect to a Cooperative Loan, the related Cooperative Apartment) or released to
the Mortgagor in accordance  with the procedures  that the Servicer would follow
in servicing mortgage loans held for its own account.

        Insurer:  Any named  insurer under any Primary  Insurance  Policy or any
successor thereto or the named insurer in any replacement policy.

        Interest  Accrual  Period:  With  respect  to any Class of  Certificates
(other than the Class A-II-1  Certificates and Class A-III-1  Certificates)  and
any  Distribution  Date,  the calendar  month  preceding the month in which such
Distribution  Date occurs.  With respect to the Class  A-II-1  Certificates  and
Class A-III-1  Certificates  and the  Distribution  Date in December  2003,  the
period  commencing on the Closing Date and ending on December 18, 2003, and with
respect to any subsequent  Distribution  Date, the period commencing on the 19th
day of the  calendar  month  immediately  preceding  the  month  in  which  such
Distribution  Date  occurs and ending on the 18th day of the month in which such
Distribution Date occurs.

        Issuer Exemption:  As defined in Section 5.02(e)(ii).

     Junior Certificateholder: The Holder of not less than 95% of the Percentage
Interests of the Junior Class of Certificates.

        Junior  Class of  Certificates:  The Class of  Subordinate  Certificates
outstanding  as of the date of the  repurchase  of a Mortgage  Loan  pursuant to
Section 4.07 herein that has the Lowest Priority.

        Late  Collections:  With  respect  to any  Mortgage  Loan,  all  amounts
received during any Due Period,  whether as late payments of Monthly Payments or
as Insurance Proceeds,  Liquidation Proceeds or otherwise,  which represent late
payments or  collections  of Monthly  Payments due but delinquent for a previous
Due Period and not previously recovered.

        LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London  interbank  offered rate quotations for one-month U.S.  Dollar  deposits,
expressed on a per annum basis, determined in accordance with Section 1.03.

        LIBOR  Business Day: Any day other than (i) a Saturday or Sunday or (ii)
a day  on  which  banking  institutions  in  London,  England  are  required  or
authorized by law to be closed.

        LIBOR Rate Adjustment Date: With respect to each Distribution  Date, the
second LIBOR Business Day immediately  preceding the commencement of the related
Interest Accrual Period.

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<PAGE>

        Liquidation  Proceeds:  Amounts (other than Insurance Proceeds) received
by the Servicer in connection with the taking of an entire Mortgaged Property by
exercise of the power of eminent domain or  condemnation  or in connection  with
the liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than REO Proceeds.

     Loan Group:  Loan Group 1, Loan Group 2, Loan Group 3 or Loan Group 4.

     Loan Group 1:  The group of Mortgage Loans comprised of the Group 1 Loans.

     Loan Group 2:  The group of Mortgage Loans comprised of the Group 2 Loans.

     Loan Group 3:  The group of Mortgage Loans comprised of the Group 3 Loans.

     Loan Group 4:  The group of Mortgage Loans comprised of the Group 4 Loans.

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

        Lower  Priority:  As of any  date  of  determination  and any  Class  of
Subordinate  Certificates,  any other  Class of  Subordinate  Certificates  then
outstanding with a later priority for payments pursuant to Section 4.02(a).

        Lowest  Priority:  As  of  any  date  of  determination,  the  Class  of
Subordinate  Certificates then outstanding with the latest priority for payments
pursuant to Section 4.02(a), in the following order: Class B-3, Class B-2, Class
B-1, Class M-3, Class M-2 and Class M-1 Certificates.

        Maturity  Date:  With  respect  to  each  Class  of  Certificates,   the
Distribution Date occurring in December 2033.

        Maximum Mortgage Rate: With respect to each Mortgage Loan, the per annum
rate indicated on the Mortgage Loan Schedule as the maximum mortgage rate, which
rate is the maximum  interest  rate that may be applicable to such Mortgage Loan
at any time during the life of such Mortgage Loan.

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

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

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

        Minimum  Mortgage Rate:  With respect to each Mortgage Loan, a per annum
rate equal to the greater of (i) the Note Margin and (ii) the rate  indicated on
the  Mortgage  Loan  Schedule as the minimum  mortgage  rate,  which rate may be
applicable  to such  Mortgage  Loan at any time during the life of such Mortgage
Loan.

        Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a
Servicing Modification.

                                       29
<PAGE>

        Modified Net Mortgage  Rate: As to any Mortgage Loan that is the subject
of a Servicing  Modification,  the Net Mortgage Rate minus the rate per annum by
which the Mortgage Rate on such Mortgage Loan was reduced.

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

        Monthly  Payment:  With respect to any Mortgage Loan  (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization  schedule at the time applicable thereto (after
adjustment,  if any, for  Curtailments  and for Deficient  Valuations  occurring
prior to such Due Date but before any adjustment to such  amortization  schedule
by reason of any  bankruptcy,  other  than a  Deficient  Valuation,  or  similar
proceeding or any  moratorium  or similar  waiver or grace period and before any
Servicing Modification that constitutes a reduction of the interest rate on such
Mortgage Loan).

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

        Mortgage:  With respect to each Mortgage Note related to a Mortgage Loan
which is not a Cooperative Loan, the mortgage, deed of trust or other comparable
instrument  creating  a first  lien on an  estate  in fee  simple  or  leasehold
interest in real property securing a Mortgage Note.

        Mortgage  File:  (I) with  respect to each  Mortgage  Loan (other than a
Cooperative Loan):

(i)  The original  Mortgage Note,  endorsed without recourse in blank, or in the
     name of the Trustee as trustee,  and signed by an authorized officer (which
     endorsement  shall  contain  either an  original  signature  or a facsimile
     signature  of an  authorized  officer  of  GMACM,  and if in the form of an
     allonge,  the  allonge  shall be stapled to the  Mortgage  Note),  with all
     intervening  endorsements  showing  a  complete  chain  of  title  from the
     originator to GMACM. If the Mortgage Loan was acquired by the endorser in a
     merger,  the endorsement must be by  "____________,  successor by merger to
     [name of predecessor]".  If the Mortgage Loan was acquired or originated by
     the endorser while doing business under another name, the endorsement  must
     be by "____________ formerly known as [previous name]";

(ii) The original Mortgage, noting the presence of the MIN of the Mortgage Loan,
     if  the  Mortgage  is  registered  on  the  MERS(R)  System,  and  language
     indicating  that the Mortgage  Loan is a MOM Loan if the Mortgage Loan is a
     MOM Loan,  with  evidence of recording  indicated  thereon or a copy of the
     Mortgage  certified by the public  recording  office in which such Mortgage
     has been recorded;

(iii)The  original of any  guarantee  executed in  connection  with the Mortgage
     Note, if applicable;

(iv) Any  rider  or the  original  of any  modification  agreement  executed  in
     connection  with the related  Mortgage  Note or Mortgage,  with evidence of
     recording if required by applicable law;

(v)  Unless the Mortgage Loan is registered  on the  MERS(R)System,  an original
     Assignment  or  Assignments  of the  Mortgage  (which may be  included in a
     blanket  assignment  or  assignments)  from  GMACM to "Bank  One,  National
     Association,  as Trustee under that certain Pooling and Servicing Agreement
     dated  as  of  November  17,   2003,   for  GMACM   Mortgage   Pass-Through
     Certificates,  Series 2003-AR2" c/o the Servicer at an address specified by
     the Servicer,  and signed by an authorized officer,  which assignment shall

                                       30
<PAGE>

     be in form and substance acceptable for recording. If the Mortgage Loan was
     acquired  by the  assignor  in a  merger,  the  assignment  must  be by " ,
     successor by merger to [name of  predecessor]".  If the  Mortgage  Loan was
     acquired or originated by the assignor  while doing  business under another
     name,  the  assignment  must be by "_________  formerly  known as [previous
     name]";

(vi) Originals of all intervening  assignments of mortgage,  which together with
     the Mortgage  shows a complete  chain of title from the originator to GMACM
     (or to MERS, if the Mortgage Loan is registered on the MERS(R) System,  and
     which notes the presence of a MIN), with evidence of recording thereon,  or
     a copy of the assignment  certified by the applicable  recording  office in
     which such assignment has been recorded;

(vii)The original  mortgagee  policy of title  insurance,  including  riders and
     endorsements  thereto,  or if the  policy  has not yet been  issued,  (i) a
     written  commitment  or  interim  binder  for  title  issued  by the  title
     insurance  or escrow  company  dated as of the date the  Mortgage  Loan was
     funded, with a statement by the title insurance company or closing attorney
     that the  priority  of the lien of the related  Mortgage  during the period
     between the date of the funding of the related  Mortgage  Loan and the date
     of the related  title policy (which title policy shall be dated the date of
     recording of the related Mortgage) is insured,  or (ii) a preliminary title
     report  issued  by a title  insurer  in  anticipation  of  issuing  a title
     insurance  policy which  evidences  existing  liens and gives a preliminary
     opinion as to the  absence  of any  encumbrance  on title to the  Mortgaged
     Property, except liens to be removed on or before purchase by the Mortgagor
     or which constitute customary  exceptions  acceptable to lenders generally;
     or other  evidence of title  insurance  acceptable to Fannie Mae or Freddie
     Mac, in accordance with the Fannie Mae Seller/Servicer Guide or Freddie Mac
     Seller/Servicer Guide, respectively;

(viii) A certified true copy of any power of attorney, if applicable; and

(ix) Originals of any security  agreement,  chattel  mortgage or the  equivalent
     executed in connection with the Mortgage, if any.

and (II) with respect to each Cooperative Loan:

(i)            The original  Mortgage  Note,  endorsed  without  recourse to the
               order  of  the  Trustee   and   showing  an  unbroken   chain  of
               endorsements from the originator thereof to GMACM;

(ii)           A  counterpart  of the  Cooperative  Lease and the  Assignment of
               Proprietary  Lease to the originator of the Cooperative Loan with
               intervening  assignments  showing an unbroken chain of title from
               such originator to the Trustee;

(iii)          The  related  Cooperative  Stock  Certificate,  representing  the
               related   Cooperative   Stock   pledged   with  respect  to  such
               Cooperative Loan,  together with an undated stock power (or other
               similar instrument) executed in blank;

(iv)           The  original  recognition  agreement by the  Cooperative  of the
               interests   of  the   mortgagee   with  respect  to  the  related
               Cooperative Loan;

                                       31
<PAGE>

(v)            The Security Agreement;

(vi)           Copies  of  the  original  UCC  financing   statement,   and  any
               continuation   statements,   filed  by  the  originator  of  such
               Cooperative  Loan  as  secured  party,   each  with  evidence  of
               recording  thereof,  evidencing  the  interest of the  originator
               under the Security  Agreement and the  Assignment of  Proprietary
               Lease;

(vii)          Copies of the filed UCC assignments or amendments of the security
               interest  referenced  in clause  (vi) above  showing an  unbroken
               chain of title  from the  originator  to the  Trustee,  each with
               evidence of  recording  thereof,  evidencing  the interest of the
               originator  under the Security  Agreement  and the  Assignment of
               Proprietary Lease;

(viii)         An executed  assignment of the interest of the  originator in the
               Security  Agreement,  Assignment  of  Proprietary  Lease  and the
               recognition agreement referenced in clause (iv) above, showing an
               unbroken chain of title from the originator to the Trustee;

(ix)           The  original  of  each  modification,  assumption  agreement  or
               preferred loan agreement,  if any,  relating to such  Cooperative
               Loan; and

(x)            A duly completed UCC financing statement showing GMACM as debtor,
               the Company as secured  party and the  Trustee as assignee  and a
               duly  completed  UCC financing  statement  showing the Company as
               debtor  and  the  Trustee  as  secured  party,  each  in  a  form
               sufficient for filing, evidencing the interest of such debtors in
               the Cooperative Loans.

It is understood  that the Mortgage  File (other than the Mortgage  Note) may be
retained in microfilm,  microfiche, optical storage or magnetic media in lieu of
hard copy;  provided,  that with respect to any Mortgage Loan not  registered on
the MERS(R) System, the original  Assignments  required by (I)(v) above shall be
retained in the Mortgage File.

        Mortgage Loan Schedule: The list or lists of the Mortgage Loans attached
hereto as Exhibit  E-1 (with  respect to the Group 1 Loans),  Exhibit  E-2 (with
respect to the Group 2 Loans),  Exhibit E-3 (with  respect to the Group 3 Loans)
and Exhibit E-4 (with  respect to the Group 4 Loans),  each as amended from time
to time to reflect the addition of Qualified  Substitute  Mortgage Loans,  which
list or lists shall set forth the following information as to each Mortgage Loan
in the related Loan Group:

(a) loan number;

(b) state code;

(c) zip code;

(d) the Loan-to-Value Ratio;

(e) the original principal balance and date of the Mortgage Note;

(f) the first Due Date;

(g) the type of Mortgaged Property;

(h) the scheduled monthly payment in effect as of the Cut-off Date;

                                       32
<PAGE>

(i) the principal balance as of the Cut-off Date;

(j) the Mortgage Rate as of the Cut-off Date;

(k) the occupancy status;

(l) the purpose of the Mortgage Loan;

(m) the paid-through date of the Mortgage Loan;

(n) the documentation type;

(o) the code "Y" under the column  "BUYDOWN",  indicating that the Mortgage Loan
is a Buydown Mortgage Loan, if applicable; and

(p)     whether such Mortgage Loan constitutes a Group 1 Loan or Group 2 Loan.

        Such  schedule  may consist of multiple  reports that  collectively  set
forth all of the information required.

        Mortgage Loans:  Such of the mortgage loans  transferred and assigned to
the Trustee  pursuant to Section 2.01 as from time to time are held or deemed to
be held as a part of the Trust Fund, the Mortgage Loans originally so held being
identified in the initial  Mortgage  Loan  Schedule,  and  Qualified  Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including,  without
limitation,  (i) with respect to each  Cooperative  Loan,  the related  Mortgage
Note,  Security  Agreement,  Assignment of Proprietary Lease,  Cooperative Stock
Certificate,  Cooperative  Lease and Mortgage  File and all rights  appertaining
thereto,  and (ii) with respect to each  Mortgage  Loan other than a Cooperative
Loan,  each related  Mortgage  Note,  Mortgage and Mortgage  File and all rights
appertaining thereto.

        Mortgage  Note:  The  originally  executed  note or  other  evidence  of
indebtedness  evidencing the  indebtedness of a Mortgagor under a Mortgage Loan,
together with any modification thereto.

        Mortgage  Pool:  The pool of mortgage  loans  including both Loan Groups
consisting of the Mortgage Loans.

        Mortgage  Rate: As to any Mortgage  Loan, the interest rate borne by the
related  Mortgage  Note,  or any  modification  thereto  other than a  Servicing
Modification.

        Mortgaged  Property:  The underlying  real property  securing a Mortgage
Loan or, with respect to a Cooperative  Loan, the related  Cooperative Lease and
Cooperative Stock.

        Mortgagor:  The obligor on a Mortgage Note.

     Net Mortgage  Rate: As to each  Mortgage  Loan,  the related  Mortgage Rate
minus the Servicing Fee Rate.

        Non-Primary Residence Loans: The Mortgage Loans designated as secured by
second or vacation  residences,  or by  non-owner  occupied  residences,  on the
Mortgage Loan Schedule.

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

                                       33
<PAGE>

        Nonrecoverable  Advance:  Any Advance  previously made or proposed to be
made by the  Servicer  in  respect  of a  Mortgage  Loan  (other  than a Deleted
Mortgage Loan) which, in the good faith judgment of the Servicer,  will not, or,
in the case of a proposed Advance,  would not, be ultimately  recoverable by the
Servicer  from  related  Late  Collections,   Insurance  Proceeds,   Liquidation
Proceeds,  REO  Proceeds or amounts  reimbursable  to the  Servicer  pursuant to
Section 4.02(a)  hereof.  The  determination  by the Servicer that it has made a
Nonrecoverable   Advance  or  that  any  proposed  Advance  would  constitute  a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate delivered
to the Company and the Trustee promptly following such determination.

        Nonsubserviced  Mortgage  Loan:  Any Mortgage  Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.

        Note Margin:  With respect to each Mortgage Loan,  the fixed  percentage
set forth in the  related  Mortgage  Note and  indicated  on the  Mortgage  Loan
Schedule  as the note  margin,  which  percentage  is added to the Index on each
Adjustment Date to determine (subject to rounding in accordance with the related
Mortgage  Note,  the  Periodic  Cap, the Maximum  Mortgage  Rate and the Minimum
Mortgage  Rate) the interest  rate to be borne by such  Mortgage  Loan until the
next Adjustment Date.

        Notional  Amount:  With respect to the Class X-II  Certificates  and any
Distribution  Date on or prior to the  related  Auction  Distribution  Date,  an
amount equal to the aggregate  Certificate  Principal  Balance of the Class A-II
Auction  Certificates  immediately prior to such Distribution Date. With respect
to the Class X-III  Certificates  and any  Distribution  Date on or prior to the
related Auction Distribution Date, an amount equal to the aggregate  Certificate
Principal Balance of the Class A-III Auction  Certificates  immediately prior to
such  Distribution  Date. With respect to each Class of Class X Certificates and
any Distribution Date after the related Auction Distribution Date, zero.

        Officer's  Certificate:  A  certificate  signed by the  Chairman  of the
Board,  the  President or a Vice  President or Assistant  Vice  President,  or a
Director  or  Managing  Director,  and,  if  necessary,  by the  Treasurer,  the
Secretary,  or one of the Assistant  Treasurer or Assistant  Secretaries  of the
Company or the Servicer,  as the case may be, and  delivered to the Trustee,  as
required by this Agreement.

        Opinion of  Counsel:  A written  opinion of  counsel  acceptable  to the
Trustee and the  Servicer,  who may be counsel for the Company or the  Servicer,
provided  that any  opinion of counsel  (i)  referred  to in the  definition  of
"Disqualified  Organization" or (ii) relating to the  qualification of any REMIC
or compliance with the REMIC Provisions must, unless otherwise specified,  be an
opinion of Independent counsel.

        Outstanding  Mortgage  Loan:  As  to  any  Due  Date,  a  Mortgage  Loan
(including an REO Property) which was not the subject of a Principal  Prepayment
in Full,  Cash  Liquidation  or REO  Disposition  and which  was not  purchased,
deleted or substituted for prior to such Due Date pursuant to Section 2.02, 2.04
or 4.07.

        Overcollateralized  Group:  Any of the Group 1 Loans, the Group 2 Loans,
Group 3 Loans or Group 4 Loans, if on any Distribution Date such Group is not an
Undercollateralized Group.

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

        Pass-Through  Rate: With respect to the Class A-I-1 Certificates and any
Distribution  Date, the Group 1 Net WAC Cap Rate.  With respect to each Class of
the Class A-II Auction Certificates and any Distribution Date on or prior to the

                                       34
<PAGE>

related Auction  Distribution  Date, a per annum rate equal to the lesser of (i)
the related Formula Rate and (ii) the Group 2 Net WAC Cap Rate, and with respect
to any  Distribution  Date after the related  Auction  Distribution  Date, a per
annum rate equal to the related  Group 2 Net WAC Cap Rate.  With respect to each
Class of the Class A-III Auction  Certificates and any  Distribution  Date on or
prior to the related  Auction  Distribution  Date, a per annum rate equal to the
lesser of (i) the  related  Formula  Rate and (ii) the Group 3 Net WAC Cap Rate,
and with respect to any Distribution Date after the related Auction Distribution
Date,  a per annum  rate  equal to the  related  Group 3 Net WAC Cap Rate.  With
respect to the Class A-IV-1  Certificates and any Distribution Date, the Group 4
Net  WAC  Cap  Rate.  With  respect  to the  Class  X-II  Certificates  and  any
Distribution  Date on or prior to the related Auction  Distribution  Date, a per
annum rate equal to the excess,  if any, of (1) the related  Group 2 Net WAC Cap
Rate over (2) the weighted average of the  Pass-Through  Rates on the Class A-II
Auction  Certificates  (adjusted  to reflect an accrual  method on a  30/360-day
basis with  respect to the Class A-II-1  Pass-Through  Rate) and with respect to
any Distribution Date after the related Auction  Distribution  Date, 0.00%. With
respect to the Class X-III Certificates and any Distribution Date on or prior to
the related Auction  Distribution Date, a per annum rate equal to the excess, if
any, of (1) the related  Group 3 Net WAC Cap Rate over (2) the weighted  average
of the Pass-Through Rates on the Class A-III Auction  Certificates  (adjusted to
reflect  an  accrual  method on a  30/360-day  basis  with  respect to the Class
A-III-1  Pass-Through  Rate) and with respect to any Distribution Date after the
related  Auction  Distribution  Date,  0.00%.  With  respect  to each  class  of
Subordinate  Certificates and any Distribution Date, the weighted average of the
Group 1 Net WAC Cap Rate, Group 2 Net WAC Cap Rate, Group 3 Net WAC Cap Rate and
Group 4 Net WAC Cap  Rate,  weighted  on the  basis of the  related  Subordinate
Component.

     Paying Agent:  The Trustee or any successor  Paying Agent  appointed by the
Trustee.

        Payment Account: The separate and segregated account or accounts created
and  maintained  pursuant to Section  4.01,  which shall be entitled  "Bank One,
National  Association,  as  trustee,  in trust  for the  registered  holders  of
Residential  Asset  Mortgage   Products,   Inc.,  GMACM  Mortgage   Pass-Through
Certificates, Series 2003-AR2" and which must be an Eligible Account.

        Payment Account Deposit Date: As to any Distribution  Date, the Business
Day prior thereto.

        Percentage Interest: With respect to any Certificate (other than a Class
X  Certificate  or Class R  Certificate),  the  undivided  percentage  ownership
interest in the related Class evidenced by such  Certificate,  which  percentage
ownership interest shall be equal to the Initial  Certificate  Principal Balance
or initial Notional Amount thereof divided by the aggregate Initial  Certificate
Principal Balance or initial Notional Amount of all the Certificates of the same
Class.  With  respect to a Class X  Certificate  or a Class R  Certificate,  the
interest  in  distributions  to be made with  respect  to such  Class  evidenced
thereby,  expressed  as a  percentage,  as  stated  on the  face  of  each  such
Certificate.

        Periodic Cap: With respect to each Mortgage  Loan, the periodic rate cap
that limits the  increase or the  decrease of the related  Mortgage  Rate on any
Adjustment Date pursuant to the terms of the related Mortgage Note.

                                       35
<PAGE>

        Permitted Investments:  One or more of the following:

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

               (ii) repurchase agreements on obligations specified in clause (i)
        maturing not more than one month from the date of  acquisition  thereof,
        provided that the unsecured  short-term  debt  obligations  of the party
        agreeing to repurchase  such  obligations  are at the time rated by each
        Rating Agency in its highest short-term rating available;

               (iii) federal funds,  certificates of deposit,  demand  deposits,
        time  deposits  and  bankers'  acceptances  (which  shall  each  have an
        original  maturity of not more than 90 days and, in the case of bankers'
        acceptances,  shall in no event have an  original  maturity of more than
        365 days or a remaining  maturity of more than 30 days)  denominated  in
        United  States  dollars  of any  U.S.  depository  institution  or trust
        company  incorporated  under the laws of the United  States or any state
        thereof or of any domestic branch of a foreign depository institution or
        trust company;  provided,  that the short-term debt  obligations of such
        depository  institution  or trust company (or, if the only Rating Agency
        is  Standard  &  Poor's,  in  the  case  of  the  principal   depository
        institution  in  a  depository   institution   holding   company,   debt
        obligations of the depository  institution  holding company) at the date
        of  acquisition  thereof  have been rated by each  Rating  Agency in its
        highest  short-term rating available;  and provided further that, if the
        only Rating  Agency is Standard & Poor's and if the  depository or trust
        company is a principal subsidiary of a bank holding company and the debt
        obligations of such subsidiary are not separately  rated, the applicable
        rating shall be that of the bank holding company;  and, provided further
        that, if the original  maturity of such short-term debt obligations of a
        domestic  branch of a foreign  depository  institution  or trust company
        shall exceed 30 days, the short-term rating of such institution shall be
        A-1+ in the case of Standard & Poor's if Standard & Poor's is the Rating
        Agency;

               (iv)   commercial   paper  and  demand  notes  (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
        short-term rating  available;  provided that such commercial paper shall
        have a remaining maturity of not more than 30 days;

               (v) any mutual  fund,  money  market  fund,  common trust fund or
        other  pooled  investment  vehicle,  the assets of which are  limited to
        instruments  that  otherwise  would  constitute  Permitted   Investments
        hereunder  and have been  rated by each  Rating  Agency  in its  highest
        short-term rating available,  including any such fund that is managed by
        the Trustee or any  affiliate of the Trustee or for which the Trustee or
        any of its affiliates acts as an adviser; and

               (vi) other  obligations or securities that are acceptable to each
        Rating  Agency as a Permitted  Investment  hereunder and will not reduce
        the rating  assigned to any Class of  Certificates by such Rating Agency
        below the lower of the  then-current  rating or the rating  assigned  to
        such  Certificates  as of the  Closing  Date by such Rating  Agency,  as
        evidenced in writing;

provided,  however,  no  instrument  shall  be  a  Permitted  Investment  if  it
represents,  either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest  payments derived from  obligations  underlying such instrument and the
principal and interest payments with respect to such instrument  provide a yield

                                       36
<PAGE>

to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.  References  herein to the highest  rating  available  on unsecured
long-term  rating  category  available shall mean Aaa in the case of Moody's and
AAA in the case of  Standard  & Poor's,  and  references  herein to the  highest
short-term  rating category  available shall mean P-1 in the case of Moody's and
A-1+ in the case of Standard & Poor's.

        Permitted  Transferee:  Any Transferee of a Class R  Certificate,  other
than a Disqualified Organization or Non-United States Person.
        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.

        Pool  Stated  Principal  Balance:  As  to  any  Distribution  Date,  the
aggregate of the Stated Principal Balances of each Mortgage Loan.

        Prepayment   Assumption:   The  prepayment  assumption  of  20%  of  the
prepayment speed assumption,  used for determining the accrual of original issue
discount and market discount and premium on the  Certificates for federal income
tax purposes.

        Prepayment  Distribution  Percentage:  With respect to any  Distribution
Date,  each Loan Group and each  Class of  Subordinate  Certificates,  under the
applicable  circumstances set forth below, the respective  percentages set forth
below:

               (i) For any  Distribution  Date on which any Class of Subordinate
        Certificates are outstanding:

                      (a) in the case of the Class of  Subordinate  Certificates
        then  outstanding  with the  Highest  Priority  and each other  Class of
        Subordinate  Certificates for which the related Prepayment  Distribution
        Trigger has been satisfied, a fraction,  expressed as a percentage,  the
        numerator of which is the  Certificate  Principal  Balance of such Class
        immediately  prior to such date and the  denominator of which is the sum
        of the Certificate  Principal Balances immediately prior to such date of
        (1) the Class of  Subordinate  Certificates  then  outstanding  with the
        Highest  Priority and (2) all other Classes of Subordinate  Certificates
        for which the  respective  Prepayment  Distribution  Triggers  have been
        satisfied; and

                      (b) in  the  case  of  each  other  Class  of  Subordinate
        Certificates  for which the  Prepayment  Distribution  Triggers have not
        been satisfied, 0%; and

               (ii)  Notwithstanding  the foregoing,  if the  application of the
        foregoing  percentages on any  Distribution  Date as provided in Section
        4.02  (determined  without  regard to the proviso to the  definition  of
        "Subordinate   Principal   Distribution   Amount")  would  result  in  a
        distribution  in  respect  of  principal  of any  Class  or  Classes  of
        Subordinate  Certificates  in  an  amount  greater  than  the  remaining
        Certificate  Principal  Balance  thereof  (any such  class,  a "Maturing
        Class"),  then:  (a)  the  Prepayment  Distribution  Percentage  of each
        Maturing  Class  shall be  reduced  to a level  that,  when  applied  as
        described above, would exactly reduce the Certificate  Principal Balance
        of such Class to zero;  (b) the  Prepayment  Distribution  Percentage of
        each  other  Class  of  Subordinate  Certificates  (any  such  Class,  a
        "Non-Maturing  Class")  shall be  recalculated  in  accordance  with the
        provisions  in paragraph  (ii) above,  as if the  Certificate  Principal
        Balance of each Maturing Class had been reduced to zero (such percentage
        as recalculated, the "Recalculated Percentage"); (c) the total amount of

                                       37
<PAGE>

        the  reductions  in  the  Prepayment  Distribution  Percentages  of  the
        Maturing  Class or  Classes  pursuant  to clause  (a) of this  sentence,
        expressed  as an  aggregate  percentage,  shall be  allocated  among the
        Non-Maturing  Classes in  proportion  to their  respective  Recalculated
        Percentages (the portion of such aggregate reduction so allocated to any
        Non-Maturing Class, the "Adjustment  Percentage");  and (d) for purposes
        of such  Distribution  Date, the Prepayment  Distribution  Percentage of
        each Non-Maturing  Class shall be equal to the sum of (1) the Prepayment
        Distribution  Percentage  thereof,  calculated  in  accordance  with the
        provisions  in  paragraph  (ii)  above as if the  Certificate  Principal
        Balance of each  Maturing  Class had not been reduced to zero,  plus (2)
        the related Adjustment Percentage.

        Prepayment  Distribution  Trigger: With respect to any Distribution Date
and  any  Class  of   Subordinate   Certificates   (other  than  the  Class  M-1
Certificates),  a test that shall be satisfied if the fraction  (expressed  as a
percentage) equal to the sum of the Certificate Principal Balances of such Class
and each Class of Subordinate Certificates with a Lower Priority than such Class
immediately  prior to such  Distribution  Date divided by the  aggregate  Stated
Principal  Balance of all of the  Mortgage  Loans (or  related  REO  Properties)
immediately  prior to such Distribution Date is greater than or equal to the sum
of the  related  Initial  Subordinate  Class  Percentages  of  such  Classes  of
Subordinate Certificates.

        Prepayment  Interest  Shortfall:  As to any  Distribution  Date  and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property)  that was
the subject of (a) a Principal  Prepayment in Full during the related Prepayment
Period,  an  amount  equal to the  excess  of one  month's  interest  at the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified  Mortgage
Loan) on the Stated  Principal  Balance of such Mortgage Loan over the amount of
interest  (adjusted to the Net Mortgage  Rate (or Modified Net Mortgage  Rate in
the  case of a  Modified  Mortgage  Loan))  paid by the  Mortgagor  during  such
Prepayment  Period  to the date of such  Principal  Prepayment  in Full or (b) a
Curtailment  during the preceding calendar month, an amount equal to one month's
interest at the Net Mortgage  Rate (or Modified Net Mortgage Rate in the case of
a Modified Mortgage Loan) on the amount of such Curtailment.

        Prepayment Period: As to any Distribution Date and Principal  Prepayment
in Full,  the  period  commencing  of the 16th  day of the  month  prior to that
Distribution  Date  and  ending  on the  15th  day of the  month  in  which  the
Distribution Date occurs.

        Primary  Insurance  Policy:  The  policy,  if any,  of primary  mortgage
guaranty insurance related to a Mortgage Loan.

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

        Principal  Prepayment  in  Full:  Any  Principal  Prepayment  made  by a
Mortgagor of the entire principal balance of a Mortgage Loan.

        Purchase Agreement:  The Mortgage Loan Purchase  Agreement,  dated as of
the Closing  Date,  between the Seller and the Company,  as  purchaser,  and all
amendments thereof and supplements thereto.

        Purchase  Price:  With  respect to any Mortgage  Loan (or REO  Property)
required to be or otherwise purchased on any date pursuant to Section 2.02, 2.04
or 4.07, an amount equal to the sum of (i) 100% of the Stated Principal  Balance
thereof as of such date, plus the principal portion of any related  unreimbursed
Advances and (ii) unpaid accrued  interest at the Mortgage Rate (or Modified Net
Mortgage  Rate plus the rate per annum at which the  Servicing Fee is calculated

                                       38
<PAGE>

in the  case of a  Modified  Mortgage  Loan)  (or at the Net  Mortgage  Rate (or
Modified Net Mortgage Rate in the case of a Modified  Mortgage Loan) in the case
of a purchase made by the Servicer) on the Stated  Principal  Balance thereof to
the Due Date in the Due Period related to the Distribution Date occurring in the
month  following the month of purchase  from the Due Date to which  interest was
last  paid by the  Mortgagor  and (iii) in  connection  with any  Mortgage  Loan
required to be repurchased  pursuant to Section 7.03 of the Purchase  Agreement,
any costs and damages  incurred by the Trust Fund with respect to such  Mortgage
Loan in connection with a breach of Section 7.02 (ff) of the Purchase Agreement.

        Qualified  Substitute  Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in an Officer's  Certificate  delivered to the Trustee, with a copy
to the Custodian,

(i)            have an outstanding  principal  balance,  after  deduction of the
               principal  portion  of the  monthly  payment  due in the month of
               substitution  (or in the case of a substitution  of more than one
               Mortgage  Loan  for  a  Deleted   Mortgage   Loan,  an  aggregate
               outstanding  principal  balance,  after such  deduction),  not in
               excess of the Stated  Principal  Balance of the Deleted  Mortgage
               Loan (the amount of any  shortfall  to be deposited by the Seller
               in the Custodial Account in the month of substitution);

(ii)           have a Mortgage  Rate and a Net  Mortgage  Rate no lower than and
               not more than 1% per annum higher than the Mortgage  Rate and Net
               Mortgage Rate,  respectively,  of the Deleted Mortgage Loan as of
               the date of substitution;

(iii)          have a Loan-to-Value  Ratio at the time of substitution no higher
               than  that  of  the  Deleted   Mortgage   Loan  at  the  time  of
               substitution;

(iv)           have a remaining  term to stated  maturity  not greater than (and
               not more than one year less  than) that of the  Deleted  Mortgage
               Loan;

(v)            have a Mortgage  Rate that  adjusts with the same  frequency  and
               based upon the same Index as that of the Deleted Mortgage Loan;

(vi)           have a Note  Margin  not less than that of the  Deleted  Mortgage
               Loan;

(vii)          have a  Periodic  Rate Cap  that is equal to that of the  Deleted
               Mortgage Loan;

(viii)         have a next  Adjustment  Date no later  than that of the  Deleted
               Mortgage Loan; and

(ix)           comply with each  representation  and warranty made by the Seller
               set forth in Section 7.02 of the Purchase Agreement.

        Rating  Agency:  Moody's  and  Standard  &  Poor's.  If any  agency or a
successor is no longer in existence,  "Rating Agency" shall be such  statistical
credit rating agency,  or other  comparable  Person,  designated by the Company,
notice of which designation shall be given to the Trustee and the Servicer.

        Realized Loss:  With respect to each Mortgage Loan (or REO Property):

(a)  as to which a Cash  Liquidation or REO Disposition has occurred,  an amount
     (not less than  zero)  equal to (i) the  Stated  Principal  Balance  of the
     Mortgage Loan (or REO Property) as of the date of Cash  Liquidation  or REO
     Disposition,  plus (ii) interest (and REO Imputed Interest,  if any) at the
     Net Mortgage  Rate from the Due Date as to which  interest was last paid or

                                       39
<PAGE>

     advanced to Certificateholders up to the Due Date in the Due Period related
     to the  Distribution  Date on which such  Realized  Loss will be  allocated
     pursuant to Section 4.05 on the Stated  Principal  Balance of such Mortgage
     Loan (or REO  Property)  outstanding  during  each  Due  Period  that  such
     interest  was not paid or  advanced,  minus  (iii)  the  proceeds,  if any,
     received  during  the  month  in  which  such  Cash   Liquidation  (or  REO
     Disposition)  occurred,  to the extent applied as recoveries of interest at
     the Net Mortgage  Rate and to principal  of the Mortgage  Loan,  net of the
     portion  thereof  reimbursable  to the  Servicer  or any  Subservicer  with
     respect  to  related  Advances  or  expenses  as to which the  Servicer  or
     Subservicer is entitled to reimbursement thereunder but which have not been
     previously reimbursed,

(b)  which is the subject of a Servicing  Modification,  (i) the amount by which
     the interest portion of a Monthly Payment or the principal  balance of such
     Mortgage  Loan was  reduced,  and (ii) any such  amount  with  respect to a
     Monthly  Payment  that was or would have been due in the month  immediately
     following the month in which a Principal  Prepayment or the Purchase  Price
     of such Mortgage Loan is received or is deemed to have been received,

(c)  which has  become the  subject of a  Deficient  Valuation,  the  difference
     between the principal balance of the Mortgage Loan outstanding  immediately
     prior to such Deficient Valuation and the principal balance of the Mortgage
     Loan as reduced by the Deficient Valuation, or

(d)  which has become the object of a Debt Service Reduction, the amount of such
     Debt Service Reduction.

Notwithstanding  the above,  neither a Deficient  Valuation  nor a Debt  Service
Reduction  shall be deemed a Realized Loss hereunder so long as the Servicer has
notified  the Trustee in writing that the  Servicer is  diligently  pursuing any
remedies that may exist in connection  with the  representations  and warranties
made  regarding the related  Mortgage  Loan and either (A) the related  Mortgage
Loan is not in default with regard to payments due  thereunder or (B) delinquent
payments of  principal  and  interest  under the related  Mortgage  Loan and any
premiums  on any  applicable  primary  hazard  insurance  policy and any related
escrow payments in respect of such Mortgage Loan are being advanced on a current
basis by the Servicer or a Subservicer,  in either case without giving effect to
any Debt Service Reduction.

        Realized  Losses on the Mortgage Loans shall be allocated to the REMIC I
Regular Interests as follows: (1) The interest portion of Realized Losses on the
Group 1 Loans,  if any,  shall be allocated  between the Class Y-1 and Class Z-1
Regular  Interests  pro rata  according  to the amount of  interest  accrued but
unpaid  thereon,  in reduction  thereof;  (2) the  interest  portion of Realized
Losses on the Group 2 Loans,  if any,  shall be allocated  between the Class Y-2
and Class Z-2 Regular  Interests  pro rata  according  to the amount of interest
accrued but unpaid thereon,  in reduction  thereof;  (3) the interest portion of
Realized  Losses on the Group 3 Loans,  if any,  shall be allocated  between the
Class Y-3 and Class Z-3 Regular  Interests  pro rata  according to the amount of
interest accrued but unpaid thereon, in reduction thereof;  and (4) the interest
portion of  Realized  Losses on the Group 4 Loans,  if any,  shall be  allocated
between the Class Y-4 and Class Z-4 Regular  Interests pro rata according to the
amount of  interest  accrued  but unpaid  thereon,  in  reduction  thereof.  Any
interest  portion  of such  Realized  Losses in excess of the  amount  allocated
pursuant to the preceding  sentence  shall be treated as a principal  portion of
Realized Losses not attributable to any specific Mortgage Loan in such Group and
allocated  pursuant  to the  succeeding  sentences.  The  principal  portion  of
Realized  Losses with  respect to the  Mortgage  Loans shall be allocated to the
REMIC I Regular  Interests  as follows:  (1) the  principal  portion of Realized
Losses on the Group 1 Loans shall be allocated,  first, to the Class Y-1 Regular
Interest to the extent of the Class Y-1 Principal  Reduction Amount in reduction
of the Class  Principal  Balance  of such  Regular  Interest  and,  second,  the
remainder,  if any, of such principal  portion of such Realized  Losses shall be
allocated to the Class Z-1 Regular  Interest in reduction of the Class Principal
Balance  thereof;  (2) the principal  portion of Realized  Losses on the Group 2

                                       40
<PAGE>

Loans shall be allocated, first, to the Class Y-2 Regular Interest to the extent
of the Class Y-2 Principal  Reduction Amount in reduction of the Class Principal
Balance of such Regular  Interest and,  second,  the remainder,  if any, of such
principal  portion of such  Realized  Losses shall be allocated to the Class Z-2
Regular Interest in reduction of the Class Principal  Balance  thereof;  (3) the
principal  portion of Realized  Losses on the Group 3 Loans shall be  allocated,
first,  to the  Class  Y-3  Regular  Interest  to the  extent  of the  Class Y-3
Principal  Reduction Amount in reduction of the Class Principal  Balance of such
Regular Interest and, second,  the remainder,  if any, of such principal portion
of such Realized Losses shall be allocated to the Class Z-3 Regular  Interest in
reduction of the Class Principal Balance thereof;  and (4) the principal portion
of Realized Losses on the Group 4 Loans shall be allocated,  first, to the Class
Y-4 Regular  Interest to the extent of the Class Y-4 Principal  Reduction Amount
in  reduction  of the Class  Principal  Balance of such  Regular  Interest  and,
second, the remainder, if any, of such principal portion of such Realized Losses
shall be allocated  to the Class Z-4 Regular  Interest in reduction of the Class
Principal Balance thereof.  For any Distribution  Date,  reductions in the Class
Principal  Balances of the Class Y and Class Z Regular Interest pursuant to this
definition of Realized Loss shall be  determined,  and shall be deemed to occur,
prior to any reductions of such Class  Principal  Balances by  distributions  on
such Distribution Date.

        Record  Date:  With  respect  to  each  Class  of  Certificates  and any
Distribution Date, the last day of the related Interest Accrual Period.

     Regular  Certificate:  Any  of  the  Certificates  other  than  a  Class  R
Certificate.

        Related Class of  Certificates:  The Classes of Certificates and Classes
of REMIC II Regular Interests shall be treated as "Related Classes" as set forth
in the following chart.

                             REMIC II
                             REGULAR       RELATED
                             INTEREST      CERTIFICATES
                             A-I-1-M       A-I-1
                             A-II-1-M      A-II-1,  X-II
                             A-II-2-M      A-II-2,  X-II
                             A-II-3-M      A-II-3,  X-II
                             A-II-4-M      A-II-4,  X-II
                             A-III-1-M     A-III-1, X-III
                             A-III-2-M     A-III-2, X-III
                             A-III-3-M     A-III-3, X-III
                             A-III-4-M     A-III-4, X-III
                             A-III-5-M     A-III-5, X-III
                             A-IV-1-M      A-IV-1
                             M-1-M         M-1
                             M-2-M         M-2
                             M-3-M         M-3
                             B-1-M         B-1
                             B-2-M         B-2
                             B-3-M         B-3

                                       41
<PAGE>

     Relief  Act:  The  Soldiers'  and  Sailors'  Civil  Relief Act of 1940,  as
amended, or similar legislation or regulations as in effect from time to time.

     Relief Act Shortfalls:  Shortfalls in interest  payable by a Mortgagor that
is not collectible from the Mortgagor pursuant to the Relief Act.

        REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.  As used herein,  the term "the REMIC" or "the REMICs"
shall mean one or more of the REMICs created under this Agreement.

        REMIC   Administrator:   The  Trustee;   provided   that  if  the  REMIC
Administrator is found by a court of competent jurisdiction to no longer be able
to fulfill its  obligations  as REMIC  Administrator  under this  Agreement  the
Servicer  or  Trustee  acting  as  Servicer  shall  appoint  a  successor  REMIC
Administrator,  subject to  assumption  of the REMIC  Administrator  obligations
under this Agreement.

        REMIC I: The segregated pool of assets (exclusive of the Hedge Agreement
and the Swap Agreement), with respect to which a REMIC election is made pursuant
to this Agreement, consisting of:

        (a)    the Mortgage Loans and the related  Mortgage Files and collateral
               securing such Mortgage Loans,

        (b)    all payments on and  collections in respect of the Mortgage Loans
               due  after  the  Cut-off  Date  as  shall  be on  deposit  in the
               Custodial  Account or in the Payment  Account and  identified  as
               belonging to the Trust Fund,

        (c)    property  that secured a Mortgage Loan and that has been acquired
               for the benefit of the  Certificateholders by foreclosure or deed
               in lieu of foreclosure,

        (d)    the hazard insurance policies and Primary Insurance Policies,  if
               any, and

        (e)    all proceeds of clauses (a) through (d) above.

        REMIC  I  Available   Distribution   Amount:  For  each  Group  for  any
Distribution Date, the sum of the following amounts with respect to the Mortgage
Loans in such Group:

        (1) the total amount of all cash  received by or on behalf of the Master
Servicer with respect to such Mortgage Loans by the Determination  Date for such
Distribution  Date and not previously  distributed,  including  Monthly Advances
made by Servicers,  Liquidation  Proceeds and scheduled amounts of distributions
from Buydown Funds respecting Buydown Loans, if any, except:

               (a) all scheduled  payments of principal  and interest  collected
        but due subsequent to such Distribution Date;

               (b) all Curtailments received after the Due Period;

               (c)  all  Principal   Prepayments  in  Full  received  after  the
        Prepayment Period immediately preceding such Distribution Date (together
        with any interest  payment  received with such Principal  Prepayments in
        Full to the extent that it represents the payment of interest accrued on
        the Mortgage Loans for the period subsequent to the Prepayment Period);

                                       42
<PAGE>

               (d)  Insurance  Proceeds,  Liquidation  Proceeds  and  Subsequent
        Recoveries received on such Mortgage Loans after the Due Period;

               (e) all  amounts  in the  Certificate  Account  which are due and
        reimbursable to a Servicer or the Master Servicer  pursuant to the terms
        of this Agreement;

               (f) the Master  Servicing Fee payable on such  Distribution  Date
        with respect to such Mortgage Loan; and

               (g) Foreclosure Profits;

        (2) the sum, to the extent not previously distributed,  of the following
amounts,  to the extent  advanced  or  received,  as  applicable,  by the Master
Servicer:

               (a) any Advance  made by the Master  Servicer to the Trustee with
        respect to such Distribution Date relating to such Mortgage Loans; and

               (b)    Compensating Interest; and

        (3) the total amount of any cash  received  during the Due Period by the
Trustee or the Master  Servicer in respect of the Purchase  Price under  Section
2.02, Section 2.04 and Section 4.07.

        REMIC I  Distribution  Amount:  For any  Distribution  Date, the REMIC I
Available  Distribution  Amount  shall be  distributed  to the  REMIC I  Regular
Interests  and the Class R-1  Residual  Interest  in the  following  amounts and
priority:

        (a) To the extent of the REMIC I Available Distribution Amount for Group
1:

               (i)  first,  to Class  Y-1 and Class Z-1  Regular  Interests  and
        Component  I of the Class R  Certificates,  concurrently,  the  Interest
        Distribution  Amounts for such Classes  remaining  unpaid from  previous
        Distribution  Dates,  pro rata according to their  respective  shares of
        such unpaid amounts;

               (ii) second, to the Class Y-1 and Class Z-1 Regular Interests and
        Component  I of the Class R  Certificates,  concurrently,  the  Interest
        Distribution Amounts for such Classes for the current Distribution Date,
        pro rata according to their respective Interest Distribution Amounts;

                                       43
<PAGE>

               (iii) third,  to Component I of the Class R  Certificates,  until
        the Class Principal Balance thereof has been reduced to zero; and

               (iv)  fourth,  to the Class Y-1 and Class Z-1 Regular  Interests,
        the Class Y-1 Principal  Distribution Amount and the Class Z-1 Principal
        Distribution Amount, respectively.

        (b) To the extent of the REMIC I Available Distribution Amount for Group
                2:

               (i)  first,  to the Class Y-2 and  Class Z-2  Regular  Interests,
        concurrently,   the  Interest  Distribution  Amounts  for  such  Classes
        remaining unpaid from previous Distribution Dates, pro rata according to
        their respective shares of such unpaid amounts;

               (ii)  second,  to the Class Y-2 and Class Z-2 Regular  Interests,
        concurrently, the Interest Distribution Amounts for such Classes for the
        current  Distribution  Date,  pro rata  according  to  their  respective
        Interest Distribution Amounts; and

               (iii)  third,  to the Class Y-2 and Class Z-2 Regular  Interests,
        the Class Y-2 Principal  Distribution Amount and the Class Z-2 Principal
        Distribution Amount, respectively.

        (c) To the extent of the REMIC I Available Distribution Amount for Group
                3:

               (i)  first,  to the Class Y-3 and  Class Z-3  Regular  Interests,
        concurrently,   the  Interest  Distribution  Amounts  for  such  Classes
        remaining unpaid from previous Distribution Dates, pro rata according to
        their respective shares of such unpaid amounts;

               (ii)  second,  to the Class Y-3 and Class Z-3 Regular  Interests,
        concurrently, the Interest Distribution Amounts for such Classes for the
        current  Distribution  Date,  pro rata  according  to  their  respective
        Interest Distribution Amounts; and

               (iii)  third,  to the Class Y-3 and Class Z-3 Regular  Interests,
        the Class Y-3 Principal  Distribution Amount and the Class Z-3 Principal
        Distribution Amount, respectively.

        (d) To the extent of the REMIC I Available Distribution Amount for Group
4:

               (i)  first,  to the Class Y-4 and  Class Z-4  Regular  Interests,
        concurrently,   the  Interest  Distribution  Amounts  for  such  Classes
        remaining unpaid from previous Distribution Dates, pro rata according to
        their respective shares of such unpaid amounts;

               (ii)  second,  to the Class Y-4 and Class Z-4 Regular  Interests,
        concurrently, the Interest Distribution Amounts for such Classes for the
        current  Distribution  Date,  pro rata  according  to  their  respective
        Interest Distribution Amounts; and

               (iii)  third,  to the Class Y-4 and Class Z-4 Regular  Interests,
        the Class Y-4 Principal  Distribution Amount and the Class Z-4 Principal
        Distribution Amount, respectively.

        (e) To the  extent of the REMIC I  Available  Distribution  Amounts  for
Group 1, Group 2, Group 3 and Group 4 for such Distribution Date remaining after
payment of the amounts  pursuant to  paragraphs  (a),  (b),  (c) and (d) of this
definition of "REMIC I Distribution Amount":

               (i)  first,  to  each  Class  of  Class  Y and  Class  Z  Regular
        Interests,  pro rata  according to the amount of  unreimbursed  Realized
        Losses allocable to principal  previously  allocated to each such Class;
        provided,  however,  that  any  amounts  distributed  pursuant  to  this
        paragraph  (e)(i) of this  definition of "REMIC I  Distribution  Amount"
        shall not cause a reduction  in the Class  Principal  Balances of any of
        the Class Y and Class Z Regular Interests; and

               (ii) second, to the Component I of the Class R Certificates,  the
        Residual Distribution Amount for Component I of the Class R Certificates
        for such Distribution Date.

        REMIC I Interest:  The REMIC I Regular  Interests and Component I of the
Class R Certificates.

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

                                       44
<PAGE>

        REMIC II: The segregated pool of assets consisting of all of the REMIC I
Regular  Interests,  with  respect to which a separate  REMIC  election is to be
made.

        REMIC II Interest:  The REMIC II Regular  Interests  and Component II of
the Class R Certificates.

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

        REMIC III: The segregated pool of assets  consisting of all of the REMIC
II Regular  Interests,  with respect to which a separate REMIC election is to be
made.

        REMIC III Certificate: Any Certificate, other than a Class R Certificate
or Class SB Certificate.

        REMIC III Regular Interest: Any of the nineteen certificated  beneficial
ownership interests in REMIC III issued hereunder,  and, hereby, designated as a
"regular  interest"  in  REMIC  III,  as  follows:  Class  A-I-1,  Class  A-II-1
(exclusive of any rights to Class A-II-1  Carryover  Shortfall  Amounts),  Class
A-II-2,  Class A-II-3,  Class A-II-4,  Class A-III-1 (exclusive of any rights to
Class A-III-1 Carryover Shortfall Amounts),  Class A-III-2, Class A-III-3, Class
A-III-4,  Class A-III-5, Class A-IV-1, Class X-II, Class X-III, Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.

        REMIC  Provisions:  Provisions of the federal income tax law relating to
real estate mortgage investment conduits,  which appear at Sections 860A through
860G of  Subchapter  M of Chapter 1 of the Code,  and  related  provisions,  and
temporary and final  regulations (or, to the extent not  inconsistent  with such
temporary or final  regulations,  proposed  regulations) and published  rulings,
notices and  announcements  promulgated  thereunder,  as the foregoing may be in
effect from time to time.

        Remittance  Report:  A report that includes the information set forth in
Exhibit L hereto.

        REO  Acquisition:  The  acquisition  by the  Servicer  on  behalf of the
Trustee for the benefit of the  Certificateholders  of any REO Property pursuant
to Section 3.14.

        REO Disposition: As to any REO Property, a determination by the Servicer
that it has received all Insurance Proceeds,  Liquidation Proceeds, REO Proceeds
and other payments and recoveries (including proceeds of a final sale) which the
Servicer expects to be finally recoverable from the sale or other disposition of
the REO Property.

        REO Imputed Interest: As to any REO Property,  for any period, an amount
equivalent to interest (at the Net Mortgage Rate that would have been applicable
to the related  Mortgage Loan had it been  outstanding) on the unpaid  principal
balance of the  Mortgage  Loan as of the date of  acquisition  thereof  for such
period.

        REO Proceeds:  Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged  Property  or,  with  respect  to  a  Cooperative  Loan,  the  related
Cooperative  Apartment)  which  proceeds are  required to be deposited  into the
Custodial Account only upon the related REO Disposition.

                                       45
<PAGE>

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

        Request  for  Release:  A request  for  release,  the forms of which are
attached as Exhibit F hereto,  or an electronic  request in a form acceptable to
the Custodian.

        Required  Insurance  Policy:  With  respect to any  Mortgage  Loan,  any
insurance policy which is required to be maintained from time to time under this
Agreement  or the related  Subservicing  Agreement  in respect of such  Mortgage
Loan.

        Responsible Officer:  When used with respect to the Trustee, any officer
of the  Corporate  Trust  Office  of the  Trustee,  including  any  Senior  Vice
President,  any Vice  President,  any Assistant  Vice  President,  any Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of
the Trustee customarily  performing  functions similar to those performed by any
of the above designated  officers to whom, with respect to a particular  matter,
such matter is referred.

     Scheduled  Final  Distribution  Date:  The  Distribution  Date occurring in
December 2033.

     Security  Agreement:  With respect to a  Cooperative  Loan,  the  agreement
creating  a  security  interest  in  favor  of the  originator  in  the  related
Cooperative Stock.

        Seller: GMACM.

        Senior  Accelerated  Distribution   Percentage:   With  respect  to  any
Distribution  Date occurring on or prior to the 60th  Distribution  Date and any
Loan Group,  100%. With respect to any Distribution Date thereafter and any Loan
Group, as follows:

               (i) for any Distribution  Date after the 60th  Distribution  Date
        but on or prior to the 72nd Distribution Date, the Senior Percentage for
        such Loan Group for such  Distribution  Date plus 70% of the Subordinate
        Percentage for such Loan Group for such Distribution Date;

               (ii) for any Distribution  Date after the 72nd  Distribution Date
        but on or prior to the 84th Distribution Date, the Senior Percentage for
        such Loan Group for such  Distribution  Date plus 60% of the Subordinate
        Percentage for such Loan Group for such Distribution Date;

               (iii) for any Distribution  Date after the 84th Distribution Date
        but on or prior to the 96th Distribution Date, the Senior Percentage for
        such Loan Group for such  Distribution  Date plus 40% of the Subordinate
        Percentage for such Loan Group for such Distribution Date;

               (iv) for any Distribution  Date after the 96th  Distribution Date
        but on or prior to the 108th  Distribution  Date, the Senior  Percentage
        for  such  Loan  Group  for  such  Distribution  Date  plus  20%  of the
        Subordinate  Percentage for such Loan Group for such Distribution  Date;
        and

               (v) for any Distribution  Date thereafter,  the Senior Percentage
        for such Distribution Date;

provided, however,

        (i) that any scheduled reduction to the Senior Accelerated  Distribution
Percentage for any Loan Group described above shall occur as of any Distribution
Date only if:

                                       46
<PAGE>

               (a) the  outstanding  principal  balance  of the  Mortgage  Loans
        delinquent  60 days or  more  (including  Mortgage  Loans  which  are in
        foreclosure,  have been  foreclosed  or  otherwise  liquidated,  or with
        respect to which the  Mortgagor is in  bankruptcy  and any REO Property)
        averaged  over the last six months,  as a  percentage  of the  aggregate
        outstanding   Certificate   Principal   Balance   of   the   Subordinate
        Certificates, is less than or equal to 50%; and

               (b)  Realized  Losses  on the  Mortgage  Loans  to date  for such
        Distribution Date if occurring during the sixth, seventh,  eighth, ninth
        or tenth year (or any year  thereafter)  after the  Closing  Date do not
        exceed  30%,  35%,  40%,  45% or  50%,  respectively,  of the sum of the
        Initial Certificate Principal Balances of the Subordinate  Certificates;
        and

        (ii)  that for any  Distribution  Date  occurring  on or after  the 60th
Distribution  Date on which the Senior  Percentage  for a Loan Group exceeds the
initial  Senior   Percentage  for  such  Loan  Group,  the  Senior   Accelerated
Distribution  Percentage for such Loan Group and  Distribution  Date shall equal
100%.

        Notwithstanding the foregoing, if on any Distribution Date the Two Times
Test is satisfied,  the Senior Accelerated Distribution Percentage for each Loan
Group shall  equal (a) on or prior to the 36th  Distribution  Date,  the related
Senior Percentage for such Distribution Date plus 50% of the related Subordinate
Percentage for such Distribution Date and (b) after the 36th Distribution  Date,
the related Senior Percentage for such Distribution Date.

        Upon the reduction of the Certificate  Principal Balances of the related
Senior  Certificates  to  zero,  the  related  Senior  Accelerated  Distribution
Percentage shall thereafter be 0%.

        Senior  Certificate:  Any  one  of the  Class  A,  Class  X or  Class  R
Certificates,  executed  by the  Trustee and  authenticated  by the  Certificate
Registrar  substantially  in the form annexed hereto as Exhibit A-1, Exhibit A-2
and Exhibit D respectively.

     Senior  Percentage:   The  Group  1  Senior  Percentage,   Group  2  Senior
Percentage,  Group  3  Senior  Percentage  or  Group  4  Senior  Percentage,  as
applicable.

     Series: All of the Certificates  issued pursuant to a Pooling and Servicing
Agreement and bearing the same series designation.

     Servicing Accounts: The account or accounts created and maintained pursuant
to Section 3.08.

        Servicing  Advances:  All  customary,  reasonable  and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other  unanticipated  event by the Servicer in the  performance of its servicing
obligations,  including,  but not limited to, the cost of (i) the  preservation,
restoration  and  protection  of a  Mortgaged  Property  or,  with  respect to a
Cooperative  Loan, the related  Cooperative  Apartment,  (ii) any enforcement or
judicial proceedings, including foreclosures, including any expenses incurred in
relation  to any such  proceedings  that  result  from the  Mortgage  Loan being
registered on the MERS System,  (iii) the management and  liquidation of any REO
Property and (iv)  compliance with the  obligations  under Sections 3.01,  3.08,
3.12(a) and 3.14,  including,  if the Servicer or any  Affiliate of the Servicer
provides services such as appraisals and brokerage services that are customarily
provided  by  Persons  other  than  servicers  of  mortgage  loans,   reasonable
compensation for such services.

        Servicing Fee: With respect to any Mortgage Loan and Distribution  Date,
the fee payable  monthly to the  Servicer in respect of  servicing  compensation
that accrues at the Servicing Fee Rate.

        Servicing Fee Rate:  0.375% per annum.

                                       47
<PAGE>

        Servicing  Modification:  Any  reduction of the interest  rate on or the
outstanding  principal  balance of a Mortgage  Loan that is in  default,  or for
which,  in the  judgment of the  Servicer,  default is  reasonably  foreseeable,
pursuant to a  modification  of such Mortgage  Loan in  accordance  with Section
3.07(a).

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

        Special Hazard Amount:  As of any Distribution  Date, an amount equal to
$6,000,013.72 minus the sum of (i) the aggregate amount of Special Hazard Losses
allocated  solely to one or more specific  Classes of Certificates in accordance
with  Section  4.05 and (ii) the  Adjustment  Amount (as defined  below) as most
recently  calculated.  For each  anniversary of the Cut-off Date, the Adjustment
Amount shall be equal to the amount,  if any, by which the amount  calculated in
accordance with the preceding  sentence  (without giving effect to the deduction
of the Adjustment  Amount for such  anniversary)  exceeds the greater of (A) the
greatest of (i) twice the outstanding  principal balance of the Mortgage Loan in
the Trust  Fund  which has the  largest  outstanding  principal  balance  on the
Distribution Date immediately  preceding such  anniversary,  (ii) the product of
1.00% multiplied by the outstanding  principal  balance of all Mortgage Loans on
the  Distribution  Date  immediately  preceding such  anniversary  and (iii) the
aggregate  outstanding  principal  balance  (as  of  the  immediately  preceding
Distribution Date) of the Mortgage Loans in any single five-digit California zip
code area with the  largest  amount of  Mortgage  Loans by  aggregate  principal
balance as of such  anniversary  and (B) the  greater of (A) the  product of the
Special Hazard  Percentage for such  anniversary  multiplied by the  outstanding
principal balance of all the Mortgage Loans on the Distribution Date immediately
preceding such  anniversary and (B) twice the outstanding  principal  balance of
the Mortgage Loan in the Trust Fund which has the largest outstanding  principal
balance on the Distribution Date immediately preceding such anniversary.

        The  Special  Hazard  Amount  may be  further  reduced  by the  Servicer
(including  accelerating the manner in which coverage is reduced)  provided that
prior to any such reduction,  the Servicer shall (i) obtain written confirmation
from each Rating Agency that such reduction shall not reduce the rating assigned
to any  Class of  Certificates  by such  Rating  Agency  below  the lower of the
then-current  rating  or the  rating  assigned  to such  Certificates  as of the
Closing  Date by such  Rating  Agency  and (ii)  provide a copy of such  written
confirmation to the Trustee.

        Special  Hazard Loss: Any Realized Loss not in excess of the cost of the
lesser of repair or replacement  of a Mortgaged  Property (or, with respect to a
Cooperative Loan, the related Cooperative  Apartment) suffered by such Mortgaged
Property  (or  Cooperative  Apartment)  on  account  of  direct  physical  loss,
exclusive  of (i) any  loss of a type  covered  by a  hazard  policy  or a flood
insurance policy required to be maintained in respect of such Mortgaged Property
pursuant  to Section  3.12(a),  except to the extent of the portion of such loss
not covered as a result of any coinsurance  provision and (ii) any Extraordinary
Loss.

        Special Hazard  Percentage:  As of each anniversary of the Cut-off Date,
the greater of (i) 1.0% and (ii) the largest percentage obtained by dividing the
aggregate   outstanding   principal   balance  (as  of   immediately   preceding
Distribution Date) of the Mortgage Loans secured by Mortgaged Properties located
in a  single,  five-digit  zip  code  area in the  State  of  California  by the
outstanding  principal  balance of all the Mortgage Loans as of the  immediately
preceding Distribution Date.

     Standard  &  Poor's:  Standard  & Poor's,  a  division  of The  McGraw-Hill
Companies, Inc., or its successor in interest.

                                       48
<PAGE>

        Stated Principal  Balance:  With respect to any Mortgage Loan or related
REO Property,  at any given time, (i) the Cut-off Date Principal  Balance of the
Mortgage  Loan,  minus (ii) the sum of (a) the principal  portion of the Monthly
Payments due with respect to such Mortgage Loan or REO Property  during each Due
Period ending prior to the most recent  Distribution Date which were received or
with  respect to which an Advance was made,  and (b) all  Principal  Prepayments
with respect to such Mortgage Loan or REO Property,  and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds,  to the extent applied by the Servicer as
recoveries  of  principal in  accordance  with Section 3.14 with respect to such
Mortgage Loan or REO Property,  in each case which were distributed  pursuant to
Section  4.02 on any  previous  Distribution  Date,  and (c) any  Realized  Loss
allocated  to   Certificateholders   with  respect   thereto  for  any  previous
Distribution Date.

        Subordinate Certificate:  Any one of the Class M Certificates or Class B
Certificates,  executed  by the  Trustee and  authenticated  by the  Certificate
Registrar  substantially  in the form annexed hereto as Exhibit B and Exhibit C,
respectively.

        Subordinate Class Percentage:  With respect to any Distribution Date and
any Class of Subordinate  Certificates,  a fraction,  expressed as a percentage,
the numerator of which is the aggregate  Certificate  Principal  Balance of such
Class  of  Subordinate  Certificates  immediately  prior  to such  date  and the
denominator  of which is the aggregate  Stated  Principal  Balance of all of the
Mortgage  Loans  (or  related  REO   Properties)   immediately   prior  to  such
Distribution Date.

        Subordinate  Component:   With  respect  to  each  Loan  Group  and  any
Distribution  Date, the aggregate Stated Principal Balance of the Mortgage Loans
in that Loan Group,  as of the first day of the  related  Due Period,  minus the
aggregate  Certificate  Principal  Balance of the  related  Senior  Certificates
immediately prior to that Distribution Date.

        Subordinate Percentage:  As of any Distribution Date and any Loan Group,
100% minus the  Senior  Percentage  for such Loan Group as of such  Distribution
Date.

        Subordinate   Principal   Distribution   Amount:  With  respect  to  any
Distribution  Date, any Loan Group and each Class of  Subordinate  Certificates,
(a) the sum of (i) the product of (x) such Class's pro rata share,  based on the
Certificate  Principal  Balance of each Class of Subordinate  Certificates  then
outstanding,   and  (y)  the  aggregate  of  the  amounts  calculated  for  such
Distribution  Date under  clauses  (1),  (2) and (3) of  Section  4.02(a)(ii)(A)
(without  giving effect to the related Senior  Percentage)  with respect to such
Loan  Group to the extent not  payable  to the  Senior  Certificates;  (ii) such
Class's pro rata share, based on the Certificate Principal Balance of each Class
of  Subordinate  Certificates  then  outstanding,  of the principal  collections
described in Section  4.02(a)(ii)(B)(b)  (without  giving  effect to the related
Senior Accelerated  Distribution  Percentage) with respect to such Loan Group to
the  extent  such  collections  are  not  otherwise  distributed  to the  Senior
Certificates;  (iii) the  product  of (x) the  related  Prepayment  Distribution
Percentage  and (y) the aggregate of all Principal  Prepayments in Full received
in the related  Prepayment  Period and  Curtailments  received in the  preceding
calendar  month with respect to such Loan Group to the extent not payable to the
related  Senior  Certificates;  (iv) if such  Class is the Class of  Subordinate

                                       49
<PAGE>

Certificates with the Highest Priority,  any Excess Subordinate Principal Amount
for such Loan Group for such  Distribution Date to the extent not payable to the
related Senior Certificates;  and (v) any amounts described in clauses (i), (ii)
and  (iii)  as  determined  for any  previous  Distribution  Date,  that  remain
undistributed  to the extent that such amounts are not  attributable to Realized
Losses which have been allocated to a Class of Subordinate  Certificates  with a
Lower Priority  minus (b) with respect to the Class of Subordinate  Certificates
with the Lowest Priority,  any Excess Subordinate Principal Amount for such Loan
Group  for such  Distribution  Date;  provided,  however,  that the  Subordinate
Principal  Distribution Amount for any Class of Subordinate  Certificates on any
Distribution Date shall in no event exceed the outstanding Certificate Principal
Balance of such Class of Certificates immediately prior to such date.

        Subserviced  Mortgage  Loan:  Any  Mortgage  Loan  that,  at the time of
reference thereto, is subject to a Subservicing Agreement.

        Subservicer:  Any  Person  with whom the  Servicer  has  entered  into a
Subservicing Agreement.

        Subservicer  Advance:  Any  delinquent   installment  of  principal  and
interest on a Mortgage Loan which is advanced by the related Subservicer (net of
its Subservicing Fee) pursuant to the Subservicing Agreement.

     Subservicing Account: An account established by a Subservicer in accordance
with Section 3.08.

     Subservicing  Agreement:  The written contract between the Servicer and any
Subservicer  relating to servicing and  administration of certain Mortgage Loans
as provided in Section 3.02.

     Subservicing  Fee: As to any Mortgage Loan, the fee payable  monthly to the
related Subservicer, if any.

        Swap Agreement: The transactions evidenced by the Swap Confirmation with
respect to the Auction  Certificates,  dated as of the Closing Date, between GCD
and the Auction Administrator.

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

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

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

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

        Trust Fund:  The segregated pool of assets consisting of:

(i)            the Mortgage Loans and the related  Mortgage Files and collateral
               securing such Mortgage Loans,

(ii)           all payments on and  collections in respect of the Mortgage Loans
               due  after  the  Cut-off  Date  as  shall  be on  deposit  in the
               Custodial  Account or in the Payment  Account and  identified  as
               belonging to the Trust Fund,

(iii)          property  that secured a Mortgage Loan and that has been acquired
               for the benefit of the  Certificateholders by foreclosure or deed
               in lieu of foreclosure,

(iv)           the hazard insurance policies and Primary Insurance Policies,  if
               any,

                                       50
<PAGE>

(v)            the Hedge Agreement,

(vi)           the Auction Administration Agreement,

(vii)          the Swap Agreement, and

(viii)         all proceeds of clauses (i) through (vii) above.

        A REMIC  election  with  respect to the Trust Fund (other than the Hedge
Agreement and the Swap Agreement) is made pursuant to this Agreement.

        Two Times Test: With respect to any Distribution  Date, the satisfaction
of all of the following conditions:  (i) the Aggregate Subordinate Percentage is
at least two times the Aggregate Subordinate  Percentage as of the Closing Date;
(ii) the  aggregate  of the Stated  Principal  Balances  of all  Mortgage  Loans
Delinquent 60 days or more  (including  Mortgage  Loans in REO and  foreclosure)
(averaged over the preceding six-month period), as a percentage of the aggregate
of the Certificate Principal Balances of the Subordinate Certificates,  does not
exceed  50%;  and  (iii) on or  after  the 36th  Distribution  Date,  cumulative
Realized Losses do not exceed 30% of the aggregate Certificate Principal Balance
of the  Subordinate  Certificates  as of the  Closing  Date or prior to the 36th
Distribution Date, cumulative Realized Losses do not exceed 20% of the aggregate
Certificate Principal Balance of the Subordinate  Certificates as of the Closing
Date.

        Uncertificated  Balance:  The amount of any REMIC I Regular  Interest or
REMIC II Regular Interest outstanding as of any date of determination. As of the
Closing Date, the Uncertificated  Balance of each REMIC I Regular Interest shall
equal the amount set forth in the  Preliminary  Statement  hereto as its Initial
Uncertificated Balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be reduced, as provided in the definition of
Realized Loss and by distributions of principal deemed made with respect to such
Interest pursuant to the definition of REMIC I Distribution Amount, Section 4.02
and Section 10.04.  As of the Closing Date, the  Uncertificated  Balance of each
REMIC II Regular  Interest  shall equal the amount set forth in the  Preliminary
Statement hereto as its Initial  Uncertificated  Balance.  On each  Distribution
Date,  the  Uncertificated  Balance of each REMIC II Regular  Interest  shall be
reduced,  first, by the portion of Realized Losses allocated in reduction of the
principal  balances of the Related Classes of Certificates on such  Distribution
Date and, second, by all distributions of principal deemed made on such REMIC II
Regular Interest,  as applicable,  on such Distribution Date pursuant to Section
10.04. The Uncertificated  Balance of each REMIC II Regular Interest shall never
be less than zero.

        Uncertificated  Interest:  With respect to any REMIC I Regular  Interest
for any  Distribution  Date, one month's interest at the rate specified for such
Interest  in the  Preliminary  Statement  applicable  to such  REMIC  I  Regular
Interest  for such  Distribution  Date,  accrued on the  Uncertificated  Balance
thereof immediately prior to such Distribution Date.  Uncertificated Interest in
respect of any REMIC I Regular  Interest  shall accrue on the basis of a 360-day
year consisting of twelve 30-day months. Uncertificated Interest with respect to
each Distribution Date, as to any REMIC I Regular Interest,  shall be reduced by
any interest  shortfalls  for such  Distribution  Date for the related  Group of
Mortgage  Loans  allocated  between  the  related  Class Y and Class Z Interests
pro-rata  according to the amount of interest accrued with respect thereto prior
to reduction by the provisions of this definition.  In addition,  Uncertificated
Interest  with  respect  to each  Distribution  Date,  as to any REMIC I Regular
Interest  shall be reduced by  interest  portion of Realized  Losses  (including
Excess Special Hazard Losses,  Excess Fraud Losses, Excess Bankruptcy Losses and
Extraordinary  Losses) for the related Group of Mortgage Loans allocated between
the related  Class Y and Class Z Interests  pro-rata  according to the amount of
interest  accrued with respect  thereto prior to reduction by the  provisions of

                                       51
<PAGE>

this  definition.  With  respect  to any  REMIC  II  Regular  Interest  for  any
Distribution  Date, one month's interest at the rate specified for such Interest
in the Preliminary  Statement  applicable to such REMIC II Regular  Interest for
such  Distribution  Date,   accrued  on  the   Uncertificated   Balance  thereof
immediately prior to such Distribution Date.  Uncertificated Interest in respect
of any REMIC II Regular  Interest  shall  accrue on the basis of a 360-day  year
consisting of twelve 30-day months. Uncertificated Interest with respect to each
Distribution Date, as to any REMIC II Regular Interest,  shall be reduced by any
interest shortfalls  allocated to the Related Classes of Certificates  (interest
losses  allocated  to the  Class X  Certificates  shall be  allocated  among the
related REMIC II Regular Interests pro rata according to the excess of the Group
2 Net WAC Cap Rate or Group 3 Net WAC Cap Rate, as applicable,  over the Formula
Rate  for the  related  Class A  Certificates)  on such  Distribution  Date . In
addition,  Uncertificated Interest with respect to each Distribution Date, as to
any REMIC II Regular  Interest shall be reduced by interest  portion of Realized
Losses  (including  Excess Special Hazard  Losses,  Excess Fraud Losses,  Excess
Bankruptcy Losses and Extraordinary  Losses) allocated to the Related Classes of
Certificates on such Distribution Date (interest losses allocated to the Class X
Certificates shall be allocated among the related REMIC II Regular Interests pro
rata  according to the excess of the Group 2 Net WAC Cap Rate or Group 3 Net WAC
Cap  Rate,  as  applicable,  over  the  Formula  Rate  for the  related  Class A
Certificates).

        Undercollateralized  Group:  For  any  Distribution  Date,  Group  1, if
immediately prior to such Distribution Date the aggregate  Certificate Principal
Balance of the Class A-I-1 Certificates and Class R Certificates is greater than
the  aggregate  Stated  Principal   Balance  of  the  Group  1  Loans;  for  any
Distribution  Date, Group 2, if immediately  prior to such Distribution Date the
Certificate  Principal Balance of the Class A-II Auction Certificates is greater
than the  aggregate  Stated  Principal  Balance  of the  Group 2 Loans;  for any
Distribution  Date, Group 3, if immediately  prior to such Distribution Date the
Certificate Principal Balance of the Class A-III Auction Certificates is greater
than the aggregate  Stated  Principal  Balance of the Group 3 Loans; and for any
Distribution  Date, Group 4, if immediately  prior to such Distribution Date the
Certificate  Principal Balance of the Class A-IV-1  Certificates is greater than
the aggregate Stated Principal Balance of the Group 4 Loans.

        Uniform Single  Attestation  Program for Mortgage  Bankers:  The Uniform
Single  Attestation  Program for Mortgage Bankers,  as published by the Mortgage
Bankers  Association  of America and  effective  with respect to fiscal  periods
ending on or after December 15, 1995.

        Uninsured  Cause:  Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.

        United States  Person:  (i) A citizen or resident of the United  States,
(ii) a  corporation,  partnership  or other entity  treated as a corporation  or
partnership for United States federal income tax purposes  organized in or under
the laws of the United  States or any state  thereof or the District of Columbia
(unless, in the case of a partnership,  Treasury regulations provide otherwise),
provided  that,  for  purposes  solely of the  restrictions  on the  transfer of
residual interests,  no partnership or other entity treated as a partnership for
United States  federal  income tax purposes  shall be treated as a United States
Person  unless all  persons  that own an  interest  in such  partnership  either
directly  or  indirectly  through  any  chain of  entities  no one of which is a
corporation  for United States  federal  income tax purposes are required by the
applicable operating agreement to be United States Persons,  (iii) an estate the
income of which is  includible  in gross income for United  States tax purposes,
regardless of its source, or (iv) a trust if a court within the United States is
able to exercise primary  supervision over the  administration  of the trust and
one or more United  States  persons have  authority  to control all  substantial
decisions of the trust.  Notwithstanding the preceding  sentence,  to the extent
provided in Treasury  regulations,  certain  trusts in  existence  on August 20,
1996,  and treated as United States  persons  prior to such date,  that elect to
continue to be treated as United  States  persons  will also be a United  States
Person.

                                       52
<PAGE>

        Voting  Rights:  The  portion  of  the  voting  rights  of  all  of  the
Certificates  which is allocated to any  Certificate,  as  designated in Section
11.09.

Section 1.02.  Use of Words and Phrases.

        "Herein," "hereby," "hereunder," `hereof," "hereinbefore," "hereinafter"
and other  equivalent  words refer to the Pooling and  Servicing  Agreement as a
whole. All references herein to Articles, Sections or Subsections shall mean the
corresponding  Articles,  Sections and  Subsections in the Pooling and Servicing
Agreement.  The  definition  set forth herein  include both the singular and the
plural.

Section 1.03.  Determination of LIBOR.

        LIBOR  applicable to the  calculation  of the  Pass-Through  Rate on the
Class  A-II-1  Certificates  and Class  A-III-1  Certificates  for any  Interest
Accrual Period will be determined as of each LIBOR Rate Adjustment Date. On each
LIBOR Rate  Adjustment  Date,  or if such LIBOR  Rate  Adjustment  Date is not a
Business  Day,  then  on the  next  succeeding  Business  Day,  LIBOR  shall  be
established by the Trustee and, as to any Interest  Accrual  Period,  will equal
the rate for one  month  United  States  dollar  deposits  that  appears  on the
Telerate  Screen Page 3750 as of 11:00  a.m.,  London  time,  on such LIBOR Rate
Adjustment  Date.  "Telerate  Screen Page 3750" means the display  designated as
page 3750 on the Bridge Telerate Service (or such other page as may replace page
3750 on that  service for the purpose of  displaying  London  interbank  offered
rates of major banks).  If such rate does not appear on such page (or such other
page as may replace that page on that  service,  or if such service is no longer
offered,  LIBOR  shall  be so  established  by use of  such  other  service  for
displaying  LIBOR or  comparable  rates as may be selected by the Trustee  after
consultation  with the Master  Servicer),  the rate will be the  Reference  Bank
Rate. The "Reference  Bank Rate" will be determined on the basis of the rates at
which deposits in U.S.  Dollars are offered by the reference  banks (which shall
be any  three  major  banks  that are  engaged  in  transactions  in the  London
interbank  market,  selected by the Trustee after  consultation  with the Master
Servicer) as of 11:00 a.m.,  London time, on the LIBOR Rate  Adjustment  Date to
prime banks in the London  interbank market for a period of one month in amounts
approximately equal to the aggregate  Certificate Principal Balance of the Class
A-II-1 Certificates and Class A-III-1 Certificates then outstanding. The Trustee
will  request the  principal  London  office of each of the  reference  banks to
provide a quotation of its rate. If at least two such  quotations  are provided,
the rate will be the arithmetic  mean of the  quotations  rounded up to the next
multiple of 1/16%.  If on such date fewer than two  quotations  are  provided as
requested,  the rate will be the  arithmetic  mean of the rates quoted by one or
more major banks in New York City,  selected by the Trustee  after  consultation
with the Master Servicer, as of 11:00 a.m., New York City time, on such date for
loans in U.S.  Dollars  to leading  European  banks for a period of one month in
amounts  approximately equal to the aggregate  Certificate  Principal Balance of
the Class A-II-1  Certificates and Class A-III-1  Certificates then outstanding.
If no such  quotations  can be  obtained,  the rate  will be LIBOR for the prior
Distribution Date; provided however,  if, under the priorities  described above,
LIBOR  for a  Distribution  Date  would  be  based  on  LIBOR  for the  previous
Distribution  Date for the third  consecutive  Distribution  Date,  the Trustee,
shall  select an  alternative  comparable  index  (over which the Trustee has no
control),  used for  determining  one-month  Eurodollar  lending  rates  that is
calculated and published (or otherwise made available) by an independent  party.
The  establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment Date and
the Trustee's subsequent  calculation of the Pass Through Rate applicable to the
Class  A-II-1  Certificates  and Class  A-III-1  Certificates  for the  relevant
Interest  Accrual Period,  in the absence of manifest  error,  will be final and
binding.  Promptly  following each LIBOR Rate  Adjustment Date the Trustee shall
supply the Master  Servicer  with the results of its  determination  of LIBOR on
such date.  Furthermore,  the Trustee  will supply to any  Certificateholder  so
requesting  by  calling  the  Bondholder  Inquiry  Line  at  1-800-275-2048  the
Pass-Through   Rate  on  the  Class  A-II-1   Certificates   and  Class  A-III-1
Certificates  for the current and the  immediately  preceding  Interest  Accrual
Period.

                                       53
<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01.  Conveyance of Mortgage Loans.

(a) The Company,  concurrently  with the  execution  and delivery  hereof,  does
hereby assign to the Trustee for the benefit of the  Certificateholders  without
recourse all the right, title and interest of the Company in and to the Mortgage
Loans,  including all interest and principal  received on or with respect to the
Mortgage  Loans after the Cut-off  Date (other than  payments of  principal  and
interest due on the Mortgage Loans on or before the Cut-off Date).

(b) In connection with such assignment,  and contemporaneously with the delivery
of this Agreement,  the Company delivered or caused to be delivered hereunder to
the Trustee,  the Hedge Agreement (the delivery of which shall evidence that the
fixed  payment  for the Hedge  Agreement  has been paid and the  Trustee and the
Trust Fund shall have no further  payment  obligation  thereunder  and that such
fixed payment has been  authorized  hereby) and the Company does hereby  deliver
to, and deposit with, the Trustee, or to and with one or more Custodians, as the
duly  appointed  agent or agents of the Trustee for such  purpose,  the original
Mortgage Note, with respect to each Mortgage Loan so assigned,  endorsed without
recourse in blank,  or in the name of the  Trustee as trustee,  and signed by an
authorized officer (which endorsement shall contain either an original signature
or a facsimile  signature of an authorized  officer of GMACM, and if in the form
of an allonge,  the allonge  shall be stapled to the  Mortgage  Note),  with all
intervening  endorsements  showing a complete chain of title from the originator
to GMACM.  If the Mortgage  Loan was  acquired by the endorser in a merger,  the
endorsement  must  be  by  "____________,   successor  by  merger  to  [name  of
predecessor]".  If the Mortgage  Loan was acquired or originated by the endorser
while  doing  business  under  another  name,   the   endorsement   must  be  by
"____________ formerly known as [previous name]."

In lieu of  delivering  the Mortgage  Note  relating to any Mortgage  Loan,  the
Company may  deliver or cause to be  delivered  a lost note  affidavit  from the
Seller stating that the original Mortgage Note was lost, misplaced or destroyed,
and, if available,  a copy of each original  Mortgage Note;  provided,  however,
that in the case of  Mortgage  Loans  which have been  prepaid in full after the
Cut-off Date and prior to the Closing Date,  the Company,  in lieu of delivering
the above documents,  may deliver or cause to be delivered to the Custodian,  if
any,  or the  Trustee,  a  certification  to such  effect and shall  deposit all
amounts  paid in respect of such  Mortgage  Loan in the  Payment  Account on the
Closing Date.

(c) All  other  documents  contained  in the  Mortgage  File  and  any  original
documents  relating to the Mortgage  Loans not contained in the Mortgage File or
delivered to the Custodian,  if any, or the Trustee are and shall be held by the
Servicer in trust as agent for the Trustee on behalf of the Certificateholders.

        In the event that in connection with any Mortgage Loan: (a) the original
recorded Mortgage (or evidence of submission to the recording  office),  (b) all
interim recorded assignments,  (c) the original recorded modification agreement,
if  required,  or (d)  evidence  of title  insurance  (together  with all riders
thereto,  if any) satisfying the  requirements of clause (I)(ii),  (iv), (vi) or
(vii) of the definition of Mortgage File, respectively,  have not been delivered
to the Servicer concurrently with the execution and delivery hereof because such
document  or  documents  have  not been  returned  from  the  applicable  public
recording  office,   or,  in  the  case  of  each  such  interim  assignment  or
modification  agreement,  because the related  Mortgage has not been returned by
the appropriate recording office, in the case of clause (I)(ii), (iv) or (vi) of
the definition of Mortgage File, or because the evidence of title  insurance has

                                       54
<PAGE>

not been  delivered  to the  Seller by the title  insurer  in the case of clause
(I)(vii)  of the  definition  of  Mortgage  File,  the  Servicer  shall  use its
reasonable best efforts to obtain,  (A) in the case of clause  (I)(ii),  (iv) or
(vi) of the definition of Mortgage File,  such original  Mortgage,  such interim
assignment, or such modification agreement, with evidence of recording indicated
thereon  upon  receipt  thereof  from the  public  recording  office,  or a copy
thereof,  certified, if appropriate, by the relevant recording office, or (B) in
the case of clause  (I)(vii) of the  definition  of Mortgage  File,  evidence of
title insurance.

(d) If any of the  documents  held by the Servicer  pursuant to clause (c) above
are  missing or  defective  in any other  respect and such  missing  document or
defect materially and adversely affects the interests of the  Certificateholders
in the related  Mortgage  Loan, the Servicer shall request that GMACM either (i)
cure such defect in all material  respects,  (ii)  substitute  for such Mortgage
Loan  a  Qualified   Substitute  Mortgage  Loan,  which  substitution  shall  be
accomplished  in the manner and subject to the  conditions  set forth in Section
2.04,  or (iii)  purchase such Mortgage Loan from the Trust Fund at the Purchase
Price  within 90 days after the date on which GMACM was notified of such defect;
provided  that if such defect would cause the  Mortgage  Loan to be other than a
"qualified  mortgage"  as defined in Section  860G(a)(3)  of the Code,  any such
cure,  substitution  or repurchase  must occur within 90 days from the date such
breach  was  discovered.  If GMACM  fails to  comply  with such  request  by the
Servicer,  the Servicer  shall  notify the Trustee of such  missing  document or
material  defect and the  Trustee  shall  cause GMACM to comply with clause (i),
(ii) or (iii) of the preceding  sentence.  It is understood  and agreed that the
obligation of GMACM to cure a material defect in, or substitute for, or purchase
any Mortgage Loan as to which a material  defect in or omission of a constituent
document  exists,  shall  constitute  the sole remedy  respecting  such material
defect or omission available to  Certificateholders  or the Trustee on behalf of
Certificateholders.  The Purchase Price for the purchased Mortgage Loan shall be
deposited or caused to be  deposited  upon receipt by the Trustee in the Payment
Account, or upon receipt by the Servicer in the Custodial Account.  Upon receipt
by the Trustee of written  notification  of such  deposit  signed by a Servicing
Officer,  the  Trustee  shall (i)  release or cause to be  released to GMACM the
related Mortgage Note, (ii) cause the Servicer to release to GMACM any remaining
documents in the related Mortgage File which are held by the Servicer, and (iii)
execute and deliver such  instruments  of transfer or  assignment,  in each case
without recourse, as GMACM shall require as necessary to vest in GMACM ownership
of any Mortgage Loan released pursuant hereto and at such time the Trustee shall
have no further responsibility with respect to the related Mortgage Note.

(e) The Servicer shall keep in its  possession (a) from time to time  additional
original  documents  evidencing an assumption or modification of a Mortgage Loan
and (b) any other documents required to be held by the Servicer.

        Except  as may  otherwise  expressly  be  provided  herein,  none of the
Seller,  the Servicer or the Trustee shall assign,  sell, dispose of or transfer
any interest in the Trust Fund or any portion thereof,  or permit the Trust Fund
or any  portion  thereof to be subject to any lien,  claim,  mortgage,  security
interest, pledge or other encumbrance of, any other Person.

        The  Servicer  shall  cause  to be  filed  the  UCC  assignment  and UCC
financing  statement referred to in clause (II)(vii) and (x),  respectively,  of
the  definition  of Mortgage  File.  If any UCC  assignment  or amendment or UCC
financing statement, as applicable,  is lost or returned unfiled to the Servicer
because of any defect  therein,  the Servicer  shall  prepare a  substitute  UCC
assignment or amendment or UCC financing statement, as applicable,  or cure such
defect,  and cause such UCC assignment or amendment or UCC financing  statement,
as applicable, to be filed in accordance with this paragraph. In connection with
its servicing of Cooperative  Loans,  the Servicer will use its reasonable  best
efforts to file timely  continuation  statements  with regard to each  financing
statement and assignment  relating to Cooperative  Loans as to which the related
Cooperative Apartment is located outside of the State of New York.

                                       55
<PAGE>

        In connection with the assignment of any Mortgage Loan registered on the
MERS(R)  System,  the  Servicer  further  agrees  that  it  will  cause,  at the
Servicer's  own expense,  as soon as  practicable  after the Closing  Date,  the
MERS(R)  System to indicate that such  Mortgage  Loans have been assigned to the
Trustee   in   accordance   with  this   Agreement   for  the   benefit  of  the
Certificateholders  by including  (or  deleting,  in the case of Mortgage  Loans
which are  repurchased in accordance with this Agreement) in such computer files
(a) the code  "[IDENTIFY  TRUSTEE  SPECIFIC  CODE]" in the field  "[IDENTIFY THE
FIELD  NAME  FOR  TRUSTEE]"  which  identifies  the  Trustee  and (b)  the  code
"[IDENTIFY  SERIES  SPECIFIC  CODE  NUMBER]"  in the field  "Pool  Field"  which
identifies  the  series  of the  Certificates  issued  in  connection  with such
Mortgage Loans.  The Servicer agrees that it will not alter the codes referenced
in this  paragraph  with  respect to any  Mortgage  Loan during the term of this
Agreement  unless and until such Mortgage Loan is repurchased in accordance with
the  terms of this  Agreement,  and there is filed any  financing  statement  or
amendment thereof necessary to comply with the New York Uniform  Commercial Code
or the Uniform Commercial Code of any applicable jurisdiction.

(f) It is  intended  that the  conveyance  by the  Company to the Trustee of the
Mortgage  Loans as provided  for in this  Section 2.01 be construed as a sale by
the  Company  to the  Trustee  of the  Mortgage  Loans  for the  benefit  of the
Certificateholders.  Further,  it is not intended that such conveyance be deemed
to be a grant of a security interest in the Mortgage Loans by the Company to the
Trustee to secure a debt or other  obligation  of the Company.  However,  if the
Mortgage  Loans are held to be property  of the Company or of the Seller,  or if
for any reason this Agreement is held or deemed to create a security interest in
the Mortgage  Loans,  then it is intended that, (a) this Agreement be and hereby
is a  security  agreement  within  the  meaning  of  Article  9 of  the  Uniform
Commercial Code of any applicable jurisdiction;  (b) the conveyance provided for
in Section 2.01 shall be deemed to be, and hereby is, (1) a grant by the Company
to the Trustee of a security  interest in all of the Company's right,  title and
interest,  whether now owned or hereafter acquired, in and to the following: (A)
the Mortgage  Loans,  including (i) with respect to each  Cooperative  Loan, the
related  Mortgage Note,  Security  Agreement,  Assignment of Proprietary  Lease,
Cooperative Stock  Certificate and Cooperative  Lease, (ii) with respect to each
Mortgage  Loan other than a  Cooperative  Loan,  the related  Mortgage  Note and
Mortgage,  and (iii) any  insurance  policies  and all  other  documents  in the
related Mortgage File, (B) all amounts payable pursuant to the Mortgage Loans in
accordance with the terms thereof, (C) all proceeds of the conversion, voluntary
or  involuntary,  of the foregoing into cash,  instruments,  securities or other
property,  including  without  limitation  all amounts from time to time held or
invested in the Payment Account or the Custodial Account, whether in the form of
cash,  instruments,  securities or other  property,  (D) all  accounts,  general
intangibles,  chattel paper,  instruments,  documents,  money, deposit accounts,
goods, letters of credit, letter-of-credit rights, oil, gas, and other minerals,
and  investment  property  consisting of, arising from or relating to any of the
foregoing,  and (E) all proceeds of the foregoing,  and (2) an assignment by the
Company to the Trustee of any  security  interest in any and all of the Seller's
right (including the power to convey title thereto), title and interest, whether
now  owned  or  hereafter  acquired,  in and to the  property  described  in the
foregoing  clauses  (1)(A),  (B),  (C), (D) and (E) granted by the Seller to the
Company pursuant to the Purchase  Agreement;  (c) the possession by the Trustee,
the Custodian or any other agent of the Trustee of any of the foregoing property
shall be deemed to be  possession  by the  secured  party,  or  possession  by a
purchaser  or a person  holding  for the  benefit  of such  secured  party,  for
purposes of  perfecting  the  security  interest  pursuant  to the  Pennsylvania
Uniform  Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction (including, without limitation,  Sections 9-313 and 9-314 thereof);
and (d)  notifications  to persons holding such property,  and  acknowledgments,
receipts or  confirmations  from persons holding such property,  shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, securities
intermediaries,  bailees or agents of, or persons  holding  for, the Trustee (as
applicable)  for  the  purpose  of  perfecting  such  security   interest  under
applicable law.

        The  Company  and,  at the  Company's  direction,  GMACM and the Trustee
shall,  to the  extent  consistent  with this  Agreement,  take such  reasonable
actions as may be necessary to ensure that, if this Agreement were determined to
create  a  security  interest  in the  Mortgage  Loans  and the  other  property
described  above,  such security  interest would be determined to be a perfected

                                       56
<PAGE>

security  interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement.  Without  limiting the generality
of the foregoing,  the Company shall prepare and deliver to the Trustee not less
than 15 days prior to any filing date and, the Trustee shall forward for filing,
or shall cause to be forwarded  for filing,  at the expense of the Company,  all
filings  necessary  to  maintain  the  effectiveness  of  any  original  filings
necessary under the Uniform  Commercial Code as in effect in any jurisdiction to
perfect the Trustee's  security  interest in the Mortgage Loans, as evidenced by
an  Officer's  Certificate  of the Company,  including  without  limitation  (x)
continuation  statements,  and (y) such other statements as may be occasioned by
(1)  any  change  of  name of the  Seller,  the  Company  or the  Trustee  (such
preparation and filing shall be at the expense of the Trustee,  if occasioned by
a change in the  Trustee's  name),  (2) any  change of type or  jurisdiction  of
organization  of the Seller or the Company and (3) any  transfer of any interest
of the Seller or the Company in any  Mortgage  Loan.  The Company  shall file or
cause to be filed the original  filing  necessary  under the Uniform  Commercial
Code to perfect the Trustee's security interest in the Mortgage Loans.

Section 2.02.  Acceptance by Trustee.

        The Trustee  acknowledges  that the  Custodian,  acting on behalf of the
Trustee,  has  received  (subject  to any  exceptions  noted  in  the  custodian
certification  described below) the Mortgage Notes and the Trustee declares that
it holds or will hold the assets  included in the definition of "Trust Fund," in
trust  for  the   exclusive   use  and   benefit  of  all   present  and  future
Certificateholders.

        The Trustee agrees, for the benefit of the Certificateholders,  to cause
the Custodian to review each Mortgage Note and to execute and deliver,  or cause
to be executed and delivered, to GMACM, the Trustee and the Servicer a custodian
certification  substantially in the form annexed hereto as Exhibit M on or prior
to the Closing Date.  Pursuant to the Custodial  Agreement,  in conducting  such
review,  the Custodian is required to ascertain  whether the Mortgage Notes have
been executed and received, and whether the Mortgage Notes relate, determined on
the basis of the Mortgagor name,  original principal balance and loan number, to
the Mortgage  Loans.  Neither the  Custodian  nor the Trustee shall be under any
duty or obligation to inspect,  review or examine said  documents,  instruments,
certificates or other papers to determine that the same are genuine, enforceable
or  appropriate  for the  represented  purpose or that they have  actually  been
recorded,  or are in  recordable  form or that  they are  other  than  what they
purport to be on their face.

        If, in the process of reviewing  the Mortgage  Notes and  preparing  the
certifications  referred to above,  the Custodian  finds any Mortgage Note to be
missing or  contains  any defect  which  materially  and  adversely  affects the
interests of the  Certificateholders in the related Mortgage Loan, the Custodian
is required  pursuant to the  Custodial  Agreement,  to notify the Trustee,  the
Company and the Seller,  and the Trustee  shall request that GMACM cure any such
defect in all material  respects within 90 days from the date on which GMACM was
notified of such defect,  and if GMACM does not cure such defect in all material
respects  during  such  period,  the  Trustee  shall  request  on  behalf of the
Certificateholders  that GMACM either (i)  substitute  for such  Mortgage Loan a
Qualified  Substitute Mortgage Loan, which substitution shall be accomplished in
the manner and  subject to the  conditions  set forth in Section  2.04,  or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase  Price within 90
days after the date on which GMACM was notified of such defect; provided that if
such  defect  would  cause  the  Mortgage  Loan to be  other  than a  "qualified
mortgage"  as  defined  in  Section  860G(a)(3)  of the  Code,  any  such  cure,
substitution  or repurchase  must occur within 90 days from the date such breach
was discovered. It is understood and agreed that the obligation of GMACM to cure
a material  defect in, or  substitute  for, or purchase any Mortgage  Loan as to
which a  material  defect  in, or  omission  of, a Mortgage  Note  exists  shall

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<PAGE>

constitute the sole remedy respecting such material defect or omission available
to  Certificateholders  or the  Trustee  on  behalf of  Certificateholders.  The
Purchase  Price for the purchased  Mortgage Loan shall be deposited or caused to
be deposited upon receipt by the Trustee in the Payment Account, or upon receipt
by the Servicer in the Custodial Account. Upon receipt by the Trustee of written
notification  of such deposit signed by a Servicing  Officer,  the Trustee shall
(i) release or cause to be released to GMACM the  related  Mortgage  Note,  (ii)
cause the  Servicer to release to GMACM any  remaining  documents in the related
Mortgage File which are held by the Servicer, and (iii) execute and deliver such
instruments of transfer or assignment,  in each case without recourse,  as GMACM
shall  require as  necessary to vest in GMACM  ownership  of any  Mortgage  Loan
released  pursuant  hereto  and at such time the  Trustee  shall have no further
responsibility with respect to the related Mortgage Note.

Section 2.03.  Representations, Warranties and Covenants of the Servicer.

        The  Servicer  hereby  represents  and  warrants  to the Trustee for the
benefit of the Certificateholders that:

(i)            The Servicer is a corporation  duly organized,  validly  existing
               and in good  standing  under the laws  governing its creation and
               existence and is or will be in  compliance  with the laws of each
               state in which any  Mortgaged  Property  is located to the extent
               necessary to ensure the  enforceability  of each Mortgage Loan in
               accordance with the terms of this Agreement;

(ii)           The execution and delivery of this  Agreement by the Servicer and
               its  performance  and compliance with the terms of this Agreement
               will not violate the Servicer's  Certificate of  Incorporation or
               Bylaws or constitute a material default (or an event which,  with
               notice or lapse of time,  would  constitute  a material  default)
               under,  or  result  in  the  material  breach  of,  any  material
               contract,  agreement or other instrument to which the Servicer is
               a party or which may be  applicable to the Servicer or any of its
               assets;

          (iii)This  Agreement,   assuming  due  authorization,   execution  and
               delivery  by the Trustee and the  Company,  constitutes  a valid,
               legal and binding obligation of the Servicer, enforceable against
               it in  accordance  with the terms  hereof  subject to  applicable
               bankruptcy, insolvency, reorganization, moratorium and other laws
               affecting the enforcement of creditors'  rights  generally and to
               general   principles  of  equity,   regardless  of  whether  such
               enforcement is considered in a proceeding in equity or at law and
               to  public   policy  as  it   relates  to   indemnification   and
               contribution under applicable securities laws;

(iv)           The  Servicer  is not in  default  with  respect  to any order or
               decree of any  court or any  order,  regulation  or demand of any
               federal,  state,  municipal or governmental agency, which default
               might have  consequences  that  would  materially  and  adversely
               affect the  condition  (financial  or other) or operations of the
               Servicer or its properties or might have  consequences that would
               materially adversely affect its performance hereunder;

(v)            No  litigation  is  pending  or,  to the  best of the  Servicer's
               knowledge,  threatened  against the Servicer which would prohibit
               its entering into this  Agreement or performing  its  obligations
               under this Agreement;

(vi)           The  Servicer  will  comply  in  all  material  respects  in  the
               performance  of this  Agreement  with all  reasonable  rules  and
               requirements  of  each  insurer  under  each  Required  Insurance
               Policy;

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<PAGE>

(vii)          No information, certificate of an officer, statement furnished in
               writing or report delivered to the Company,  any Affiliate of the
               Company or the Trustee by the Servicer  will, to the knowledge of
               the Servicer,  contain any untrue statement of a material fact or
               omit  a  material  fact   necessary  to  make  the   information,
               certificate, statement or report not misleading; and

(viii)         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 Mortgage Loans that
               are registered with MERS.

It is understood and agreed that the representations and warranties set forth in
this Section 2.03 shall survive delivery of the respective Mortgage Notes to the
Custodian, if any, or the Trustee.

Section 2.04.  Representations and Warranties of the Seller.

        The  Company   hereby   assigns  to  the  Trustee  for  the  benefit  of
Certificateholders  all of its  right,  title and  interest  in  respect  of the
Purchase   Agreement   insofar  as  the  Purchase   Agreement   relates  to  the
representations  and  warranties  made by the Seller in respect of the  Mortgage
Loans  and  any   remedies   provided   thereunder   for  any   breach  of  such
representations  and warranties,  such right, title and interest may be enforced
by the  Servicer on behalf of the Trustee and the  Certificateholders.  Upon the
discovery by the Company, the Servicer, the Trustee or any Custodian of a breach
of any of the  representations and warranties made by the Seller in the Purchase
Agreement (which, for purposes hereof, will be deemed to include any other cause
giving rise to a repurchase  obligation under the Purchase Agreement) in respect
of any Mortgage Loan which materially and adversely affects the interests of the
Certificateholders  in such Mortgage  Loan,  the party  discovering  such breach
shall give prompt written  notice to the other parties (any  Custodian  being so
obligated under a Custodial  Agreement).  The Servicer shall promptly notify the
Seller of such breach and request that the Seller either (i) cure such breach in
all  material  respects  within 90 days from the date the Seller was notified of
such  breach or (ii)  purchase  such  Mortgage  Loan from the Trust  Fund at the
Purchase Price and in the manner set forth in Section 2.02; provided that in the
case of a breach under the Purchase Agreement, the Seller, shall have the option
to  substitute a Qualified  Substitute  Mortgage Loan or Loans for such Mortgage
Loan if such  substitution  occurs within two years  following the Closing Date;
provided  that if the breach  would cause the  Mortgage  Loan to be other than a
"qualified  mortgage"  as defined in Section  860G(a)(3)  of the Code,  any such
cure,  repurchase  or  substitution  must occur within 90 days from the date the
breach  was  discovered.  In the event that the Seller  elects to  substitute  a
Qualified Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant
to this  Section  2.04,  the  Trustee  shall  cause the Seller to deliver to the
Custodian with respect to such Qualified  Substitute Mortgage Loan or Loans, the
original  Mortgage Note  endorsed as required by Section  2.01,  and the Trustee
shall cause the Seller to deliver to the Servicer with respect to such Qualified
Substitute  Mortgage  Loan,  the  Mortgage,  an  Assignment  of the  Mortgage in
recordable  form if required  pursuant to Section 2.01, and such other documents
and  agreements  as are required to be held by the Servicer  pursuant to Section
2.01. No substitution will be made in any calendar month after the Determination
Date for such month.  Monthly Payments due with respect to Qualified  Substitute
Mortgage Loans in the month of substitution  shall not be part of the Trust Fund
and will be retained by the  Servicer and remitted by the Servicer to the Seller
on the  next  succeeding  Distribution  Date.  For the  month  of  substitution,
distributions to the Certificateholders  will include the Monthly Payment due on

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<PAGE>

a Deleted  Mortgage  Loan for such  month and  thereafter  the  Seller  shall be
entitled to retain all  amounts  received  in respect of such  Deleted  Mortgage
Loan. The Servicer shall amend or cause to be amended the Mortgage Loan Schedule
for the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Qualified  Substitute Mortgage Loan or
Loans and the Servicer  shall deliver the amended  Mortgage Loan Schedule to the
Trustee. Upon such substitution, the Qualified Substitute Mortgage Loan or Loans
shall be subject to the terms of this  Agreement  and the  related  Subservicing
Agreement  in all  respects,  and the  Seller  shall be  deemed to have made the
representations and warranties with respect to the Qualified Substitute Mortgage
Loan contained in the Purchase Agreement as of the date of substitution.

        In connection with the substitution of one or more Qualified  Substitute
Mortgage  Loans  for one or more  Deleted  Mortgage  Loans,  the  Servicer  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 is less
than the aggregate Stated  Principal  Balance of all such Deleted Mortgage Loans
(in each case after application of the principal portion of the Monthly Payments
due  in  the  month  of   substitution   that  are  to  be  distributed  to  the
Certificateholders in the month of substitution). The Servicer shall deposit the
amount of such shortfall  received from the Seller into the Custodial Account on
the day of  substitution.  The  Servicer  shall  give  notice in  writing to the
Trustee  of such  event,  which  notice  shall be  accompanied  by an  Officer's
Certificate  as to the  calculation  of such  shortfall  and (subject to Section
10.01(f)) by an Opinion of Counsel to the effect that such substitution will not
cause (a) any  federal tax to be imposed on the Trust  Fund,  including  without
limitation,  any federal tax imposed on "prohibited  transactions" under Section
860F(a)(1)  of the Code or on  "contributions  after  the  startup  date"  under
Section  860G(d)(1)  of the Code or (b) any  portion  of either of the REMICs to
fail to qualify as such at any time that any Certificate is outstanding.

        It is  understood  and agreed that the  obligation of the Seller to cure
such breach or purchase (or to substitute  for) such Mortgage Loan as to which a
breach of its  representations  and  warranties  has occurred and is  continuing
shall  constitute  the sole  remedy  respecting  such  breach  available  to the
Certificateholders or the Trustee on behalf of Certificateholders. In connection
with the purchase of or  substitution  for any such Mortgage Loan by the Seller,
the Trustee shall assign to such Person all of the right,  title and interest in
respect of the Purchase Agreement applicable to such Mortgage Loan.

Section 2.05.  Execution and Authentication of Certificates.

        The Trustee  acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Mortgage  Notes to the  Custodian on its behalf,  subject to
any  exceptions  noted,  together with the  assignment to it of all other assets
included  in the Trust Fund  and/or the  applicable  REMIC,  receipt of which is
hereby  acknowledged.  Concurrently with such delivery and in exchange therefor,
the  Trustee,  pursuant  to the written  request of the  Company  executed by an
officer of the Company has executed and caused to be authenticated and delivered
to or upon the order of the Company the Certificates in authorized denominations
which evidence ownership of the entire Trust Fund.

Section 2.06.  Purposes and Powers of the Trust Fund.

        The  purpose of the trust,  as  created  hereunder,  is to engage in the
following activities:

(a) to sell the Certificates to the Company in exchange for the Mortgage Loans;

(b) to enter into and perform its obligations under this Agreement;

(c) to engage in those activities that are necessary,  suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith; and

(d)  subject  to  compliance  with  this  Agreement,  to  engage  in such  other
activities as may be required in connection with  conservation of the Trust Fund
and the making of distributions to the Certificateholders.

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<PAGE>

        The trust is hereby  authorized to engage in the  foregoing  activities.
The trust shall not engage in any  activity  other than in  connection  with the
foregoing or other than as required or authorized by the terms of this Agreement
while   any   Certificate   is   outstanding   without   the   consent   of  the
Certificateholders  evidencing a majority of the aggregate  Voting Rights of the
Certificates.

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

Section 3.01.  Servicer to Act as Servicer.

(a) The Servicer  shall service and  administer the Mortgage Loans in accordance
with the terms of this Agreement and the respective Mortgage Loans, shall follow
such  practices and  procedures  as it shall deem  necessary or advisable and as
shall be normal and usual in its  general  mortgage  servicing  activities,  and
shall have full power and  authority,  acting alone or through  Subservicers  as
provided in Section 3.02,  to do any and all things which it may deem  necessary
or desirable in  connection  with such  servicing  and  administration.  Without
limiting the generality of the foregoing, the Servicer in its own name or in the
name of a Subservicer is hereby authorized and empowered by the Trustee when the
Servicer or the Subservicer,  as the case may be, believes it appropriate in its
best judgment, to execute and deliver, on behalf of the  Certificateholders  and
the  Trustee  or any of  them,  any  and  all  instruments  of  satisfaction  or
cancellation,  or of partial  or full  release  or  discharge,  or of consent to
assumption or  modification  in  connection  with a proposed  conveyance,  or of
assignment of any Mortgage and Mortgage Note in connection  with the  repurchase
of a Mortgage Loan and all other comparable instruments,  or with respect to the
modification  or  re-recording  of a Mortgage for the purpose of correcting  the
Mortgage,  the  subordination  of the lien of the  Mortgage in favor of a public
utility company or government agency or unit with powers of eminent domain,  the
taking  of a deed in lieu  of  foreclosure,  the  commencement,  prosecution  or
completion  of  judicial  or  non-judicial  foreclosure,  the  conveyance  of  a
Mortgaged  Property to the related  Insurer,  the  acquisition  of any  property
acquired  by  foreclosure  or deed in lieu of  foreclosure,  or the  management,
marketing and conveyance of any property acquired by foreclosure or deed in lieu
of  foreclosure  with  respect  to the  Mortgage  Loans and with  respect to the
Mortgaged  Properties.  The Servicer  further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name or
in the name of the  Subservicer,  when the Servicer or the  Subservicer,  as the
case may be,  believes it  appropriate  in its best  judgment  to  register  any
Mortgage Loan on the MERS(R) System,  or cause the removal from the registration
of any Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of
the Trustee and the  Certificateholders  or any of them, any and all instruments
of assignment and other  comparable  instruments with respect to such assignment
or  re-recording  of a Mortgage  in the name of MERS,  solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection with
the actions  described in the preceding  sentence shall be borne by the Servicer
in accordance with Section 3.16(c),  with no right of  reimbursement;  provided,
that if, as a result  of MERS  discontinuing  or  becoming  unable  to  continue
operations in connection  with the MERS System,  it becomes  necessary to remove
any Mortgage  Loan from  registration  on the MERS System and to arrange for the
assignment of the related  Mortgages to the Trustee,  then any related  expenses
shall be reimbursable to the Servicer. Notwithstanding the foregoing, subject to
Section 3.07(a),  the Servicer shall not permit any modification with respect to
any Mortgage Loan that would both constitute a sale or exchange of such Mortgage
Loan within the meaning of Section 1001 of the Code and any proposed,  temporary
or final  regulations  promulgated  thereunder  (other than in connection with a
proposed  conveyance  or  assumption  of such Mortgage Loan that is treated as a
Principal  Prepayment in Full pursuant to Section  3.13(d) hereof) and cause any
REMIC formed under this  Agreement to fail to qualify as a REMIC under the Code.

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<PAGE>

Upon request, the Trustee shall furnish the Servicer with any powers of attorney
and other  documents  necessary or appropriate to enable the Servicer to service
and  administer  the  Mortgage  Loans.  The Trustee  shall not be liable for any
action  taken by the  Servicer  or any  Subservicer  pursuant  to such powers of
attorney. In connection with servicing and administering the Mortgage Loans, the
Servicer and any  Affiliate of the  Servicer  (i) may perform  services  such as
appraisals and brokerage services that are not customarily provided by servicers
of mortgage loans, and shall be entitled to reasonable  compensation therefor in
accordance  with Section 3.10 and (ii) may, at its own  discretion and on behalf
of the Trustee, obtain credit information in the form of a "credit score" from a
credit repository.

(b) All costs  incurred by the  Servicer or by  Subservicers  in  effecting  the
timely  payment  of taxes  and  assessments  on the  properties  subject  to the
Mortgage Loans shall not, for the purpose of calculating  monthly  distributions
to the  Certificateholders,  be added to the  amount  owing  under  the  related
Mortgage Loans,  notwithstanding that the terms of such Mortgage Loan so permit,
and  such  costs  shall  be  recoverable  to the  extent  permitted  by  Section
3.10(a)(ii).

(c) The Servicer may enter into one or more  agreements in  connection  with the
offering of pass-through certificates evidencing interests in one or more of the
Certificates  providing  for the payment by the Servicer of amounts  received by
the Servicer as servicing  compensation  hereunder and required to cover certain
Prepayment  Interest  Shortfalls on the Mortgage Loans, which payment obligation
will thereafter be an obligation of the Servicer hereunder.

Section               3.02.   Subservicing   Agreements   Between  Servicer  and
                      Subservicers;  Enforcement of  Subservicers'  and Seller's
                      Obligations.

        The Servicer may enter into Subservicing  Agreements with  Subservicers,
for the servicing and  administration of all or some of the Mortgage Loans. Each
Subservicer  of a Mortgage  Loan shall be entitled  to receive  and  retain,  as
provided in the related Subservicing  Agreement and in Section 3.07, the related
Subservicing Fee from payments of interest  received on such Mortgage Loan after
payment of all amounts  required  to be  remitted to the  Servicer in respect of
such Mortgage  Loan. Any  Subservicing  Fee shall be paid by the Servicer out of
the Servicing Fee for the related Mortgage Loans.  Unless the context  otherwise
requires,  references  in this  Agreement to actions taken or to be taken by the
Servicer in servicing the Mortgage Loans include actions taken or to be taken by
a Subservicer on behalf of the Servicer.

Section 3.03.  Successor Subservicers.

        The Servicer shall be entitled to terminate any  Subservicing  Agreement
that may exist in accordance with the terms and conditions of such  Subservicing
Agreement  and without any  limitation  by virtue of this  Agreement;  provided,
however,  that in the event of termination of any Subservicing  Agreement by the
Servicer or the  Subservicer,  the Servicer  shall either act as servicer of the
related  Mortgage Loan or enter into a  Subservicing  Agreement with a successor
Subservicer  which  will be  bound  by the  terms  of the  related  Subservicing
Agreement.

Section 3.04.  Liability of the Servicer.

        Notwithstanding  any  Subservicing  Agreement,  any of the provisions of
this Agreement relating to agreements or arrangements  between the Servicer or a
Subservicer  or reference to actions taken  through a Subservicer  or otherwise,
the  Servicer  shall  remain  obligated  and  liable  to  the  Trustee  and  the
Certificateholders  for the servicing and administering of the Mortgage Loans in
accordance  with the  provisions  of Section  3.01  without  diminution  of such
obligation   or  liability  by  virtue  of  such   Subservicing   Agreements  or
arrangements or by virtue of indemnification from the Subservicer or the Company

                                       62
<PAGE>

and to the same  extent  and  under  the same  terms  and  conditions  as if the
Servicer alone were servicing and administering the Mortgage Loans. The Servicer
shall be entitled to enter into any agreement  with a Subservicer  or the Seller
for  indemnification  of the  Servicer and nothing  contained in this  Agreement
shall be deemed to limit or modify such indemnification.

Section 3.05.  No Contractual Relationship Between Subservicer and Trustee or
                      Certificateholders.

        Any  Subservicing  Agreement  that may be  entered  into  and any  other
transactions or services  relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an  originator  shall be deemed to be between
the   Subservicer   and   the   Servicer   alone   and  the   Trustee   and  the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights,  obligations,  duties or liabilities  with respect to the Subservicer in
its capacity as such except as set forth in Section 3.06.

Section 3.06.  Assumption or Termination of Subservicing Agreements by Trustee.

(a) If the Servicer shall for any reason no longer be the servicer (including by
reason of an Event of Default), the Trustee, its designee or its successor shall
thereupon  assume all of the rights and  obligations  of the Servicer under each
Subservicing  Agreement  that may have  been  entered  into.  The  Trustee,  its
designee  or the  successor  servicer  for the  Trustee  shall be deemed to have
assumed all of the Servicer's interest therein and to have replaced the Servicer
as a  party  to  the  Subservicing  Agreement  to  the  same  extent  as if  the
Subservicing  Agreement had been assigned to the assuming  party except that the
Servicer shall not thereby be relieved of any liability or obligations under the
Subservicing Agreement.

(b) The  Servicer  shall,  upon request of the Trustee but at the expense of the
Servicer,  deliver to the assuming  party all documents and records  relating to
each  Subservicing  Agreement and the Mortgage  Loans then being serviced and an
accounting of amounts  collected and held by it and otherwise use its reasonable
efforts  to effect the  orderly  and  efficient  transfer  of each  Subservicing
Agreement to the assuming party.

Section  3.07.  Collection  of  Certain  Mortgage  Loan  Payments;  Deposits  to
Custodial Account.

(a) The Servicer shall make  reasonable  efforts to collect all payments  called
for under the terms and  provisions  of the Mortgage  Loans,  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 would employ in its good faith business  judgment and which are
normal and usual in its general mortgage servicing  activities.  Consistent with
the  foregoing,  the Servicer may in its  discretion  (i) waive any late payment
charge or any  prepayment  charge or penalty  interest  in  connection  with the
prepayment of a Mortgage Loan and (ii) extend the Due Date for payments due on a
Mortgage Note for a period not greater than 180 days;  provided,  however,  that
the Servicer  shall first  determine  that any such waiver or extension will not
impair the  coverage  of any  related  Primary  Insurance  Policy or  materially
adversely  affect  the lien of the  related  Mortgage.  In the event of any such
arrangement,  the Servicer  shall make timely  advances on the related  Mortgage
Loan during the scheduled period in accordance with the amortization schedule of
such Mortgage Loan without  modification  thereof by reason of such arrangements
unless  otherwise  agreed  to by the  Holders  of the  Classes  of  Certificates
affected thereby; provided, however, that no such extension shall be made if any
such advance would be a  Nonrecoverable  Advance.  Consistent  with the terms of
this  Agreement,  the  Servicer  may also 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 if in the  Servicer's
determination  such waiver,  modification,  postponement  or  indulgence  is not
materially  adverse to the  interests  of the  Certificateholders  (taking  into
account any  estimated  Realized  Loss that might  result  absent such  action);
provided,  however,  that the Servicer may not modify  materially  or permit any
Subservicer  to modify any  Mortgage  Loan,  including  without  limitation  any
modification  that would  change the Mortgage  Rate,  forgive the payment of any
principal or interest  (unless in connection with the liquidation of the related
Mortgage Loan or except in connection  with  prepayments to the extent that such

                                       63
<PAGE>

reamortization  is not  inconsistent  with the terms of the Mortgage  Loan),  or
extend the final maturity date of such Mortgage Loan,  unless such Mortgage Loan
is in default or, in the judgment of the  Servicer,  such default is  reasonably
foreseeable;  and provided,  further, that no such modification shall reduce the
interest  rate on a Mortgage  Loan below the  Servicing  Fee Rate. In connection
with any  Curtailment  of a  Mortgage  Loan,  the  Servicer,  to the  extent not
inconsistent with the terms of the Mortgage Note and local law and practice, may
permit the  Mortgage  Loan to be  reamortized  such that the Monthly  Payment is
recalculated  as an  amount  that  will  fully  amortize  the  remaining  Stated
Principal  Balance  thereof by the original  Maturity Date based on the original
Mortgage Rate; provided,  that such re-amortization shall not be permitted if it
would  constitute  a  reissuance  of the  Mortgage  Loan for federal  income tax
purposes,  except if such reissuance is described in Treasury Regulation Section
1.860G-2(b)(3).  The  Servicer  shall not be  required to  institute  or join in
litigation with respect to collection of any payment  (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental  authority with
respect to a taking or  condemnation)  if it reasonably  believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.

(b) The  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
held in trust,  entitled "GMAC Mortgage  Corporation  Custodial Account in trust
for the  benefit of the  Holders of GMACM  Mortgage  Pass-Through  Certificates,
Series  2003-AR2."  Each  Custodial  Account shall be an Eligible  Account.  The
Custodial  Account  shall be maintained  as a segregated  account,  separate and
apart from trust funds created for mortgage  pass-through  certificates of other
series, and the other accounts of the Servicer.

        Within two Business  Days of receipt,  except as otherwise  specifically
provided  herein,  the  Servicer  shall  deposit  or cause to be  deposited  the
following payments and collections remitted by subservicers or received by it in
respect of the  Mortgage  Loans  subsequent  to the Cut-off  Date (other than in
respect of principal  and interest due on such  Mortgage  Loans on or before the
Cut-off Date) and the following amounts required to be deposited hereunder:

(i)            All  payments  on  account  of  principal,   including  Principal
               Prepayments  made by  Mortgagors  on the  Mortgage  Loans and the
               principal  component  of any  Subservicer  Advance  or of any REO
               Proceeds received in connection with an REO Property for which an
               REO Disposition has occurred;

(ii)           All payments on account of interest at the Net  Mortgage  Rate on
               the Mortgage Loans, and the interest component of any Subservicer
               Advance or of any REO Proceeds received in connection with an REO
               Property for which an REO  Disposition  has  occurred,  minus the
               amount of any interest paid by a Mortgagor in  connection  with a
               Principal Prepayment in Full for the calendar month in which such
               Principal  Prepayment  is to be  distributed  pursuant to Section
               4.02;

(iii)          Insurance  Proceeds and Liquidation  Proceeds (net of any related
               expenses of the Subservicer);

(iv)           All proceeds of any Mortgage Loans purchased  pursuant to Section
               2.02,  2.04 or 4.07 and all amounts  required to be  deposited in
               connection  with  the  substitution  of  a  Qualified  Substitute
               Mortgage Loan pursuant to Section 2.04;

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(v)            Any amounts required to be deposited pursuant to Section 3.07(c);
               and

(vi)           All amounts transferred from the Payment Account to the Custodial
               Account in accordance with Section 4.02(a).

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 on the Mortgage Loans which are not part of the Trust
Fund  (consisting  of  payments  in respect of  principal  and  interest  on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections in
the nature of prepayment  charges or late payment charges or assumption fees may
but need not be deposited by the Servicer in the Custodial Account. In the event
any  amount  not  required  to be  deposited  in  the  Custodial  Account  is so
deposited,  the Servicer may at any time withdraw such amount from the Custodial
Account,  any  provision  herein to the contrary  notwithstanding.  The Servicer
shall  maintain  records  with  respect to all  deposits  made  pursuant to this
Section. All funds deposited in the Custodial Account shall be held in trust for
the Certificateholders until withdrawn in accordance with Section 3.10.

        With respect to Insurance Proceeds,  Liquidation Proceeds,  REO Proceeds
and the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.04 and 4.07  received in any calendar  month,  the Servicer may elect to treat
such  amounts  as  included  in  the  Available   Distribution  Amount  for  the
Distribution Date in the month of receipt, but is not obligated to do so. If the
Servicer so elects,  such amounts will be deemed to have been  received (and any
related  Realized Loss shall be deemed to have  occurred) on the last day of the
month prior to the receipt thereof.

(c) The  Servicer  shall  use  commercially  reasonable  efforts  to  cause  the
institution  maintaining  the  Custodial  Account  to  invest  the  funds in the
Custodial  Account  attributable to the Mortgage Loans in Permitted  Investments
which  shall  mature  not  later  than the  Payment  Account  Deposit  Date next
following the date of such investment (with the exception of the Amount Held for
Future  Distribution)  and which shall not be sold or disposed of prior to their
maturities.  All income and gain realized from any such investment  shall be for
the benefit of the Servicer as additional  servicing  compensation  and shall be
subject to its  withdrawal or order from time to time.  The amount of any losses
incurred in respect of any such  investments  attributable  to the investment of
amounts in respect of the Mortgage  Loans shall be  deposited  in the  Custodial
Account by the Servicer out of its own funds immediately as realized without any
right of reimbursement.

Section 3.08.  Subservicing Accounts; Servicing Accounts.

(a) In those cases where a Subservicer  is servicing a Mortgage Loan pursuant to
a Subservicing Agreement, the Servicer shall cause the Subservicer,  pursuant to
the Subservicing  Agreement,  to establish and maintain one or more Subservicing
Accounts  which  shall be an  Eligible  Account  or, if such  account  is not an
Eligible  Account,  shall be acceptable to the Servicer and each Rating  Agency.
The  Subservicer  will be  required  thereby  to deposit  into the  Subservicing
Account  on a daily  basis  all  proceeds  of  Mortgage  Loans  received  by the
Subservicer,  less its Subservicing Fees and unreimbursed advances and expenses,
to the extent  permitted  by the  Subservicing  Agreement.  If the  Subservicing
Account  is not an  Eligible  Account,  the  Servicer  shall be  deemed  to have
received such monies upon receipt  thereof by the  Subservicer.  The Subservicer
shall not be  required  to  deposit  in the  Subservicing  Account  payments  or
collections  in the nature of  prepayment  charges or late charges or assumption
fees.  On or before  each  Determination  Date,  the  Servicer  shall  cause the
Subservicer,  pursuant to the Subservicing  Agreement,  to remit to the Servicer
for deposit in the Custodial Account all funds held in the Subservicing  Account
with  respect  to each  Mortgage  Loan  serviced  by such  Subservicer  that are
required to be remitted to the Servicer.

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(b) In addition to the Custodial  Account and the Payment Account,  the Servicer
shall for any Nonsubserviced Mortgage Loan, and shall cause the Subservicers for
Subserviced  Mortgage  Loans to,  establish  and maintain one or more  Servicing
Accounts and deposit and retain therein all collections  from the Mortgagors (or
advances  from  Subservicers)  for the  payment  of taxes,  assessments,  hazard
insurance  premiums,  Primary  Insurance  Policy  premiums,  if  applicable,  or
comparable items for the account of the Mortgagors. Each Servicing Account shall
be hold in trust, entitled "GMAC Mortgage Corporation Servicing Account in trust
for  the  benefit  of  the  of  the  Holders  of  GMACM  Mortgage   Pass-Through
Certificates,  Series 2003-AR2."  Withdrawals of amounts related to the Mortgage
Loans from the Servicing  Accounts may be made only to effect timely  payment of
taxes,  assessments,   hazard  insurance  premiums,   Primary  Insurance  Policy
premiums,  if  applicable,  or  comparable  items,  to reimburse the Servicer or
Subservicer  out of  related  collections  for any  payments  made  pursuant  to
Sections 3.11 (with respect to the Primary  Insurance  Policy) and 3.12(a) (with
respect to hazard  insurance),  to refund to any  Mortgagors  any sums as may be
determined  to be overages,  to pay  interest,  if required,  to  Mortgagors  on
balances  in the  Servicing  Account  or to clear and  terminate  the  Servicing
Account at the termination of this Agreement in accordance with Section 9.01. As
part of its servicing  duties,  the Servicer shall, and the  Subservicers  will,
pursuant to the  Subservicing  Agreements,  be required to pay to the Mortgagors
interest on funds in this account to the extent required by law.

(c) The  Servicer  shall  advance  the  payments  referred  to in the  preceding
subsection  that  are not  timely  paid by the  Mortgagors  or  advanced  by the
Subservicers  on the date when the tax,  premium  or other  cost for which  such
payment is intended  is due,  but the  Servicer  shall be required so to advance
only to the  extent  that  such  advances,  in the good  faith  judgment  of the
Servicer,  will  be  recoverable  by the  Servicer  out of  Insurance  Proceeds,
Liquidation Proceeds or otherwise.

Section 3.09.  Access to Certain  Documentation  and  Information  Regarding the
Mortgage Loans.

        If   compliance   with  this  Section  3.09  shall  make  any  Class  of
Certificates  legal  for  investment  by  federally  insured  savings  and  loan
associations,  the Servicer shall provide, or cause the Subservicers to provide,
to the Trustee, the Office of Thrift Supervision or the FDIC and the supervisory
agents and examiners thereof access to the documentation  regarding the Mortgage
Loans required by applicable  regulations  of the Office of Thrift  Supervision,
such access being afforded  without charge but only upon reasonable  request and
during normal  business  hours at the offices  designated  by the Servicer.  The
Servicer shall permit such  representatives  to photocopy any such documentation
and  shall  provide   equipment   for  that  purpose  at  a  charge   reasonably
approximating the cost of such photocopying to the Servicer.

Section 3.10.  Permitted Withdrawals from the Custodial Account.

(a)            The  Servicer  may,  from time to time as provided  herein,  make
               withdrawals  from the  Custodial  Account  of  amounts on deposit
               therein  pursuant to Section  3.07 that are  attributable  to the
               Mortgage Loans for the following purposes:

(i)            to make deposits  into the Payment  Account in the amounts and in
               the manner provided for in Section 4.01;

          (ii) to reimburse  itself or the related  Subservicer  for  previously
               unreimbursed advances or expenses made pursuant to Sections 3.01,
               3.07(a),   3.08,  3.11,  3.12(a),  3.14  and  4.04  or  otherwise
               reimbursable  pursuant  to the  terms  of  this  Agreement,  such
               withdrawal  right being limited to amounts received on particular
               Mortgage  Loans  (including,  for  this  purpose,  REO  Proceeds,
               Insurance  Proceeds,  Liquidation  Proceeds and proceeds from the
               purchase of a Mortgage  Loan  pursuant to Section  2.02,  2.04 or
               4.07) which  represent (A) Late  Collections of Monthly  Payments
               for which any such  advance  was made in the case of  Subservicer
               Advances or Advances  pursuant to Section 4.04 and (B) recoveries
               of amounts in  respect  of which such  advances  were made in the
               case of Servicing Advances;

          (iii)to pay to itself or the related  Subservicer  (if not  previously
               retained by such Subservicer) out of each payment received by the
               Servicer  on  account  of   interest   on  a  Mortgage   Loan  as
               contemplated  by Sections  3.14 and 3.16, an amount equal to that
               remaining  portion of any such payment as to interest (but not in
               excess of the  Servicing  Fee and the  Subservicing  Fee,  if not
               previously  retained)  which,  when deducted,  will result in the
               remaining  amount  of such  interest  being  interest  at the Net

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               Mortgage  Rate (or Modified  Net  Mortgage  Rate in the case of a
               Modified   Mortgage   Loan)  on  the  amount   specified  in  the
               amortization  schedule  of  the  related  Mortgage  Loan  as  the
               principal   balance  thereof  at  the  beginning  of  the  period
               respecting  which such  interest was paid after giving  effect to
               any previous Curtailments;

(iv)           to  pay  to  itself  as  additional  servicing  compensation  any
               interest or investment  income earned on funds and other property
               deposited  in or credited  to the  Custodial  Account  that it is
               entitled to withdraw pursuant to Section 3.07(c);

(v)            to  pay  to  itself  as  additional  servicing  compensation  any
               Foreclosure  Profits, and any amounts remitted by Subservicers or
               received from Mortgagors as interest in respect of Curtailments;

(vi)           to pay the Seller, with respect to each Mortgage Loan or property
               acquired in respect  thereof that has been purchased or otherwise
               transferred  pursuant to Section 2.02,  2.04,  4.07 or 9.01,  all
               amounts  received  thereon and not required to be  distributed to
               the Certificateholders as of the date on which the related Stated
               Principal Balance or Purchase Price is determined;

          (vii)to  reimburse   itself  or  the  related   Subservicer   for  any
               Nonrecoverable   Advance  or  any  Advance  that  was  ultimately
               determined  to be Excess  Special  Hazard  Losses,  Excess  Fraud
               Losses,  Excess Bankruptcy Losses or Extraordinary  Losses in the
               manner and to the extent  provided in subsection  (c) below,  any
               Advance made in connection with a modification of a Mortgage Loan
               that is in default or, in the judgment of the  Servicer,  default
               is reasonably  foreseeable  pursuant to Section  3.07(a),  to the
               extent  the  amount  of  the   Advance  has  been  added  to  the
               outstanding  principal  balance  of  the  Mortgage  Loan,  or any
               Advance reimbursable to the Servicer pursuant to Section 4.02(a);

(viii)         to reimburse  itself or the Company for expenses  incurred by and
               reimbursable to it or the Company  pursuant to Sections  3.01(a),
               3.11, 3.13, 3.14(c), 6.03, 10.01 or otherwise;

(ix)           to reimburse  itself for  Servicing  Advances  expended by it (a)
               pursuant  to Section  3.14 in good faith in  connection  with the
               restoration of property damaged by an Uninsured Cause, and (b) in
               connection with the liquidation of a Mortgage Loan or disposition
               of an  REO  Property  to  the  extent  not  otherwise  reimbursed
               pursuant to clause (ii) or (viii) above; and

(x)            to withdraw any amount  deposited in the  Custodial  Account that
               was not  required  to be  deposited  therein  pursuant to Section
               3.07.

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(b)            Since, in connection with  withdrawals  pursuant to clauses (ii),
               (iii),  (v) and  (vi),  the  Servicer's  entitlement  thereto  is
               limited  to  collections  or  other  recoveries  on  the  related
               Mortgage  Loan,  the Servicer  shall keep and  maintain  separate
               accounting,  on a Mortgage Loan by Mortgage  Loan basis,  for the
               purpose of justifying any withdrawal  from the Custodial  Account
               pursuant to such clauses.  All permitted  withdrawals pursuant to
               clauses (iv),  (vii),  (viii) and (ix) shall be  reimbursed  from
               collections  on the Mortgage  Loans in the related Loan Group or,
               if such  reimbursement is not attributable to a specific Mortgage
               Loan,  shall  be  reimbursed  from  collections  received  on the
               Mortgage Loans in each Loan Group,  pro rata, based on the Stated
               Principal Balance of each such Loan Group.

(c)            The Servicer shall be entitled to reimburse itself or the related
               Subservicer  for any Advance  made in respect of a Mortgage  Loan
               that the Servicer determines to be a Nonrecoverable Advance or an
               Advance  that was  ultimately  determined  to be  Excess  Special
               Hazard Losses,  Excess Fraud Losses,  Excess Bankruptcy Losses or
               Extraordinary  Losses by withdrawal from the Custodial Account of
               amounts on deposit therein  attributable to the Mortgage Loans on
               any Payment  Account  Deposit  Date  succeeding  the date of such
               determination.  Such  right  of  reimbursement  in  respect  of a
               Nonrecoverable  Advance on any such Payment  Account Deposit Date
               shall be limited to an amount not  exceeding  the portion of such
               Advance   previously   paid  to   Certificateholders   (and   not
               theretofore   reimbursed   to  the   Servicer   or  the   related
               Subservicer).

Section  3.11.  Maintenance  of  the  Primary  Insurance  Policies;  Collections
Thereunder.

(a) The Servicer  shall not take, or permit any  Subservicer to take, any action
which would result in non-coverage under any applicable Primary Insurance Policy
of any loss which,  but for the actions of the  Servicer or  Subservicer,  would
have been covered thereunder.  To the extent coverage is available, the Servicer
shall  keep or cause to be kept in full  force and  effect a  Primary  Insurance
Policy  in the  case of each  Mortgage  Loan  having  a  Loan-to-Value  Ratio at
origination  in  excess of 80%,  until  the  principal  balance  of the  related
Mortgage  Loan secured by a Mortgaged  Property is reduced to 80% or less of the
appraised  value based on the most recent  appraisal of the  Mortgaged  Property
performed by a qualified appraiser, such appraisal to be included in the related
servicing  file.  The  Servicer  shall  not  cancel  or refuse to renew any such
Primary  Insurance  Policy  applicable  to a  Nonsubserviced  Mortgage  Loan, or
consent to any  Subservicer  canceling  or  refusing  to renew any such  Primary
Insurance  Policy  applicable to a Mortgage Loan  subserviced  by it, that is in
effect at the date of the initial  issuance of the  Certificates and is required
to be kept in force hereunder  unless the replacement  Primary  Insurance Policy
for such  canceled or  non-renewed  policy is  maintained  with an insurer whose
claims-paying   ability  is  acceptable  to  each  Rating  Agency  for  mortgage
pass-through  certificates  having a rating equal to or better than the lower of
the  then-current  rating or the rating  assigned to the  Certificates as of the
Closing  Date by such  Rating  Agency.  In  connection  with any  assumption  or
substitution  agreement  entered into or to be entered into  pursuant to Section
3.13, 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,  the Servicer shall
obtain a replacement Primary Insurance Policy as provided above.

(b) In  connection  with its  activities  as  administrator  and servicer of the
Mortgage  Loans,  the  Servicer  agrees  to  present  or to  cause  the  related
Subservicer to present, on behalf of the Servicer, the Subservicer,  if any, the
Trustee and Certificateholders,  claims to the related Insurer under any Primary
Insurance Policies, in a timely manner in accordance with such policies, and, in
this  regard,  to take or cause to be taken such  reasonable  action as shall be

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necessary to permit  recovery under any Primary  Insurance  Policies  respecting
defaulted  Mortgage  Loans.  Pursuant to Section 3.07,  any  Insurance  Proceeds
collected by or remitted to the Servicer  under any Primary  Insurance  Policies
shall be deposited in the Custodial Account,  subject to withdrawal  pursuant to
Section 3.10.

Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage.

(a) The Servicer shall cause to be maintained for each Mortgage Loan (other than
a Cooperative  Loan) fire insurance with extended coverage in an amount which is
equal to the lesser of (i) the  greater of (A) the  principal  balance  owing on
such Mortgage Loan and (B) the percentage  such that the proceeds  thereof shall
be sufficient to prevent the application of a co-insurance  clause;  or (ii) 100
percent of the insurable value of the improvements. If the Mortgaged Property is
in an  area  identified  in  the  Federal  Register  by  the  Federal  Emergency
Management   Agency   as  being  a   special   flood   hazard   area   that  has
federally-mandated  flood insurance requirements,  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, in an amount representing coverage not less than the least of
(i) the  outstanding  principal  balance of the Mortgage Loan,  (ii) the maximum
insurable  value of the  improvements  securing  such Mortgage Loan or (iii) the
maximum  amount  of  insurance  which is  available  under  the  Flood  Disaster
Protection  Act of  1973,  as  amended.  The  Servicer  shall  also  cause to be
maintained  on  property  acquired  upon   foreclosure,   or  deed  in  lieu  of
foreclosure,  of any  Mortgage  Loan  (other  than  a  Cooperative  Loan),  fire
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 Flood
Disaster  Protection  Act of 1973, as amended,  flood  insurance in an amount as
provided above.  Pursuant to Section 3.07, any amounts collected by the Servicer
under any such policies  (other than amounts to be applied to the restoration or
repair of the related  Mortgaged  Property or property  thus acquired or amounts
released to the Mortgagor in accordance  with the  Servicer's  normal  servicing
procedures) shall be deposited in the Custodial  Account,  subject to withdrawal
pursuant to Section 3.10. Any cost incurred by the Servicer in  maintaining  any
such insurance shall not, for the purpose of calculating  monthly  distributions
to the Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding  that the terms of the Mortgage Loan so permit. Such costs shall
be  recoverable by the Servicer out of related late payments by the Mortgagor or
out of Insurance  Proceeds and Liquidation  Proceeds to the extent  permitted by
Section 3.10. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property  acquired
in respect of a Mortgage  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.  All  such  policies  shall  be  endorsed  with  standard
mortgagee  clauses with loss payable to the Servicer and its  successors  and/or
assigns and shall provide for at least thirty days prior  written  notice of any
cancellation,  reduction  in the amount 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,  however,
that the Servicer  shall not accept any such  insurance  policies from insurance
companies  unless such  companies  currently  reflect a General Policy Rating in
Best's Key Rating Guide  currently  acceptable to Fannie Mae and are licensed to
do business in the state wherein the property subject to the policy is located.

        If the  Servicer  shall  obtain and  maintain a blanket  fire  insurance
policy with  extended  coverage  insuring  against  hazard  losses on all of the
Mortgage  Loans,  it  shall   conclusively  be  deemed  to  have  satisfied  its
obligations as set forth in the first sentence of this Section 3.12(a), it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer  shall, in the event that there shall not have been maintained
on the related Mortgaged  Property a policy complying with the first sentence of
this  Section  3.12(a)  and there  shall have been a loss which  would have been
covered by such policy,  deposit in the Payment Account the amount not otherwise

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payable under the blanket policy  because of such  deductible  clause.  Any such
deposit by the Servicer shall be made on the Payment  Account  Deposit Date next
preceding the Distribution Date which occurs in the month following the month in
which  payments under any such policy would have been deposited in the Custodial
Account.  In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to present, on behalf of itself, the Trustee
and the Certificateholders, claims under any such blanket policy.

(b) The  Servicer  shall obtain and maintain at its own expense and keep in full
force and effect  throughout the term of this Agreement a blanket  fidelity bond
and an errors and omissions  insurance  policy covering the Servicer's  officers
and employees  and other persons  acting on behalf of the Servicer in connection
with its  activities  under  this  Agreement.  The  amount  of  coverage,  taken
together,  shall be at least  equal to the  coverage  that would be  required by
Fannie Mae or Freddie Mac,  with  respect to the  Servicer if the Servicer  were
servicing and administering the Mortgage Loans for Fannie Mae or Freddie Mac. In
the event  that any such bond or policy  ceases to be in  effect,  the  Servicer
shall obtain a comparable  replacement bond or policy from an issuer or insurer,
as the case may be, meeting the requirements set forth above.

Section               3.13.  Enforcement of Due-on-Sale Clauses;  Assumption and
                      Modification Agreements; Certain Assignments.

(a) When any Mortgaged  Property is conveyed by the  Mortgagor,  the Servicer or
Subservicer,  to the extent it has knowledge of such  conveyance,  shall enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under  applicable law and  governmental  regulations,  but only to the
extent that such enforcement  will not adversely  affect or jeopardize  coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Servicer
is not required to exercise  such rights with respect to a Mortgage  Loan if the
Person to whom the related  Mortgaged  Property has been conveyed or is proposed
to be conveyed satisfies the terms and conditions contained in the Mortgage Note
and  Mortgage  related  thereto  and the  consent  of the  mortgagee  under such
Mortgage Note or Mortgage is not otherwise so required  under such Mortgage Note
or Mortgage as a condition to such  transfer.  In the event that the Servicer is
prohibited by law from  enforcing any such  due-on-sale  clause,  or if coverage
under  any  Required  Insurance  Policy  would  be  adversely  affected,  or  if
nonenforcement  is otherwise  permitted  hereunder,  the Servicer is authorized,
subject to Section 3.13(b), to take or enter into an assumption and modification
agreement  from or with the person to whom such property has been or is about to
be  conveyed,  pursuant to which such person  becomes  liable under the Mortgage
Note and,  unless  prohibited  by applicable  state law, the  Mortgagor  remains
liable thereon, provided that the Mortgage Loan shall continue to be covered (if
so covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.13(b), is also authorized
with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability  agreement with such Person,  pursuant to
which the  original  Mortgagor  is released  from  liability  and such Person is
substituted   as  Mortgagor  and  becomes   liable  under  the  Mortgage   Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default
under this  Section by reason of any transfer or  assumption  which the Servicer
reasonably  believes it is  restricted  by law from  preventing,  for any reason
whatsoever.

(b)  Subject to the  Servicer's  duty to enforce any  due-on-sale  clause to the
extent set forth in Section 3.13(a),  in any case in which a Mortgaged  Property
is to be conveyed to a Person by a  Mortgagor,  and such Person is to enter into
an  assumption or  modification  agreement or supplement to the Mortgage Note or
Mortgage  which  requires the  signature of the Trustee,  or if an instrument of
release signed by the Trustee is required releasing the Mortgagor from liability
on the Mortgage Loan, the Servicer is authorized, subject to the requirements of
the sentence next following,  to execute and deliver,  on behalf of the Trustee,
the assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such  modification  agreement or supplement to the Mortgage Note or
Mortgage or other  instruments  as are  reasonable or necessary to carry out the
terms  of the  Mortgage  Note or  Mortgage  or  otherwise  to  comply  with  any
applicable laws regarding  assumptions or the transfer of the Mortgaged Property
to such Person; provided,  however, that in connection with any such assumption,
no  material  term  of  the  Mortgage  Note  may be  changed.  Upon  receipt  of

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appropriate instructions from the Servicer in accordance with the foregoing, the
Trustee  shall  execute  any  necessary   instruments  for  such  assumption  or
substitution  of  liability  as  directed in writing by the  Servicer.  Upon the
closing of the transactions  contemplated by such documents,  the Servicer shall
cause the originals or true and correct copies of the assumption agreement,  the
release (if any),  or the  modification  or  supplement  to the Mortgage Note or
Mortgage to be delivered to the Trustee or the Custodian and deposited  with the
Mortgage File for such Mortgage  Loan. Any fee collected by the Servicer or such
related Subservicer for entering into an assumption or substitution of liability
agreement  will be retained by the Servicer or such  Subservicer  as  additional
servicing compensation.

(c) The  Servicer  or the  related  Subservicer,  as the case  may be,  shall be
entitled  to approve a request  from a  Mortgagor  for a partial  release of the
related  Mortgaged  Property,  the  granting of an easement  thereon in favor of
another Person,  any alteration or demolition of the related Mortgaged  Property
(or,  with respect to a Cooperative  Loan,  the related  Cooperative  Apartment)
without  any  right  of  reimbursement  or  other  similar  matters  if  it  has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related  Mortgage Loan, that the security for,
and the timely  and full  collectability  of,  such  Mortgage  Loan would not be
adversely affected thereby and if it has also determined that any portion of the
applicable REMIC would not fail to continue to qualify as a REMIC under the Code
as a result thereof and (subject to Section 10.01(f)) that no tax on "prohibited
transactions" or "contributions"  after the startup day would be imposed on such
REMIC as a result  thereof.  Any fee  collected  by the  Servicer or the related
Subservicer  for  processing  such a request will be retained by the Servicer or
such Subservicer as additional servicing compensation.

(d) Subject to any other applicable terms and conditions of this Agreement,  the
Trustee  and  Servicer  shall be entitled  to approve an  assignment  in lieu of
satisfaction  with  respect to any  Mortgage  Loan,  provided  the obligee  with
respect to such Mortgage Loan  following such proposed  assignment  provides the
Trustee and Servicer  with a "Lender  Certification  for  Assignment of Mortgage
Loan"  in the  form  attached  hereto  as  Exhibit  K,  in  form  and  substance
satisfactory to the Trustee and Servicer,  providing the following: (i) that the
substance of the  assignment  is, and is intended to be, a  refinancing  of such
Mortgage;  (ii) that the Mortgage Loan  following the proposed  assignment  will
have a rate of  interest  at least  0.25  percent  below  or  above  the rate of
interest on such Mortgage Loan prior to such proposed assignment; and (iii) that
such  assignment  is at the request of the borrower  under the related  Mortgage
Loan. Upon approval of an assignment in lieu of satisfaction with respect to any
Mortgage  Loan, the Servicer shall receive cash in an amount equal to the unpaid
principal balance of and accrued interest on such Mortgage Loan and the Servicer
shall treat such amount as a Principal  Prepayment  in Full with respect to such
Mortgage Loan for all purposes hereof.

Section 3.14.  Realization Upon Defaulted Mortgage Loans.

(a) The Servicer shall foreclose upon or otherwise comparably convert (which may
include an REO  Acquisition)  the ownership of  properties  securing such of the
Mortgage  Loans  as come  into  and  continue  in  default  and as to  which  no
satisfactory  arrangements  can be made for  collection of  delinquent  payments
pursuant  to  Section  3.07.  In  connection  with  such  foreclosure  or  other
conversion,  the  Servicer  shall,  consistent  with Section  3.11,  follow such
practices and  procedures as it shall deem  necessary or advisable,  as shall be
normal and usual in its general mortgage servicing activities, as shall meet the
requirements of the Insurer under any Required Insurance Policy, and as shall be
consistent  with the  provisions  of this  Agreement.  With  respect  to any REO
Property,  the  deed or  certificate  of sale  shall be taken in the name of the
Trustee for the benefit of the Certificateholders,  or its nominee, on behalf of
the Certificateholders.  The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual capacity.
The Servicer  shall ensure that the title to such REO Property  references  this
Agreement and the Trustee's capacity thereunder.  The Servicer,  however,  shall
not be required to expend its own funds or incur other  reimbursable  charges in
connection  with  any  foreclosure,   or  attempted  foreclosure  which  is  not

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completed,  or towards the restoration of any property unless it shall determine
(i) that such  restoration  and/or  foreclosure  will  increase  the proceeds of
liquidation  of the  Mortgage  Loan to  Holders of  Certificates  of one or more
Classes after reimbursement to itself for such expenses or charges and (ii) that
such expenses or charges will be recoverable to it through Liquidation Proceeds,
Insurance Proceeds, or REO Proceeds (respecting which it shall have priority for
purposes of  withdrawals  from the Custodial  Account  pursuant to Section 3.10,
whether or not such expenses and charges are actually  recoverable  from related
Liquidation Proceeds,  Insurance Proceeds or REO Proceeds). In the event of such
a determination by the Servicer  pursuant to this Section 3.14(a),  the Servicer
shall be entitled to  reimbursement of such amounts pursuant to Section 3.10. If
the  Servicer  has  knowledge  that a Mortgaged  Property  which the Servicer is
contemplating  acquiring in  foreclosure  or by deed in lieu of  foreclosure  is
located within a one (1) mile radius of any site listed in the Expenditure  Plan
for the  Hazardous  Substance  Clean  Up Bond  Act of 1984 or  other  site  with
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring  the  Mortgaged  Property,  consider such risks and only take
action in accordance with its established environmental review procedures.

        The Servicer  shall,  either itself or through an agent  selected by the
Servicer,  and in accordance with the Fannie Mae guidelines,  manage,  conserve,
protect  and  operate  each 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.  Each  disposition  of REO Property shall be carried out by
the  Servicer at such price and upon such terms and  conditions  as the Servicer
deems to be in the best interest of the Certificateholders.

        Upon the occurrence of a Cash Liquidation or REO Disposition,  following
the deposit in the  Custodial  Account of all  Insurance  Proceeds,  Liquidation
Proceeds and other  payments and  recoveries  referred to in the  definition  of
"Cash  Liquidation"  or "REO  Disposition,"  as applicable,  upon receipt by the
Trustee of written  notification of such deposit signed by a Servicing  Officer,
the Trustee or any Custodian,  as the case may be, shall release to the Servicer
the related  Mortgage  File and the  Trustee  shall  execute  and  deliver  such
instruments  of transfer or assignment  prepared by the  Servicer,  in each case
without recourse, as shall be necessary to vest in the Servicer or its designee,
as the case may be, the related Mortgage Loan, and thereafter such Mortgage Loan
shall not be part of the Trust Fund.  Notwithstanding the foregoing or any other
provision of this  Agreement,  in the Servicer's sole discretion with respect to
any  defaulted  Mortgage  Loan or REO  Property  as to either  of the  following
provisions,  (i) a Cash  Liquidation  or REO  Disposition  may be deemed to have
occurred if substantially all amounts expected by the Servicer to be received in
connection  with the related  defaulted  Mortgage Loan or REO Property have been
received,  and (ii) for purposes of  determining  the amount of any  Liquidation
Proceeds,  Insurance Proceeds, REO Proceeds or any other unscheduled collections
or the amount of any Realized Loss,  the Servicer may take into account  minimal
amounts  of  additional  receipts  expected  to be  received  or  any  estimated
additional  liquidation  expenses expected to be incurred in connection with the
related defaulted Mortgage Loan or REO Property.

(b) If title to any  Mortgaged  Property is acquired by the Trust Fund as an REO
Property  by  foreclosure  or by  deed  in  lieu  of  foreclosure,  the  deed or
certificate  of sale shall be issued to the  Trustee or to its nominee on behalf
of  Certificateholders.  Notwithstanding  any  such  acquisition  of  title  and
cancellation  of the related  Mortgage Loan,  such REO Property shall (except as
otherwise expressly provided herein) be considered to be an Outstanding Mortgage
Loan held in the Trust Fund until such time as the REO  Property  shall be sold.
Consistent with the foregoing for purposes of all calculations hereunder so long
as such REO Property shall be considered to be an  Outstanding  Mortgage Loan it

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shall be assumed that,  notwithstanding  that the indebtedness  evidenced by the
related  Mortgage  Note shall have been  discharged,  such Mortgage Note and the
related  amortization  schedule in effect at the time of any such acquisition of
title  (after  giving  effect  to  any  previous  Curtailments  and  before  any
adjustment  thereto by reason of any  bankruptcy  or similar  proceeding  or any
moratorium or similar  waiver or grace period)  remain in effect.  To the extent
the net income  received  during any  calendar  month is in excess of the amount
attributable  to  amortizing  principal  and  accrued  interest  at the  related
Mortgage Rate on the related Mortgage Loan for such calendar month,  such excess
shall be considered to be a Curtailment of the related Mortgage Loan.

(c) If the Trust Fund  acquires  any REO  Property as  aforesaid or otherwise in
connection  with a default or imminent  default on a Mortgage Loan, the Servicer
on behalf of the Trust Fund shall dispose of such REO Property within three full
years after the taxable year of its  acquisition  by the Trust Fund for purposes
of Section  860G(a)(8)  of the Code (or such shorter  period as may be necessary
under  applicable  state (including any state in which such property is located)
law to  maintain  the status of any portion of the  applicable  REMIC as a REMIC
under  applicable state law and avoid taxes resulting from such property failing
to be foreclosure property under applicable state law) or, at the expense of the
Trust Fund, request, more than 60 days before the day on which such grace period
would  otherwise  expire,  an extension of such grace period unless the Servicer
(subject  to Section  10.01(f))  obtains  for the Trustee an Opinion of Counsel,
addressed to the Trustee and the Servicer, to the effect that the holding by the
Trust Fund of such REO Property subsequent to such period will not result in the
imposition of taxes on "prohibited  transactions"  as defined in Section 860F of
the Code or  cause  the  applicable  REMIC to fail to  qualify  as a REMIC  (for
federal (or any applicable State or local) income tax purposes) at any time that
any Certificates  are outstanding,  in which case the Trust Fund may continue to
hold such REO Property  (subject to any conditions  contained in such Opinion of
Counsel).  The Servicer  shall be entitled to be  reimbursed  from the Custodial
Account for any costs incurred in obtaining such Opinion of Counsel, as provided
in Section 3.10.  Notwithstanding any other provision of this Agreement,  no REO
Property  acquired  by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise  used by or on behalf of the Trust Fund in such a manner
or  pursuant  to any terms  that would (i) cause  such REO  Property  to fail to
qualify as "foreclosure  property"  within the meaning of Section  860G(a)(8) of
the Code or (ii) subject the Trust Fund to the  imposition of any federal income
taxes on the income earned from such REO  Property,  including any taxes imposed
by reason of Section  860G(c) of the Code,  unless  the  Servicer  has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of any
such taxes.

(d) The  proceeds  of any Cash  Liquidation,  REO  Disposition  or  purchase  or
repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as well
as any recovery resulting from a collection of Liquidation  Proceeds,  Insurance
Proceeds or REO Proceeds,  will be applied in the  following  order of priority:
first,  to reimburse the Servicer or the related  Subservicer in accordance with
Section 3.10(a)(ii); second, to all Servicing Fees and Subservicing Fees payable
therefrom  (and the  Servicer and the  Subservicer  shall have no claims for any
deficiencies  with  respect  to  such  fees  which  result  from  the  foregoing
allocation);  third,  to the  Certificateholders  to the extent of  accrued  and
unpaid interest on the Mortgage Loan, and any related REO Imputed  Interest,  at
the Net  Mortgage  Rate  (or the  Modified  Net  Mortgage  Rate in the case of a
Modified  Mortgage Loan) to the Due Date prior to the Distribution Date on which
such  amounts are to be  distributed;  fourth,  to the  Certificateholders  as a
recovery of principal on the Mortgage Loan (or REO  Property)(provided  that, if
such  recovery is of an amount  previously  allocated  to one or more Classes of
Certificates  as a Realized Loss,  such recovery  shall be allocated  among such
Classes in the same  proportions as the allocation of such Realized  Losses and,
if any such Class of  Certificates  to which such Realized Loss was allocated is
no longer  outstanding,  such  subsequent  recovery  shall be distributed to the
persons who were the Holders of such Class of Certificates when it was retired);
and fifth, to Foreclosure Profits.

(e) In the event of a default on a Mortgage  Loan one or more of whose  obligors
is not a United States Person, in connection with any foreclosure or acquisition
of a deed in lieu of foreclosure  (together,  "foreclosure")  in respect of such
Mortgage  Loan,  the  Servicer  will cause  compliance  with the  provisions  of

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Treasury Regulation Section  1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such  foreclosure  except  to the  extent,  if  any,  that  proceeds  of such
foreclosure are required to be remitted to the obligors on such Mortgage Loan.

Section 3.15.  Trustee to Cooperate; Release of Mortgage Notes.

(a) Upon becoming aware of the payment in full of any Mortgage Loan, or upon 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  immediately  notify
the Custodian, if any, or the Trustee (if it holds the related Mortgage Note) by
delivery of a Request for Release  substantially  in the form attached hereto as
Exhibit F  requesting  delivery  to it of the  Mortgage  Note.  The  Servicer is
authorized to execute and deliver to the Mortgagor the request for reconveyance,
deed of  reconveyance  or release or satisfaction of mortgage or such instrument
releasing  the lien of the  Mortgage,  together  with the Mortgage Note with, as
appropriate,  written evidence of cancellation  thereon and to cause the removal
from the  registration on the MERS(R) System of such Mortgage and to execute and
deliver, on behalf of the Trustee and the Certificateholders or any of them, any
and all  instruments  of  satisfaction  or  cancellation  or of  partial or full
release.  No expenses incurred in connection with any instrument of satisfaction
or deed of  reconveyance  shall be chargeable  to the  Custodial  Account or the
Payment Account.

(b) From time to time as is appropriate  for the servicing or foreclosure of any
Mortgage  Loan,  the  Servicer  shall  deliver  a  Request  for  Release  to the
Custodian,  if any,  or the  Trustee  (if it holds the  related  Mortgage  Note)
requesting  that possession of the Mortgage Note be released to the Servicer and
certifying  as to the reason for such  release  and that such  release  will not
invalidate any insurance coverage provided in respect of the Mortgage Loan under
any Required Insurance Policy. Upon receipt of the foregoing, the Trustee (if it
holds the related  Mortgage  Note) or the  Custodian  shall deliver the Mortgage
Note to the Servicer. The Servicer shall cause each Mortgage Note so released to
be returned to the Trustee,  or the  Custodian as agent for the Trustee when the
need therefor by the Servicer no longer exists, unless (i) the Mortgage Loan has
been liquidated and the Liquidation  Proceeds relating to the Mortgage Loan have
been  deposited  in the  Custodial  Account or (ii) the  Mortgage  Note has been
delivered  directly  or through a  Subservicer  to an  attorney,  or to a public
trustee or other public  official as required by law, for purposes of initiating
or  pursuing  legal  action  or other  proceedings  for the  foreclosure  of the
Mortgaged  Property either  judicially or  non-judicially,  and the Servicer has
delivered  directly or through a Subservicer  to the Trustee and the Custodian a
certificate of a Servicing Officer  certifying as to the name and address of the
Person to which such  Mortgage Note was delivered and the purpose or purposes of
such  delivery.  In the event of the  liquidation of any such Mortgage Loan, the
Custodian,  if any, or the Trustee  shall  deliver the Request for Release  with
respect thereto to the Servicer upon deposit of the related Liquidation Proceeds
in the Custodial Account.

(c) The  Servicer  on the  Trustee's  behalf  shall  execute  and deliver to the
Servicer,  if necessary,  any court  pleadings,  requests for trustee's  sale or
other  documents  necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage  Note or Mortgage or to obtain a deficiency  judgment,
or to enforce any other  remedies or rights  provided  by the  Mortgage  Note or
Mortgage  or  otherwise  available  at  law or in  equity.  Together  with  such
documents or pleadings (if signed by the Trustee), the Servicer shall deliver to
the Trustee a certificate of a Servicing Officer  requesting that such pleadings
or  documents  be executed by the Trustee and  certifying  as to the reason such
documents or pleadings are required and that the execution and delivery  thereof
by the Trustee will not  invalidate  any insurance  coverage  under any Required
Insurance  Policy or  invalidate  or otherwise  affect the lien of the Mortgage,
except for the  termination of such a lien upon completion of the foreclosure or
trustee's sale.

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(d) Notwithstanding  any other provisions of this Agreement,  the Servicer shall
account  fully to the  Trustee for any funds  received by the  Servicer or which
otherwise  are  collected by the Servicer as  Liquidation  Proceeds or Insurance
Proceeds in respect of any related  Mortgage  Loan. All Mortgage Files and funds
collected  or held by, or under the control  of, the  Servicer in respect of any
Mortgage Loans,  whether from the collection of principal and interest  payments
or from Liquidation Proceeds, including but not limited to, any funds on deposit
in the Custodial Account(s),  shall be held by the Servicer for and on behalf of
the  Trustee  and shall be and remain  the sole and  exclusive  property  of the
Trustee,  subject to the applicable  provisions of this Agreement.  The Servicer
also agrees that it shall not create,  incur or subject any Mortgage File or any
funds  that are  deposited  in the  Custodial  Account,  Payment  Account or any
related Servicing Account,  or any funds that otherwise are or may become due or
payable to the Trustee for the benefit of the Certificateholders,  to any claim,
lien,   security  interest,   judgment,   levy,  writ  of  attachment  or  other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds  collected  on, or in connection  with, a
Mortgage Loan, except,  however,  that the Servicer shall be entitled to set off
against  and deduct from any such funds any amounts  that are  properly  due and
payable to the Servicer under this Agreement.

Section 3.16.  Servicing and Other Compensation; Compensating Interest.

(a) The  Servicer,  as  compensation  for its  activities  hereunder,  shall  be
entitled  to receive  on each  Distribution  Date the  amounts  provided  for by
clauses (iii), (iv) and (v) of Section 3.10(a), subject to clause (e) below. The
amount of servicing compensation provided for in such clauses shall be accounted
for on a Mortgage  Loan-by-Mortgage  Loan basis.  In the event that  Liquidation
Proceeds,  Insurance  Proceeds  and REO  Proceeds  (net of amounts  reimbursable
therefrom  pursuant to Section  3.10(a)(ii)) in respect of a Cash Liquidation or
REO Disposition  exceed the unpaid principal  balance of such Mortgage Loan plus
unpaid interest accrued thereon  (including REO Imputed Interest) at a per annum
rate equal to the related Net Mortgage  Rate (or the Modified Net Mortgage  Rate
in the case of a Modified  Mortgage  Loan),  the  Servicer  shall be entitled to
retain  therefrom  and to pay to itself  and/or  the  related  Subservicer,  any
Foreclosure  Profits and any Servicing Fee or Subservicing  Fee considered to be
accrued but unpaid.

(b)  Additional  servicing  compensation  in the  form  of  prepayment  charges,
assumption  fees,  late  payment  charges,  investment  income on amounts in the
Custodial  Account  or  otherwise  shall  be  retained  by the  Servicer  or the
Subservicer to the extent provided herein, subject to clause (e) below.

(c) The  Servicer  shall be required to pay, or cause to be paid,  all  expenses
incurred by it in connection with its servicing  activities hereunder (including
payment of premiums for the Primary  Insurance  Policies,  if any, to the extent
such  premiums  are not required to be paid by the related  Mortgagors,  certain
expenses of the Trustee as provided in Section  8.05,  and the fees and expenses
of any Custodian) and shall not be entitled to reimbursement  therefor except as
specifically provided in Sections 3.01, 3.10 and 3.14.

(d)  The  Servicer's  right  to  receive  servicing   compensation  may  not  be
transferred in whole or in part except in connection with the transfer of all of
its responsibilities and obligations of the Servicer under this Agreement.

(e)  Notwithstanding any other provision herein, the amount of the Servicing Fee
that the Servicer shall be entitled to receive for its activities  hereunder for
the period  ending on each  Distribution  Date  shall be reduced  (but not below
zero) by an amount equal to Compensating Interest (if any) for such Distribution
Date.  In  making  such  reduction,  the  Servicer  will not  withdraw  from the
Custodial Account any such amount representing all or a portion of the Servicing
Fee to which it is entitled pursuant to Section 3.10(a)(iii).

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Section               3.17.  Periodic  Filings with the  Securities and Exchange
                      Commission; Additional Information.

(a) Within 15 days after each  Distribution  Date, the Trustee shall prepare and
file in accordance  with industry  standards  with the  Securities  and Exchange
Commission  (the  "Commission")  via the Electronic Data Gathering and Retrieval
System ("EDGAR"),  and the Servicer shall execute, a Form 8-K with a copy of the
statement to the  Certificateholders  for such  Distribution  Date as an exhibit
thereto.  Prior to January  31,  2004,  the  Trustee  shall  prepare and file in
accordance with industry  standards,  and the Servicer shall execute,  a Form 15
Suspension Notification with respect to the Trust Fund, if applicable,  with the
Commission  via EDGAR.  Prior to April 30,  2004 and prior to April 30th of each
succeeding year until the earlier of (i) a Form 15 Suspension  Notification  has
been  filed  with  respect  to the  Trust  Fund or (ii) the year  following  the
termination  of the Trust Fund pursuant to the terms  hereof,  the Trustee shall
prepare and file,  and the Servicer  shall  execute,  a Form 10-K,  in substance
conforming  to  industry  standards  with  respect  to the  Trust  Fund with the
Commission  via EDGAR.  The Company hereby grants a limited power of attorney to
execute and file each such document on behalf of the Company to the Servicer and
the Trustee,  respectively.  Each such power of attorney  shall  continue  until
either the earlier of (i) receipt by the Trustee or the Servicer, as applicable,
from the Company of written  termination  of such power of attorney and (ii) the
termination of the Trust Fund. The Company agrees to promptly furnish to each of
the Trustee  and the  Servicer,  from time to time upon  request,  such  further
information,  reports,  and financial  statements  within its control related to
this  Agreement  and the  Mortgage  Loans as the  Trustee  or the  Servicer,  as
applicable,  reasonably  deems  appropriate  to prepare  and file all  necessary
reports with the Commission.  The Servicer shall have no  responsibility to file
any items other than those specified in this section.

(b) Any Form 10-K filed with the  Commission  in  connection  with this  Section
shall  include a  certification,  signed by the senior  officer in charge of the
servicing functions of the Servicer,  in the form attached as Exhibit N-1 hereto
or such other form as may be required or permitted by the Commission  (the "Form
10-K  Certification"),  in  compliance  with Rule  13a-14 and  15d-14  under the
Exchange Act and any additional directives of the Commission. In connection with
the Form 10-K  Certification,  the Trustee shall provide the Servicer with (x) a
back-up certification  substantially in the form attached hereto as Exhibit N-2;
and (y) (I) a list of Certificateholders as shown on the Certificate Register as
of the end of each  calendar  year,  (II) copies of all  pleadings,  other legal
process and any other  documents  relating to any claims,  charges or complaints
involving  the Trustee,  as trustee,  or the Trust Fund that are received by the
Trustee,  (III)  notice  of all  matters  that,  to the  actual  knowledge  of a
Responsible  Officer  of the  Trustee,  have  been  submitted  to a vote  of the
Certificateholders,  other than those matters that have been submitted to a vote
of the  Certificateholders  at the request of the Company or the  Servicer,  and
(IV)  notice of any  failure  of the  Trustee  to make any  distribution  to the
Certificateholders as required pursuant to this Agreement.  Neither the Servicer
nor the Trustee shall have any liability  with respect to the Trustee's  failure
to properly prepare or file, or the Servicer's failure to execute, such periodic
reports  resulting from or relating to the  Servicer's or the Trustee's,  as the
case may be,  inability or failure to obtain any  information not resulting from
the negligence or willful misconduct of such party.

Section 3.18.  Annual Statement as to Compliance.

        The Servicer  shall deliver to the Company,  the Trustee and each Rating
Agency  on or  before  90 days  after  the end of the  Servicer's  fiscal  year,
commencing  with  its  fiscal  year  ending  December  31,  2003,  an  Officer's
Certificate  stating,  as to  the  signer  thereof,  that  (i) a  review  of the
activities  of the  Servicer  during  the  preceding  calendar  year  and of the
performance  of the  Servicer  under  this  Agreement  has been made  under such
officer's supervision and (ii) to the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement

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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 except for such defaults as such officer in his or her
good faith judgment believes to be immaterial.

Section 3.19.  Annual Independent Public Accountants' Servicing Report.

        On or  before  90 days  after  the end of the  Servicer's  fiscal  year,
commencing  with its 2003 fiscal year, the Servicer at its expense shall cause a
firm of independent  public  accountants  (who may also render other services to
the  Servicer,  the Company or any affiliate  thereof)  which is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
Trustee  and the  Company  to the  effect  that such firm has  examined  certain
documents and records relating to the Servicer's  servicing of mortgage loans of
the  same  type  as  the  Mortgage  Loans   pursuant  to  servicing   agreements
substantially  similar to this  Agreement,  which  agreements  may include  this
Agreement,   and  that,  on  the  basis  of  such  an   examination,   conducted
substantially  in compliance  with the Uniform  Single  Attestation  Program for
Mortgage Bankers,  such firm is of the opinion that the Servicer's servicing has
been  conducted in  compliance  with the  agreements  examined  pursuant to this
Section,  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.  Copies of such  statement  shall be  provided  by the Trustee to any
Certificateholder  upon  request  at  the  Servicer's  expense,   provided  such
statement is delivered to the Trustee.

Section 3.20.  Rights of the Company in Respect of the Servicer.

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

Section 3.21.  Administration of Buydown Funds.

(a) With respect to any Buydown  Mortgage  Loan, the Servicer will withdraw from
the account that  satisfies the  requirements  for a  Subservicing  Account (the
"Buydown  Account") the predetermined  amount that, when added to the amount due
on such date from the  Mortgagor,  equals the full  Monthly  Payment and deposit
that amount in the Custodial  Account  together with the related payment made by
the Mortgagor or advanced by the Subservicer.

(b) If the  Mortgagor  on a  Buydown  Mortgage  Loan  prepays  such  loan in its
entirety  during  the period  (the  "Buydown  Period")  when  Buydown  Funds are
required  to be  applied to such  Buydown  Mortgage  Loan,  the  Servicer  shall
withdraw from the Buydown  Account and remit any Buydown Funds  remaining in the
Buydown Account in accordance with the related buydown agreement.  The amount of
Buydown  Funds  which may be  remitted in  accordance  with the related  buydown
agreement  may reduce the amount  required to be paid by the  Mortgagor to fully
prepay the related  Mortgage  Loan. If the Mortgagor on a Buydown  Mortgage Loan
defaults  on such  Mortgage  Loan  during the  Buydown  Period and the  property
securing such Buydown  Mortgage Loan is sold in the liquidation  thereof (either
by the Servicer or the insurer under any related Primary Insurance Policy),  the
Servicer  shall  withdraw  from the Buydown  Account the Buydown  Funds for such
Buydown  Mortgage Loan still held in the Buydown Account and deposit the same in
the Custodial Account or, pay to the insurer under any related Primary Insurance
Policy if the Mortgaged Property is transferred to such insurer and such insurer
pays all of the loss incurred in respect of such default. Any amount so remitted
pursuant to the  preceding  sentence will be deemed to reduce the amount owed on
the Mortgage Loan.

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

Section 4.01.  Payment Account.

(a) The Trustee shall  establish and maintain a Payment  Account for the benefit
of the  Certificateholders  in which the Servicer shall cause to be deposited on
behalf of the  Trustee  on or before  2:00  P.M.  New York time on each  Payment
Account  Deposit Date by wire transfer of immediately  available funds an amount
equal to the sum of (i) any Advance for the immediately succeeding  Distribution
Date, (ii) any amount  required to be deposited in the Payment Account  pursuant
to Section  3.12(a),  (iii) any amount  required to be  deposited in the Payment
Account  pursuant to Section 4.07,  (iv) any amount required to be paid pursuant
to  Section  9.01  and  (v)  all  other  amounts   constituting   the  Available
Distribution Amount for the immediately succeeding Distribution Date.

(b) The Trustee may invest,  or cause the  institution  maintaining  the Payment
Account to  invest,  or hold  uninvested,  the funds in the  Payment  Account in
Permitted  Investments  designated in the name of the Trustee for the benefit of
the  Certificateholders,  which  shall  mature or be payable on demand not later
than the Business Day next  preceding the  Distribution  Date next following the
date of such investment  (except that (i) any investment in the institution with
which the Payment  Account is  maintained  may mature or be payable on demand on
such Distribution Date and (ii) any other investment may mature or be payable on
demand on such  Distribution  Date if the Trustee  shall  advance  funds on such
Distribution  Date  to  the  Payment  Account  in the  amount  payable  on  such
investment on such  Distribution  Date,  pending  receipt  thereof to the extent
necessary to make  distributions on the  Certificates)  and shall not be sold or
disposed  of prior to  maturity.  All  income  and gain  realized  from any such
investment or from  uninvested  balances in the Payment Account shall be for the
benefit of the Trustee and shall be subject to its withdrawal or order from time
to time.  The amount of any losses  incurred in respect of any such  investments
shall be  deposited  in the Payment  Account by the Trustee out of its own funds
immediately as realized without any right of reimbursement.

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Section 4.02.  Distributions.

(a)            On each Distribution Date, the REMIC I Distribution  Amount shall
               be deemed  distributed  from REMIC I to REMIC II as the holder of
               the REMIC I Regular Interests and to the Holder of Component I of
               the Class R  Certificates  in accordance  with the priorities set
               forth in the definition of REMIC I Distribution  Amount.  On each
               Distribution  Date,  the amount  received by REMIC II pursuant to
               the  preceding  sentence  and  Section  10.04(a)  shall be deemed
               distributed from REMIC II to REMIC III as the holder of the REMIC
               II Regular  interests in the amounts and in  accordance  with the
               priorities  set forth in Section  10.02(b)  through  (c). On each
               Distribution  Date, the Trustee or the Paying Agent  appointed by
               the Trustee shall distribute  first, to the Trustee,  payment for
               any  servicing  transfer  expenses  reimbursable  to the  Trustee
               pursuant  to  Section  7.02(a)  and that  have  not been  paid or
               reimbursed to the Trustee by the Servicer, allocated in reduction
               of the Available  Distribution  Amounts pro rata,  based upon the
               aggregate Stated Principal  Balances of each Loan Group,  second,
               to the  Servicer,  in the  case  of a  distribution  pursuant  to
               Section  4.02(a)(iv) below, the amount required to be distributed
               to the Servicer or a Subservicer  pursuant to Section 4.02(a)(iv)
               below, and third, to each Certificateholder of record on the next
               preceding  Record Date  (other  than as provided in Section  9.01
               respecting   the  final   distribution)   either  in  immediately
               available funds (by wire transfer or otherwise) to the account of
               such   Certificateholder   at  a  bank  or  other  entity  having
               appropriate facilities therefor, if such Certificateholder has so
               notified the Trustee or the Paying Agent, as the case may be, or,
               if such  Certificateholder has not so notified the Trustee or the
               Paying  Agent  by the  Record  Date,  by  check  mailed  to  such
               Certificateholder  at the address of such Holder appearing in the
               Certificate Register such Certificateholder's  share (which share
               with respect to each Class of Certificates, shall be based on the
               aggregate of the Percentage Interests represented by Certificates
               of the  applicable  Class held by such  Holder) of the  following
               amounts,  in the  following  order of  priority  (subject  to the
               provisions of Section 4.02(b) below),  in each case to the extent
               of the related Available  Distribution Amount (net of the amounts
               payable  above)(except,  with respect to clauses  (iii) and (xix)
               below  and Loan  Group 2 and Loan  Group 3, to the  extent of the
               remaining  related Available  Distribution  Amount plus the Class
               A-II-1  Hedge  Payment  or  Class  A-III-1  Hedge   Payment,   as
               applicable):

(i)  (I) from the Available Distribution Amount related to the Group 1 Loans, to
     the Holders of the Class A-I-1 Certificates,  Accrued Certificate  Interest
     on  such  Certificates  for  such  Distribution   Date,  plus  any  Accrued
     Certificate   Interest   thereon   remaining   unpaid  from  any   previous
     Distribution  Date except as provided in the last paragraph of this Section
     4.02(a), in each case in respect of interest on such Classes;

(II) from the Available Distribution Amount related to the Group 2 Loans, to the
     Holders of the Group 2  Certificates,  on a pro rata basis based on Accrued
     Certificate  Interest payable on such Classes of Certificates  with respect
     to such Distribution Date, Accrued Certificate  Interest on such Classes of
     Certificates  for such  Distribution  Date,  plus any  Accrued  Certificate
     Interest  thereon  remaining  unpaid from any  previous  Distribution  Date
     except as provided in the last paragraph of this Section  4.02(a),  in each
     case in respect of interest on such Classes;

(III)from the Available  Distribution  Amount  related to the Group 3 Loans,  to
     the  Holders  of the Group 3  Certificates,  on a pro rata  basis  based on
     Accrued  Certificate  Interest payable on such Classes of Certificates with
     respect to such Distribution  Date,  Accrued  Certificate  Interest on such
     Classes  of  Certificates  for such  Distribution  Date,  plus any  Accrued
     Certificate   Interest   thereon   remaining   unpaid  from  any   previous
     Distribution  Date except as provided in the last paragraph of this Section
     4.02(a), in each case in respect of interest on such Classes; and

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<PAGE>

(IV)           from the  Available  Distribution  Amount  related to the Group 4
               Loans, to the Holders of the Class A-IV-1  Certificates,  Accrued
               Certificate  Interest on such  Certificates for such Distribution
               Date, plus any Accrued  Certificate  Interest  thereon  remaining
               unpaid from any previous  Distribution Date except as provided in
               the last  paragraph  of this  Section  4.02(a),  in each  case in
               respect of interest on such Classes; and

(ii)           from the related  Available  Distribution  Amount remaining after
               the  distributions  pursuant to Section  4.02(a)(i) above, to the
               Holders  of the  Senior  Certificates  (other  than  the  Class X
               Certificates)  related to a Loan  Group,  in the  priorities  and
               amounts set forth in Section  4.02(b) through (e), the sum of the
               following  (applied to reduce the Certificate  Principal Balances
               of such Senior Certificates, as applicable):

(A)            the Senior  Percentage for such Loan Group for such  Distribution
               Date times the sum of the following:

(1)  the  principal  portion of each Monthly  Payment due during the related Due
     Period on each Outstanding Mortgage Loan in the related Loan Group, whether
     or not received on or prior to the related  Determination  Date,  minus the
     principal  portion of any Debt Service  Reduction in the related Loan Group
     which together with other Bankruptcy Losses exceeds the Bankruptcy Amount;

(2)  the Stated Principal Balance of any Mortgage Loan in the related Loan Group
     repurchased  during the preceding calendar month (or deemed to have been so
     repurchased in accordance with Section 3.07(b))  pursuant to Sections 2.02,
     2.04 or 4.07,  and the amount of any  shortfall  deposited in the Custodial
     Account in connection with the substitution of a Deleted Mortgage Loan from
     the related Loan Group pursuant to Section 2.02 or Section 2.04, during the
     preceding calendar month; and

(3)  the principal portion of all other unscheduled  collections with respect to
     the  related  Loan Group  (other  than  Principal  Prepayments  in Full and
     Curtailments  and amounts received in connection with a Cash Liquidation or
     REO  Disposition of a Mortgage Loan in such Loan Group described in Section
     4.02(a)(ii)(B)  below,  including without  limitation  Insurance  Proceeds,
     Liquidation  Proceeds  and REO  Proceeds)  received  during  the  preceding
     calendar month or, in the case of Principal  Prepayment in Full, during the
     related Prepayment Period (or deemed to have been so received in accordance
     with Section  3.07(b)) to the extent  applied by the Servicer as recoveries
     of principal of the related Mortgage Loan pursuant to Section 3.14;

(B)  with respect to each  Mortgage Loan from the related Loan Group for which a
     Cash  Liquidation  or a  REO  Disposition  occurred  during  the  preceding
     calendar  month  (or was  deemed to have  occurred  during  such  period in
     accordance  with Section  3.07(b)) and did not result in any Excess Special
     Hazard  Losses,   Excess  Fraud  Losses,   Excess   Bankruptcy   Losses  or
     Extraordinary  Losses,  an amount  equal to the  lesser  of (a) the  Senior
     Percentage for such Loan Group for such  Distribution Date times the Stated
     Principal  Balance of such  Mortgage  Loan and (b) the  Senior  Accelerated
     Distribution  Percentage  for such Loan  Group for such  Distribution  Date

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<PAGE>

     times the related  unscheduled  collections  (including  without limitation
     Insurance  Proceeds,  Liquidation  Proceeds and REO Proceeds) to the extent
     applied by the Servicer as recoveries of principal of the related  Mortgage
     Loan pursuant to Section 3.14);

(C)  the Senior Accelerated Distribution Percentage for such Loan Group for such
     Distribution Date times the aggregate of all Principal  Prepayments in Full
     received  with  respect to Mortgage  Loans in the related Loan Group in the
     related  Prepayment  Period  and  Curtailments  received  with  respect  to
     Mortgage Loans in the related Loan Group in the preceding calendar month;

(D)  any Excess Subordinate Principal Amount allocated to the related Loan Group
     for such Distribution Date but only to the extent of Eligible Funds for the
     related Loan Group on such Distribution Date; and

(E)  any amounts described in subsection (ii),  clauses (A), (B) and (C) of this
     Section  4.02(a),  as determined  for any previous  Distribution  Date with
     respect to such Loan  Group,  which  remain  unpaid  after  application  of
     amounts  previously  distributed  pursuant to this clause (E) to the extent
     that such amounts are not  attributable  to Realized Losses which have been
     allocated to the Subordinate Certificates;

(iii)(A) to the  Holders  of the Class  A-II-1  Certificates,  the Class  A-II-1
     Carryover Shortfall Amount, if any, for such Distribution Date, paid first,
     from the Class A-II-1 Hedge Payment for such  Distribution Date (but not in
     excess of the Class A-II-1 Yield Maintenance  Amount) and second,  from the
     related  Available   Distribution   Amount  remaining  after  distributions
     pursuant to the preceding  paragraphs of this Section  4.02(a),  but not in
     excess of the  amount of  Accrued  Certificate  Interest  on the Class X-II
     Certificates for such Distribution Date determined without reduction by the
     provisions of the last paragraph of the  definition of Accrued  Certificate
     Interest  and (B) to the  Holders of the Class  A-III-1  Certificates,  the
     Class A-III-1  Carryover  Shortfall  Amount,  if any, for such Distribution
     Date,   paid  first,   from  the  Class  A-III-1  Hedge  Payment  for  such
     Distribution Date (but not in excess of the Class A-III-1 Yield Maintenance
     Amount)  and  second,  from  the  related  Available   Distribution  Amount
     remaining after distributions  pursuant to the preceding paragraphs of this
     Section  4.02(a),  but not in excess of the amount of  Accrued  Certificate
     Interest  on the  Class  X-III  Certificates  for  such  Distribution  Date
     determined without reduction by the provisions of the last paragraph of the
     definition of Accrued Certificate Interest;

(iv) from  the  Available   Distribution  Amount  remaining,   if  any,  if  the
     Certificate  Principal  Balances of the Subordinate  Certificates  have not
     been reduced to zero,  to the Servicer or a  Subservicer,  by remitting for
     deposit to the Custodial Account, to the extent of and in reimbursement for
     any Advances or Subservicer  Advances  previously  made with respect to any
     Mortgage Loan or REO Property which remain unreimbursed in whole or in part
     following the Cash  Liquidation or REO Disposition of such Mortgage Loan or
     REO  Property,  minus any such  Advances  that were  made with  respect  to
     delinquencies  that  ultimately  constituted  Excess Special Hazard Losses,
     Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses;

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<PAGE>

(v)            from the Available Distribution Amount remaining,  if any, to the
               Holders of the Class M-1  Certificates,  the Accrued  Certificate
               Interest  thereon for such  Distribution  Date,  plus any Accrued
               Certificate  Interest thereon  remaining unpaid from any previous
               Distribution Date, except as provided below;

(vi)           from the Available Distribution Amount remaining,  if any, to the
               Holders  of the Class M-1  Certificates,  an amount  equal to the
               Subordinate Principal  Distribution Amount derived from each Loan
               Group for such Class of Certificates for such Distribution  Date,
               applied in reduction of the Certificate  Principal Balance of the
               Class M-1 Certificates;

(vii)          from the Available Distribution Amount remaining,  if any, to the
               Holders of the Class M-2  Certificates,  the Accrued  Certificate
               Interest  thereon for such  Distribution  Date,  plus any Accrued
               Certificate  Interest thereon  remaining unpaid from any previous
               Distribution Date, except as provided below;

(viii)         from the Available Distribution Amount remaining,  if any, to the
               Holders  of the Class M-2  Certificates,  an amount  equal to the
               Subordinate Principal  Distribution Amount derived from each Loan
               Group for such Class of Certificates for such Distribution  Date,
               applied in reduction of the Certificate  Principal Balance of the
               Class M-2 Certificates;

(ix)           from the Available Distribution Amount remaining,  if any, to the
               Holders of the Class M-3  Certificates,  the Accrued  Certificate
               Interest  thereon for such  Distribution  Date,  plus any Accrued
               Certificate  Interest thereon  remaining unpaid from any previous
               Distribution Date, except as provided below;

(x)            from the Available Distribution Amount remaining,  if any, to the
               Holders  of the Class M-3  Certificates,  an amount  equal to the
               Subordinate Principal  Distribution Amount derived from each Loan
               Group for such Class of Certificates for such Distribution  Date,
               applied in reduction of the Certificate  Principal Balance of the
               Class M-3 Certificates;

(xi)           from the Available Distribution Amount remaining,  if any, to the
               Holders of the Class B-1  Certificates,  the Accrued  Certificate
               Interest  thereon for such  Distribution  Date,  plus any Accrued
               Certificate  Interest thereon  remaining unpaid from any previous
               Distribution Date, except as provided below;

(xii)          from the Available Distribution Amount remaining,  if any, to the
               Holders  of the Class B-1  Certificates,  an amount  equal to the
               Subordinate Principal  Distribution Amount derived from each Loan
               Group for such Class of Certificates for such Distribution  Date,
               applied in reduction of the Certificate  Principal Balance of the
               Class B-1 Certificates;

(xiii)         from the Available Distribution Amount remaining,  if any, to the
               Holders of the Class B-2  Certificates,  the Accrued  Certificate
               Interest  thereon for such  Distribution  Date,  plus any Accrued
               Certificate  Interest thereon  remaining unpaid from any previous
               Distribution Date, except as provided below;

(xiv)          from the Available Distribution Amount remaining,  if any, to the
               Holders  of the Class B-2  Certificates,  an amount  equal to the
               Subordinate Principal  Distribution Amount derived from each Loan
               Group for such Class of Certificates for such Distribution  Date,
               applied in reduction of the Certificate  Principal Balance of the
               Class B-2 Certificates;

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<PAGE>

(xv)           from the Available Distribution Amount remaining,  if any, to the
               Holders  of the Class B-3  Certificates,  an amount  equal to the
               Accrued Certificate  Interest thereon for such Distribution Date,
               plus any Accrued  Certificate  Interest thereon  remaining unpaid
               from any previous Distribution Date, except as provided below;

(xvi)          from the Available Distribution Amount remaining,  if any, to the
               Holders  of the Class B-3  Certificates,  an amount  equal to the
               Subordinate Principal  Distribution Amount derived from each Loan
               Group for such Class of Certificates for such  Distribution  Date
               applied in reduction of the Certificate  Principal Balance of the
               Class B-3 Certificates;

(xvii)         from the Available Distribution Amount remaining,  if any, to the
               Holders of the Senior Certificates  related to any Loan Group, in
               the priority set forth in Section 4.02(b),  the portion,  if any,
               of  the  Available   Distribution  Amount  for  such  Loan  Group
               remaining  after the foregoing  distributions,  applied to reduce
               the Certificate  Principal Balances of such Senior  Certificates,
               but in no  event  more  than  the  aggregate  of the  outstanding
               Certificate  Principal  Balances  of each  such  Class of  Senior
               Certificates;  and  thereafter,  to  each  Class  of  Subordinate
               Certificates then outstanding  beginning with such Class with the
               Highest  Priority,  any  portion  of the  Available  Distribution
               Amount for each Loan Group  remaining  after the  related  Senior
               Certificates have been retired, applied to reduce the Certificate
               Principal Balance of each such Class of Subordinate Certificates,
               but in no event more than the outstanding  Certificate  Principal
               Balance of each such Class of Subordinate Certificates;

(xviii)        from the Available Distribution Amount remaining,  if any, to the
               Trustee,  any fees and/or expenses payable or reimbursable by the
               Servicer  pursuant to Section 8.05 hereof, to the extent not paid
               by the Servicer;

(xix)          to the  Holders  of the  Class SB  Certificates,  from the  Class
               A-II-1 Hedge Payment,  if any, or Class A-III-1 Hedge Payment, if
               any, the amount of such  payments  remaining  after  distribution
               pursuant to Section 4.02(a)(iii) above; and

(xx)           to  the  Class  R  Certificates,  the  balance,  if  any,  of the
               Available Distribution Amount.

        Notwithstanding the foregoing, on any Distribution Date, with respect to
the Class of Subordinate Certificates outstanding on such Distribution Date with
the Lowest Priority, or in the event the Subordinate  Certificates are no longer
outstanding, the Senior Certificates related to the Loan Group in which Mortgage
Loan  described  below is in, Accrued  Certificate  Interest  thereon  remaining
unpaid from any previous  Distribution  Date shall be distributable  only to the
extent  that such  unpaid  Accrued  Certificate  Interest  was  attributable  to
interest shortfalls relating to the failure of the Servicer to make any required
Advance, or the determination by the Servicer that any proposed Advance would be
a Nonrecoverable  Advance,  with respect to the related Mortgage Loan where such
Mortgage  Loan  has  not yet  been  the  subject  of a Cash  Liquidation  or REO
Disposition.

(b)                   Distributions  of principal on the Senior  Certificates on
                      each  Distribution  Date  occurring  prior  to the  Credit
                      Support Depletion Date shall be made as follows:

(i)                   Group 1. An amount  equal to the Group 1 Senior  Principal
                      Distribution Amount shall be distributed sequentially,  to

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<PAGE>

                      the Class R Certificates and Class A-I-1 Certificates,  in
                      that order,  in each case in reduction of the  Certificate
                      Principal Balance thereof, until the Certificate Principal
                      Balance thereof has been reduced to zero;

(ii)                  Group 2. An amount  equal to the Group 2 Senior  Principal
                      Distribution Amount shall be distributed sequentially,  to
                      the Class A-II-1 Certificates,  Class A-II-2 Certificates,
                      Class A-II-3  Certificates and Class A-II-4  Certificates,
                      in  that  order,   in  each  case  in   reduction  of  the
                      Certificate   Principal   Balance   thereof,   until   the
                      Certificate  Principal Balance thereof has been reduced to
                      zero;

(iii)                 Group 3. An amount  equal to the Group 3 Senior  Principal
                      Distribution Amount shall be distributed sequentially,  to
                      the   Class    A-III-1    Certificates,    Class   A-III-2
                      Certificates,  Class A-III-3  Certificates,  Class A-III-4
                      Certificates  and  Class  A-III-5  Certificates,  in  that
                      order,  in  each  case  in  reduction  of the  Certificate
                      Principal Balance thereof, until the Certificate Principal
                      Balance thereof has been reduced to zero; and

(iv)                  Group 4. An amount  equal to the Group 4 Senior  Principal
                      Distribution  Amount  shall be  distributed,  to the Class
                      A-IV-1  Certificates,   until  the  Certificate  Principal
                      Balance thereof has been reduced to zero.

     (c) Prior to the occurrence of the Credit Support  Depletion Date but after
the reduction of the  Certificate  Principal  Balances of any of the Class A-I-1
Certificates,   the  Group  2  Certificates  in  the  aggregate,   the  Group  3
Certificates  in the aggregate or the Class A-IV-1  Certificates,  to zero,  the
remaining Senior Certificates shall be entitled to receive, pro rata, based upon
their respective aggregate  Certificate  Principal Balances,  in addition to any
Principal  Prepayments in Full and  Curtailments  related to such  Certificates'
respective  Loan  Group,   100%  of  the  Principal   Prepayments  in  Full  and
Curtailments on the Mortgage Loans in the Loan Group or Loan Groups with respect
to which the  aggregate  Certificate  Principal  Balance of the  related  Senior
Certificates  has been reduced to zero, in accordance  with the  priorities  set
forth in  clause  4.02(b)  above,  in  reduction  of the  Certificate  Principal
Balances  thereof,  on any  Distribution  Date if (i) the Aggregate  Subordinate
Percentage is less than 200% of the Aggregate  Subordinate  Percentage as of the
Closing  Date or (ii) the  aggregate  of the Stated  Principal  Balances  of all
Mortgage Loans  Delinquent 60 days or more (including  Mortgage Loans in REO and
foreclosure)  (averaged over the preceding six month period), as a percentage of
the  aggregate  of  the  Certificate   Principal  Balances  of  the  Subordinate
Certificates, is greater than or equal to 50%.

        In  addition,  on any  Distribution  Date  prior to the  Credit  Support
Depletion Date on which the aggregate  Certificate  Principal  Balance of any of
the Class A-I-1  Certificates,  the Group 2 Certificates  in the aggregate,  the
Group 3  Certificates  in the  aggregate  or the Class A-IV-1  Certificates,  is
greater than the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group, in each case after giving effect to distributions to be made
on such  Distribution  Date  (each  such  Loan  Group,  an  "Undercollateralized
Group"),  the Available  Distribution Amount for the  Overcollateralized  Groups
otherwise allocable to the Subordinate Certificates shall instead be distributed
to such Undercollateralized  Group(s), as applicable, pro rata, based upon their
respective amounts of undercollateralization,  in accordance with the priorities
set forth in clause 4.02(b) above, (1) in reduction of the Certificate Principal
Balances  thereof,  until the aggregate  Certificate  Principal  Balance of such
Undercollateralized   Group(s),  as  applicable,  equals  the  aggregate  Stated
Principal Balance of the Mortgage Loans in the related Loan Group(s), and (2) an
amount equal to one month's  interest at the  applicable  Pass-Through  Rate for
such  Undercollateralized  Group(s),  as  applicable,  on  the  amount  of  such
difference,  first,  to pay any  unpaid  interest  on such  Class or  Classes of
Certificates  and  second,  to pay  principal  on  such  Classes  in the  manner
described in (1) above.

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(d) On or after the Credit Support  Depletion  Date, all priorities  relating to
distributions  as  described  in Section  4.02(b)  above in respect of principal
among the Class A-II Auction Certificates shall be disregarded,  and the Group 2
Senior  Principal  Distribution  Amount shall be  distributed  to the  remaining
Classes of Class A-II Auction  Certificates,  pro rata, in accordance with their
respective  outstanding   Certificate  Principal  Balances  and  all  priorities
relating to  distributions  as described in Section  4.02(b) above in respect of
principal among the Class A-III Auction  Certificates shall be disregarded,  and
the Group 3 Senior  Principal  Distribution  Amount shall be  distributed to the
remaining Classes of Class A-III Auction  Certificates,  pro rata, in accordance
with their respective outstanding Certificate Principal Balances.

(e) After the  reduction  of the  Certificate  Principal  Balances of the Senior
Certificates  relating  to a Loan Group to zero but prior to the Credit  Support
Depletion  Date,  such  Senior  Certificates  shall be  entitled  to no  further
distributions of principal thereon and the related Available Distribution Amount
shall be  distributed  solely to the holders of the related Class X Certificates
and Subordinate  Certificates,  in each case as described  herein,  except as is
otherwise set forth in Section 4.02(c) above.

(f) In addition to the  foregoing  distributions,  with  respect to any Mortgage
Loan that was previously the subject of a Cash Liquidation or an REO Disposition
that resulted in a Realized Loss, in the event that within two years of the date
on which  such  Realized  Loss was  determined  to have  occurred  the  Servicer
receives amounts, which the Servicer reasonably believes to represent subsequent
recoveries  (net of any related  liquidation  expenses),  or determines  that it
holds  surplus  amounts  previously   reserved  to  cover  estimated   expenses,
specifically  related to such  Mortgage  Loan  (including,  but not  limited to,
recoveries in respect of the  representations  and warranties made by the Seller
pursuant to the Purchase Agreement),  the Servicer shall distribute such amounts
to the  applicable  Certificateholders  of the Class or  Classes  to which  such
Realized Loss was allocated,  if applicable  (with the amounts to be distributed
allocated  among such Classes in the same  proportions as such Realized Loss was
allocated), and within each such Class to the Certificateholders of record as of
the Record Date immediately  preceding the date of such distribution (or if such
Class of Certificates is no longer  outstanding,  to the  Certificateholders  of
record at the time that such Realized Loss was allocated); provided that no such
distribution to any Class of Certificates of subsequent  recoveries related to a
Mortgage Loan shall exceed, either individually or in the aggregate and together
with any other amounts distributed in reimbursement  therefor, the amount of the
related  Realized  Loss  that  was  allocated  to such  Class  of  Certificates.
Notwithstanding  the foregoing,  no such distribution shall be made with respect
to the  Certificates  of any Class to the extent  that either (i) such Class was
protected  against the related  Realized Loss or (ii) such Class of Certificates
has been deposited into a separate trust fund or other  structuring  vehicle and
separate certificates or other instruments  representing  interests therein have
been issued in one or more  classes,  and any of such separate  certificates  or
other  instruments were protected  against the related Realized Loss pursuant to
any limited guaranty,  payment obligation,  irrevocable letter of credit, surety
bond, insurance policy or similar instrument or a reserve fund, or a combination
thereof. Any amount to be so distributed with respect to the Certificates of any
Class shall be distributed by the Servicer to the  Certificateholders  of record
as of the Record Date  immediately  preceding the date of such  distribution (i)
with  respect  to  the  Certificates  of any  Class  (other  than  the  Class  X
Certificates),  on a pro rata basis based on the Percentage Interest represented
by each  Certificate  of such Class as of such Record Date and (ii) with respect
to each Class of Class X Certificates,  to such Class X Certificates in the same
proportion  as the related  Realized  Loss was  allocated.  Any amounts to be so
distributed  shall not be remitted to or  distributed  from the Trust Fund,  and
shall constitute  subsequent  recoveries with respect to Mortgage Loans that are
no longer assets of the Trust Fund.

(g) Each distribution with respect to a Book-Entry  Certificate shall be paid to
the  Depository,   as  Holder  thereof,  and  the  Depository  shall  be  solely
responsible for crediting the amount of such distribution to the accounts of its
Depository   Participants  in  accordance  with  its  normal  procedures.   Each

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Depository  Participant shall be responsible for disbursing such distribution to
the  Certificate  Owners that it represents  and to each indirect  participating
brokerage firm (a "brokerage  firm") for which it acts as agent.  Each brokerage
firm shall be responsible for disbursing funds to the Certificate Owners that it
represents.  None of the Trustee, the Certificate Registrar,  the Company or the
Servicer shall have any  responsibility for the allocation of such distributions
among Depository Participants, brokerage firms and Certificate Owners.

(h) Except as otherwise  provided in Section 9.01,  if the Servicer  anticipates
that a final  distribution  with respect to any Class of  Certificates  shall be
made on the next  Distribution  Date,  the  Servicer  shall,  no later  than the
Determination Date in the month of such final  distribution,  notify the Trustee
and the Trustee shall, no later than two (2) Business Days after receipt of such
notices or such  Determination  Date,  mail on such date to each  Holder of such
Class of  Certificates a notice to the effect that: (i) the Trustee  anticipates
that the final  distribution with respect to such Class of Certificates shall be
made on such  Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein, and
(ii) no interest shall accrue on such Certificates from and after the end of the
related Interest Accrual Period. In the event that  Certificateholders  required
to surrender  their  Certificates  pursuant to Section  9.01(c) do not surrender
their  Certificates  for final  cancellation,  the  Trustee  shall  cause  funds
distributable with respect to such Certificates to be withdrawn from the Payment
Account  and  credited  to a separate  escrow  account  for the  benefit of such
Certificateholders as provided in Section 9.01(d).

Section 4.03.  Statements to Certificateholders.

(a) Concurrently with each distribution  charged to the Payment Account and with
respect  to  each  Distribution  Date,  the  Trustee  shall  make  available  to
Certificateholders  and  other  parties  to this  Agreement  via  the  Trustee's
internet  website a statement as to each Class of Certificates  and the Mortgage
Pool and each Loan Group that  includes the  information  set forth in Exhibit L
attached hereto.

        The  Trustee's   internet   website   shall   initially  be  located  at
"www.abs.bankone.com."  Assistance  in using  the  website  can be  obtained  by
calling the Trustee's customer service desk at (800) 524-9472.  Parties that are
unable to use the website  are  entitled to have a paper copy mailed to them via
first class mail by calling the customer  service desk and indicating  such. The
Trustee shall have the right to change the way Distribution  Date statements are
distributed  in order to make such  distribution  more  convenient  and/or  more
accessible  to the above  parties,  provided  that such  procedures  are no less
convenient for the  Certificateholders  and the Trustee shall provide timely and
adequate notification to all above parties regarding any such changes.

(b) Within a reasonable  period of time after the end of each calendar year, the
Trustee shall prepare,  or cause to be prepared,  and shall forward, or cause to
be  forwarded,  to each Person who at any time during the calendar  year was the
Holder  of a  Certificate,  other  than  a  Class  R  Certificate,  a  statement
containing the  information  set forth in clauses (i) and (ii) of subsection (a)
above  aggregated  for such calendar year or applicable  portion  thereof during
which such Person was a Certificateholder.  Such obligation of the Trustee shall
be deemed to have been  satisfied  to the extent that  substantially  comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code.

(c) Within a reasonable  period of time after the end of each calendar year, the
Trustee shall prepare,  or cause to be prepared,  and shall forward, or cause to
be  forwarded,  to each Person who at any time during the calendar  year was the
Holder  of  a  Class  R  Certificate,  a  statement  containing  the  applicable
distribution  information  provided pursuant to this Section 4.03 aggregated for
such calendar year or applicable  portion  thereof  during which such Person was

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the Holder of a Class R  Certificate.  Such  obligation  of the Trustee 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.

(d) Upon the written request of any  Certificateholder,  the Trustee, as soon as
reasonably practicable, shall provide the requesting Certificateholder with such
information as is necessary and  appropriate,  in the Trustee's sole discretion,
for purposes of satisfying  applicable  reporting  requirements under Rule 144A.
The Company and the Servicer  shall  cooperate with the Trustee as is reasonably
necessary to respond to any such request.

Section               4.04.  Distribution  of  Reports  to the  Trustee  and the
                      Company; Advances by the Servicer.

(a) Prior to the close of  business on the  Business  Day next  succeeding  each
Determination  Date,  the Servicer  shall furnish the  Remittance  Report to the
Trustee in a mutually  agreed upon form of an  electromagnetic  tape or disk and
hard  copy,  or other  automated  transmission.  The  Remittance  Report and any
information  supplemental thereto shall include such information with respect to
the  Mortgage  Loans that is required by the Trustee for  purposes of making the
calculations  described in Section 4.02, as set forth in written  specifications
or  guidelines  issued by the  Servicer  or the Trustee  from time to time.  The
Trustee  shall be  protected in relying  upon the  information  set forth in the
Remittance Report without any independent check or verification.

(b) On or before 2:00 P.M. New York time on each Payment  Account  Deposit Date,
the Servicer shall either (i) deposit in the Payment Account from its own funds,
or  funds  received  therefor  from the  Subservicers,  an  amount  equal to the
Advances to be made by the Servicer in respect of the related Distribution Date,
which shall be in an aggregate  amount equal to the aggregate  amount of Monthly
Payments (with each interest portion thereof adjusted to the Net Mortgage Rate),
less the amount of any related Servicing Modifications,  Debt Service Reductions
or reductions in the amount of interest  collectable from the Mortgagor pursuant
to the Relief Act, on the Outstanding Mortgage Loans as of the related Due Date,
which  Monthly  Payments  were  delinquent as of the close of business as of the
related  Determination  Date; provided that no Advance shall be made if it would
be a  Nonrecoverable  Advance,  (ii)  withdraw  from  amounts  on deposit in the
Custodial  Account and  deposit in the  Payment  Account all or a portion of the
Amount Held for Future  Distribution in discharge of any such Advance,  or (iii)
make advances in the form of any  combination  of (i) and (ii)  aggregating  the
amount of such Advance.  Any portion of the Amount Held for Future  Distribution
so used shall be replaced by the  Servicer by deposit in the Payment  Account on
or before 11:00 A.M. New York time on any future Payment Account Deposit Date to
the extent that funds  attributable  to the Mortgage Loans that are available in
the Custodial Account for deposit in the Payment Account on such Payment Account
Deposit Date shall be less than  payments to  Certificateholders  required to be
made on the following  Distribution  Date. The Servicer shall be entitled to use
any Advance made by a Subservicer as described in Section  3.07(b) that has been
deposited in the Custodial  Account on or before such  Distribution Date as part
of the Advance made by the Servicer pursuant to this Section 4.04. The amount of
any reimbursement pursuant to Section 4.02(a) in respect of outstanding Advances
on any Distribution Date shall be allocated to specific Monthly Payments due but
delinquent  for previous Due Periods,  which  allocation  shall be made,  to the
extent  practicable,  to Monthly  Payments  which have been  delinquent  for the
longest  period of time.  Such  allocations  shall be conclusive for purposes of
reimbursement to the Servicer from recoveries on related Mortgage Loans pursuant
to Section 3.10.

        The  determination  by the  Servicer  that it has made a  Nonrecoverable
Advance or that any proposed Advance, if made, would constitute a Nonrecoverable
Advance,  shall  be  evidenced  by an  Officer's  Certificate  of  the  Servicer
delivered to the Company and the Trustee.

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<PAGE>

        If the Servicer  determines as of the Business Day preceding any Payment
Account Deposit Date that it will be unable to deposit in the Payment Account an
amount equal to the Advance  required to be made for the immediately  succeeding
Distribution  Date,  it shall give  notice to the  Trustee of its  inability  to
advance  (such notice may be given by telecopy),  not later than 3:00 P.M.,  New
York time, on such Business Day,  specifying  the portion of such amount that it
will be unable to  deposit.  Not later  than 3:00 P.M.,  New York  time,  on the
Payment Account  Deposit Date the Trustee shall,  unless by 12:00 Noon, New York
time,  on such day the Trustee shall have been notified in writing (by telecopy)
that the Servicer  shall have  directly or  indirectly  deposited in the Payment
Account such portion of the amount of the Advance as to which the Servicer shall
have given notice pursuant to the preceding sentence,  pursuant to Section 7.01,
(a)  terminate  all of the rights and  obligations  of the  Servicer  under this
Agreement  in  accordance  with  Section  7.01 and (b)  assume  the  rights  and
obligations  of the Servicer  hereunder,  including the obligation to deposit in
the  Payment  Account  an  amount  equal  to the  Advance  for  the  immediately
succeeding Distribution Date.

        The Trustee shall deposit all funds it receives pursuant to this Section
4.04 into the Payment Account.

Section 4.05.  Allocation of Realized Losses.

        Prior to each Distribution  Date, the Servicer shall determine the total
amount of Realized  Losses,  if any, that  resulted  from any Cash  Liquidation,
Servicing  Modification,  Debt  Service  Reduction,  Deficient  Valuation or REO
Disposition  that  occurred  during the calendar  month  preceding  the month of
distribution  or, in the case of a Servicing  Modification  that  constitutes  a
reduction of the interest rate on a Mortgage  Loan,  the amount of the reduction
in the  interest  portion of the  Monthly  Payment  due during the  related  Due
Period.  The amount of each  Realized  Loss shall be  evidenced  by an Officer's
Certificate.  All Realized  Losses,  other than Excess  Special  Hazard  Losses,
Extraordinary  Losses, Excess Bankruptcy Losses or Excess Fraud Losses, shall be
allocated as follows: first, to the Class B-3 Certificates until the Certificate
Principal  Balance  thereof has been reduced to zero;  second,  to the Class B-2
Certificates until the Certificate Principal Balance thereof has been reduced to
zero;  third,  to the Class B-1  Certificates  until the  Certificate  Principal
Balance thereof has been reduced to zero;  fourth, to the Class M-3 Certificates
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-2 Certificates  until the Certificate  Principal  Balance thereof
has been  reduced  to zero;  sixth,  to the  Class  M-1  Certificates  until the
Certificate Principal Balance thereof has been reduced to zero; and, thereafter,
the  remainder of the Realized  Losses on the Mortgage  Loans shall be allocated
(A) in the case of a Group 1 Loan, to the Class A-I-1  Certificates;  (B) in the
case of a Group 2 Loan, among the Class A-II Auction  Certificates,  in the case
of the principal  portion of such loss, on a pro rata basis, and among the Group
2 Certificates,  in the case of the interest portion of such loss, on a pro rata
basis;  (C) in the  case of a  Group  3 Loan,  among  the  Class  A-III  Auction
Certificates,  in the case of the principal  portion of such loss, on a pro rata
basis,  and among the Group 3 Certificates,  in the case of the interest portion
of such loss, on a pro rata basis; and (D) in the case of a Group 4 Loan, to the
Class  A-IV-1  Certificates.  The  Group 1  Senior  Percentage,  Group 2  Senior
Percentage,  Group  3  Senior  Percentage  or  Group  4  Senior  Percentage,  as
applicable,  of any Excess  Special  Hazard Losses,  Excess  Bankruptcy  Losses,

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<PAGE>

Excess Fraud Losses, or Extraordinary  Losses shall be allocated (A) in the case
of a Group 1 Loan, to the Class A-I-1 Certificates; (B) in the case of a Group 2
Loan,  among the Class A-II Auction  Certificates,  in the case of the principal
portion of such loss, on a pro rata basis,  and among the Group 2  Certificates,
in the case of the interest  portion of such loss,  on a pro rata basis;  (C) in
the case of a Group 3 Loan, among the Class A-III Auction  Certificates,  in the
case of the principal  portion of such loss, on a pro rata basis,  and among the
Group 3 Certificates, in the case of the interest portion of such loss, on a pro
rata  basis;  and  (D) in the  case  of a Group  4  Loan,  to the  Class  A-IV-1
Certificates;  and the remainder of any Excess  Special  Hazard  Losses,  Excess
Bankruptcy Losses,  Excess Fraud Losses, or Extraordinary Losses on the Mortgage
Loans in any Loan  Group  shall  be  allocated  among  the  Class M and  Class B
Certificates, on a pro rata basis, as described below.

        As used herein,  an  allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata  basis,  among the  various  Classes  so  specified,  to each such Class of
Certificates  on the  basis  of their  then  outstanding  Certificate  Principal
Balances, or, in the case of the Subordinate  Certificates,  on the basis of the
Apportioned Principal Balances thereof,  prior to giving effect to distributions
to be made on such  Distribution  Date in the case of the principal portion of a
Realized Loss or based on the Accrued  Certificate  Interest  thereon payable on
such  Distribution  Date (without regard to any  Compensating  Interest for such
Distribution Date) in the case of an interest portion of a Realized Loss. Except
as provided in the following  sentence,  any allocation of the principal portion
of  Realized  Losses  (other  than  Debt  Service  Reductions)  to  a  Class  of
Certificates shall be made by reducing the Certificate Principal Balance thereof
by the amount so allocated, which allocation shall be deemed to have occurred on
such  Distribution  Date.  Any  allocation of the principal  portion of Realized
Losses (other than Debt Service Reductions) to the Subordinate Certificates then
outstanding  with  the  Lowest  Priority  shall  be  made  by  operation  of the
definition of "Certificate Principal Balance" and by operation of the provisions
of Section  4.02(a).  Allocations  of the interest  portions of Realized  Losses
shall be made in proportion to the amount of Accrued Certificate Interest and by
operation of the definition of "Accrued  Certificate  Interest" and by operation
of the provisions of Section  4.02(a).  Allocations of the principal  portion of
Debt Service  Reductions shall be made by operation of the provisions of Section
4.02(a).  All  Realized  Losses  and all other  losses  allocated  to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.

Section 4.06.  Reports of Foreclosures and Abandonment of Mortgaged Property.

        The Servicer or the  Subservicers  shall file  information  returns with
respect to the receipt of mortgage  interests  received in a trade or  business,
the reports of foreclosures and  abandonments of any Mortgaged  Property and the
information returns relating to cancellation of indebtedness income with respect
to  any  Mortgaged  Property  required  by  Sections  6050H,  6050J  and  6050P,
respectively,  of  the  Code.  Such  reports  shall  be in  form  and  substance
sufficient to meet the reporting  requirements  imposed by Sections 6050H, 6050J
and 6050P of the Code.

Section 4.07.  Optional Purchase of Defaulted Mortgage Loans.

        As to any  Mortgage  Loan which is  delinquent  in payment by 90 days or
more,  the Servicer may, upon the written  request of and with funds provided by
the Junior  Certificateholder,  purchase  such Mortgage Loan from the Trustee at
the Purchase Price therefor.  If at any time the Servicer makes a payment to the
Payment  Account  covering the amount of the Purchase  Price for such a Mortgage
Loan,  and the  Servicer  provides  to the Trustee a  certification  signed by a
Servicing  Officer stating that the amount of such payment has been deposited in
the Payment  Account,  then the Trustee  shall  execute the  assignment  of such
Mortgage  Loan at the  request of the  Servicer  without  recourse to the Junior
Certificateholder,  which shall  succeed to all the Trustee's  right,  title and
interest in and to such Mortgage Loan,  and all security and documents  relative
thereto.  Such assignment shall be an assignment  outright and not for security.
The Junior  Certificateholder  shall  thereupon own such Mortgage,  and all such
security and  documents,  free of any further  obligation  to the Trustee or the
Certificateholders with respect thereto.

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Section 4.08.  Hedge Agreements.

        (a) In the event that the Trustee  does not receive by the  Business Day
preceding a  Distribution  Date the amount as  specified  by the Servicer in the
Remittance  Report  pursuant to Section  4.04(a) hereof as the amount to be paid
with respect to such Distribution Date by the Hedge Counterparty under the Hedge
Agreements,  the Trustee shall enforce the obligation of the Hedge  Counterparty
thereunder.  The parties hereto acknowledge that the Hedge Counterparty shall be
making all  calculations,  and determine the amounts to be paid, under the Hedge
Agreements.  Absent manifest error,  the Trustee may  conclusively  rely on such
calculations and  determination  and any notice received by it from the Servicer
pursuant to Section 4.04(a) hereof.

        (b) The  Trustee  shall  deposit  or cause to be  deposited  any  amount
received under the Hedge  Agreements  into the  Certificate  Account on the date
such  amount is received  from the Hedge  Counterparty  under the related  Hedge
Agreement (including  termination payments, if any). All payments received under
the Hedge  Agreements shall be distributed in accordance with the priorities set
forth in Section 4.02(a) hereof.

        (c)  In  the  event  that  the  Class  A-II-1  Hedge  Agreement,  or any
replacement  thereof,  terminates  prior to the Payment Date in February 2008 or
the Class A-III-1 Hedge Agreement, or any replacement thereof,  terminates prior
to the Payment  Date in January  2008,  the  Servicer,  but at no expense to the
Servicer,  on behalf of the Trustee,  to the extent that the  termination  value
under such Hedge Agreement is sufficient  therefor and only to the extent of the
related  termination  payment  received from the Hedge  Counterparty,  shall (i)
cause a new hedge  counterparty  to assume the  obligations  of such  terminated
hedge  counterparty  or (ii) cause a new hedge  counterparty to enter into a new
interest rate hedge agreement with the Trust Fund having  substantially  similar
terms as those set forth in the terminated hedge agreement.

Section 4.09.  Auction Administration Agreement; Swap Agreement.

        (a)  Concurrently  with  the  execution  and  delivery  hereof,  at  the
direction of the Company, the Auction Administrator shall execute and deliver an
Auction Administration  Agreement  substantially in the form of Exhibit O hereto
and a Swap Agreement  substantially in the form of Exhibit P hereto. The Trustee
shall have no duty to review or otherwise  determine the adequacy of the Auction
Administration Agreement or the Swap Agreement.

        (b) Each Holder of an Auction  Certificate  is deemed,  by acceptance of
such  Certificate,  to  acknowledge  and  accept  and  agree  to be bound by the
provisions of the Auction Administration Agreement and the Swap Agreement.

                                   ARTICLE V

                                THE CERTIFICATES

Section 5.01.  The Certificates.

(a) The Senior, Class M, Class B and Class R Certificates shall be substantially
in the forms set forth in Exhibits A, B, C and D,  respectively,  and shall,  on
original  issue,  be executed and  delivered  by the Trustee to the  Certificate
Registrar  for  authentication  and delivery to or upon the order of the Company
upon receipt by the Trustee or one or more Custodians of the documents specified
in Section 2.01. The Certificates shall be issuable in the minimum denominations
designated in the Preliminary Statement.

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<PAGE>

        The Certificates  shall be executed by manual or facsimile  signature on
behalf of an  authorized  signatory  of the  Trustee.  Certificates  bearing the
manual or facsimile  signatures of  individuals  who were at any time the proper
authorized  signatories  of the Trustee shall bind the Trustee,  notwithstanding
that such  individuals  or any of them have ceased to hold such offices prior to
the authentication and delivery of such Certificate or did not hold such offices
at the  date of such  Certificates.  No  Certificate  shall be  entitled  to any
benefit under this Agreement,  or be valid for any purpose, unless there appears
on such  Certificate a certificate of  authentication  substantially in the form
provided for herein executed by the Certificate  Registrar by manual  signature,
and such certificate upon any Certificate shall be conclusive evidence,  and the
only evidence,  that such Certificate has been duly  authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.

(b) Except as provided below, registration of Book-Entry Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates  for the respective  Certificate  Owners with  Ownership  Interests
therein. The Holders of the Book-Entry  Certificates shall hold their respective
Ownership  Interests in and to each of such Certificates  through the book-entry
facilities  of the  Depository  and,  except  as  provided  below,  shall not be
entitled to Definitive Certificates in respect of such Ownership Interests.  All
transfers by Certificate Owners of their respective  Ownership  Interests in the
Book-Entry  Certificates  shall  be  made  in  accordance  with  the  procedures
established by the Depository  Participant or brokerage firm  representing  such
Certificate  Owner.  Each  Depository  Participant  shall transfer the Ownership
Interests  only  in  the  Book-Entry   Certificates  of  Certificate  Owners  it
represents or of brokerage  firms for which it acts as agent in accordance  with
the Depository's normal procedures.

        The  Trustee,  the  Servicer  and  the  Company  may  for  all  purposes
(including  the making of payments due on the  respective  Classes of Book-Entry
Certificates)  deal with the Depository as the authorized  representative of the
Certificate  Owners  with  respect  to  the  respective  Classes  of  Book-Entry
Certificates  for the purposes of  exercising  the rights of  Certificateholders
hereunder.  The rights of  Certificate  Owners  with  respect to the  respective
Classes of Book-Entry  Certificates shall be limited to those established by law
and agreements between such Certificate  Owners and the Depository  Participants
and brokerage firms representing such Certificate Owners.  Multiple requests and
directions  from,  and  votes  of,  the  Depository  as  Holder  of any Class of
Book-Entry  Certificates  with  respect to any  particular  matter  shall not be
deemed  inconsistent  if they are made with  respect  to  different  Certificate
Owners.  The Trustee may establish a reasonable  record date in connection  with
solicitations  of consents from or voting by  Certificateholders  and shall give
notice to the Depository of such record date.

        If (i)(A) the Company advises the Trustee in writing that the Depository
is no longer  willing or able to  properly  discharge  its  responsibilities  as
Depository and (B) the Company is unable to locate a qualified successor or (ii)
the  Company  at its option  advises  the  Trustee in writing  that it elects to
terminate the book-entry system through the Depository, the Trustee shall notify
all Certificate  Owners,  through the Depository,  of the occurrence of any such
event and of the availability of Definitive  Certificates to Certificate  Owners
requesting   the  same.   Upon  surrender  to  the  Trustee  of  the  Book-Entry
Certificates by the Depository,  accompanied by registration  instructions  from
the  Depository  for  registration  of  transfer,  the  Trustee  shall issue the
Definitive Certificates. Neither the Company, the Servicer nor the Trustee shall
be liable for any actions  taken by the  Depository  or its nominee,  including,
without  limitation,  any  delay  in  delivery  of  such  instructions  and  may
conclusively  rely on, and shall be protected in relying on, such  instructions.
Upon  the  issuance  of  Definitive   Certificates  all  references   herein  to
obligations  imposed upon or to be performed by the Company in  connection  with
the issuance of the Definitive  Certificates pursuant to this Section 5.01 shall
be deemed to be imposed upon and  performed by the Trustee,  and the Trustee and
the Servicer  shall  recognize  the Holders of the  Definitive  Certificates  as
Certificateholders hereunder.

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Section 5.02.  Registration of Transfer and Exchange of Certificates.

(a)                   The  Trustee  shall cause to be kept at one of the offices
                      or agencies to be appointed  by the Trustee in  accordance
                      with  the   provisions  of  Section  8.12,  a  Certificate
                      Register in which, subject to such reasonable  regulations
                      as it may  prescribe,  the Trustee  shall  provide for the
                      registration   of   Certificates   and  of  transfers  and
                      exchanges of Certificates as herein provided.  The Trustee
                      is  initially  appointed  Certificate  Registrar  for  the
                      purpose of  registering  Certificates  and  transfers  and
                      exchanges of Certificates as herein provided.

(b)                   Upon  surrender  for   registration  of  transfer  of  any
                      Certificate  at  any  office  or  agency  of  the  Trustee
                      maintained for such purpose  pursuant to Section 8.12 and,
                      in  the  case  of  any  Class  M,   Class  B  or  Class  R
                      Certificate, upon satisfaction of the conditions set forth
                      below,  the  Trustee  shall  execute  and the  Certificate
                      Registrar shall  authenticate and deliver,  in the name of
                      the designated transferee or transferees,  one or more new
                      Certificates  of a like  Class  and  aggregate  Percentage
                      Interest.

(c)                   At the option of the Certificateholders,  Certificates may
                      be  exchanged   for  other   Certificates   of  authorized
                      denominations  of a like  Class and  aggregate  Percentage
                      Interest,   upon  surrender  of  the  Certificates  to  be
                      exchanged  at any such  office  or  agency.  Whenever  any
                      Certificates  are so surrendered  for exchange the Trustee
                      shall  execute  and  the   Certificate   Registrar   shall
                      authenticate  and deliver the  Certificates  of such Class
                      which  the   Certificateholder   making  the  exchange  is
                      entitled  to  receive.   Every  Certificate  presented  or
                      surrendered for transfer or exchange shall (if so required
                      by the  Trustee  or the  Certificate  Registrar)  be  duly
                      endorsed by, or be accompanied by a written  instrument of
                      transfer  in  form  satisfactory  to the  Trustee  and the
                      Certificate Registrar duly executed by, the Holder thereof
                      or his attorney duly authorized in writing.

(d)                   No transfer,  sale, pledge or other disposition of a Class
                      B Certificate  shall be made unless such  transfer,  sale,
                      pledge   or  other   disposition   is   exempt   from  the
                      registration  requirements  of the Securities Act of 1933,
                      as amended, and any applicable state securities laws or is
                      made in  accordance  with said Act and laws.  In the event
                      that a  transfer  of a Class B  Certificate  is to be made
                      either (i)(A) the Trustee shall require a written  Opinion
                      of  Counsel  acceptable  to  and  in  form  and  substance
                      satisfactory  to the  Trustee  and the  Company  that such
                      transfer may be made pursuant to an exemption,  describing
                      the applicable exemption and the basis therefor, from said
                      Act and laws or is  being  made  pursuant  to said Act and
                      laws,  which Opinion of Counsel shall not be an expense of
                      the Trustee,  the Company or the Servicer (except that, if
                      such  transfer is made by the  Company or the  Servicer or
                      any Affiliate  thereof,  the Company or the Servicer shall
                      provide  such  Opinion of  Counsel at their own  expense);
                      provided  that  such  Opinion  of  Counsel  shall  not  be
                      required in  connection  with the initial  transfer of any
                      such  Certificate by the Company or any Affiliate  thereof
                      to the Company or an  Affiliate of the Company and (B) the
                      Trustee  shall   require  the   transferee  to  execute  a
                      representation  letter,   substantially  in  the  form  of
                      Exhibit  H  hereto,  and the  Trustee  shall  require  the
                      transferor   to   execute   a    representation    letter,
                      substantially  in the  form  of  Exhibit  I  hereto,  each
                      acceptable  to and in form and substance  satisfactory  to
                      the Company and the Trustee  certifying to the Company and
                      the Trustee the facts  surrounding  such  transfer,  which
                      representation  letters  shall  not be an  expense  of the
                      Trustee, the Company or the Servicer;  provided,  however,
                      that such representation  letters shall not be required in
                      connection  with any transfer of any such  Certificate  by
                      the Company or any Affiliate  thereof to the Company or an
                      Affiliate  of  the  Company,  and  the  Trustee  shall  be
                      entitled  to  conclusively   rely  upon  a  representation
                      (which,  upon  the  request  of the  Trustee,  shall  be a

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                      written representation) from the Company, of the status of
                      such transferee as an Affiliate of the Company or (ii) the
                      prospective  transferee  of such a  Certificate  shall  be
                      required  to provide  the  Trustee,  the  Company  and the
                      Servicer with an investment  letter  substantially  in the
                      form of Exhibit J  attached  hereto (or such other form as
                      the  Company  in its sole  discretion  deems  acceptable),
                      which  investment  letter  shall not be an  expense of the
                      Trustee, the Company or the Servicer, and which investment
                      letter states that,  among other things,  such  transferee
                      (A) is a "qualified  institutional buyer" as defined under
                      Rule 144A,  acting for its own account or the  accounts of
                      other  "qualified  institutional  buyers" as defined under
                      Rule 144A,  and (B) is aware that the proposed  transferor
                      intends  to  rely  on  the  exemption  from   registration
                      requirements under the Securities Act of 1933, as amended,
                      provided by Rule 144A. The Holder of any such  Certificate
                      desiring  to effect  any such  transfer,  sale,  pledge or
                      other  disposition   shall,  and  does  hereby  agree  to,
                      indemnify the Trustee,  the Company,  the Servicer and the
                      Certificate  Registrar  against  any  liability  that  may
                      result if the transfer,  sale, pledge or other disposition
                      is not so  exempt or is not made in  accordance  with such
                      federal and state laws.

(e)                   (i) In the  case  of any  Class B or  Class R  Certificate
                      presented  for  registration  in the  name of any  Person,
                      either (A) the Trustee shall require an Opinion of Counsel
                      acceptable  to and in form and substance  satisfactory  to
                      the  Trustee,  the Company and the  Servicer to the effect
                      that the  purchase  or  holding of such Class B or Class R
                      Certificate is permissible  under applicable law, will not
                      constitute   or  result  in  any   non-exempt   prohibited
                      transaction  under Section 406 of the Employee  Retirement
                      Income  Security  Act of 1974,  as amended  ("ERISA"),  or
                      Section 4975 of the Code (or comparable  provisions of any
                      subsequent enactments),  and will not subject the Trustee,
                      the Company or the Servicer to any obligation or liability
                      (including  obligations  or  liabilities  under  ERISA  or
                      Section 4975 of the Code) in addition to those  undertaken
                      in this  Agreement,  which Opinion of Counsel shall not be
                      an expense of the Trustee,  the Company or the Servicer or
                      (B)  the  prospective  Transferee  shall  be  required  to
                      provide the Trustee,  the Company and the Servicer  with a
                      certification  to the effect set forth in paragraph six of
                      Exhibit H or paragraph three of Exhibit J (with respect to
                      any Class B Certificate)  or paragraph  sixteen of Exhibit
                      G-1 (with respect to any Class R  Certificate),  which the
                      Trustee  may  rely  upon   without   further   inquiry  or
                      investigation, or such other certifications as the Trustee
                      may deem desirable or necessary in order to establish that
                      such   Transferee   or  the  Person  in  whose  name  such
                      registration  is  requested  either (a) is not an employee
                      benefit  plan or  other  plan  subject  to the  prohibited
                      transaction  provisions  of ERISA or  Section  4975 of the
                      Code, or any Person  (including an investment  manager,  a
                      named  fiduciary  or a  trustee  of any such  plan) who is
                      using  "plan  assets"  of any  such  plan to  effect  such
                      acquisition  (each, a "Plan  Investor") or (b) in the case
                      of any Class B Certificate,  the following  conditions are
                      satisfied:  (i) such  Transferee is an insurance  company,
                      (ii) the  source of funds used to  purchase  and hold such
                      Certificate (or interest therein) is an "insurance company
                      general  account" (as defined in U.S.  Department of Labor
                      Prohibited Transaction Class Exemption ("PTCE") 95-60, and
                      (iii) the  conditions  set forth in  Sections I and III of
                      PTCE 95-60 have been satisfied (each entity that satisfies
                      these  subsections (i) through (iii) of this clause (b), a
                      "Complying Insurance Company").

(ii) Any Transferee of a Senior  Certificate  (other than a Class R Certificate)
     or a Class M Certificate  shall be deemed to have  represented by virtue of
     its  purchase or holding of such  Certificate  (or interest  therein)  that
     either (a) such Transferee is not a Plan Investor,  (b) it has acquired and
     is holding such Certificate in reliance on Prohibited Transaction Exemption
     ("PTE")  94-29,  59 Fed.  Reg.  14674 (March 29,  1994),  as amended by PTE
     97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE 2000-58,  65 Fed. Reg. 67765
     (November 13, 2000) and PTE 2002-41,  67 Fed. Reg.  54487 (August 22, 2002)
     (the  "Issuer  Exemption"),  and that (i) it  understands  that  there  are
     certain  conditions to the availability of the Issuer  Exemption  including
     that such  Certificate  must be rated,  at the time of purchase,  not lower
     that "BBB-" (or its equivalent) by Standard & Poor's,  Fitch or Moody's and
     (ii)  it is an  "accredited  investor"  as  defined  in Rule  501(a)(1)  of
     Regulation  D of the  Securities  Act of  1933,  as  amended,  or (c)  such
     Transferee is a Complying Insurance Company.

(iii)(A) If any Senior  Certificate  (other than a Class R  Certificate)  or any
     Class M  Certificate  (or any interest  therein) is acquired or held by any
     Person that does not satisfy the  conditions  described in  paragraph  (ii)
     above,  then the last  preceding  Transferee  that either (i) is not a Plan

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<PAGE>

     Investor,  (ii) acquired  such  Certificate  in compliance  with the Issuer
     Exemption,  or (iii) is a Complying Insurance Company shall be restored, to
     the extent  permitted by law, to all rights and  obligations as Certificate
     Owner thereof retroactive to the date of such Transfer of such Certificate.
     The  Trustee  shall be under no  liability  to any  Person  for  making any
     payments due on such Certificate to such preceding Transferee.

(B)                   Any  purported  Certificate  Owner  whose  acquisition  or
                      holding  of  any  Senior   Certificate   or  any  Class  M
                      Certificate   (or   interest   therein)  was  effected  in
                      violation  of the  restrictions  in this  Section  5.02(e)
                      shall  indemnify  and  hold  harmless  the  Company,   the
                      Trustee, the Servicer, any Subservicer, and the Trust Fund
                      from and against any and all liabilities, claims, costs or
                      expenses  incurred  by such  parties  as a result  of such
                      acquisition or holding.

     (f) (i) Each Person who has or who  acquires  any  Ownership  Interest in a
Class R Certificate  shall be deemed by the  acceptance or  acquisition  of such
Ownership Interest to have agreed to be bound by the following provisions and to
have  irrevocably  authorized the Trustee or its designee under clause  (iii)(A)
below to deliver  payments to a Person  other than such Person and to  negotiate
the terms of any mandatory  sale under clause  (iii)(B) below and to execute all
instruments of transfer and to do all other things  necessary in connection with
any such sale. The rights of each Person  acquiring any Ownership  Interest in a
Class R Certificate are expressly subject to the following provisions:

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

(B)  In connection  with any proposed  Transfer of any  Ownership  Interest in a
     Class R  Certificate,  the Trustee shall require  delivery to it, and shall
     not register the Transfer of any Class R Certificate  until its receipt of,
     (I) an affidavit and agreement (a "Transfer  Affidavit and  Agreement,"  in
     the form attached hereto as Exhibit G-1) from the proposed  Transferee,  in
     form  and  substance   satisfactory  to  the  Servicer,   representing  and
     warranting,  among other things, that it is a Permitted Transferee, that it
     is not acquiring its Ownership  Interest in the Class R Certificate that is
     the subject of the proposed Transfer as a nominee, trustee or agent for any
     Person who is not a  Permitted  Transferee,  that for so long as it retains
     its  Ownership  Interest  in a Class R  Certificate,  it shall  endeavor to
     remain a Permitted  Transferee,  and that it has reviewed the provisions of
     this  Section  5.02(f)  and  agrees  to  be  bound  by  them,  and  (II)  a
     certificate,  in the form  attached  hereto as Exhibit G-2, from the Holder
     wishing  to  transfer  the  Class  R  Certificate,  in form  and  substance
     satisfactory  to the Servicer,  representing  and  warranting,  among other
     things,  that  no  purpose  of  the  proposed  Transfer  is to  impede  the
     assessment or collection of tax.

(C)  Notwithstanding  the delivery of a Transfer  Affidavit  and  Agreement by a
     proposed Transferee under clause (B) above, if a Responsible Officer of the
     Trustee who is assigned to this  Agreement  has actual  knowledge  that the
     proposed  Transferee  is not a  Permitted  Transferee,  no  Transfer  of an
     Ownership  Interest in a Class R Certificate  to such  proposed  Transferee
     shall be effected.

(D)  Each  Person  holding or  acquiring  any  Ownership  Interest  in a Class R
     Certificate  shall agree (x) to require a Transfer  Affidavit and Agreement

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<PAGE>

     from any  other  Person  to whom  such  Person  attempts  to  transfer  its
     Ownership  Interest in a Class R  Certificate  and (y) not to transfer  its
     Ownership  Interest  unless it provides a certificate to the Trustee in the
     form attached hereto as Exhibit G-2.

(E)  Each  Person  holding  or  acquiring  an  Ownership  Interest  in a Class R
     Certificate,  by  purchasing  an  Ownership  Interest in such  Certificate,
     agrees  to give  the  Trustee  written  notice  that it is a  "pass-through
     interest  holder"  within the  meaning of  Temporary  Treasury  Regulations
     Section   1.67-3T(a)(2)(i)(A)   immediately  upon  acquiring  an  Ownership
     Interest  in a Class R  Certificate,  if it is, or is holding an  Ownership
     Interest in a Class R Certificate  on behalf of, a  "pass-through  interest
     holder."

(ii) The Trustee shall register the Transfer of any Class R Certificate  only if
     it shall have received the Transfer Affidavit and Agreement,  a certificate
     of the Holder  requesting  such  transfer  in the form  attached  hereto as
     Exhibit G-2 and all of such other  documents as shall have been  reasonably
     required by the Trustee as a condition to such  registration.  Transfers of
     the Class R  Certificates  to Non-United  States  Persons and  Disqualified
     Organizations   (as  defined  in  Section   860E(e)(5)  of  the  Code)  are
     prohibited.

(iii)(A) If any  Disqualified  Organization  shall  become a holder of a Class R
     Certificate,   then  the  last  preceding  Permitted  Transferee  shall  be
     restored,  to the extent permitted by law, to all rights and obligations as
     Holder thereof  retroactive to the date of registration of such Transfer of
     such Class R  Certificate.  If a  Non-United  States  Person shall become a
     holder of a Class R  Certificate,  then the last  preceding  United  States
     Person shall be restored, to the extent permitted by law, to all rights and
     obligations as Holder thereof  retroactive to the date of  registration  of
     such  Transfer  of such Class R  Certificate.  If a  transfer  of a Class R
     Certificate  is   disregarded   pursuant  to  the  provisions  of  Treasury
     Regulations  Section 1.860E-1 or Section 1.860G-3,  then the last preceding
     Permitted Transferee shall be restored,  to the extent permitted by law, to
     all rights and  obligations  as Holder  thereof  retroactive to the date of
     registration  of such  Transfer  of such Class R  Certificate.  The Trustee
     shall be under no liability to any Person for any  registration of Transfer
     of a Class R  Certificate  that is in fact not  permitted  by this  Section
     5.02(f) or for making any  payments due on such  Certificate  to the holder
     thereof or for taking any other  action with  respect to such holder  under
     the provisions of this Agreement.

(B)  If any purported  Transferee shall become a Holder of a Class R Certificate
     in violation of the  restrictions in this Section 5.02(f) and to the extent
     that the retroactive  restoration of the rights of the Holder of such Class
     R  Certificate  as  described  in clause  (iii)(A)  above shall be invalid,
     illegal or unenforceable,  then the Servicer shall have the right,  without
     notice to the holder or any prior  holder of such Class R  Certificate,  to
     sell such Class R  Certificate  to a purchaser  selected by the Servicer on
     such terms as the  Servicer may choose.  Such  purported  Transferee  shall
     promptly  endorse and deliver the Class R Certificates  in accordance  with
     the instructions of the Servicer. Such purchaser may be the Servicer itself
     or any  Affiliate of the  Servicer.  The proceeds of such sale,  net of the
     commissions (which may include  commissions  payable to the Servicer or its
     Affiliates),  expenses  and taxes due,  if any,  shall be  remitted  by the
     Servicer to such purported Transferee. The terms and conditions of any sale
     under this clause  (iii)(B)  shall be determined in the sole  discretion of
     the Servicer,  and the Servicer shall not be liable to any Person having an
     Ownership  Interest in a Class R Certificate as a result of its exercise of
     such discretion.

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<PAGE>

(iv) The Trustee shall make  available,  upon written  request from the Internal
     Revenue  Service  or  any  potentially  affected  Person,  all  information
     necessary  to compute any tax imposed (A) as a result of the Transfer of an
     Ownership  Interest  in a  Class  R  Certificate  to  any  Person  who is a
     Disqualified  Organization,  including the  information  regarding  "excess
     inclusions"  of such Class R  Certificates  required  to be provided to the
     Internal  Revenue  Service and  certain  Persons as  described  in Treasury
     Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result
     of any regulated  investment company,  real estate investment trust, common
     trust fund, partnership, trust, estate or organization described in Section
     1381 of the Code that holds an Ownership  Interest in a Class R Certificate
     having  as  among  its  record  holders  at any time  any  Person  who is a
     Disqualified  Organization.  Reasonable  compensation  for  providing  such
     information  may be  required by the Trustee  before it will  provide  such
     information to any such potentially affected Person.

(v)  The  provisions of this Section  5.02(f) set forth prior to this clause (v)
     may be modified,  added to or  eliminated,  provided  that there shall have
     been delivered to the Trustee the following:

(A)  written  notification  from  each  Rating  Agency  to the  effect  that the
     modification,  addition to or elimination of such provisions will not cause
     such Rating Agency to downgrade its  then-current  ratings,  if any, of any
     Class of the Senior, Class M or Class B Certificates below the lower of the
     then-current  rating or the rating assigned to such  Certificates as of the
     Closing Date by such Rating Agency; and

(B)  subject to Section  10.01(f),  an  Officer's  Certificate  of the  Servicer
     stating that the  Servicer has received an Opinion of Counsel,  in form and
     substance   satisfactory   to  the  Servicer,   to  the  effect  that  such
     modification,  addition to or absence of such provisions will not cause any
     portion of the applicable REMIC to cease to qualify as a REMIC and will not
     cause  (x)  any  portion  of  the  applicable  REMIC  to be  subject  to an
     entity-level  tax caused by the  Transfer of any Class R  Certificate  to a
     Person that is a Disqualified  Organization or (y) a  Certificateholder  or
     another Person to be subject to a REMIC-related  tax caused by the Transfer
     of a Class R Certificate to a Person that is not a Permitted Transferee.

     (g) No  service  charge  shall  be made for any  transfer  or  exchange  of
Certificates  of any  Class,  but  the  Trustee  may  require  payment  of a sum
sufficient  to cover  any tax or  governmental  charge  that may be  imposed  in
connection with any transfer or exchange of Certificates.

     (h) All  Certificates  surrendered  for  transfer  and  exchange  shall  be
destroyed by the Certificate Registrar.

Section 5.03.  Mutilated, Destroyed, Lost or Stolen Certificates.

        If (i) any  mutilated  Certificate  is  surrendered  to the  Certificate
Registrar,  or the Trustee and the  Certificate  Registrar  receive  evidence to
their  satisfaction of the destruction,  loss or theft of any  Certificate,  and
(ii) there is  delivered  to the  Trustee  and the  Certificate  Registrar  such
security or indemnity as may be required by them to save each of them  harmless,
then, in the absence of notice to the Trustee or the Certificate  Registrar that
such  Certificate has been acquired by a bona fide purchaser,  the Trustee shall
execute  and the  Certificate  Registrar  shall  authenticate  and  deliver,  in
exchange  for or in lieu  of any  such  mutilated,  destroyed,  lost  or  stolen
Certificate,  a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new

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Certificate  under this  Section,  the  Trustee may require the payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
relation thereto and any other expenses  (including the fees and expenses of the
Trustee  and the  Certificate  Registrar)  connected  therewith.  Any  duplicate
Certificate  issued  pursuant to this  Section  shall  constitute  complete  and
indefeasible  evidence of ownership in the Trust Fund, as if originally  issued,
whether or not the lost,  stolen or destroyed  Certificate shall be found at any
time.

Section 5.04.  Persons Deemed Owners.

        Prior to due presentation of a Certificate for registration of transfer,
the Company, the Servicer,  the Trustee, the Certificate Registrar and any agent
of the Company,  the Servicer,  the Trustee,  or the  Certificate  Registrar may
treat the Person in whose name any  Certificate  is  registered  as the owner of
such Certificate for the purpose of receiving  distributions pursuant to Section
4.02 and for all other purposes whatsoever, except as and to the extent provided
in the definition of "Certificateholder," and neither the Company, the Servicer,
the  Trustee,  the  Certificate  Registrar  nor any  agent of the  Company,  the
Servicer,  the Trustee, or the Certificate Registrar shall be affected by notice
to the contrary except as provided in Section 5.02(f).

Section 5.05.  Appointment of Paying Agent.

        The  Trustee  may  appoint  a Paying  Agent  for the  purpose  of making
distributions to the  Certificateholders  pursuant to Section 4.02. In the event
of any such appointment, on or prior to each Distribution Date the Trustee shall
deposit or cause to be deposited  with the Paying Agent a sum sufficient to make
the payments to the Certificateholders in the amounts and in the manner provided
for in  Section  4.02,  such  sum to be held in  trust  for the  benefit  of the
Certificateholders.

        The Trustee  shall cause each Paying Agent to execute and deliver to the
Trustee an  instrument  in which such Paying  Agent shall agree with the Trustee
that such  Paying  Agent  shall hold all sums held by it for the  payment to the
Certificateholders in trust for the benefit of the  Certificateholders  entitled
thereto until such sums shall be  distributed  to such  Certificateholders.  Any
sums so held by such Paying Agent shall be held only in Eligible Accounts to the
extent such sums are not  distributed to the  Certificateholders  on the date of
receipt by such Paying Agent.

Section 5.06.  Optional Purchase of Certificates.

(a)                   On  any  Distribution   Date  on  which  the  Pool  Stated
                      Principal Balance, prior to giving effect to distributions
                      to be made on such  Distribution  Date,  is less  than ten
                      percent  of the  Cut-off  Date  Principal  Balance  of the
                      Mortgage Loans,  the Servicer shall have the right, at its
                      option,  to purchase the Certificates in whole, but not in
                      part,  at a price  equal  to the  outstanding  Certificate
                      Principal  Balance  of such  Certificates  plus the sum of
                      Accrued  Certificate  Interest  thereon  for  the  related
                      Interest Accrual Period and any previously  unpaid Accrued
                      Certificate Interest.

(b)                   The Servicer shall give the Trustee not less than 60 days'
                      prior  notice  of  the  Distribution  Date  on  which  the
                      Servicer   anticipates   that  it   shall   purchase   the
                      Certificates  pursuant to Section  5.06(a).  Notice of any
                      such purchase, specifying the Distribution Date upon which
                      the  Holders  may  surrender  their  Certificates  to  the
                      Trustee for payment in accordance  with this Section 5.06,
                      shall be given  promptly  by the  Servicer  by  letter  to
                      Certificateholders   (with  a  copy  to  the   Certificate
                      Registrar and each Rating  Agency) mailed not earlier than
                      the 9th day and not  later  than the 19th day of the month
                      next  preceding  the  month  of such  final  distribution,
                      specifying:

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(i)                   the   Distribution   Date  upon  which   purchase  of  the
                      Certificates  is anticipated to be made upon  presentation
                      and surrender of such Certificates at the office or agency
                      of the Trustee therein designated,

(ii)                  the purchase price therefor, if known, and

(iii)                 that  the  Record  Date   otherwise   applicable  to  such
                      Distribution  Date is not applicable,  payments being made
                      only upon  presentation  and surrender of the Certificates
                      at the office or agency of the Trustee therein specified.

If the Servicer gives the notice  specified above, the Servicer shall deposit in
the Payment Account before the Distribution  Date on which the purchase pursuant
to Section  5.06(a) is to be made, in  immediately  available  funds,  an amount
equal to the purchase price for the Certificates computed as provided above.

(c) Upon presentation and surrender of the Certificates to be purchased pursuant
to Section 5.06(a) by the Holders thereof,  the Trustee shall distribute to such
Holders an amount equal to the outstanding Certificate Principal Balance thereof
plus the sum of Accrued  Certificate  Interest  thereon for the related Interest
Accrual  Period and any  previously  unpaid  Accrued  Certificate  Interest with
respect thereto.

(d) If any  Certificateholders  do not surrender their Certificates on or before
the Distribution Date on which a purchase pursuant to this Section 5.06 is to be
made,  the  Trustee  shall on such date cause all funds in the  Payment  Account
deposited  therein by the Servicer  pursuant to Section  5.06(b) to be withdrawn
therefrom  and  deposited in a separate  escrow  account for the benefit of such
Certificateholders,  and the Servicer shall give a second written notice to such
Certificateholders  to surrender their  Certificates for payment of the purchase
price  therefor.  If within six months after the second  notice any  Certificate
shall not have  been  surrendered  for  cancellation,  the  Trustee  shall  take
appropriate  steps as  directed  by the  Servicer to contact the Holders of such
Certificates concerning surrender of their Certificates.  The costs and expenses
of maintaining the escrow account and of contacting  Certificateholders shall be
paid out of the assets which remain in the escrow account. If within nine months
after the second notice any  Certificates  shall not have been  surrendered  for
cancellation  in accordance with this Section 5.06, the Trustee shall pay to the
Servicer all amounts distributable to the Holders thereof and the Servicer shall
thereafter  hold such amounts until  distributed  to such  Holders.  No interest
shall  accrue or be payable to any  Certificateholder  on any amount held in the
escrow  account  or by the  Servicer  as a  result  of such  Certificateholder's
failure to surrender  its  Certificate(s)  for payment in  accordance  with this
Section 5.06. Any Certificate that is not surrendered on the  Distribution  Date
on which a purchase pursuant to this Section 5.06 occurs as provided above shall
be deemed to have been  purchased  and the  Holder as of such date shall have no
rights with respect  thereto except to receive the purchase price therefor minus
any costs and expenses associated with such escrow account and notices allocated
thereto.  Any Certificates so purchased or deemed to have been purchased on such
Distribution Date shall remain outstanding hereunder.  The Servicer shall be for
all purposes the Holder thereof as of such date.

                                   ARTICLE VI

                          THE COMPANY AND THE SERVICER

Section 6.01.  Respective Liabilities of the Company and the Servicer.

        The Company and the Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed upon
and undertaken by the Company and the Servicer  herein.  By way of  illustration
and  not   limitation,   the  Company  is  not  liable  for  the  servicing  and

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administration  of the  Mortgage  Loans,  nor is it obligated by Section 7.01 or
Section 10.01 to assume any obligations of the Servicer or to appoint a designee
to assume such obligations,  nor is it liable for any other obligation hereunder
that it may, but is not  obligated  to,  assume  unless it elects to assume such
obligation in accordance herewith.

Section               6.02.  Merger  or  Consolidation  of  the  Company  or the
                      Servicer; Assignment of Rights and Delegation of Duties by
                      Servicer.

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

(b) Any  Person  into  which  the  Company  or the  Servicer  may be  merged  or
consolidated,  or any corporation  resulting from any merger or consolidation to
which the Company or the Servicer shall be a party, or any Person  succeeding to
the  business  of the Company or the  Servicer,  shall be the  successor  of the
Company or the Servicer, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary  notwithstanding;  provided,  however,  that the
successor  or  surviving  Person to the  Servicer  shall be qualified to service
mortgage loans on behalf of Fannie Mae or Freddie Mac; and provided further that
each  Rating  Agency's  ratings,  if  any,  of the  Senior  Class  M or  Class B
Certificates in effect  immediately  prior to such merger or consolidation  will
not be  qualified,  reduced or withdrawn as a result  thereof (as evidenced by a
letter to such effect from each Rating Agency).

(c)  Notwithstanding  anything else in this Section 6.02 and Section 6.04 to the
contrary,  the  Servicer  may  assign its  rights  and  delegate  its duties and
obligations  under  this  Agreement;  provided  that the Person  accepting  such
assignment  or  delegation  shall be a  Person  which is  qualified  to  service
mortgage   loans  on  behalf  of  Fannie  Mae  or  Freddie  Mac,  is  reasonably
satisfactory to the Trustee and the Company,  is willing to service the Mortgage
Loans and executes and delivers to the Company and the Trustee an agreement,  in
form and substance reasonably satisfactory to the Company and the Trustee, which
contains an  assumption by such Person of the due and punctual  performance  and
observance  of each  covenant  and  condition to be performed or observed by the
Servicer under this Agreement; provided further that each Rating Agency's rating
of the Classes of Certificates that have been rated in effect  immediately prior
to such assignment and delegation will not be qualified, reduced or withdrawn as
a result of such  assignment  and  delegation  (as evidenced by a letter to such
effect  from  each  Rating  Agency).  In the  case of any  such  assignment  and
delegation,  the  Servicer  shall be released  from its  obligations  under this
Agreement,  except that the Servicer shall remain liable for all liabilities and
obligations  incurred by it as Servicer  hereunder prior to the  satisfaction of
the conditions to such assignment and delegation set forth in the next preceding
sentence.

Section 6.03.  Limitation on Liability of the Company, the Servicer and Others.

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

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officer, employee or agent of the Company or the Servicer may rely in good faith
on any document of any kind prima facie  properly  executed and submitted by any
Person respecting any matters arising hereunder.  The Company,  the Servicer and
any director, officer, employee or agent of the Company or the Servicer shall be
indemnified by the Trust Fund and held harmless  against any loss,  liability or
expense  incurred in connection with any legal action relating to this Agreement
or the  Certificates,  other than any loss,  liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss,  liability or
expense  shall be otherwise  reimbursable  pursuant to this  Agreement)  and any
loss, liability or expense incurred by reason of willful misfeasance,  bad faith
or gross  negligence  in the  performance  of duties  hereunder  or by reason of
reckless disregard of obligations and duties hereunder.

        Neither the Company nor the Servicer  shall be under any  obligation  to
appear in, prosecute or defend any legal or administrative  action,  proceeding,
hearing or examination  that is not  incidental to its  respective  duties under
this  Agreement  and which in its  opinion  may  involve  it in any  expense  or
liability;  provided,  however,  that the  Company  or the  Servicer  may in its
discretion undertake any such action, proceeding, hearing or examination that it
may deem  necessary or desirable in respect to this Agreement and the rights and
duties  of the  parties  hereto  and  the  interests  of the  Certificateholders
hereunder.  In such  event,  the  legal  expenses  and  costs  of  such  action,
proceeding,  hearing or examination and any liability  resulting therefrom shall
be expenses,  costs and  liabilities  of the Trust Fund, and the Company and the
Servicer shall be entitled to be reimbursed therefor out of amounts attributable
to the Mortgage Loans on deposit in the Custodial Account as provided by Section
3.10  and,  on  the  Distribution  Date(s)  following  such  reimbursement,  the
aggregate  of such  expenses  and costs shall be  allocated  in reduction of the
Accrued  Certificate  Interest on each Class entitled thereto in the same manner
as if such expenses and costs constituted a Prepayment Interest Shortfall.

Section 6.04.  Company and Servicer Not to Resign.

        Subject to the  provisions of Section 6.02,  neither the Company nor the
Servicer shall resign from its respective  obligations and duties hereby imposed
on it  except  upon  determination  that  its  duties  hereunder  are no  longer
permissible  under  applicable  law.  Any  such  determination   permitting  the
resignation  of the Company or the Servicer  shall be evidenced by an Opinion of
Counsel to such effect  delivered to the  Trustee.  No such  resignation  by the
Servicer shall become effective until the Trustee or a successor  servicer shall
have assumed the Servicer's  responsibilities and obligations in accordance with
Section 7.02.

                                  ARTICLE VII

                                     DEFAULT

Section 7.01.  Events of Default.

        Event of Default,  wherever used herein,  means any one of the following
events  (whatever  reason  for such  Event of  Default  and  whether it shall be
voluntary or  involuntary  or be effected by operation of law or pursuant to any
judgment,  decree or order of any court or any order,  rule or regulation of any
administrative or governmental body):

(i)  the  Servicer  shall  fail to  deposit  or cause to be  deposited  into the
     Payment Account any amounts required to be so deposited therein at the time
     required  pursuant to Section 4.01 or otherwise,  and in either case,  such
     failure  shall  continue  unremedied  for a period of 5 days after the date
     upon which  written  notice of such failure,  requiring  such failure to be
     remedied,  shall  have been  given to the  Servicer  by the  Trustee or the
     Company or to the  Servicer,  the Company and the Trustee by the Holders of
     Certificates of such Class evidencing  Percentage Interests aggregating not
     less than 25%; or

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(ii) the Servicer  shall fail to observe or perform in any material  respect any
     other of the covenants or agreements on the part of the Servicer  contained
     in the  Certificates  of any Class or in this  Agreement  and such  failure
     shall continue  unremedied for a period of 30 days (except that such number
     of days  shall be 15 in the case of a failure  to pay the  premium  for any
     Required  Insurance  Policy) 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 Trustee or the Company, or to the Servicer, the Company and
     the Trustee by the Holders of Certificates of any Class evidencing,  in the
     case of any such Class, Percentage Interests aggregating not less than 25%;
     or

(iii)a decree  or order of a court or  agency or  supervisory  authority  having
     jurisdiction  in the premises in an  involuntary  case under any present or
     future federal or state bankruptcy, insolvency or similar law or appointing
     a conservator or receiver or liquidator in any insolvency,  readjustment of
     debt, marshalling of assets and liabilities or similar proceedings,  or for
     the  winding-up  or  liquidation  of its  affairs,  shall have been entered
     against the Servicer and such decree or order shall have  remained in force
     undischarged or unstayed for a period of 60 days; or

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

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

(vi) the Servicer shall notify the Trustee  pursuant to Section  4.04(b) that it
     is unable to deposit in the Payment Account an amount equal to the Advance.

        If an Event of  Default  described  in clauses  (i)-(v) of this  Section
shall  occur,  then,  and in each and every such case,  so long as such Event of
Default shall not have been  remedied,  the Company may, and at the direction of
Holders  of  Certificates  entitled  to at least 51% of the Voting  Rights,  the
Trustee shall, by notice in writing to the Servicer (and to the Company if given
by the Trustee or to the Trustee if given by the Company),  terminate all of the
rights and  obligations  of the Servicer  under this Agreement and in and to the
Mortgage  Loans  and  the  proceeds   thereof,   other  than  its  rights  as  a
Certificateholder  hereunder.  If an Event of Default  described  in clause (vi)
hereof  shall  occur,  the  Trustee  shall,  by notice to the  Servicer  and the
Company, immediately terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds  thereof,
other than its rights as a  Certificateholder  hereunder  as provided in Section
4.04(b).  On or after the receipt by the  Servicer of such written  notice,  all
authority and power of the Servicer under this  Agreement,  whether with respect
to the  Certificates  (other than as a Holder  thereof) or the Mortgage Loans or
otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or
the  Trustee's  designee  appointed  pursuant  to  Section  7.02;  and,  without
limitation,  the  Trustee is hereby  authorized  and  empowered  to execute  and
deliver, on behalf of the Servicer,  as  attorney-in-fact or otherwise,  any and
all documents and other  instruments,  and to do or accomplish all other acts or
things  necessary  or  appropriate  to effect  the  purposes  of such  notice of
termination,  whether to complete the transfer and  endorsement or assignment of
the Mortgage Loans and related documents,  or otherwise.  The Servicer agrees to
cooperate  with the  Trustee in  effecting  the  termination  of the  Servicer's

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responsibilities  and  rights  hereunder,  including,  without  limitation,  the
transfer to the Trustee or its  designee  for  administration  by it of all cash
amounts  which  shall at the time be credited  to the  Custodial  Account or the
Payment  Account or thereafter  be received with respect to the Mortgage  Loans,
and the delivery to the Trustee of the Mortgage  Files,  and the  recordation of
Assignments  of  Mortgages  to the  Trustee  if MERS is not the  mortgagee  of a
Mortgage  Loan  or  otherwise  in  accordance  with  Section  7.02(b).  No  such
termination shall release the Servicer for any liability that it would otherwise
have  hereunder  for any act or  omission  prior to the  effective  time of such
termination.

        Notwithstanding  any  termination  of the  activities  of  GMACM  in its
capacity as Servicer hereunder,  GMACM shall be entitled to receive,  out of any
late  collection of a Monthly  Payment on a Mortgage Loan which was due prior to
the notice terminating  GMACM's rights and obligations as Servicer hereunder and
received after such notice, that portion to which GMACM would have been entitled
pursuant to Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing Fee in
respect  thereof,   and  any  other  amounts  payable  to  GMACM  hereunder  the
entitlement to which arose prior to the termination of its activities hereunder.

Section 7.02.  Trustee to Act; Appointment of Successor.

(a) Within 90 days of the time the Servicer  resigns pursuant to Section 6.04 or
receives a notice of  termination  pursuant  to Section  7.01,  the Trustee or a
successor  Servicer appointed by the Trustee hereunder shall be the successor in
all respects to the Servicer in its  capacity as Servicer  under this  Agreement
and the  transactions  set forth or  provided  for  herein  and shall be subject
thereafter to all the responsibilities,  duties,  liabilities and limitations on
liabilities relating thereto placed on the Servicer, including the obligation to
make Advances  which have been or will be required to be made, but excluding the
representations  of the  Servicer  contained in Section  2.03,  by the terms and
provisions  hereof;  provided  that  any  failure  to  perform  such  duties  or
responsibilities  caused  by  the  predecessor  Servicer's  failure  to  provide
information  required by Section 4.02 or 4.03 shall not be  considered a default
by the Trustee as successor  Servicer  hereunder;  and provided further that the
Trustee shall have no obligation whatsoever with respect to any liability (other
than  Advances  deemed  recoverable  and not  previously  made)  incurred by the
predecessor  Servicer at or prior to the time of receipt by such Servicer of the
notice of termination  pursuant to Section 7.01 or receipt by the Trustee of the
Opinion of Counsel  referred to in Section 6.04. As compensation  therefor,  the
Trustee  shall be entitled to the  Servicing  Fee and all funds  relating to the
Mortgage  Loans  which the  Servicer  would have been  entitled to charge to the
Custodial  Account if the Servicer had  continued to act  hereunder,  except for
amounts that the Servicer shall be entitled to receive pursuant to Section 7.01.
If the Trustee has become the  successor  to the  Servicer  in  accordance  with
Section  6.04 or this  Section  7.02,  then  notwithstanding  the above,  if the
Trustee  shall be unwilling to so act, or shall be unable to so act, the Trustee
may  appoint,  or petition a court of  competent  jurisdiction  to appoint,  any
established housing and home finance institution,  which is also a Fannie Mae or
Freddie Mac-approved mortgage servicing  institution,  having a net worth of not
less  than  $10,000,000  as the  successor  to  the  Servicer  hereunder  in the
assumption of all or any part of the responsibilities,  duties or liabilities of
the  Servicer  hereunder.  Pending  appointment  of a successor  to the Servicer
hereunder,  the Trustee shall act in such capacity as herein above provided.  In
connection  with such  appointment  and  assumption,  the  Trustee may make such
arrangements  for the compensation of such successor out of payments on Mortgage
Loans as it and such  successor  shall agree;  provided,  however,  that no such
compensation shall be in excess of that permitted the Servicer  hereunder.  Each
of the Seller, the Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.

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        If the Trustee  becomes the  successor  to the Servicer  hereunder,  the
Trustee  shall be  entitled  to be  reimbursed  by the  Servicer  for all  costs
associated  with the  transfer of the  servicing  of the  Mortgage  Loans to the
Trustee,  including any costs or expenses  associated with the complete transfer
of all servicing data and the  completion,  correction or  manipulation  of such
servicing  data as may be  required  by the  Trustee  to  correct  any errors or
insufficiencies  in the  servicing  data or  otherwise  to enable the Trustee to
service the Mortgage Loans in accordance with this Agreement. To the extent that
any such costs and expenses of the Trustee resulting from the termination of the
Servicer  pursuant to this Section  7.02 are not  reimbursed  by the  terminated
Servicer,  the  Trustee  shall be entitled  to  reimbursement  of such costs and
expenses from the Payment Account.

        Any successor,  including the Trustee, to the Servicer shall maintain in
force  during its term as Servicer  hereunder  insurance  policies  and fidelity
bonds as may be required to be  maintained  by the Servicer  pursuant to Section
3.12.

        If the Trustee  shall succeed to any duties of the Servicer with respect
to the Mortgage Loans as provided herein,  it shall do so in a separate capacity
and not in its capacity as Trustee and,  accordingly,  the provisions of Article
VIII shall be inapplicable to the Trustee in its duties as successor Servicer in
the servicing of the Mortgage Loans (although such provisions  shall continue to
apply to the Trustee in its capacity as trustee); the provisions of Article III,
however, shall apply to the Trustee in its capacity as successor Servicer.

(b) In connection with the termination or resignation of the Servicer hereunder,
either (i) the  successor  Servicer,  including  the  Trustee if the  Trustee is
acting as 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
Mortgage  Loans that are  registered  with MERS,  in which case the  predecessor
Servicer shall  cooperate with the successor  Servicer in causing MERS to revise
its records to reflect the transfer of servicing  to the  successor  Servicer as
necessary under MERS' rules and  regulations,  or (ii) the predecessor  Servicer
shall  cooperate  with the  successor  Servicer  in causing  MERS to execute and
deliver an assignment  of Mortgage in  recordable  form to transfer the Mortgage
from  MERS to the  Trustee  and to  execute  and  deliver  such  other  notices,
documents  and other  instruments  as may be  necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor Servicer.  The predecessor  Servicer shall file or cause
to be  filed  any such  assignment  in the  appropriate  recording  office.  The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing any
assignments  of  Mortgage,  and fees and  costs of  filing  any  assignments  of
Mortgage that may be required under this subsection (b). The successor  Servicer
shall cause such  assignment  to be  delivered  to the Trustee or the  Custodian
promptly upon receipt of the original  with  evidence of recording  thereon or a
copy  certified  by the public  recording  office in which such  assignment  was
recorded.

Section 7.03.  Notification to Certificateholders.

(a) Upon any such termination or appointment of a successor to the Servicer, the
Trustee shall give prompt written notice  thereof to the  Certificateholders  at
their respective addresses appearing in the Certificate Register.

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

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Section 7.04.  Waiver of Events of Default.

        The Holders representing at least 66% of the Voting Rights affected by a
default  or Event of  Default  hereunder  may  waive  such  default  or Event of
Default; provided,  however, that (a) a default or Event of Default under clause
(i) of Section  7.01 may be waived  only by all of the  Holders of  Certificates
affected by such default or Event of Default and (b) no waiver  pursuant to this
Section 7.04 shall affect the Holders of Certificates in the manner set forth in
Section  11.01(b)(i)  or (ii).  Upon any such  waiver of a  default  or Event of
Default by the Holders  representing  the requisite  percentage of Voting Rights
affected by such  default or Event of Default,  such default or Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder.  No such waiver shall extend to any  subsequent  or other  default or
Event of  Default or impair any right  consequent  thereon  except to the extent
expressly so waived.

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

Section 8.01.  Duties of Trustee.

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

(b) The Trustee,  upon  receipt of all  resolutions,  certificates,  statements,
opinions,  reports,  documents,  orders or other  instruments  furnished  to the
Trustee  which  are  specifically  required  to be  furnished  pursuant  to  any
provision  of this  Agreement,  shall  examine  them to  determine  whether they
conform to the  requirements  of this  Agreement.  The Trustee  shall notify the
Certificateholders  of any such documents which do not materially conform to the
requirements  of  this  Agreement  in the  event  that  the  Trustee,  after  so
requesting, does not receive satisfactorily corrected documents.

        The Trustee shall  forward or cause to be forwarded in a timely  fashion
the  notices,  reports and  statements  required to be  forwarded by the Trustee
pursuant to Sections 4.03, 7.03 and 10.01. The Trustee shall furnish in a timely
fashion to the Servicer such information as the Servicer may reasonably  request
from time to time for the  Servicer  to fulfill  its duties as set forth in this
Agreement.   The  Trustee  covenants  and  agrees  that  it  shall  perform  its
obligations hereunder in a manner so as to maintain the status of any portion of
the  applicable  REMIC as a REMIC  under the REMIC  Provisions  and  (subject to
Section  10.01(f))  to prevent the  imposition  of any  federal,  state or local
income,  prohibited transaction,  contribution or other tax on the Trust Fund to
the extent that  maintaining  such status and avoiding such taxes are reasonably
within the  control of the Trustee  and are  reasonably  within the scope of its
duties under this Agreement.

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

     (i)  Prior to the  occurrence of an Event of Default,  and after the curing
          or waiver of all such Events of Default which may have  occurred,  the
          duties and  obligations  of the Trustee shall be determined  solely by
          the express  provisions  of this  Agreement,  the Trustee shall not be
          liable except for the  performance  of such duties and  obligations as

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          are specifically set forth in this Agreement,  no implied covenants or
          obligations shall be read into this Agreement against the Trustee and,
          in the  absence of bad faith on the part of the  Trustee,  the Trustee
          may  conclusively  rely,  as to the  truth of the  statements  and the
          correctness of the opinions expressed  therein,  upon any certificates
          or opinions  furnished  to the Trustee by the Company or the  Servicer
          and which on their face, do not  contradict the  requirements  of this
          Agreement;

     (ii) The Trustee  shall not be  personally  liable for an error of judgment
          made in good faith by a Responsible Officer or Responsible Officers of
          the Trustee,  unless it shall be proved that the Trustee was negligent
          in ascertaining the pertinent facts;

(iii)          The Trustee  shall not be  personally  liable with respect to any
               action taken, suffered or omitted to be taken by it in good faith
               in  accordance  with the direction of  Certificateholders  of any
               Class  holding  Certificates  which  evidence,  as to such Class,
               Percentage  Interests  aggregating  not  less  than 25% as to the
               time,  method  and place of  conducting  any  proceeding  for any
               remedy available to the Trustee, or exercising any trust or power
               conferred upon the Trustee, under this Agreement;

(iv)           The Trustee  shall not be charged  with  knowledge of any default
               (other  than a default in payment to the  Trustee)  specified  in
               clauses (i) and (ii) of Section 7.01 or an Event of Default under
               clauses (iii),  (iv) and (v) of Section 7.01 unless a Responsible
               Officer of the Trustee  assigned to and working in the  Corporate
               Trust Office obtains actual knowledge of such failure or event or
               the Trustee  receives  written notice of such failure or event at
               its Corporate Trust Office from the Servicer,  the Company or any
               Certificateholder; and

     (v)  Except to the extent  provided in Section  7.02,  no provision in this
          Agreement  shall  require  the Trustee to expend or risk its own funds
          (including,   without  limitation,  the  making  of  any  Advance)  or
          otherwise incur any personal financial liability in the performance of
          any of its duties as Trustee  hereunder,  or in the exercise of any of
          its rights or powers, if the Trustee shall have reasonable grounds for
          believing that repayment of funds or adequate  indemnity  against such
          risk or liability is not reasonably assured to it.

     (d) The Trustee shall timely pay, from its own funds, the amount of any and
all  federal,  state and local taxes  imposed on the Trust Fund or its assets or
transactions including, without limitation, (A) "prohibited transaction" penalty
taxes as defined in Section 860F of the Code,  if, when and as the same shall be
due and payable,  (B) any tax on contributions to a REMIC after the Closing Date
imposed  by  Section  860G(d)  of the Code and (C) any tax on "net  income  from
foreclosure  property"  as defined in Section  860G(c) of the Code,  but only if
such taxes  arise out of a breach by the Trustee of its  obligations  hereunder,
which breach constitutes negligence or willful misconduct of the Trustee.

Section 8.02.  Certain Matters Affecting the Trustee.

(a)            Except as otherwise provided in Section 8.01:

(i)            The  Trustee  may  rely and  shall  be  protected  in  acting  or
               refraining   from   acting   upon   any   resolution,   Officer's
               Certificate,  certificate  of Servicing  Officer,  certificate of
               auditors  or  any  other  certificate,   statement,   instrument,

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<PAGE>

               opinion, report, notice, request, consent, order, appraisal, bond
               or other  paper or  document  believed by it to be genuine and to
               have been signed or presented by the proper party or parties;

(ii)           The Trustee may consult  with  counsel and the written  advice of
               such  counsel  and any  Opinion  of  Counsel  shall  be full  and
               complete  authorization  and  protection in respect of any action
               taken or suffered or omitted by it hereunder in good faith and in
               accordance with such advice or Opinion of Counsel;

          (iii)The Trustee  shall be under no  obligation to exercise any of the
               trusts or powers vested in it by this  Agreement or to institute,
               conduct or defend any litigation  hereunder or in relation hereto
               at   the   request,   order   or   direction   of   any   of  the
               Certificateholders, pursuant to the provisions of this Agreement,
               unless such Certificateholders  shall have offered to the Trustee
               reasonable security or indemnity against the costs,  expenses and
               liabilities  which may be incurred  therein or  thereby;  nothing
               contained  herein  shall,  however,  relieve  the  Trustee of the
               obligation, upon the occurrence of an Event of Default (which has
               not been cured or  waived),  to  exercise  such of the rights and
               powers vested in it by this Agreement, and to use the same degree
               of care and skill in their  exercise as a prudent  investor would
               exercise  or use under the  circumstances  in the conduct of such
               investor's own affairs;

(iv)           The Trustee shall not be personally  liable for any action taken,
               suffered or omitted by it in good faith and  believed by it to be
               authorized or within the discretion or rights or powers conferred
               upon it by this Agreement;

          (v)  Prior to the  occurrence  of an Event of  Default  hereunder  and
               after the  curing or waiver of all  Events of  Default  which may
               have  occurred,  the  Trustee  shall  not be  bound  to make  any
               investigation into the facts or matters stated in any resolution,
               certificate,  statement,  instrument,  opinion,  report,  notice,
               request,  consent,  order,  approval,  bond  or  other  paper  or
               document,  unless  requested  in  writing  so to do by Holders of
               Certificates  of  any  Class   evidencing,   as  to  such  Class,
               Percentage  Interests,  aggregating not less than 50%;  provided,
               however,  that if the  payment  within a  reasonable  time to the
               Trustee  of the  costs,  expenses  or  liabilities  likely  to be
               incurred  by it in the  making of such  investigation  is, in the
               opinion of the Trustee,  not reasonably assured to the Trustee by
               the security  afforded to it by the terms of this Agreement,  the
               Trustee may require reasonable  indemnity against such expense or
               liability as a condition to so proceeding. The reasonable expense
               of every such  examination  shall be paid by the Servicer,  if an
               Event of  Default  shall have  occurred  and is  continuing,  and
               otherwise by the Certificateholder requesting the investigation;

(vi)           The Trustee may execute any of the trusts or powers  hereunder or
               perform  any duties  hereunder  either  directly or by or through
               Affiliates, agents or attorneys; and

          (vii)To the  extent  authorized  under  the Code  and the  regulations
               promulgated  thereunder,  each  Holder  of a Class R  Certificate
               hereby irrevocably  appoints and authorizes the Trustee to be its
               attorney-in-fact for purposes of signing any Tax Returns required
               to be filed on behalf of the Trust Fund.  The Trustee  shall sign
               on behalf of the Trust  Fund and  deliver  to the  Servicer  in a
               timely  manner any Tax  Returns  prepared  by or on behalf of the
               Servicer  that the Trustee is required to sign as  determined  by
               the Servicer pursuant to applicable  federal,  state or local tax
               laws,  provided that the Servicer shall indemnify the Trustee for
               signing any such Tax Returns that contain errors or omissions.

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<PAGE>

(b)            Following the issuance of the Certificates, the Trustee shall not
               accept  any  contribution  of  assets to the  Trust  Fund  unless
               (subject  to Section  10.01(f))  it shall have  obtained  or been
               furnished  with an Opinion of Counsel,  which shall not be a cost
               of the  Trustee  or the  Trust  Fund,  to the  effect  that  such
               contribution  will not (i) cause any  portion  of the  applicable
               REMIC  to fail  to  qualify  as a  REMIC  at any  time  that  any
               Certificates  are  outstanding or (ii) cause the Trust Fund to be
               subject  to any  federal  tax as a  result  of such  contribution
               (including  the  imposition  of any  federal  tax on  "prohibited
               transactions" imposed under Section 860F(a) of the Code).

Section 8.03.  Trustee Not Liable for Certificates or Mortgage Loans.

        The recitals  contained herein and in the  Certificates  (other than the
execution of the  Certificates and relating to the acceptance and receipt of the
Mortgage  Loans) shall be taken as the statements of the Company or the Servicer
as the  case  may be,  and the  Trustee  assumes  no  responsibility  for  their
correctness.  The  Trustee  makes  no  representations  as to  the  validity  or
sufficiency  of  this  Agreement  or  of  the  Certificates   (except  that  the
Certificates  shall be duly and  validly  executed  and  authenticated  by it as
Certificate  Registrar)  or of any  Mortgage  Loan,  Mortgage  File  or  related
document, or of MERS or the MERS(R) System. Except as otherwise provided herein,
the Trustee shall not be  accountable  for the use or application by the Company
or the  Servicer  of  any  of  the  Certificates  or of  the  proceeds  of  such
Certificates,  or for the use or application of any funds paid to the Company or
the Servicer in respect of the Mortgage  Loans or deposited in or withdrawn from
the Custodial Account or the Payment Account by the Company or the Servicer.

Section 8.04.  Trustee May Own Certificates.

        The Trustee in its individual or any other capacity may become the owner
or pledgee  of  Certificates  with the same  rights it would have if it were not
Trustee. The Trustee may transact business with the Company,  the Servicer,  and
their Affiliates, with the same rights it would have if it were not Trustee.

Section 8.05.  Servicer to Pay Trustee's Fees and Expenses; Indemnification.

(a)            The  Servicer  shall pay the  Trustee's  fees and  reimburse  its
               expenses hereunder pursuant to a separate agreement to be entered
               into between the Servicer and the Trustee.

(b)            The Servicer agrees to indemnify the Trustee for, and to hold the
               Trustee harmless against, any loss, liability or expense incurred
               without  negligence or willful  misconduct on the Trustee's part,
               arising  out  of,  or in  connection  with,  the  acceptance  and
               administration  of  the  Trust  Fund,  including  the  costs  and
               expenses  (including  reasonable  legal  fees  and  expenses)  of
               defending  itself  against  any  claim  in  connection  with  the
               exercise or performance of any of its powers or duties under this
               Agreement and the Custodial Agreement, provided that:

(i)            with respect to any such claim,  the Trustee shall have given the
               Servicer  written notice thereof promptly after the Trustee shall
               have actual knowledge thereof;

(ii)           while maintaining control over its own defense, the Trustee shall
               cooperate and consult  fully with the Servicer in preparing  such
               defense; and

(iii)          notwithstanding  anything in this Agreement to the contrary,  the
               Servicer  shall not be liable for  settlement of any claim by the
               Trustee  entered into  without the prior  consent of the Servicer
               which consent shall not be unreasonably withheld.

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<PAGE>

No termination of this Agreement,  or the resignation or removal of the Trustee,
shall affect the obligations  created by this Section 8.05(b) of the Servicer to
indemnify the Trustee under the conditions and to the extent set forth herein.

        Notwithstanding  the  foregoing,  the  indemnification  provided  by the
Servicer in this  Section  8.05(b)  shall not pertain to any loss,  liability or
expense of the Trustee,  including  the costs and  expenses of defending  itself
against any claim,  incurred in connection with any actions taken by the Trustee
at the  direction  of the  Certificateholders  pursuant  to the  terms  of  this
Agreement.

Section 8.06.  Eligibility Requirements for Trustee.

        The Trustee  hereunder shall at all times be a corporation or a national
banking  association  having its principal office in a state and city acceptable
to the Company and organized and doing  business under the laws of such state or
the United States of America,  authorized under such laws to exercise  corporate
trust powers,  having a combined capital and surplus of at least $50,000,000 and
subject to supervision or  examination  by federal or state  authority.  If such
corporation or national banking  association  publishes  reports of condition at
least  annually,  pursuant  to  law  or to the  requirements  of  the  aforesaid
supervising  or examining  authority,  then for the purposes of this Section the
combined  capital  and  surplus  of such  corporation  shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so  published.  In case at any time the  Trustee  shall  cease to be eligible in
accordance  with the  provisions  of this  Section,  the  Trustee  shall  resign
immediately in the manner and with the effect specified in Section 8.07.

Section 8.07.  Resignation and Removal of the Trustee.

(a) The Trustee may at any time resign and be discharged  from the trusts hereby
created by giving  written  notice  thereof to the Company.  Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written  instrument,  in  duplicate,  one  copy of  which  instrument  shall  be
delivered to the resigning Trustee and one copy to the successor trustee.  If no
successor  trustee shall have been so appointed  and have  accepted  appointment
within 30 days after the giving of such  notice of  resignation,  the  resigning
Trustee may petition any court of competent  jurisdiction for the appointment of
a successor trustee.

(b) If at any time the Trustee shall cease to be eligible in accordance with the
provisions  of  Section  8.06 and shall  fail to resign  after  written  request
therefor by the Company, or if at any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or of its property  shall be appointed,  or any public officer shall take charge
or  control of the  Trustee or of its  property  or affairs  for the  purpose of
rehabilitation,  conservation  or  liquidation,  then the Company may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate, one
copy of which  instrument  shall be  delivered to the Trustee so removed and one
copy to the  successor  trustee.  In  addition,  in the event  that the  Company
determines  that  the  Trustee  has  failed  (i) to  distribute  or  cause to be
distributed  to the  Certificateholders  any amount  required to be  distributed
hereunder, if such amount is held by the Trustee or its Paying Agent (other than
the Servicer or the Company) for  distribution  or (ii) to otherwise  observe or
perform in any material respect any of its covenants,  agreements or obligations
hereunder, and such failure shall continue unremedied for a period of 5 days (in
respect of clause (i) above) or 30 days (in respect of clause (ii) above)  after
the date on which  written  notice of such failure,  requiring  that the same be
remedied,  shall have been given to the Trustee by the Company, then the Company
may remove the Trustee and  appoint a  successor  trustee by written  instrument

                                      108
<PAGE>

delivered  as  provided  in the  preceding  sentence.  In  connection  with  the
appointment  of a successor  trustee  pursuant to the  preceding  sentence,  the
Company  shall,  on or  before  the date on which any such  appointment  becomes
effective,  obtain  from  each  Rating  Agency  written  confirmation  that  the
appointment  of any such  successor  trustee will not result in the reduction of
the  ratings  on any  class of the  Certificates  below  the  lesser of the then
current or original ratings on such Certificates.

(c) The Holders of  Certificates  entitled to at least 51% of the Voting  Rights
may at any time remove the  Trustee  and appoint a successor  trustee by written
instrument  or  instruments,  in  triplicate,  signed by such  Holders  or their
attorneys-in-fact  duly authorized,  one complete set of which instruments shall
be delivered to the Company,  one complete set to the Trustee so removed and one
complete set to the successor so appointed.

(d) Any  resignation  or removal of the Trustee and  appointment  of a successor
trustee pursuant to any of the provisions of this Section shall become effective
upon  acceptance of appointment by the successor  trustee as provided in Section
8.08.

Section 8.08.  Successor Trustee.

(a) Any successor  trustee  appointed as provided in Section 8.07 shall execute,
acknowledge  and  deliver  to the  Company  and to its  predecessor  trustee  an
instrument accepting such appointment  hereunder,  and thereupon the resignation
or removal of the predecessor  trustee shall become effective and such successor
trustee shall become effective and such successor  trustee,  without any further
act, deed or conveyance,  shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder,  with the like effect as if
originally named as trustee herein. The predecessor trustee shall deliver to the
successor  trustee all Mortgage Files and related  documents and statements held
by it hereunder  (other than any Mortgage Files at the time held by a Custodian,
which  shall  become  the agent of any  successor  trustee  hereunder),  and the
Company, the Servicer and the predecessor trustee shall execute and deliver such
instruments  and do such other  things as may  reasonably  be required  for more
fully and certainly  vesting and  confirming  in the successor  trustee all such
rights, powers, duties and obligations.

(b) No successor  trustee shall accept  appointment  as provided in this Section
unless at the time of such acceptance  such successor  trustee shall be eligible
under the provisions of Section 8.06.

(c) Upon  acceptance of appointment  by a successor  trustee as provided in this
Section,  the  Company  shall  mail  notice of the  succession  of such  trustee
hereunder  to all Holders of  Certificates  at their  addresses  as shown in the
Certificate  Register.  If the Company  fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee,  the successor trustee
shall cause such notice to be mailed at the expense of the Company.

Section 8.09.  Merger or Consolidation of Trustee.

        Any corporation or national  banking  association into which the Trustee
may be  merged  or  converted  or  with  which  it may  be  consolidated  or any
corporation  or  national  banking   association   resulting  from  any  merger,
conversion  or  consolidation  to which  the  Trustee  shall be a party,  or any
corporation or national  banking  association  succeeding to the business of the
Trustee,  shall  be  the  successor  of the  Trustee  hereunder,  provided  such
corporation  or  national  banking  association  shall  be  eligible  under  the
provisions of Section 8.06,  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.  The Trustee  shall mail notice of any such merger or
consolidation  to the  Certificateholders  at  their  address  as  shown  in the
Certificate Register.

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<PAGE>

Section 8.10.  Appointment of Co-Trustee or Separate Trustee.

(a) Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting  any legal  requirements  of any  jurisdiction  in which any part of the
Trust  Fund or  property  securing  the  same may at the  time be  located,  the
Servicer and the Trustee  acting  jointly shall have the power and shall execute
and  deliver all  instruments  to appoint  one or more  Persons  approved by the
Trustee to act as  co-trustee  or  co-trustees,  jointly  with the  Trustee,  or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or  Persons,  in such  capacity,  such title to the Trust
Fund, or any part thereof,  and, subject to the other provisions of this Section
8.10, such powers,  duties,  obligations,  rights and trusts as the Servicer and
the Trustee may consider necessary or desirable.  If the Servicer shall not have
joined in such  appointment  within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be  continuing,
the Trustee alone shall have the power to make such  appointment.  No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor  trustee under Section 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof.

(b) In the case of any appointment of a co-trustee or separate  trustee pursuant
to this Section 8.10 all rights,  powers,  duties and  obligations  conferred or
imposed upon the Trustee  shall be  conferred  or imposed upon and  exercised or
performed by the  Trustee,  and such  separate  trustee or  co-trustee  jointly,
except  to the  extent  that  under  any law of any  jurisdiction  in which  any
particular act or acts are to be performed  (whether as Trustee  hereunder or as
successor  to the  Servicer  hereunder),  the Trustee  shall be  incompetent  or
unqualified  to perform such act or acts,  in which event such  rights,  powers,
duties and obligations  (including the holding of title to the Trust Fund or any
portion  thereof in any such  jurisdiction)  shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.

(c) Any notice, request or other writing given to the Trustee shall be deemed to
have  been  given to each of the then  separate  trustees  and  co-trustees,  as
effectively  as if  given  to each of  them.  Every  instrument  appointing  any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee,  upon its acceptance
of the trusts conferred,  shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided  therein,  subject to all the  provisions of this  Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording  protection to, the Trustee.  Every
such instrument shall be filed with the Trustee.

(d) Any separate trustee or co-trustee may, at any time, constitute the Trustee,
its agent or attorney-in-fact,  with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name.  If any separate  trustee or  co-trustee  shall die,
become  incapable  of  acting,  resign  or  be  removed,  all  of  its  estates,
properties,  rights,  remedies  and trusts shall vest in and be exercised by the
Trustee,  to the extent  permitted by law,  without the  appointment of a new or
successor trustee.

Section 8.11.  Appointment of Custodians.

        The Trustee  may,  with the  consent of the  Servicer  and the  Company,
appoint one or more  Custodians  who,  except for Escrow Bank USA, an industrial
loan  corporation  organized  under  the  laws of the  State  of  Utah,  are not
Affiliates  of the Company,  the Servicer or the Seller to hold all or a portion
of the  Mortgage  Notes as agent for the Trustee,  by entering  into a Custodial
Agreement;  provided,  however, that the Trustee may appoint a Custodian that is
an Affiliate of the Company,  the Servicer or the Seller if the Trustee receives
written  confirmation  from each Rating  Agency that such  appointment  will not
reduce the rating  assigned to any Class of  Certificates  by such Rating Agency
below  the  lower of the  then-current  rating or the  rating  assigned  to such

                                      110
<PAGE>

Certificates  as of the Closing Date by such Rating  Agency.  Subject to Article
VIII, the Trustee  agrees to comply with the terms of each  Custodial  Agreement
and to enforce the terms and  provisions  thereof  against the Custodian for the
benefit  of  the  Certificateholders.  Each  Custodian  shall  be  a  depository
institution  subject to supervision  by federal or state  authority and shall be
qualified  to do business  in the  jurisdiction  in which it holds any  Mortgage
File. Each Custodian (other than the Custodian appointed as of the Closing Date)
shall  have a  combined  capital  and  surplus  of at  least  $10,000,000.  Each
Custodial  Agreement  may be amended  only as  provided  in Section  11.01.  The
Trustee shall notify the  Certificateholders of the appointment of any Custodian
(other than the  Custodian  appointed as of the Closing  Date)  pursuant to this
Section 8.11.

Section 8.12.  Appointment of Office or Agency.

        The Trustee  shall  maintain an office or agency in the City of New York
where  Certificates may be surrendered for registration of transfer or exchange.
The Trustee initially  designates its offices located at 55 Water Street,  First
Floor,  New York,  New York 10041 for the  purposes of keeping  the  Certificate
Register.  The Trustee shall maintain an office at each of the addresses  stated
in Section  11.05  hereof  where  notices  and demands to or upon the Trustee in
respect of this Agreement may be served.

                                   ARTICLE IX

                                   TERMINATION

          Section 9.01. Termination Upon Purchase by the Servicer or Liquidation
               of All Mortgage Loans.

(a)            Subject  to  Section  9.02,   the  respective   obligations   and
               responsibilities  of the  Company,  the  Servicer and the Trustee
               created  hereby in respect of the  Certificates  (other  than the
               obligation  of the  Trustee to make  certain  payments  after the
               Final Distribution Date to Certificateholders  and the obligation
               of the Company to send certain  notices as hereinafter set forth)
               shall  terminate upon the last action required to be taken by the
               Trustee on the Final  Distribution  Date pursuant to this Article
               IX following the earlier of:

          (i)  the  later of the  final  payment  or other  liquidation  (or any
               Advance with respect thereto) of the last Mortgage Loan remaining
               in the Trust Fund or the  disposition  of all  property  acquired
               upon  foreclosure  or deed in lieu of foreclosure of any Mortgage
               Loan, or

          (ii) the  purchase  by the  Servicer  of all  Mortgage  Loans  and all
               property  acquired in respect of any Mortgage  Loan  remaining in
               the Trust Fund at a price  equal to 100% of the unpaid  principal
               balance of each  Mortgage  Loan or, the fair market  value of the
               related underlying property of such Mortgage Loan with respect to
               Mortgage  Loans as to which title has been  acquired if such fair
               market value is less than such unpaid  principal  balance (net of
               any unreimbursed  Advances  attributable to principal) on the day
               of repurchase plus accrued  interest  thereon at the Net Mortgage
               Rate (or Modified  Net Mortgage  Rate in the case of any Modified
               Mortgage Loan) to, but not including,  the first day of the month
               in which such repurchase price is distributed, provided, however,
               that in no event shall the trust created hereby  continue  beyond
               the expiration of 21 years from the death of the last survivor of
               the descendants of Joseph P. Kennedy,  the late ambassador of the
               United  States  to the  Court of St.  James,  living  on the date
               hereof and provided  further  that the  purchase  price set forth
               above shall be increased as is  necessary,  as  determined by the
               Servicer,  to avoid  disqualification of any portion of any REMIC
               as a REMIC.

                                      111
<PAGE>

        The right of the  Servicer to purchase  all the assets of the Trust Fund
pursuant to clause  (ii) above is  conditioned  upon the Pool  Stated  Principal
Balance  as  of  the  Final   Distribution  Date,  prior  to  giving  effect  to
distributions to be made on such Distribution  Date, being less than ten percent
of the Cut-off Date Principal  Balance of the Mortgage  Loans.  If such right is
exercised by the Servicer,  the Servicer shall be deemed to have been reimbursed
for the full amount of any  unreimbursed  Advances  theretofore  made by it with
respect to the Mortgage Loans. In addition,  the Servicer,  shall provide to the
Trustee  and the  Custodian  a Request  for  Release  substantially  in the form
attached hereto as Exhibit F and the Trustee and any Custodian  shall,  promptly
following payment of the purchase price, release to the Servicer, as applicable,
the Mortgage Files pertaining to the Mortgage Loans being purchased.

     (b) The Servicer shall give the Trustee not less than 60 days' prior notice
of the  Distribution  Date on which  the  Servicer  anticipates  that the  final
distribution  will be made to  Certificateholders  (whether  as a result  of the
exercise by the  Servicer of its right to purchase  the assets of the Trust Fund
or  otherwise).  Notice of any  termination,  specifying the  anticipated  Final
Distribution  Date (which shall be a date that would otherwise be a Distribution
Date) upon which the  Certificateholders may surrender their Certificates to the
Trustee  (if  so  required  by the  terms  hereof)  for  payment  of  the  final
distribution and cancellation, shall be given promptly by the Servicer (if it is
exercising  its right to  purchase  the  assets of the  Trust  Fund),  or by the
Trustee  (in any  other  case) by letter to the  Certificateholders  mailed  not
earlier  than the 9th day and not  later  than the  19th day of the  month  next
preceding the month of such final distribution specifying:

(i)            the anticipated Final  Distribution Date upon which final payment
               of the  Certificates is anticipated to be made upon  presentation
               and  surrender  of  Certificates  at the  office or agency of the
               Trustee therein designated,

(ii)           the amount of any such final payment, if known, and

(iii)          that the Record Date  otherwise  applicable to such  Distribution
               Date  is  not   applicable,   and  in  the  case  of  the  Senior
               Certificates and Class M Certificates, that payment shall be made
               only upon  presentation  and surrender of the Certificates at the
               office or agency of the Trustee therein specified.

If the Servicer is obligated to give notice to  Certificateholders as aforesaid,
it shall give such notice to the  Certificate  Registrar at the time such notice
is  given  to  Certificateholders.  In the  event  such  notice  is given by the
Servicer,  the Servicer  shall deposit in the Payment  Account  before the Final
Distribution Date in immediately available funds an amount equal to the purchase
price for the assets of the Trust Fund computed as above provided.

(c)  In  the  case  of  the  Senior,  Class  M or  Class  B  Certificates,  upon
presentation  and  surrender  of  the  Certificates  by  the  Certificateholders
thereof, the Trustee shall distribute to the  Certificateholders  (i) the amount
otherwise distributable on such Distribution Date, if not in connection with the
Servicer's  election  to  repurchase,  or (ii)  if the  Servicer  elected  to so
repurchase,   an  amount  determined  as  follows:  (A)  with  respect  to  each
Certificate the outstanding  Certificate Principal Balance thereof, plus Accrued
Certificate  Interest for the related  Interest  Accrual  Period thereon and any
previously  unpaid  Accrued  Certificate  Interest,  subject to the priority set
forth in Section 4.02(a), and (B) with respect to the Class R Certificates,  any
excess of the amounts available for distribution (including the repurchase price
specified  in clause  (ii) of  subsection  (a) of this  Section)  over the total
amount distributed under the immediately preceding clause (A).

(d) If any  Certificateholders  shall not surrender their Certificates for final
payment  and  cancellation  on or  before  the  Final  Distribution  Date (if so
required by the terms hereof), the Trustee shall on such date cause all funds in
the Payment Account not distributed in final distribution to  Certificateholders
to be withdrawn  therefrom and credited to the remaining  Certificateholders  by
depositing  such  funds in a separate  escrow  account  for the  benefit of such
Certificateholders,  and the Servicer (if it exercised its right to purchase the

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assets of the Trust  Fund),  or the  Trustee  (in any other  case)  shall give a
second written  notice to the remaining  Certificateholders  to surrender  their
Certificates for cancellation  and receive the final  distribution  with respect
thereto.  If within six months after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee shall take appropriate steps
as  directed  by  the  Servicer  to  contact  the  remaining  Certificateholders
concerning   surrender  of  their  Certificates.   The  costs  and  expenses  of
maintaining  the escrow  account and of contacting  Certificateholders  shall be
paid out of the assets which remain in the escrow account. If within nine months
after the second notice any  Certificates  shall not have been  surrendered  for
cancellation, the Trustee shall pay to the Servicer all amounts distributable to
the holders  thereof and the Servicer shall  thereafter  hold such amounts until
distributed  to such  holders.  No  interest  shall  accrue or be payable to any
Certificateholder on any amount held in the escrow account or by the Servicer as
a result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 9.01.

Section 9.02.  Additional Termination Requirements.

     (a) Each  REMIC  that  comprises  the Trust  Fund  shall be  terminated  in
accordance  with the  following  additional  requirements,  unless  (subject  to
Section  10.01(f))  the Trustee  and the  Servicer  have  received an Opinion of
Counsel (which Opinion of Counsel shall not be an expense of the Trustee) to the
effect  that the failure of any REMIC to comply  with the  requirements  of this
Section 9.02 will not (i) result in the imposition on the Trust Fund of taxes on
"prohibited  transactions,"  as described  in Section 860F of the Code,  or (ii)
cause any REMIC to fail to qualify  as a REMIC at any time that any  Certificate
is outstanding:

(i)            The Servicer shall establish a 90-day liquidation period for such
               REMIC and  specify  the first day of such  period in a  statement
               attached  to the  Trust  Fund's  final  Tax  Return  pursuant  to
               Treasury  regulations  Section 1.860F-1.  The Servicer also shall
               satisfy all of the requirements of a qualified  liquidation for a
               REMIC under Section 860F of the Code and regulations thereunder;

(ii)           The Servicer shall notify the Trustee at the commencement of such
               90-day  liquidation period and, at or prior to the time of making
               of the final payment on the Certificates,  the Trustee shall sell
               or otherwise  dispose of all of the remaining assets of the Trust
               Fund in accordance with the terms hereof; and

(iii)          If the Servicer is exercising its right to purchase the assets of
               the Trust Fund, the Servicer shall, during the 90-day liquidation
               period and at or prior to the Final Distribution  Date,  purchase
               all of the assets of the Trust Fund for cash.

     (b)  Each  Holder  of a  Certificate  and the  Trustee  hereby  irrevocably
approves and appoints  the Servicer as its  attorney-in-fact  to adopt a plan of
complete  liquidation  for  such  REMIC  at the  expense  of the  Trust  Fund in
accordance with the terms and conditions of this Agreement.

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                                   ARTICLE X

                                REMIC PROVISIONS

Section 10.01. REMIC Administration.

(a) The REMIC  Administrator  shall  make an  election  to treat the Trust  Fund
(other than the portion  thereof  consisting of the Hedge Agreement and the Swap
Agreement)  as three REMICs under the Code and, if necessary,  under  applicable
state  law.  The  assets of each  REMIC are set  forth in this  Agreement.  Such
election  shall  be made  on  Form  1066 or  other  appropriate  federal  tax or
information return (including Form 8811) or any appropriate state return for the
taxable  year  ending  on the  last  day of  the  calendar  year  in  which  the
Certificates  are issued.  For the purposes of the REMIC elections in respect of
the Trust Fund,  Certificates  and  interests to be  designated  as the "regular
interests" and the sole class of "residual interests" in each REMIC shall be set
forth in Section 10.03. The REMIC Administrator and the Trustee shall not permit
the creation of any "interests" (within the meaning of Section 860G of the Code)
in each REMIC  elected  in  respect  of the Trust  Fund other than the  "regular
interests" and "residual interests" so designated.

(b) The Closing Date is hereby  designated  as the  "startup  day" of each REMIC
comprising the Trust Fund within the meaning of Section 860G(a)(9) of the Code.

(c) GMACM  shall  hold a Class R  Certificate  representing  a 0.01%  Percentage
Interest in each Class of the Class R  Certificates  and shall be  designated as
"the tax matters person" with respect to each REMIC in the manner provided under
Treasury  regulations  section  1.860F-4(d)  and  Treasury  regulations  section
301.6231(a)(7)-1.  The REMIC Administrator, as tax matters person, shall (i) act
on behalf of each REMIC in relation to any tax matter or  controversy  involving
the Trust  Fund and (ii)  represent  the  Trust  Fund in any  administrative  or
judicial  proceeding  relating to an  examination  or audit by any  governmental
taxing authority with respect  thereto.  The legal expenses,  including  without
limitation attorneys' or accountants' fees, and costs of any such proceeding and
any liability  resulting  therefrom  shall be expenses of the Trust Fund and the
REMIC Administrator  shall be entitled to reimbursement  therefor out of amounts
attributable  to the  Mortgage  Loans on  deposit  in the  Custodial  Account as
provided by Section  3.10 unless such legal  expenses  and costs are incurred by
reason  of the REMIC  Administrator's  willful  misfeasance,  bad faith or gross
negligence.

(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax
Returns  that it  determines  are required  with  respect to each REMIC  created
hereunder and deliver such Tax Returns in a timely manner to the Trustee and the
Trustee shall sign and file such Tax Returns in a timely manner. The expenses of
preparing  such returns  shall be borne by the REMIC  Administrator  without any
right of reimbursement therefor. The REMIC Administrator agrees to indemnify and
hold harmless the Trustee with respect to any tax or liability  arising from the
Trustee's  signing of Tax Returns that contain errors or omissions.  The Trustee
and  Servicer  shall  promptly  provide  the  REMIC   Administrator   with  such
information  as the REMIC  Administrator  may from time to time  request for the
purpose of enabling the REMIC Administrator to prepare Tax Returns.

(e) The REMIC  Administrator  shall  provide (i) to any  Transferor of a Class R
Certificate  such  information  as is necessary for the  application  of any tax
relating  to the  transfer of a Class R  Certificate  to any Person who is not a
Permitted Transferee,  (ii) to the Trustee, and the Trustee shall forward to the
Certificateholders,  such  information or reports as are required by the Code or
the REMIC  Provisions  including  reports  relating to interest,  original issue
discount and market  discount or premium (using the Prepayment  Assumption)  and
(iii) to the Internal  Revenue  Service the name,  title,  address and telephone
number of the person who will serve as the representative of each REMIC.

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<PAGE>

(f) The Servicer and the REMIC  Administrator  shall take such actions and shall
cause each REMIC created hereunder to take such actions as are reasonably within
the Servicer's or the REMIC Administrator's  control and the scope of its duties
more  specifically  set  forth  herein as shall be  necessary  or  desirable  to
maintain the status of each REMIC as a REMIC under the REMIC Provisions (and the
Trustee  shall assist the Servicer  and the REMIC  Administrator,  to the extent
reasonably  requested by the Servicer and the REMIC Administrator to do so). The
Servicer and the REMIC  Administrator  shall not knowingly or intentionally take
any action,  cause the Trust Fund to take any action or fail to take (or fail to
cause to be taken) any action reasonably  within their respective  control that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of any portion of any REMIC as a REMIC or (ii) result in the
imposition  of a tax upon any REMIC  (including  but not  limited  to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on  contributions  to a REMIC set forth in Section  860G(d) of the Code) (either
such  event,  in the  absence of an  Opinion  of Counsel or the  indemnification
referred to in this  sentence,  an "Adverse REMIC Event") unless the Servicer or
the REMIC Administrator,  as applicable,  has received an Opinion of Counsel (at
the expense of the party  seeking to take such action or, if such party fails to
pay such expense,  and the Servicer or the REMIC  Administrator,  as applicable,
determines that taking such action is in the best interest of the Trust Fund and
the Certificateholders, at the expense of the Trust Fund, but in no event at the
expense of the Servicer,  the REMIC  Administrator or the Trustee) to the effect
that the  contemplated  action  will not,  with  respect to each  REMIC  created
hereunder, endanger such status or, unless the Servicer, the REMIC Administrator
or both, as applicable,  determine in its or their sole  discretion to indemnify
the Trust Fund against the imposition of such a tax, result in the imposition of
such a tax.  Wherever in this Agreement a  contemplated  action may not be taken
because the timing of such action might result in the imposition of a tax on the
Trust Fund,  or may only be taken  pursuant  to an Opinion of Counsel  that such
action would not impose a tax on the Trust Fund,  such action may nonetheless be
taken provided that the indemnity  given in the preceding  sentence with respect
to any taxes that might be imposed on the Trust Fund has been given and that all
other  preconditions  to the  taking of such  action  have been  satisfied.  The
Trustee  shall not take or fail to take any action  (whether  or not  authorized
hereunder) as to which the Servicer or the REMIC  Administrator,  as applicable,
has  advised it in  writing  that it has  received  an Opinion of Counsel to the
effect that an Adverse  REMIC Event could occur with respect to such action.  In
addition, prior to taking any action with respect to any REMIC created hereunder
or any related assets thereof, or causing any REMIC to take any action, which is
not expressly  permitted  under the terms of this  Agreement,  the Trustee shall
consult  with the Servicer or the REMIC  Administrator,  as  applicable,  or its
designee, in writing, with respect to whether such action could cause an Adverse
REMIC Event to occur with respect to any REMIC,  and the Trustee  shall not take
any such  action  or cause  any  REMIC to take any such  action  as to which the
Servicer or the REMIC  Administrator,  as applicable,  has advised it in writing
that  an  Adverse   REMIC  Event  could   occur.   The  Servicer  or  the  REMIC
Administrator,  as  applicable,  may consult  with  counsel to make such written
advice,  and the cost of same  shall be borne by the party  seeking  to take the
action not expressly permitted by this Agreement, but in no event at the expense
of the Servicer or the REMIC  Administrator.  At all times as may be required by
the Code,  the Servicer  shall to the extent within its control and the scope of
its duties more specifically set forth herein, maintain substantially all of the
assets of each REMIC created  hereunder as  "qualified  mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.

(g) In the event  that any tax is imposed on  "prohibited  transactions"  of any
REMIC  created  hereunder as defined in Section  860F(a)(2) of the Code, on "net
income from foreclosure  property" of any REMIC as defined in Section 860G(c) of
the Code,  on any  contributions  to any REMIC after the  Startup  Day  therefor
pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code
or any  applicable  provisions  of state or local  tax  laws,  such tax shall be
charged (i) to the Servicer,  if such tax arises out of or results from a breach
by the Servicer of any of its  obligations  under this Agreement or the Servicer
has in its sole  discretion  determined to indemnify the Trust Fund against such
tax, (ii) to the Trustee,  if such tax arises out of or results from a breach by

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the Trustee of any of its  obligations  under this Article X, or (iii) otherwise
against amounts on deposit in the Custodial  Account as provided by Section 3.10
and on the Distribution  Date(s)  following such  reimbursement the aggregate of
such taxes shall be allocated in reduction of the Accrued  Certificate  Interest
on each Class entitled thereto in the same manner as if such taxes constituted a
Prepayment Interest Shortfall.

(h) The  Trustee  and the  Servicer  shall,  for  federal  income tax  purposes,
maintain  books and records  with respect to each REMIC  created  hereunder on a
calendar  year and on an accrual  basis or as  otherwise  may be required by the
REMIC Provisions.

(i) Following the Startup Day, neither the Servicer nor the Trustee shall accept
any  contributions  of assets to any REMIC created  hereunder unless (subject to
Section 10.01(f)) the Servicer and the Trustee shall have received an Opinion of
Counsel (at the expense of the party seeking to make such  contribution)  to the
effect that the  inclusion of such assets in such REMIC will not cause any REMIC
to fail to qualify as a REMIC at any time that any  Certificates are outstanding
or subject any REMIC to any tax under the REMIC  Provisions or other  applicable
provisions of federal, state and local law or ordinances.

(j) Neither the Servicer  nor the Trustee  shall  (subject to Section  10.01(f))
enter into any  arrangement by which any REMIC created  hereunder will receive a
fee or other  compensation  for  services  nor permit  any REMIC to receive  any
income  from  assets  other  than  "qualified  mortgages"  as defined in Section
860G(a)(3)  of the  Code  or  "permitted  investments"  as  defined  in  Section
860G(a)(5) of the Code.

(k)  Solely for the  purposes  of Section  1.860G-1(a)(4)(iii)  of the  Treasury
Regulations,  the  "latest  possible  maturity  date"  for each  REMIC I Regular
Interest,  REMIC II Regular Interest and REMIC III Regular Interest shall be the
Maturity Date.

(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare
and file with the Internal  Revenue Service Form 8811,  "Information  Return for
Real Estate Mortgage  Investment  Conduits (REMIC) and Issuers of Collateralized
Debt Obligations" for each REMIC created hereunder.

(m) Neither the Trustee nor the Servicer  shall sell,  dispose of or  substitute
for any of the  Mortgage  Loans  (except  in  connection  with (i) the  default,
imminent  default or foreclosure  of a Mortgage Loan,  including but not limited
to, the acquisition or sale of a Mortgaged  Property acquired by deed in lieu of
foreclosure,  (ii) the  bankruptcy  of any REMIC  created  hereunder,  (iii) the
termination of the applicable  REMIC pursuant to Article IX of this Agreement or
(iv) a  purchase  of  Mortgage  Loans  pursuant  to  Article  II or III of  this
Agreement)  nor  acquire  any assets  for any REMIC,  nor sell or dispose of any
investments in the Custodial  Account or the Payment Account for gain nor accept
any  contributions to any REMIC after the Closing Date unless it has received an
Opinion of Counsel that such sale, disposition, substitution or acquisition will
not (a)  affect  adversely  the status of any REMIC as a REMIC or (b) unless the
Servicer has  determined  in its sole  discretion  to  indemnify  the Trust Fund
against  such  tax,  cause  any  REMIC  to be  subject  to a tax on  "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.

(n) The  Trustee  shall  apply for an  employer  identification  number from the
Internal Revenue Service on a Form SS-4 or any other  acceptable  method for all
tax entities.

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Section 10.02. Servicer, REMIC Administrator and Trustee Indemnification.

(a) The Trustee  agrees to  indemnify  the Trust Fund,  the  Company,  the REMIC
Administrator  and the  Servicer  for any  taxes and  costs  including,  without
limitation,  any  reasonable  attorneys fees imposed on or incurred by the Trust
Fund,  the  Company or the  Servicer,  as a result of a breach of the  Trustee's
covenants set forth in Article VIII or this Article X.

(b) The REMIC Administrator agrees to indemnify the Trust Fund, the Company, the
Servicer and the Trustee for any taxes and costs (including, without limitation,
any  reasonable  attorneys'  fees) imposed on or incurred by the Trust Fund, the
Company,  the  Servicer  or the  Trustee,  as a result  of a breach of the REMIC
Administrator's covenants set forth in this Article X with respect to compliance
with the REMIC Provisions,  including without limitation,  any penalties arising
from the Trustee's  execution of Tax Returns prepared by the REMIC Administrator
that contain errors or omissions;  provided,  however, that such liability shall
not be imposed to the extent  such breach is a result of an error or omission in
information  provided to the REMIC  Administrator  by the Servicer in which case
Section 10.02(c) shall apply.

(c) The Servicer  agrees to  indemnify  the Trust Fund,  the Company,  the REMIC
Administrator  and the  Trustee  for any  taxes and  costs  (including,  without
limitation,  any reasonable attorneys' fees) imposed on or incurred by the Trust
Fund,  the Company,  the REMIC  Administrator  or the Trustee,  as a result of a
breach of the Servicer's covenants set forth in this Article X or in Article III
with  respect  to  compliance  with  the  REMIC  Provisions,  including  without
limitation,  any penalties  arising from the Trustee's  execution of Tax Returns
prepared by the Servicer that contain errors or omissions.

Section 10.03. Designation of REMIC(s).

        The REMIC  Administrator  shall  make an  election  to treat the  entire
segregated  pool of assets  described in the definition of Trust Fund (exclusive
of the Hedge  Agreement and the Swap  Agreement),  and subject to this Agreement
(including the Mortgage Loans) as a REMIC ("REMIC I") and shall make an election
to treat  the pool of assets  comprised  of the  uncertificated  REMIC I Regular
Interests  as a REMIC  ("REMIC II") and shall make an election to treat the pool
of assets  comprised  of the  underlying  REMIC II Regular  Interests as a REMIC
("REMIC III") for federal income tax purposes.

        The REMIC I Regular Interests will be "regular interests" in REMIC I and
Component  I of the Class R  Certificates  will be the sole  class of  "residual
interests" in REMIC I for purposes of the REMIC  Provisions (as defined  herein)
under the  federal  income  tax law.  The  REMIC II  Regular  Interests  will be
"regular  interests"  in REMIC II and  Component II of the Class R  Certificates
will be the sole class of "residual  interests"  in REMIC II for purposes of the
REMIC Provisions (as defined herein) under the federal income tax law.

        The Class A-I-1, Class A-II-1, Class A-II-2, Class A-II-3, Class A-II-4,
Class A-III-1, Class A-III-2, Class A-III-3, Class A-III-4, Class A-III-5, Class
A-IV-1,  Class X-II,  Class X-III,  Class M-1,  Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates,  will be "regular interests" in REMIC III,
and  Component  III of the  Class R  Certificates  will  be the  sole  class  of
"residual  interests"  therein for purposes of the REMIC  Provisions (as defined
herein) under federal income tax law.

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Section 10.04.  Distributions  on REMIC I Regular  Interests,  REMIC II  Regular
     Interests and REMIC III Regular Interests.

(a)     On each Distribution  Date, the trustee shall be deemed to distribute to
        itself as the holder of the REMIC I Regular Interests,  the following to
        the extent of the Available Distribution Amount reduced by distributions
        made to the Class R  Certificateholders  pursuant  to  Section  4.02(a):
        those  portions of the REMIC I  Distribution  Amount not  designated  to
        Component I of the Class R Certificate, in the amounts and in accordance
        with the  priorities set forth in the definition of REMIC I Distribution
        Amount.

(b)     On each  Distribution  Date the Trustee shall be deemed to distribute to
        itself, as the holder of the REMIC II Regular  Interests,  the following
        amounts  in  the  following  order  of  priority  to the  extent  of the
        Available Distribution Amount reduced by distributions made to the Class
        R Certificates pursuant to Section 4.02(a):

(i)     Uncertificated  Interest  on the  REMIC II  Regular  Interests  for such
        Distribution  Date, plus any  Uncertificated  Interest thereon remaining
        unpaid from any previous Distribution Date; and

(ii)    In accordance with the priority set forth in Section 10.04(c), an amount
        equal to the sum of the amounts in respect of principal distributable on
        each Class of Certificates  (other than the Class R Certificates)  under
        Section 4.02(a), as allocated thereto pursuant to Section 4.02(b).

(c)     The amount described in Section 10.04(b)(ii) shall be deemed distributed
        with  respect  to REMIC II  Regular  Interests  in  accordance  with the
        priority assigned to each Related Class of Certificates  (other than the
        Class R  Certificates),  respectively,  under Section  4.02(b) until the
        Uncertificated Balance of each such interest is reduced to zero.

(d)     The portion of the Uncertificated  Interest amounts described in Section
        10.04(b)(i)  shall be  deemed  distributed  by REMIC II to REMIC  III in
        accordance  with the  priority  assigned  to the REMIC III  Certificates
        relative to that  assigned  to the Class R  Certificates  under  Section
        4.02(a).

(e)     In determining from time to time the amounts  distributable on the REMIC
        II Regular Interests  Realized Losses allocated to the REMIC III Regular
        Interests shall be deemed allocated to the REMIC II Regular Interests in
        accordance  with  the  priority   assigned  to  each  Related  Class  of
        Certificates  (other than the Class R Certificates)  respectively  under
        Section 4.05.

(f)     On each Distribution Date the Trustee shall be deemed to distribute from
        REMIC III, in the priority set forth in Sections 4.02(a) and (b), to the
        Holders  of  each  Class  of  Certificates   (other  than  the  Class  R
        Certificates)  the amounts  distributable  thereon with respect to their
        interests in REMIC III from the amounts  deemed to have been received by
        REMIC II from REMIC I under this Section 10.04.

(g)     Notwithstanding the deemed  distributions on the Uncertificated  REMIC I
        Regular  Interests  described in this Section  10.04,  distributions  of
        funds from the Certificate Account shall be made only in accordance with
        Section 4.02.

Section 10.05. Compliance with Withholding Requirements.

        Notwithstanding  any other provision of this  Agreement,  the Trustee or
any Paying  Agent,  as  applicable,  shall  comply with all federal  withholding
requirements  respecting payments to  Certificateholders,  including interest or

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original  issue  discount  payments or advances  thereof that the Trustee or any
Paying Agent, as applicable,  reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding. In
the event the Trustee or any Paying  Agent,  as  applicable,  does  withhold any
amount from interest or original issue discount  payments or advances thereof to
any Certificateholder pursuant to federal withholding requirements,  the Trustee
or any Paying Agent,  as applicable,  shall indicate the amount withheld to such
Certificateholder pursuant to the terms of such requirements.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

Section 11.01. Amendment.

(a)            This  Agreement or any  Custodial  Agreement  may be amended from
               time  to time  by the  Company,  the  Servicer  and the  Trustee,
               without the consent of any of the Certificateholders:

(i)            to cure any ambiguity,

(ii)           to correct or supplement any provisions herein or therein,  which
               may be inconsistent  with any other provisions  herein or therein
               or to correct any error,

          (iii)to  modify,  eliminate  or add to any of its  provisions  to such
               extent  as  shall be  necessary  or  desirable  to  maintain  the
               qualification  of any REMIC  created  hereunder as a REMIC at all
               times that any Certificate is outstanding or to avoid or minimize
               the risk of the  imposition of any tax on the Trust Fund pursuant
               to the  Code  that  would  be a claim  against  the  Trust  Fund,
               provided  that the Trustee has  received an Opinion of Counsel to
               the effect  that (A) such action is  necessary  or  desirable  to
               maintain such  qualification  or to avoid or minimize the risk of
               the  imposition  of any  such tax and (B)  such  action  will not
               adversely  affect in any  material  respect the  interests of any
               Certificateholder,

          (iv) to change the timing and/or nature of deposits into the Custodial
               Account or the Payment Account or to change the name in which the
               Custodial  Account is  maintained,  provided that (A) the Payment
               Account  Deposit Date shall in no event be later than the related
               Distribution  Date, (B) such change shall not, as evidenced by an
               Opinion of Counsel,  adversely affect in any material respect the
               interests of any  Certificateholder and (C) such change shall not
               result in a  reduction  of the  rating  assigned  to any Class of
               Certificates  below the lower of the  then-current  rating or the
               rating  assigned to such  Certificates as of the Closing Date, as
               evidenced by a letter from each Rating Agency to such effect,

          (v)  to modify,  eliminate or add to the provisions of Section 5.02(f)
               or any other provision hereof restricting transfer of the Class R
               Certificates,  by virtue of their being the "residual  interests"
               in a REMIC,  provided  that (A) such  change  shall not result in
               reduction   of  the  rating   assigned   to  any  such  Class  of
               Certificates  below the lower of the  then-current  rating or the
               rating  assigned to such  Certificates as of the Closing Date, as
               evidenced by a letter from each Rating Agency to such effect, and
               (B) such  change  shall not  (subject  to Section  10.01(f)),  as
               evidenced  by an Opinion of Counsel  (at the expense of the party
               seeking so to modify,  eliminate or add such  provisions),  cause
               any  REMIC  created  hereunder  or any of the  Certificateholders
               (other than the transferor) to be subject to a federal tax caused
               by a transfer to a Person that is not a Permitted Transferee,

                                      119
<PAGE>

(vi)           to make any other provisions with respect to matters or questions
               arising under this  Agreement or such Custodial  Agreement  which
               shall not be materially  inconsistent with the provisions of this
               Agreement,  provided  that such action shall not, as evidenced by
               an Opinion of Counsel,  adversely  affect in any material respect
               the interests of any Certificateholder, or

(vii)          to amend any provision  herein or therein that is not material to
               any of the Certificateholders.

(b)            This  Agreement or any  Custodial  Agreement  may also be amended
               from time to time by the  Company,  the  Servicer and the Trustee
               with the consent of the Holders of Certificates evidencing in the
               aggregate not less than 66% of the  Percentage  Interests of each
               Class of Certificates  affected thereby for the purpose of adding
               any provisions to or changing in any manner or eliminating any of
               the provisions of this  Agreement or such Custodial  Agreement or
               of  modifying  in  any  manner  the  rights  of  the  Holders  of
               Certificates  of  such  Class;  provided,  however,  that no such
               amendment shall:

(i)            reduce in any  manner  the  amount  of, or delay the  timing  of,
               payments which are required to be distributed on any  Certificate
               without the consent of the Holder of such Certificate,

(ii)           reduce the aforesaid  percentage of Certificates of any Class the
               Holders of which are  required to consent to any such  amendment,
               in any such  case  without  the  consent  of the  Holders  of all
               Certificates of such Class then outstanding.

     (c) Notwithstanding  any contrary provision of this Agreement,  the Trustee
shall not consent to any amendment to this Agreement  unless it shall have first
received an Opinion of Counsel  (subject to Section  10.01(f) and at the expense
of the party seeking such  amendment)  to the effect that such  amendment or the
exercise  of any power  granted to the  Servicer,  the Company or the Trustee in
accordance  with such  amendment  will not result in the imposition of a federal
tax on the Trust  Fund or cause any REMIC to fail to  qualify  as a REMIC at any
time that any Certificate is outstanding.

     (d) Promptly  after the  execution of any such  amendment the Trustee shall
furnish written notification of the substance of such amendment to the Custodian
and each  Certificateholder.  It  shall  not be  necessary  for the  consent  of
Certificateholders  under this Section 11.01 to approve the  particular  form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance  thereof.  The manner of obtaining such consents and of evidencing
the  authorization  of the  execution  thereof  by  Certificateholders  shall be
subject to such reasonable regulations as the Trustee may prescribe.

Section 11.02. Recordation of Agreement; Counterparts.

(a) To the extent  permitted by  applicable  law,  this  Agreement is subject to
recordation in all appropriate  public offices for real property  records in all
the  counties  or other  comparable  jurisdictions  in  which  any or all of the
properties  subject to the Mortgages are situated,  and in any other appropriate
public  recording  office or elsewhere,  such  recordation to be effected by the
Servicer and at its expense on direction by the Trustee (pursuant to the request
of Holders of Certificates  entitled to at least 25% of the Voting Rights),  but
only upon direction accompanied by an Opinion of Counsel to the effect that such
recordation   materially   and   beneficially   affects  the  interests  of  the
Certificateholders.

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

                                      120
<PAGE>

Section 11.03. Limitation on Rights of Certificateholders.

(a) The  death or  incapacity  of any  Certificateholder  shall not  operate  to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal  representatives  or heirs to claim an accounting or to take any action or
proceeding  in any court for a partition  or winding up of the Trust  Fund,  nor
otherwise  affect the rights,  obligations and liabilities of any of the parties
hereto.

(b) No  Certificateholder  shall  have any right to vote  (except  as  expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto,  nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third  person by reason of any action  taken by the  parties  to this  Agreement
pursuant to any provision hereof.

(c) No Certificateholder shall have any right by virtue of any provision of this
Agreement to institute  any suit,  action or proceeding in equity or at law upon
or under or with respect to this Agreement,  unless such Holder previously shall
have given to the  Trustee a written  notice of default  and of the  continuance
thereof, as hereinbefore  provided,  and unless also the Holders of Certificates
of any  Class  evidencing  in the  aggregate  not less  than 25% of the  related
Percentage  Interests of such Class,  shall have made  written  request upon the
Trustee to institute such action,  suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable  indemnity as it
may require against the costs,  expenses and liabilities to be incurred  therein
or  thereby,  and the  Trustee,  for 60 days after its  receipt of such  notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action,  suit or proceeding  it being  understood  and intended,  and being
expressly    covenanted   by   each    Certificateholder    with   every   other
Certificateholder  and the Trustee,  that no one or more Holders of Certificates
of any  Class  shall  have any  right in any  manner  whatever  by virtue of any
provision of this  Agreement to affect,  disturb or prejudice  the rights of the
Holders of any other of such  Certificates  of such Class or any other Class, or
to  obtain or seek to  obtain  priority  over or  preference  to any other  such
Holder,  or to  enforce  any right  under this  Agreement,  except in the manner
herein provided and for the common benefit of  Certificateholders  of such Class
or all Classes,  as the case may be. For the protection  and  enforcement of the
provisions  of this  Section  11.03,  each and every  Certificateholder  and the
Trustee  shall be entitled  to such  relief as can be given  either at law or in
equity.

Section 11.04. Governing Law.

        This agreement and the  Certificates  shall be governed by and construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties  hereunder  shall be determined  in accordance  with
such laws.

                                      121
<PAGE>

Section 11.05. Notices.

        All  demands  and  notices  hereunder  shall be in writing  and shall be
deemed to have been duly given if sent by facsimile or if  personally  delivered
at or mailed by  registered  mail,  postage  prepaid  (except for notices to the
Trustee  which shall be deemed to have been duly given only when  received),  to
the appropriate address for each recipient listed in the table below or, in each
case,  such  other  address  as may  hereafter  be  furnished  in writing to the
Servicer, the Trustee and the Company, as applicable:

Recipient                           Address
Company                             8400 Normandale Lake Boulevard
                                    Suite 250, Minneapolis, Minnesota 55437,
                                    Attention: President
Servicer                            100 Witmer Road
                                    Horsham, Pennsylvania 19044,
                                    Attention: President
Trustee                             1 Bank One Plaza
                                    Suite IL1-0481
                                    Chicago, Illinois 60670-0481
Standard & Poor's                   55 Water Street
                                    New York, New York 10041
Moody's                             99 Church Street
                                    New York, New York 10007
Hedge Counterparty                  383 Madison Avenue
                                    Suite 2700
                                    New York, New York 10179

Any notice  required or permitted to be mailed to a  Certificateholder  shall be
given by first class  mail,  postage  prepaid,  at the address of such holder as
shown  in the  Certificate  Register.  Any  notice  so  mailed  within  the time
prescribed in this Agreement  shall be  conclusively  presumed to have been duly
given, whether or not the Certificateholder receives such notice.

Section 11.06. Required Notices to Rating Agency and Subservicer.

        The Company,  the Servicer or the Trustee,  as applicable,  shall notify
each Rating Agency and the Subservicer at such time as it is otherwise  required
pursuant  to this  Agreement  to give  notice of the  occurrence  of, any of the
events  described in clause (a),  (b),  (c),  (d), (g) or (h) below or provide a
copy to each Rating  Agency at such time as  otherwise  required to be delivered
pursuant to this Agreement of any of the statements described in clauses (e) and
(f) below:

(a) a material change or amendment to this Agreement,

(b) the occurrence of an Event of Default,

                                      122
<PAGE>

(c) the  termination  or  appointment  of a  successor  Servicer or Trustee or a
change in the majority ownership of the Trustee,

(d) the filing of any claim under the Servicer's  blanket  fidelity bond and the
errors  and  omissions   insurance  policy  required  by  Section  3.12  or  the
cancellation or modification of coverage under any such instrument,

(e) the  statement  required  to be  delivered  to the  Holders of each Class of
Certificates  pursuant to Section 4.03, which statements shall be mailed to each
Rating Agency via first class mail,

(f) the statements required to be delivered pursuant to Sections 3.18 and 3.19,

(g) the  occurrence  of any monthly  cash flow  shortfall  to the Holders of any
Class of  Certificates  resulting  from the  failure by the  Servicer to make an
Advance pursuant to Section 4.04, and

(h) the occurrence of the Final Distribution Date.

provided,  however,  that with respect to notice of the occurrence of the events
described in clauses (d) or (g) above, the Servicer shall provide prompt written
notice to each Rating Agency and the  Subservicer of any such event known to the
Servicer.

Section 11.07. Severability of Provisions.

        If any one or more of the covenants, agreements,  provisions or terms of
this  Agreement  shall be for any  reason  whatsoever  held  invalid,  then such
covenants,  agreements,  provisions or terms shall be deemed  severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or  enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

Section 11.08. Supplemental Provisions for Resecuritization.

        This  Agreement  may be  supplemented  by  means  of the  addition  of a
separate  Article  hereto  (a   "Supplemental   Article")  for  the  purpose  of
resecuritizing  any of the Certificates  issued  hereunder,  under the following
circumstances.  With  respect  to any Class or Classes  of  Certificates  issued
hereunder,  or any portion of any such Class,  as to which the Company or any of
its  Affiliates  (or  any  designee  thereof)  is  the  registered  Holder  (the
"Resecuritized  Certificates"),  the  Company  may  deposit  such  Resecuritized
Certificates into a new REMIC, grantor trust, FASIT or custodial  arrangement (a
"Restructuring  Vehicle") to be held by the Trustee  pursuant to a  Supplemental
Article.  The instrument adopting such Supplemental Article shall be executed by
the Company, the Servicer and the Trustee;  provided,  that neither the Servicer
nor the  Trustee  shall  withhold  their  consent  thereto  if their  respective
interests would not be materially adversely affected thereby. To the extent that
the terms of the Supplemental Article do not in any way affect any provisions of
this Agreement as to any of the  Certificates  initially issued  hereunder,  the
adoption of the Supplemental Article shall not constitute an "amendment" of this
Agreement.

        Each  Supplemental  Article  shall set forth  all  necessary  provisions
relating to the holding of the  Resecuritized  Certificates by the Trustee,  the
establishment of the  Restructuring  Vehicle,  the issuing of various classes of
new certificates by the  Restructuring  Vehicle and the distributions to be made
thereon,  and any  other  provisions  necessary  for the  purposes  thereof.  In
connection  with each  Supplemental  Article,  the Company  shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the  Restructuring  Vehicle
will  qualify as a REMIC,  grantor  trust,  FASIT or other entity not subject to

                                      123
<PAGE>

taxation  for  federal  income  tax  purposes  and  (ii)  the  adoption  of  the
Supplemental Article will not endanger the status of any REMIC created hereunder
as a REMIC or (subject to Section  10.01(f))  result in the  imposition of a tax
upon the Trust Fund or any REMIC created hereunder (including but not limited to
the tax on prohibited  transactions as defined in Section 860F(a)(2) of the Code
and the tax on  contributions  to a REMIC as set forth in Section 860G(d) of the
Code).

Section 11.09. Allocation of Voting Rights.

        98% of all of the Voting  Rights  shall be  allocated  among  Holders of
Certificates,  other than the Class X and Class R Certificates, in proportion to
the outstanding Certificate Principal Balances of their respective Certificates;
0.5% of all Voting Rights shall be allocated among the Holders of the Class X-II
Certificates,  in accordance with their respective Percentage Interests, 0.5% of
all Voting  Rights  shall be  allocated  among the  Holders  of the Class  X-III
Certificates, in accordance with their respective Percentage Interests and 1% of
all  Voting  Rights  shall  be  allocated  among  the  Holders  of the  Class  R
Certificates, in accordance with their respective Percentage Interests.

Section 11.10. Non-Petition.

        The Company,  the Seller, the Servicer and the Trustee, by entering into
this Agreement, and each Certificateholder,  by accepting a Certificate,  hereby
covenant  and agree that they will not at any time  institute  against the Trust
Fund or join in any  institution  against  the  Trust  Fund of,  any  bankruptcy
proceedings  under any United States federal or state  bankruptcy or similar law
in  connection  with any  obligation  with respect to the  Certificates  or this
Agreement.

                                      124
<PAGE>

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

                                            RESIDENTIAL ASSET MORTGAGE
                                               PRODUCTS, INC.

                                            By:
                                            Name:
                                            Title:

                                            GMAC MORTGAGE CORPORATION

                                            By:
                                            Name:
                                           Title:

                                            BANK ONE, NATIONAL ASSOCIATION,
                                               as Trustee

                                            By:
                                            Name:
                                            Title:

                                      125
<PAGE>

STATE OF                                      )
                                              ) ss.:
COUNTY OF                                     )

        On the _____ day of __________,  200__ before me, a notary public in and
for  said   State,   personally   appeared   __________,   known  to  me  to  be
_______________  of  Residential  Asset  Mortgage  Products,  Inc.,  one  of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said  corporation,  and  acknowledged  to me
that such corporation executed the within instrument.

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

                                                   Notary Public

[Notarial Seal]

<PAGE>

STATE OF                                      )
                                              ) ss.:
COUNTY OF                                     )

        On the ___ day of  __________,  200__ before me, a notary  public in and
for  said  State,  personally  appeared  _______________,  known  to  me  to  be
________________  of GMAC Mortgage  Corporation,  one of the  corporations  that
executed  the  within  instrument,  and also  known to me to be the  person  who
executed  it on behalf of said  corporation,  and  acknowledged  to me that such
corporation executed the within instrument.

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

                                                   Notary Public

[Notarial Seal]

<PAGE>

STATE OF        ILLINOIS                      )
                                              ) ss.:
COUNTY OF          COOK                       )

        On the ___ day of  __________,  200__ before me, a notary  public in and
for  said  State,  personally  appeared  ______________,  known to me to be a[n]
______________   of  Bank  One,   National   Association,   a  national  banking
association, that executed the within instrument, and also known to me to be the
person who executed it on behalf of said banking  corporation,  and acknowledged
to me that such banking corporation executed the within instrument.

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

                                                   Notary Public

[Notarial Seal]

<PAGE>

                                      APPENDIX I

        Class Y  Principal  Reduction  Amounts:  For any  Distribution  Date the
amounts by which the principal  balances of the Class Y-1,  Class Y-2, Class Y-3
and Class Y-4  Certificates  respectively  will be reduced on such  distribution
date by the  allocation of Realized  Losses and the  distribution  of principal,
determined as follows:

        First for each of Group I,  Group II,  Group III and Group IV  determine
the  weighted  average  pass-through  rate for that Group for  distributions  of
interest that will be made on the next succeeding  Distribution Date (the "Group
Interest  Rate").  The  Principal  Reduction  Amount  for  each  of the  Class Y
Certificates will be determined  pursuant to the "Generic solution for the Class
Y Principal  Reduction  Amounts"  set forth below (the  "Generic  Solution")  by
making  identifications  among the actual  Groups and their  related Class Y and
Class Z  Certificates  and weighted  average  pass-through  rates and the Groups
named in the Generic Solution and their related Class Y and Class Z Certificates
as follows:

               A. Determine which Group has the lowest Group Interest Rate. That
Group will be identified  with Group AA and the Class Y and Class Z Certificates
related to that Group will be  respectively  identified  with the Class Y-aa and
Class  Z-aa  Certificates.  The  Group  Interest  Rate  for that  Group  will be
identified  with J%. If two or more Groups have the lowest Group  Interest  Rate
pick one for this  purpose,  subject to the  restriction  that each Group may be
picked only once in the course of any such  selections  pursuant to paragraphs A
through D or this definition.

               B.  Determine  which Group has the second  lowest Group  Interest
Rate.  That Group will be  identified  with Group BB and the Class Y and Class Z
Certificates  related  to that Group will be  respectively  identified  with the
Class Y-bb and Class Z-bb  Certificates.  The Group Interest Rate for that Group
will be  identified  with K%. If two or more Groups have the second lowest Group
Interest Rate pick one for this purpose,  subject to the  restriction  that each
Group may be picked only once in the course of any such  selections  pursuant to
paragraphs A through D or this definition.

               C.  Determine  which Group has the third  lowest  Group  Interest
Rate.  That Group will be  identified  with Group CC and the Class Y and Class Z
Certificates  related  to that Group will be  respectively  identified  with the
Class Y-cc and Class Z-cc  Certificates.  The Group Interest Rate for that Group
will be  identified  with L%. If two or more Groups have the third  lowest Group
Interest Rate pick one for this purpose,  subject to the  restriction  that each
Group may be picked only once in the course of any such  selections  pursuant to
paragraphs A through D or this definition.

               D.  Determine  which Group has the fourth  lowest Group  Interest
Rate.  That Group will be  identified  with Group DD and the Class Y and Class Z
Certificates  related  to that Group will be  respectively  identified  with the
Class Y-dd and Class Z-dd  Certificates.  The Group Interest Rate for that Group
will be  identified  with M%. If two or more Groups have the fourth lowest Group
Interest Rate pick one for this purpose,  subject to the  restriction  that each
Group may be picked only once in the course of any such  selections  pursuant to
paragraphs A through D or this definition.

        Second,  apply the Generic  Solution  set forth below to  determine  the
Class  Y  Principal  Reduction  Amounts  for the  Distribution  Date  using  the
identifications made above.

        Class Y Principal  Reduction  Amounts:  For any  Distribution  Date, the
amounts by which the Class  Principal  Balances of the Class  Y-aa,  Class Y-bb,

<PAGE>

Class Y-cc and Class Y-dd Regular  Interests,  respectively,  will be reduced on
such Distribution Date by the allocation of Realized Losses and the distribution
of principal, determined as follows:

        For purposes of the succeeding formulas the following symbols shall have
        the meanings set forth below:

PAAB    = the Subordinate Component Balance for Group AA after the allocation of
        Realized  Losses and  distributions  of principal  on such  Distribution
        Date.

PBBB    = the Subordinate Component Balance for Group BB after the allocation of
        Realized  Losses and  distributions  of principal  on such  Distribution
        Date.

PCCB    = the Subordinate Component Balance for Group CC after the allocation of
        Realized  Losses and  distributions  of principal  on such  Distribution
        Date.

PDDB    = the Subordinate Component Balance for Group DD after the allocation of
        Realized  Losses and  distributions  of principal  on such  Distribution
        Date.

R   = the Remittance Rate on the  Subordinate  Certificates = (J%PAAB + K%PBBB +
    L%PCCB + M%PDDB)/( PAAB + PBBB + PCCB + PDDB)

R1   = the weighted  average of the  Remittance  Rates on the Group AA-L,  Group
     BB-L and Group CC-L  Regular  Interests  (other than any Class P-L or Class
     X-L Regular Interests or portions thereof related to such Groups) = (J%(Pjj
     -  (DELTA)Pjj)  + K%(Pkk -  (DELTA)Pkk)  +  M%(Pll  -  (DELTA)Pll))/(Pjj  -
     (DELTA)Pjj + Pkk - (DELTA)Pkk + Pll - (DELTA)Pll)

R2   = the weighted  average of the  Remittance  Rates on the Group BB-L,  Group
     CC-L and Group DD-L  Regular  Interests  (other than any Class X-L or Class
     P-L Regular Interests or portions thereof related to such Groups) = (K%(Pkk
     -  (DELTA)Pkk)  + L%(Pll -  (DELTA)Pll)  +  M%(Pmm  -  (DELTA)Pmm))/(Pkk  -
     (DELTA)Pkk + Pll - (DELTA)Pll + Pmm - (DELTA)Pmm)

R3   = the weighted  average of the Remittance Rates on the Group AA-L and Group
     BB-L  Regular  Interests  (other  than any Class  P-L or Class X-L  Regular
     Interests  or  portions  thereof  related  to  such  Groups)  =  (J%(Pjj  -
     (DELTA)Pjj) + K%(Pkk - (DELTA)Pkk))/(Pjj - (DELTA)Pjj + Pkk - (DELTA)Pkk)

R4   = the weighted  average of the Remittance Rates on the Group CC-L and Group
     DD-L  Regular  Interests  (other  than any Class  X-L or Class P-L  Regular
     Interests  or  portions  thereof  related  to  such  Groups)  =  (L%(Pll  -
     (DELTA)Pll) + M%(Pmm - (DELTA)Pmm))/(Pll - (DELTA)Pll + Pmm - (DELTA)Pmm)
<PAGE>

r1 = the  weighted  average  of the  Class  Y-aa,  Class  Y-bb  and  Class  Y-cc
   Remittance Rates = (J% Yjj + K% Ykk + L% Yll)/(Yjj + Ykk + Yll)

r2      = the  weighted  average  of the Class  Y-bb,  Class Y-cc and Class Y-dd
        Remittance Rates = (K% Ykk + L% Yll + M% Ymm)/(Ykk + Yll + Ymm)

r3 =    the weighted average of the Class Y-aa and Class Y-bb Remittance Rates
   =     (J% Yjj + K% Ykk)/(Yjj + Ykk)

r4 =    the weighted average of the Class Y-cc and Class Y-dd Remittance Rates
   =    (L% Yll + M% Ymm)/(Yll + Ymm)

Yjj     = the  principal  balance  of the Class  Y-aa  Regular  Interests  after
        distributions on the prior Distribution Date.

Ykk     = the  principal  balance  of the Class  Y-bb  Regular  Interests  after
        distributions on the prior Distribution Date.

Yll     = the  principal  balance  of the Class  Y-cc  Regular  Interests  after
        distributions on the prior Distribution Date.

Ymm     = the  principal  balance  of the Class  Y-dd  Regular  Interests  after
        distributions on the prior Distribution Date.

(DELTA)Yjj =   the Class Y-aa Principal Reduction Amount.

(DELTA)Ykk =   the Class Y-bb Principal Reduction Amount.

(DELTA)Yll =   the Class Y-cc Principal Reduction Amount.

(DELTA)Ymm =   the Class Y-dd Principal Reduction Amount.

Pjj     = the  aggregate  principal  balance  of the Class  Y-aa and Class  Z-aa
        Regular Interests after  distributions on the prior  Distribution  Date,
        which is equal to the aggregate  principal balance of the Group AA Loans
        reduced by the portion,  if any, of the Principal  Balance  derived from
        Group  AA  Loans  of  any  Class  P-M  Regular  Interest  or  Class  R-I
        Certificate.

Pkk     = the  aggregate  principal  balance  of the Class  Y-bb and Class  Z-bb
        Regular Interests after  distributions on the prior  Distribution  Date,
        which is equal to the aggregate  principal balance of the Group BB Loans
        reduced by the portion,  if any, of the Principal  Balance  derived from
        Group  BB  Loans  of  any  Class  P-M  Regular  Interest  or  Class  R-I
        Certificate.

Pll     = the  aggregate  principal  balance  of the Class  Y-cc and Class  Z-cc
        Regular Interests after  distributions on the prior  Distribution  Date,
        which is equal to the aggregate  principal balance of the Group CC Loans
        reduced by the portion,  if any, of the Principal  Balance  derived from
        Group  CC  Loans  of  any  Class  P-M  Regular  Interest  or  Class  R-I
        Certificate.

Pmm     = the  aggregate  principal  balance  of the Class  Y-dd and Class  Z-dd
        Regular Interests after  distributions on the prior  Distribution  Date,
        which is equal to the aggregate  principal balance of the Group DD Loans
        reduced by the portion,  if any, of the Principal  Balance  derived from
        Group  DD  Loans  of  any  Class  P-M  Regular  Interest  or  Class  R-I
        Certificate.

(DELTA)Pjj = the aggregate  principal  reduction  resulting on such Distribution
        Date on the  Group  AA  Loans as a  result  of  principal  distributions
        (exclusive  of any amounts  distributed  pursuant  to clauses  (d)(i) or
        (d)(ii) of the definition of REMIC I Distribution Amount) to be made and
        realized losses to be allocated on such  Distribution  Date,  reduced by
        the  portion,  if any,  of such  reduction  allocable  to any  Class P-M
        Regular  Interest  or  Class  R-I  Certificate,  which  is  equal to the
        aggregate of the Class Y-aa and Class Z-aa Principal Reduction Amounts.
<PAGE>

(DELTA)Pkk= the aggregate  principal  reduction  resulting on such  Distribution
        Date on the  Group  BB  Loans as a  result  of  principal  distributions
        (exclusive  of any amounts  distributed  pursuant  to clauses  (d)(i) or
        (d)(ii) of the definition of REMIC I Distribution Amount) to be made and
        realized losses to be allocated on such  Distribution  Date,  reduced by
        the  portion,  if any,  of such  reduction  allocable  to any  Class P-M
        Regular  Interest  or  Class  R-I  Certificate,  which  is  equal to the
        aggregate of the Class Y-bb and Class Z-bb Principal Reduction Amounts.

(DELTA)Pll = the aggregate  principal  reduction  resulting on such Distribution
        Date on the  Group  CC  Loans as a  result  of  principal  distributions
        (exclusive  of any amounts  distributed  pursuant  to clauses  (d)(i) or
        (d)(ii) of the definition of REMIC I Distribution Amount) to be made and
        realized losses to be allocated on such  Distribution  Date,  reduced by
        the  portion,  if any,  of such  reduction  allocable  to any  Class P-M
        Regular  Interest  or  Class  R-I  Certificate,  which  is  equal to the
        aggregate of the Class Y-cc and Class Z-cc Principal Reduction Amounts.

(DELTA)Pmm = the aggregate  principal  reduction  resulting on such Distribution
        Date on the  Group  DD  Loans as a  result  of  principal  distributions
        (exclusive  of any amounts  distributed  pursuant  to clauses  (d)(i) or
        (d)(ii) of the definition of REMIC I Distribution Amount) to be made and
        realized losses to be allocated on such  Distribution  Date,  reduced by
        the  portion,  if any,  of such  reduction  allocable  to any  Class P-M
        Regular  Interest  or  Class  R-I  Certificate,  which  is  equal to the
        aggregate of the Class Y-dd and Class Z-dd Principal Reduction Amounts.

(alpha) = .0005

(gamma)1= (R - R1)/(M% - R). If R=>L%,  (gamma)1 is a non-negative number unless
        its denominator is zero, in which event it is undefined.

(gamma)2 =     (R - J%)/(R2 - R).  If R
        greater than K%, (gamma)2 is a non-negative number.

(gamma)3= (R - R3)/(R4 - R). If  K%<=R<=L%,  (gamma)3 is a  non-negative  number
        unless its denominator is zero, in which case it is undefined.

If      (gamma)1 is undefined,  (DELTA)Yjj = Yjj, (DELTA)Ykk = Ykk, (DELTA)Yll =
        Yll, and (DELTA)Ymm = (Ymm/Pmm)(DELTA)Pmm.

If      (gamma)2 is zero,  (DELTA)Yjj =  (Yjj/Pjj)(DELTA)Pjj,  (DELTA)Ykk = Ykk,
        (DELTA)Yll = Yll and (DELTA)Ymm = Ymm.

If      K%<=R<=L% and (gamma)3 is undefined, (DELTA)Yjj = Yjj, (DELTA)Ykk = Ykk,
        (DELTA)Ymm = Ymm, and (DELTA)Yll = (Yll/Pll)(DELTA)Pll.

If      K%<=R<=L%  and  (gamma)3  is  zero,  (DELTA)Ykk  =  (Ykk/Pkk)(DELTA)Pkk,
        (DELTA)Yjj = Yjj, (DELTA)Yll = Yll and (DELTA)Ymm = Ymm.

In      the  remaining  situations,   (DELTA)Yjj,   (DELTA)Ykk,  (DELTA)Yll  and
        (DELTA)Ymm shall be defined as follows:

I. If R=>L%, make the following additional definitions:

(delta)Yjj = 0, if R1 less than r1; (R1- r1)( Yjj + Ykk +  Yll)Yjj/((R1 - J%)Yjj
     + (R1 - K%)Ykk),  if R1= greater than r1 and R1= greater than K %; and (R1-
     r1)( Yjj + Ykk + Yll)/(R1 - J%), if R1= greater than r1 and R1 greater than
     K%;

(delta)Ykk = 0, if R1 less than r1 and R1=greater than K%; (R1- r1)( Yjj + Ykk +
     Yll)Ykk/((R1  - K%)Ykk + (R1 -  L%)Yll),  if R1 less than r1 and R1 greater
     than K%; (R1- r1)( Yjj + Ykk +  Yll)Ykk/((R1  - J%)Yjj + (R1 - K%)Ykk),  if
     R1=greater  than r1 and R1= greater than K%; and 0, if  R1=greater  than r1
     and R1 greater than K%; and

<PAGE>

(delta)Yll  = (R1-  r1)(  Yjj + Ykk +  Yll)/(R1  - L%),  if  R1less  than r1 and
     R1=greater  thanK%;  (R1-  r1)( Yjj + Ykk +  Yll)Yll/((R1  - K%)Ykk + (R1 -
     L%)Yll),  if R less than r1 and R1 greater  than K%; and 0, if R1=  greater
     than r1.

(delta)Y1, (delta)Ykk,  and (delta)Yll are numbers between Yjj and 0, Ykk and 0,
        and Yll and 0, respectively, such that (J%(Yjj - (delta)Yjj) + K%( Ykk.-
        (delta)Ykk)  +  L%(  Yll.-   (delta)Yll))/(Yjj   -  (delta)Yjj  +  Ykk.-
        (delta)Ykk + Yll.- (delta)Yll) = R1.

Y5 =    Yjj - (delta)Yjj + Ykk.- (delta)Ykk + Yll.- (delta)Yll

P5 =    Pjj + Pkk + Pll.

(DELTA)P5 = (DELTA)Pjj + (DELTA)Pkk + (DELTA)Pll.

AY5 =   AYjj - (delta)Yjj + AYkk.- (delta)Ykk + AYll.- (delta)Yll

1.  If Ymm - (alpha)(Pmm - (DELTA)Pmm)  => 0, Y5-  (alpha)(P5 - (DELTA)P5) => 0,
    and  (gamma)1(P5  -  (DELTA)P5)  < (Pmm -  (DELTA)Pmm),  (DELTA)Ymm  = Ymm -
    (alpha)(gamma)1(P5   -  (DELTA)P5)   and  (DELTA)Y5  =  Y5  -  (alpha)(P5  -
    (DELTA)P5).

2.  If Ymm - (alpha)(Pmm - (DELTA)Pmm)  => 0, Y5 - (alpha)(P5 - (DELTA)P5) => 0,
    and  (gamma)1(P5  -  (DELTA)P5)  => (Pmm -  (DELTA)Pmm),  (DELTA)Ymm = Ymm -
    (alpha)(Pmm -  (DELTA)Pmm)  and  (DELTA)Y5 = Y5 -  ((alpha)/(gamma)1)(Pmm  -
    (DELTA)Pmm).

3.   If  Ymm -  (alpha)(Pmm  -  (DELTA)Pmm)  less  than  0,  Y5 -  (alpha)(P5  -
     (DELTA)P5) => 0, and Y5 - (alpha)(P5 - (DELTA)P5)  => Y5 -  (Ymm/(gamma)1),
     (DELTA)Ymm = Ymm -  (alpha)(gamma)1(P5  - (DELTA)P5)  and  (DELTA)Y5 = Y5 -
     (alpha)(P5 - (DELTA)P5).

4.   If Ymm - (alpha)(Pmm - (DELTA)Pmm) less than 0, Y5 -  (Ymm/(gamma)1)  => 0,
     and Y5 - (alpha)(P5 - (DELTA)P5) <= Y5 - (Ymm/(gamma)1), (DELTA)Ymm = 0 and
     (DELTA)Y5 = Y5 - (Ymm/(gamma)1).

5.  If Y5 -  (alpha)(P5 -  (DELTA)P5)  < 0, Y5 -  (Ymm/(gamma)1)  < 0, and Ymm -
    (alpha)(Pmm  -  (DELTA)Pmm)  <=  Ymm  -  ((gamma)1Y5),  (DELTA)Ymm  =  Ymm -
    ((gamma)1Y5) and (DELTA)Y5 = 0.

6.   If  Y5 -  (alpha)(P5  -  (DELTA)P5)  less  than  0,  Ymm  -  (alpha)(Pmm  -
     (DELTA)Pmm)   =>  0,  and  Ymm  -  (alpha)(Pmm  -  (DELTA)Pmm)   =>  Ymm  -
     ((gamma)1Y5),  (DELTA)Ymm = Ymm - (alpha)(Pmm - (DELTA)Pmm) and (DELTA)Y5 =
     Y5 - ((alpha)/(gamma)1)(Pmm - (DELTA)Pmm).

AYjj    = (delta)Yjj + [(Yjj -  (delta)Yjj)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk
        + Yll - (delta)Yll)] AY5

AYkk    = (delta)Ykk + [(Ykk -  (delta)Ykk)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk
        + Yll - (delta)Yll)]AY5

AYll    = (delta)Yll + [(Yll -  (delta)Yll)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk
        + Yll - (delta)Yll)]AY5

        The purpose of the foregoing  definitional  provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal  Distribution  Amounts is to accomplish  the following  goals in the
following order of priority:

1.   Making the ratio of Ymm to Y5 equal to (gamma)1 after taking account of the
     allocation  Realized Losses and the distributions that will be made through

<PAGE>

     end of the Distribution  Date to which such provisions  relate and assuring
     that the Principal Reduction Amount for each of the Class Y-aa, Class Y-bb,
     Class Y-cc,  Class Y-dd,  Class Z-aa, Class Z-bb, Class Z-cc and Class Z-dd
     Regular  Interests is greater  than or equal to zero for such  Distribution
     Date;

2.   Making the Class Y-aa Principal Balance less than or equal to 0.0005 of the
     sum of the Class Y-aa and Class  Z-aa  Principal  Balances,  the Class Y-bb
     Principal Balance less than or equal to 0.0005 of the sum of the Class Y-bb
     and Class Z-bb Principal  Balances,  the Class Y-bb Principal  Balance less
     than or  equal to  0.0005  of the sum of the  Class  Y-cc  and  Class  Z-cc
     Principal  Balances and the Class Y-dd Principal Balance less than or equal
     to 0.0005 of the sum of the Class Y-dd and Class Z-dd Principal Balances in
     each case  after  giving  effect to  allocations  of  Realized  Losses  and
     distributions to be made through the end of the Distribution  Date to which
     such provisions relate; and

3.   Making  the larger of (a) the  fraction  whose  numerator  is Ymm and whose
     denominator is the sum of Ymm and Class Z-dd Principal  Balance and (b) the
     fraction whose numerator is Y5 and whose  denominator is the sum of Y5, the
     Class Z-aa  Principal  Balance,  the Class Z-bb  Principal  Balance and the
     Class Z-cc Principal Balance as large as possible while remaining less than
     or equal to 0.0005.

        In the event of a failure of the foregoing  portion of the definition of
Class Y Principal  Reduction  Amount to accomplish  both of goals 1 and 2 above,
the amounts  thereof should be adjusted to so as to accomplish such goals within
the requirement  that each Class Y Principal  Reduction Amount must be less than
or  equal to the sum of (a) the  principal  portion  of  Realized  Losses  to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if  any)  and  (b) the  remainder  of the  portion  of the  REMIC  I  Available
Distribution  Amount derived from the related Group after  reduction  thereof by
the  distributions to be made on such Distribution Date (i) to the related Class
P-M Regular  Interest (if any), (ii) to the related Class X-M Regular  Interests
and (iii) in  respect of  interest  on the  related  Class Y and Class Z Regular
Interests,  or,  if  both of such  goals  cannot  be  accomplished  within  such
requirement,  such adjustment as is necessary shall be made to accomplish goal 1
within such  requirement.  In the event of any conflict  among the provisions of
the definition of the Class Y Principal  Reduction Amounts,  such conflict shall
be  resolved  on the basis of the goals and  their  priorities  set forth  above
within the  requirement  set forth in the  preceding  sentence.  If the  formula
allocation of AY5 among AYjj,  AYkk and AYll cannot be achieved  because  either
AYjj as so defined is greater than APjj, AYkk as so defined is greater than APkk
or AYll as so defined is greater than APll, such an allocation  shall be made as
close as possible to the formula  allocation  within the requirement that AYjj <
APjj, AYkk < APkk and AYll < APll.

II. If R<=K%, make the following additional definitions:

(delta)Ykk = 0, if R2less than r2; (R2- r2)( Ykk + Yll + Ymm)Ykk/((R2 - K%)Ykk +
     (R2 - L%)Yll), if R2=greater than r2 and R2= greater than L%; and (R2- r2)(
     Ykk + Yll + Ymm)/(R2 - K%), if R2= greater than r2 and R2 less than L%;

(delta)Yll = 0, if R2 less than r2 and R2= greater  than L%; (R2- r2)( Ykk + Yll
     +  Ymm)Yll/((R2  - L%)Yll + (R2 -  M%)Ymm),  if R2less  thanr2  and R2 less
     thanL%;  (R2- r2)( Ykk + Yll +  Ymm)Yll/((R2  - K%)Ykk + (R2 - L%)Yll),  if
     R2=greater thab r2 and R2= greater thanL%; and 0, if R2=greater than r2 and
     R2 less than L%; and

(delta)Ymm = (R2-  r2)(  Ykk + Yll +  Ymm)/(R2  - M%),  if R2  less  than r2 and
     R2=greater  than L%;  (R2- r2)( Ykk + Yll +  Ymm)Ymm/((R2  - L%)Yll + (R2 -
     M%)Ymm), if R2 less than r2 and R2 less than L%; and 0, if R2= greater than
     r2.

<PAGE>

(delta)Ykk, (delta)Yll, and (delta)Ymm are numbers between Ykk and 0, Yll and 0,
        and Ymm and 0, respectively, such that (K%(Ykk - (delta)Ykk) + L%( Yll.-
        (delta)Yll)  +  M%(  Ymm.-   (delta)Ymm))/(Ykk   -  (delta)Ykk  +  Yll.-
        (delta)Yll + Ymm.- (delta)Ymm) = R2.

Y6 =    Ykk - (delta)Ykk + Yll.- (delta)Yll + Ymm.- (delta)Ymm

P6 =    Pkk + Pll + Pmm.

(DELTA)P6 = (DELTA)Pkk + (DELTA)Pll + (DELTA)Pmm.

AY6 =   AYkk - (delta)Ykk + AYll.- (delta)Yll + AYmm.- (delta)Ymm

1.  If Y6 - (alpha)(P6 - (DELTA)P6) => 0, Yjj-  (alpha)(Pjj - (DELTA)Pjj)  => 0,
    and  (gamma)2(Pjj  -  (DELTA)Pjj)  <  (P6  -  (DELTA)P6),  (DELTA)Y6  = Y6 -
    (alpha)(gamma)2(Pjj  -  (DELTA)Pjj)  and  (DELTA)Yjj = Yjj -  (alpha)(Pjj  -
    (DELTA)Pjj).

2.  If Y6 - (alpha)(P6 - (DELTA)P6) => 0, Yjj - (alpha)(Pjj - (DELTA)Pjj)  => 0,
    and  (gamma)2(Pjj  -  (DELTA)Pjj)  =>  (P6 -  (DELTA)P6),  (DELTA)Y6  = Y6 -
    (alpha)(P6  - (DELTA)P6)  and  (DELTA)Yjj  = Yjj -  ((alpha)/(gamma)2)(P6  -
    (DELTA)P6).

3.  If Y6 - (alpha)(P6 - (DELTA)P6) < 0, Yjj - (alpha)(Pjj  - (DELTA)Pjj)  => 0,
    and Yjj - (alpha)(Pjj - (DELTA)Pjj) => Yjj - (Y6/(gamma)2), (DELTA)Y6 = Y6 -
    (alpha)(gamma)2(Pjj  -  (DELTA)Pjj)  and  (DELTA)Yjj = Yjj -  (alpha)(Pjj  -
    (DELTA)Pjj).

4.  If Y6 - (alpha)(P6 -  (DELTA)P6)  < 0, Yjj -  (Y6/(gamma)2)  => 0, and Yjj -
    (alpha)(Pjj  -  (DELTA)Pjj)  <=  Yjj  -  (Y6/(gamma)2),  (DELTA)Y6  = 0  and
    (DELTA)Yjj = Yjj - (Y6/(gamma)2).

5.  If Yjj - (alpha)(Pjj -  (DELTA)Pjj) < 0, Yjj -  (Y6/(gamma)2)  < 0, and Y6 -
    (alpha)(P6  -  (DELTA)P6)   <=  Y6  -   ((gamma)2Yjj),   (DELTA)Y6  =  Y6  -
    ((gamma)2Yjj) and (DELTA)Yjj = 0.

6.  If Yjj -  (alpha)(Pjj  - (DELTA)Pjj) < 0, Y6 - (alpha)(P6 - (DELTA)P6) => 0,
    and Y6 -  (alpha)(P6 - (DELTA)P6)  => Y6 -  ((gamma)2Yjj),  (DELTA)Y6 = Y6 -
    (alpha)(P6  - (DELTA)P6)  and  (DELTA)Yjj  = Yjj -  ((alpha)/(gamma)2)(P6  -
    (DELTA)P6).

AYkk    = (delta)Ykk + [(Ykk -  (delta)Ykk)/(Ykk - (delta)Ykk + Yll - (delta)Yll
        + Ymm - (delta)Ymm)] AY6

AYll    = (delta)Yll + [(Yll -  (delta)Yll)/(Ykk - (delta)Ykk + Yll - (delta)Yll
        + Ymm - (delta)Ymm)] AY6

AYmm    = (delta)Ymm + [(Ymm -  (delta)Ymm)/(Ykk - (delta)Ykk + Yll - (delta)Yll
        + Ymm - (delta)Ymm)]A Y6

        The purpose of the foregoing  definitional  provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal  Distribution  Amounts is to accomplish  the following  goals in the
following order of priority:

1.   Making the ratio of Y6 to Yjj equal to (gamma)2 after taking account of the
     allocation  Realized Losses and the distributions that will be made through
     end of the Distribution  Date to which such provisions  relate and assuring
     that the Principal Reduction Amount for each of the Class Y-aa, Class Y-bb,
     Class Y-cc,  Class Y-dd,  Class Z-aa, Class Z-bb, Class Z-cc and Class Z-dd
     Regular  Interests is greater  than or equal to zero for such  Distribution
     Date;
<PAGE>

2.   Making the Class Y-aa Principal Balance less than or equal to 0.0005 of the
     sum of the Class Y-aa and Class  Z-aa  Principal  Balances,  the Class Y-bb
     Principal Balance less than or equal to 0.0005 of the sum of the Class Y-bb
     and Class Z-bb Principal  Balances,  the Class Y-bb Principal  Balance less
     than or  equal to  0.0005  of the sum of the  Class  Y-cc  and  Class  Z-cc
     Principal  Balances and the Class Y-dd Principal Balance less than or equal
     to 0.0005 of the sum of the Class Y-dd and Class Z-dd Principal Balances in
     each case  after  giving  effect to  allocations  of  Realized  Losses  and
     distributions to be made through the end of the Distribution  Date to which
     such provisions relate; and

3.   Making  the larger of (a) the  fraction  whose  numerator  is Yjj and whose
     denominator is the sum of Yjj and Class Z-aa Principal  Balance and (b) the
     fraction whose numerator is Y6 and whose  denominator is the sum of Y6, the
     Class Z-bb  Principal  Balance,  the Class Z-cc  Principal  Balance and the
     Class Z-dd Principal Balance as large as possible while remaining less than
     or equal to 0.0005.

        In the event of a failure of the foregoing  portion of the definition of
Class Y Principal  Reduction  Amount to accomplish  both of goals 1 and 2 above,
the amounts  thereof should be adjusted to so as to accomplish such goals within
the requirement  that each Class Y Principal  Reduction Amount must be less than
or  equal to the sum of (a) the  principal  portion  of  Realized  Losses  to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if  any)  and  (b) the  remainder  of the  portion  of the  REMIC  I  Available
Distribution  Amount derived from the related Group after  reduction  thereof by
the  distributions to be made on such Distribution Date (i) to the related Class
P-M Regular  Interest (if any), (ii) to the related Class X-M Regular  Interests
and (iii) in  respect of  interest  on the  related  Class Y and Class Z Regular
Interests,  or,  if  both of such  goals  cannot  be  accomplished  within  such
requirement,  such adjustment as is necessary shall be made to accomplish goal 1
within such  requirement.  In the event of any conflict  among the provisions of
the definition of the Class Y Principal  Reduction Amounts,  such conflict shall
be  resolved  on the basis of the goals and  their  priorities  set forth  above
within the  requirement  set forth in the  preceding  sentence.  If the  formula
allocation of AY6 among AYkk,  AYll and AYmm cannot be achieved  because  either
AYkk as so defined is greater than APkk, AYll as so defined is greater than APll
or AYmm as so defined is greater than APmm, such an allocation  shall be made as
close as possible to the formula  allocation  within the requirement that AYkk <
APkk, AYll < APll and AYmm < APmm.

III. If K%<=R<=L%, make the following additional definitions:

(delta)Yjj =   0,                                 if R3< r3; and
        (R3- r3)( Yjj + Ykk)/(R3 - J%),           if R3=> r3;

(delta)Ykk =   0,                                 if R3=> r3; and
        (R3- r3)( Yjj + Ykk)/(R3 - K%),           if R3< r3;

(delta)Yll =   0,                                 if R4< r4; and
        (R4- r4)(Yll + Ymm)/(R4 - L%),            if R4=> r4; and

(delta)Ymm =   (R4- r4)(Yll + Ymm)/(R4 - M%),             if R4< r4; and
        0,                                         if R4=> r4.

(delta)Yjj, (delta)Ykk,  (delta)Yll,  and (delta)Ymm are numbers between Yjj and
        0, Ykk and 0, Yll and 0, and Ymm and 0, respectively,  such that (J%(Yjj
        -  (delta)Yjj)  +  K%(Ykk.-   (delta)Ykk))/(Yjj  -  (delta)Yjj  +  Ykk.-
        (delta)Ykk) = R3 and (L%(Yll - (delta)Yll) + M%(Ymm.-  (delta)Ymm))/(Yll
        - (delta)Yll + Ymm.- (delta)Ymm) = R4.
<PAGE>

Y7 =    Yjj - (delta)Yjj + Ykk.- (delta)Ykk

P7 = Pjj + Pkk.

(DELTA)P7 = (DELTA)Pjj + (DELTA)Pkk.

AY7 = AYjj - (delta)Yjj + AYkk.- (delta)Ykk.

Y8 = Yll.- (delta)Yll + Ymm.- (delta)Ymm.

P8 = Pll + Pmm.

(DELTA)P8 = (DELTA)Pll + (DELTA)Pmm.

AY8 =   AYll.- (delta)Yll + AYmm.- (delta)Ymm

1.  If Y8 - (alpha)(P8 - (DELTA)P8) => 0, Y7-  (alpha)(P7 - (DELTA)P7) => 0, and
    (gamma)3(P7   -   (DELTA)P7)   <  (P8  -   (DELTA)P8),   (DELTA)Y8  =  Y8  -
    (alpha)(gamma)3(P7   -  (DELTA)P7)   and  (DELTA)Y7  =  Y7  -  (alpha)(P7  -
    (DELTA)P7).

2.  If Y8 - (alpha)(P8 - (DELTA)P8) => 0, Y7 - (alpha)(P7 - (DELTA)P7) => 0, and
    (gamma)3(P7 - (DELTA)P7) => (P8 - (DELTA)P8),  (DELTA)Y8 = Y8 - (alpha)(P8 -
    (DELTA)P8) and (DELTA)Y7 = Y7 - ((alpha)/(gamma)3)(P8 - (DELTA)P8).

3.  If Y8 - (alpha)(P8 - (DELTA)P8) < 0, Y7 - (alpha)(P7 - (DELTA)P7)  => 0, and
    Y7 -  (alpha)(P7  -  (DELTA)P7)  =>  Y7 -  (Y8/(gamma)3),  (DELTA)Y8  = Y8 -
    (alpha)(gamma)3(P7   -  (DELTA)P7)   and  (DELTA)Y7  =  Y7  -  (alpha)(P7  -
    (DELTA)P7).

4.  If Y8 -  (alpha)(P8  -  (DELTA)P8)  < 0, Y7 -  (Y8/(gamma)3)  => 0, and Y7 -
    (alpha)(P7 - (DELTA)P7) <= Y7 - (Y8/(gamma)3), (DELTA)Y8 = 0 and (DELTA)Y7 =
    Y7 - (Y8/(gamma)3).

5.  If Y7 -  (alpha)(P7  -  (DELTA)P7)  < 0, Y7 -  (Y8/(gamma)3)  < 0,  and Y8 -
    (alpha)(P8 - (DELTA)P8) <= Y8 - ((gamma)3Y7),  (DELTA)Y8 = Y8 - ((gamma)3Y7)
    and (DELTA)Y7 = 0.

6.  If Y7 - (alpha)(P7 - (DELTA)P7) < 0, Y8 - (alpha)(P8 - (DELTA)P8)  => 0, and
    Y8 -  (alpha)(P8  -  (DELTA)P8)  =>  Y8  -  ((gamma)3Y7),  (DELTA)Y8  = Y8 -
    (alpha)(P8  -  (DELTA)P8)  and  (DELTA)Y7  =  Y7 -  ((alpha)/(gamma)3)(P8  -
    (DELTA)P8).

AYjj = (delta)Yjj + [(Yjj -  (delta)Yjj)/(Yjj  - (delta)Yjj + Ykk - (delta)Ykk)]
AY7

AYkk  =  (delta)Ykk  +  [(Ykk  -   (delta)Ykk)/(   Yjj  -  (delta)Yjj  +  Ykk  -
(delta)Ykk)]AY7

AYll = (delta)Yll + [(Yll -  (delta)Yll)/(Yll  - (delta)Yll + Ymm - (delta)Ymm)]
AY8

AYmm = (delta)Ymm + [(Ymm -  (delta)Ymm)/(Yll  - (delta)Yll + Ymm - (delta)Ymm)]
AY8

        The purpose of the foregoing  definitional  provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal  Distribution  Amounts is to accomplish  the following  goals in the
following order of priority:
<PAGE>

1.   Making the ratio of Y8 to Y7 equal to (gamma)3  after taking account of the
     allocation  Realized Losses and the distributions that will be made through
     end of the Distribution  Date to which such provisions  relate and assuring
     that the Principal Reduction Amount for each of the Class Y-aa, Class Y-bb,
     Class Y-cc,  Class Y-dd,  Class Z-aa, Class Z-bb, Class Z-cc and Class Z-dd
     Regular  Interests is greater  than or equal to zero for such  Distribution
     Date;

2.   Making the Class Y-aa Principal Balance less than or equal to 0.0005 of the
     sum of the Class Y-aa and Class  Z-aa  Principal  Balances,  the Class Y-bb
     Principal Balance less than or equal to 0.0005 of the sum of the Class Y-bb
     and Class Z-bb Principal  Balances,  the Class Y-bb Principal  Balance less
     than or  equal to  0.0005  of the sum of the  Class  Y-cc  and  Class  Z-cc
     Principal  Balances and the Class Y-dd Principal Balance less than or equal
     to 0.0005 of the sum of the Class Y-dd and Class Z-dd Principal Balances in
     each case  after  giving  effect to  allocations  of  Realized  Losses  and
     distributions to be made through the end of the Distribution  Date to which
     such provisions  relate; and

3.   Making  the  larger of (a) the  fraction  whose  numerator  is Y7 and whose
     denominator  is the sum of Y7, the Class  Z-aa  Principal  Balance  and the
     Class Z-bb Principal Balance and (b) the fraction whose numerator is Y8 and
     whose  denominator is the sum of Y8, the Class Z-cc  Principal  Balance and
     the Class Z-dd Principal  Balance as large as possible while remaining less
     than or equal to 0.0005.

        In the event of a failure of the foregoing  portion of the definition of
Class Y Principal  Reduction  Amount to accomplish  both of goals 1 and 2 above,
the amounts  thereof should be adjusted to so as to accomplish such goals within
the requirement  that each Class Y Principal  Reduction Amount must be less than
or  equal to the sum of (a) the  principal  portion  of  Realized  Losses  to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if  any)  and  (b) the  remainder  of the  portion  of the  REMIC  I  Available
Distribution  Amount derived from the related Group after  reduction  thereof by
the  distributions to be made on such Distribution Date (i) to the related Class
P-M Regular  Interest (if any), (ii) to the related Class X-M Regular  Interests
and (iii) in  respect of  interest  on the  related  Class Y and Class Z Regular
Interests,  or,  if  both of such  goals  cannot  be  accomplished  within  such
requirement,  such adjustment as is necessary shall be made to accomplish goal 1
within such  requirement.  In the event of any conflict  among the provisions of
the definition of the Class Y Principal  Reduction Amounts,  such conflict shall
be  resolved  on the basis of the goals and  their  priorities  set forth  above
within the  requirement  set forth in the  preceding  sentence.  If the  formula
allocation  of AY7 between AYjj and AYkk, or of AY8 between AYll and AYmm cannot
be achieved  because either AYjj as so defined is greater than APjj,  AYkk as so
defined is greater than APkk, AYll as so defined is greater than APll or AYmm as
so defined is greater than APmm,  such an  allocation  shall be made as close as
possible to the formula allocation within the requirement that AYjj < APjj, AYkk
< APkk, AYll < APll and AYmm < APmm.Exhibit 4.1

                       SAVANNAH ELECTRIC AND POWER COMPANY

                                       TO

                              THE BANK OF NEW YORK,
                                     TRUSTEE

                          FIFTH SUPPLEMENTAL INDENTURE

                          DATED AS OF DECEMBER 17, 2003

                           SERIES E 4.90% SENIOR NOTES

                              DUE DECEMBER 15, 2013

                               TABLE OF CONTENTS1

                                                                         PAGE

ARTICLE 1            .....................................................1

SECTION 101.         Establishment........................................1
                     -------------

SECTION 102.         Definitions..........................................2
                     -----------

SECTION 103.         Payment of Principal and Interest....................2
                     ---------------------------------

SECTION 104.         Denominations........................................3
                     -------------

SECTION 105.         Global Security......................................3
                     ---------------

SECTION 106.         Transfer.............................................4
                     --------

ARTICLE 2            .....................................................4

SECTION 201.         Recitals by Company..................................4
                     -------------------

SECTION 202.         Ratification   and   Incorporation   of  Original
                     ---------------------------------------------------
                     Indenture............................................4
                     ------------------

SECTION 203.         Executed in Counterparts.............................4
                     ------------------------

1This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.

<PAGE>

         THIS FIFTH SUPPLEMENTAL INDENTURE is made as of the 17th day of
December, 2003, by and between SAVANNAH ELECTRIC AND POWER COMPANY, a Georgia
corporation, 600 Bay Street, East, Savannah, Georgia 31401 (the "Company"), and
THE BANK OF NEW YORK, a New York banking corporation, 101 Barclay Street, 21
West, New York, New York 10286 (the "Trustee").

                                               W I T N E S S E T H:

         .........WHEREAS, the Company has heretofore entered into a Senior Note
Indenture, dated as of March 1, 1998 (the "Original Indenture"), with The Bank
of New York, as trustee, as heretofore supplemented;

         .........WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as heretofore supplemented and as further
supplemented by this Fifth Supplemental Indenture, is herein called the
"Indenture";

         .........WHEREAS, under the Original Indenture, a new series of Senior
Notes may at any time be established pursuant to a supplemental indenture
executed by the Company and the Trustee;

         .........WHEREAS, the Company proposes to create under the Indenture a
new series of Senior Notes;

         .........WHEREAS, additional Senior Notes of other series hereafter
established, except as may be limited in the Original Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and

         .........WHEREAS, all conditions necessary to authorize the execution
and delivery of this Fifth Supplemental Indenture and to make it a valid and
binding obligation of the Company have been done or performed.

         .........NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

                                    ARTICLE 1

                              Series E Senior Notes

         SECTION 101. Establishment. In accordance with Section 301 of the
Indenture, there is hereby established a new series of Senior Notes to be issued
under the Indenture, to be designated as the Company's Series E 4.90% Senior
Notes due December 15, 2013 (the "Series E Notes").

         There are to be authenticated and delivered $25,000,000 principal
amount of Series E Notes, and such principal amount of the Series E Notes may be
increased from time to time without limit pursuant to Section 301 of the
Original Indenture. All Series E Notes need not be issued at the same time and
such series may be reopened at any time, without the consent of any Holder, for
issuances of additional Series E Notes. Any such additional Series E Notes will
have the same interest rate, maturity and other terms as those initially issued.
No Series E Notes shall be authenticated and delivered in excess of the
principal amount as so increased except as provided by Sections 203, 303, 304 or
907 of the Original Indenture. The Series E Notes shall be issued in definitive
fully registered form.

         As provided in Section 105 hereof, the Series E Notes shall be issued
in the form of one or more Global Securities in substantially the form set out
in Exhibit A hereto. The Depositary with respect to the Series E Notes shall be
The Depository Trust Company.

         The form of the Trustee's Certificate of Authentication for the Series
E Notes shall be in substantially the form set forth in Exhibit B hereto.

         Each Series E Note shall be dated the date of authentication thereof
and shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.

         The Series E Notes will not be redeemable at the option of the Company
prior to the Stated Maturity and will not have a sinking fund.

         SECTION 102. Definitions. The following defined terms used herein
shall, unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture.

         "Interest Payment Dates" means June 15 and December 15 of each year.

         "Original Issue Date" means December 17, 2003.

         "Regular Record Date" means, with respect to each Interest Payment
Date, the fifteenth calendar day preceding such Interest Payment Date (whether
or not a Business Day).

         "Stated Maturity" means December 15, 2013.

         SECTION 103. Payment of Principal and Interest. The principal of the
Series E Notes shall be due at the Stated Maturity. The unpaid principal amount
of the Series E Notes shall bear interest at the rate of 4.90% per annum until
paid or duly provided for. Interest shall be paid semiannually in arrears on
each Interest Payment Date to the Person in whose name the Series E Notes are
registered on the Regular Record Date for such Interest Payment Date, provided
that interest payable at the Stated Maturity of principal as provided herein
will be paid to the Person to whom principal is payable. Any such interest that
is not so punctually paid or duly provided for will forthwith cease to be
payable to the Holders on such Regular Record Date and may either be paid to the
Person or Persons in whose name the Series E Notes are registered at the close
of business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Holders of the
Series E Notes not less than ten (10) days prior to such Special Record Date, or
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange, if any, on which the Series E Notes
shall be listed, and upon such notice as may be required by any such exchange,
all as more fully provided in the Original Indenture.

         Payments of interest on the Series E Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series E Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series E Notes is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), with the same force and effect as if made on the date the
payment was originally payable.

         Payment of the principal and interest due at the Stated Maturity of the
Series E Notes shall be made upon surrender of the Series E Notes at the
Corporate Trust Office of the Trustee. The principal of and interest on the
Series E Notes shall be paid in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of interest (including interest on any Interest Payment
Date) will be made, subject to such surrender where applicable, at the option of
the Company, (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (ii) by wire transfer
or other electronic transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least sixteen (16) days prior to the date for payment by the Person entitled
thereto.

         SECTION 104. Denominations. The Series E Notes may be issued in the
denominations of $1,000, or any integral multiple thereof.

         SECTION 105. Global Securities. The Series E Notes will be issued in
the form of one or more Global Securities registered in the name of the
Depositary or its nominee. Except under the limited circumstances described
below, Series E Notes represented by one or more Global Securities will not be
exchangeable for, and will not otherwise be issuable as, Series E Notes in
definitive form. The Global Securities described above may not be transferred
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or to a
successor Depositary or its nominee.

         Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series E Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.

         A Global Security shall be exchangeable for Series E Notes registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security or if at any time the Depositary ceases to
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such Depositary and in each case no successor Depositary shall have been
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such cessation, (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable, or (iii) there
shall have occurred an Event of Default with respect to the Series E Notes. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series E Notes registered in such names as the Depositary shall
direct.

         SECTION 106. Transfer. No service charge will be made for any transfer
or exchange of Series E Notes, but payment will be required of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.

                                    ARTICLE 2

                            Miscellaneous Provisions

         SECTION 201. Recitals by Company. The recitals in this Fifth
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of Series E Notes and of this Fifth Supplemental Indenture
as fully and with like effect as if set forth herein in full.

         SECTION 202. Ratification and Incorporation of Original Indenture. As
heretofore supplemented and as supplemented hereby, the Original Indenture is in
all respects ratified and confirmed, and the Original Indenture as heretofore
supplemented and as supplemented by this Fifth Supplemental Indenture shall be
read, taken and construed as one and the same instrument.

         SECTION 203. Executed in Counterparts. This Fifth Supplemental
Indenture may be simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.

<PAGE>

         .........IN WITNESS WHEREOF, each party hereto has caused this
instrument to be signed in its name and behalf by its duly authorized officers,
all as of the day and year first above written.

ATTEST:                                 SAVANNAH ELECTRIC AND POWER COMPANY

By:      .........         ....         By:
   ----------------------------            ------------------------------------
         Wayne Boston      ....                  Kirby R. Willis
         Assistant Secretary...                  Vice President, Treasurer and
         .........         ....                  Chief Financial Officer

ATTEST:  .........         ....         THE BANK OF NEW YORK, as Trustee

By:      .........         ....         By:
   ----------------------------            ------------------------------------
         .........         ....         Elizabeth T. Wagner
         .........         ....         Authorized Signatory

<PAGE>

                                    EXHIBIT A

                              FORM OF SERIES E NOTE

<PAGE>

NO. __ CUSIP NO. 804787DH9

                       SAVANNAH ELECTRIC AND POWER COMPANY
                           SERIES E 4.90% SENIOR NOTE
                              DUE DECEMBER 15, 2013

Principal Amount:                      $_____________

Regular Record Date:                   15th  calendar  day  prior to the
                                       applicable  Interest  Payment  Date
                                       (whether or not a Business Day)

Original Issue Date:                   December 17, 2003

Stated Maturity:                       December 15, 2013

Interest Payment Dates:                June 15 and December 15

Interest Rate:                         4.90% per annum

Authorized Denomination:               $1,000, or any integral multiple thereof

         Savannah Electric and Power Company, a Georgia corporation (the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to _____________________________________________, or registered assigns, the
principal sum of _________ DOLLARS ($__________) on the Stated Maturity shown
above, and to pay interest thereon from the Original Issue Date shown above, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually in arrears on each Interest Payment Date as
specified above, commencing June 15, 2004, and on the Stated Maturity at the
rate per annum shown above until the principal hereof is paid or made available
for payment and on any overdue principal and on any overdue installment of
interest. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date (other than an Interest Payment Date that is the
Stated Maturity) will, as provided in such Indenture, be paid to the Person in
whose name this Note (the "Note") is registered at the close of business on the
Regular Record Date as specified above next preceding such Interest Payment
Date, provided that any interest payable at Stated Maturity will be paid to the
Person to whom principal is payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Note is registered at the close
of business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of
this series not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange, if any, on which the Notes of this series shall be
listed, and upon such notice as may be required by any such exchange, all as
more fully provided in the Indenture.

         Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), with the same force and effect
as if made on the date the payment was originally payable. A "Business Day"
shall mean any day other than a Saturday or a Sunday or a day on which banking
institutions in New York City are authorized or required by law or executive
order to remain closed or a day on which the Corporate Trust Office of the
Trustee is closed for business.

         Payment of the principal of and interest due at the Stated Maturity of
the Series E Notes shall be made upon surrender of the Series E Notes at the
Corporate Trust Office of the Trustee. The principal of and interest on the
Series E Notes shall be paid in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payment of interest (including interest on an Interest Payment
Date) will be made, subject to such surrender where applicable, at the option of
the Company, (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (ii) by wire transfer
or other electronic transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least 16 days prior to the date for payment by the Person entitled thereto.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

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

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                SAVANNAH ELECTRIC AND POWER COMPANY

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

Attest:

Title:

           {Seal of SAVANNAH ELECTRIC AND POWER COMPANY appears here}

<PAGE>

                          CERTIFICATE OF AUTHENTICATION

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

                         THE BANK OF NEW YORK,
                         as Trustee

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

<PAGE>

                             (Reverse Side of Note)

         This Note is one of a duly authorized issue of Senior Notes of the
Company (the "Notes"), issued and issuable in one or more series under a Senior
Note Indenture, dated as of March 1, 1998, as supplemented (the "Indenture"),
between the Company and The Bank of New York, as Trustee (the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures incidental thereto reference is hereby made for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes issued thereunder and of
the terms upon which said Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof as Series E 4.90%
Senior Notes due December 15, 2013 (the "Series E Notes") which is unlimited in
aggregate principal amount. Capitalized terms used herein for which no
definition is provided herein shall have the meanings set forth in the
Indenture.

         The Series E Notes will not have a sinking fund.

         The Series E Notes will not be redeemable at the option of the Company
prior to the Stated Maturity.

         If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the Notes at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and of like tenor and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by the
Holder surrendering the same upon surrender of the Note or Notes to be exchanged
at the office or agency of the Company.

         This Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York.

<PAGE>

                                  ABBREVIATIONS

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

<PAGE>

TEN COM- as tenants in        UNIF GIFT MIN ACT- _______ Custodian ________
         common                                  (Cust)            (Minor)
TEN ENT- as tenants by the
         entireties                        under Uniform Gifts to
 JT TEN- as joint tenants          Minors Act
         with right of
         survivorship and                   ________________________
         not as tenants                          (State)
         in common

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

         FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

    (please insert Social Security or other identifying number of assignee)

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing

agent to transfer said Note on the books of the Company, with full power of
substitution in the premises.

Dated:
       --------------------   ------------------------------------------------

                                            NOTICE: The signature to this
                                            assignment must correspond with the
                                            name as written upon the face of the
                                            within instrument in every
                                            particular without alteration or
                                            enlargement, or any change whatever.

<PAGE>

                                    EXHIBIT B

                          CERTIFICATE OF AUTHENTICATION

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

                THE BANK OF NEW YORK,
                as Trustee

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

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