Document:

NET LEASE AGREEMENT

     THIS  LEASE, made and entered effective as of this 30th
day  of  December, 2003, by and between AEI Income &  Growth
Fund   XXI  Limited  Partnership,  whose  corporate  general
partner  is  AEI Fund Management XXI, Inc. whose address  is
1300  Wells Fargo Place, 30 East Seventh Street,  St.  Paul,
Minnesota 55101 (together, "Lessor")(fax #651 227 7705), and
Kona  Restaurant Group, Inc., a Delaware corporation,  whose
address is 20308 Highway 71 West, Suite 5, Spicewood,  Texas
78669 ("Lessee") (fax # 512 263 8055);

                          WITNESSETH:

     WHEREAS, Lessor is the fee owner of a certain parcel of
real  property  and  the building and  improvements  thereon
(together,  the  "Building") located at  Laredo,  Texas  and
legally  described in Exhibit "A", which is attached  hereto
and incorporated herein by reference (said real property and
Building  hereinafter referred to as the "Leased Premises");
and

     WHEREAS,  Lessee has been in possession of  the  Leased
Premises continuously since June 10, 1999, pursuant to  that
certain  Lease  dated June 10, 1999, with  FFCA  Acquisition
Corporation (the "Prior Lease"); and

     WHEREAS,  Lessor acquired the Leased Premises and  took
assignment  of  the Landlord's interest in the  Prior  Lease
from FFCA Acquisition Corporation as of the date hereof; and

     WHEREAS,  Lessee  desires to lease the Leased  Premises
from  Lessor  upon  the  terms  and  conditions  hereinafter
provided,  and terminate the Prior Lease in its entirety  in
exchange  for mutually beneficial changes to the  leasehold,
the  receipt and sufficiency of which is hereby acknowledged
by the parties hereto;

     NOW,  THEREFORE, in consideration of the Rents,  terms,
covenants, conditions, and agreements hereinafter  described
to  be  paid,  kept,  and performed by Lessee,  Lessor  does
hereby grant, demise, lease, and let unto Lessee, and Lessee
does  hereby  take  and  hire from Lessor  and  does  hereby
covenant, promise, and agree as follows:

ARTICLE 1.     LEASED PREMISES

     Lessor  hereby leases to Lessee, and Lessee leases  and
takes  from  Lessor,  the  Leased Premises  subject  to  the
conditions of this Lease.

ARTICLE 2.  TERM

     (A)    The  term  of  this  Lease  ("Term")  shall   be
consecutive  "Lease  Years", or such  portions  thereof,  as
hereinafter defined, commencing on the effective date  first
listed above, ("Occupancy Date"), expiring August 31, 2016.

     (B)  The first "Lease Year" of the Term shall be for  a
period  of twelve (l2) consecutive calendar months from  the
Occupancy  Date.  If the Occupancy Date shall be other  than
the  first  day of a calendar month, the first "Lease  Year"
shall  be the period from the Occupancy Date to the  end  of
the calendar month of the Occupancy Date, plus the following
twelve  (l2)  calendar months.  Each Lease  Year  after  the
first Lease Year shall be a successive period of twelve (l2)
calendar months.

   (C)  The  parties agree that once the Occupancy Date  has
been  established, upon the request of either party, a short
form  or  memorandum  of this Lease  will  be  executed  for
recording purposes.  That short form or memorandum  of  this
Lease  will  set forth the actual occupancy and  termination
dates of the Term and optional Renewal Terms, as defined  in
Article  28  hereof,  and the existence  of  any  option  to
extend, and that said option shall terminate when the Lessee
shall  lose right to possession or this Lease is terminated,
whichever occurs first.

ARTICLE 3.  CONSTRUCTION OF IMPROVEMENTS

   (A)  Lessee  warrants and agrees that  the  Building  has
been  constructed  on  the Leased Premises,  and  all  other
improvements  to  the  land,  including  the  parking   lot,
approaches, and service areas, have been constructed in  all
material  respects by Lessee in accordance  with  the  plot,
plans, and specifications heretofore submitted to Lessor.

   (B)  Lessee  warrants  that as of the  date  hereof,  the
Building  and all other improvements to the land  do  comply
with  the  laws, ordinances, rules, and regulations  of  all
state and local governments.

   (C)  Lessee agrees to pay, if not already paid  in  full,
for all architectural fees and actual construction costs, in
the past, present or future, which shall include, but not be
limited  to, plans and specifications, general construction,
carpentry,  electrical, plumbing, heating, ventilating,  air
conditioning,  decorating, equipment  installation,  outside
lighting,  curbing,  landscaping,  blacktopping,  electrical
sign hookup, conduit and wiring from building, fencing,  and
parking  curbs,  builder's  risk insurance  (naming  Lessor,
Lessee,  and contractor as co-insured), and all construction
bonds  for  improvements  made by or  at  the  direction  of
Lessee, to the extent incurred or authorized by Lessee.

   (D)  Opening  for  business in  the  Leased  Premises  by
Lessee shall constitute an acceptance of the Leased Premises
and an acknowledgment by Lessee that the premises are in the
condition described under this Lease.

ARTICLE 4.  RENT PAYMENTS

   (A)  Annual  Rent Payable until August 31, 2005:   Lessee
        shall   pay  to  Lessor  an  annual  Base  Rent   of
        $215,646.12,  which  amount  shall  be  payable   in
        advance  on  the  first day of each month  in  equal
        monthly  installments of $17,970.51 to  Lessor.   If
        the  first  day of the Lease Term is not  the  first
        day  of  a  calendar month, then  the  monthly  Rent
        payable  for that partial month shall be a  prorated
        portion  of  the equal monthly installment  of  Base
        Rent.

   (B)      Annual Rent Payable beginning September 1, 2005,
        and each Lease Year thereafter (September through August)
        until August 31, 2008, shall increase by an amount equal to
        one  Percent (1%) of the Base Rent payable  for  the
        immediately prior Lease Year.  Such increased Base Rent
        shall be payable in advance of the first day of each month
        in equal monthly installments.

   (C)      Annual Rent Payable beginning September 1, 2008,
        and each Lease Year  thereafter (September through August),
        shall increase by an amount equal to one and one-half
        Percent (1.5%) of the Base Rent payable for the immediately
        prior Lease Year.  Such increased Base Rent shall be payable
        in advance of the first day of each month in equal monthly
        installments

   (D) Overdue Payments.

   Lessee  shall  pay  interest on all overdue  payments  of
Rent or other monetary amounts due hereunder at the rate  of
fifteen  percent (15%) per annum or the highest rate allowed
by  law,  whichever  is less, accruing beginning  five  days
after  written notice to Lessee that Rent or other  monetary
amounts properly due and payable were not paid.

ARTICLE 5. INSURANCE AND INDEMNITY

   (A)  Lessee shall, throughout the Term or Renewal  Terms,
if  any, of this Lease, at its own cost and expense, procure
and  maintain insurance which covers the Leased Premises and
improvements against fire, wind, and storm damage (including
flood  insurance if the Leased Premises is  in  a  federally
designated flood prone area) and such other risks (including
earthquake insurance, if the Leased Premises is located in a
federally designated earthquake zone or in an ISO high  risk
earthquake zone) as may be included in the broadest form  of
extended  coverage insurance as may, from time to  time,  be
available in amounts sufficient to prevent Lessor or  Lessee
from   becoming  a  co-insurer  within  the  terms  of   the
applicable policies.  In any event, the insurance shall  not
be  less  than  one  hundred  percent  (100%)  of  the  then
insurable    value.     Additionally,    replacement    cost
endorsements,   inflation   guard  endorsements,   vandalism
endorsement,  malicious  mischief  endorsement,  waiver   of
subrogation  endorsement, waiver of co-insurance  or  agreed
amount  endorsement  (if available), and Building  Ordinance
Compliance  endorsement and Rent loss  endorsements  (for  a
period of one year) must be obtained.

   (B)  Lessee  agrees to place and maintain throughout  the
Term  or  Renewal Terms, if any, of this Lease, at  Lessee's
own  expense,  public liability insurance  with  respect  to
Lessee's use and occupancy of said premises, including "Dram
Shop" or liquor liability insurance, if the same shall be or
become available in the State of Texas and liquor is sold on
the Premises, with initial limits of at least $3,000,000 per
occurrence/$5,000,000 general aggregate, or such  additional
amounts  as  Lessor shall reasonably require  from  time  to
time,  upon  Lessor's  good  faith  determination  that  the
present insurance coverage is inadequate, such amounts to be
consistent  with requirements of other Lessor's  in  similar
circumstances.

   (C)  Lessee agrees to notify Lessor in writing if  Lessee
is  unable  to  procure all or some part  of  the  aforesaid
insurance.   In  the  event  Lessee  fails  to  provide  all
insurance required under this Lease, Lessor shall  have  the
right, but not the obligation, to procure such insurance  on
Lessee's  behalf.  Lessee will then, within  five  (5)  days
from receiving written notice, pay Lessor the amount of  the
premiums due or paid, together with interest thereon at  the
lesser  of  12% per annum or the highest rate  allowable  by
law, which amount shall be considered Rent payable by Lessee
in addition to the Rent defined at Article 4 hereof.

   (D)   All   policies  of  insurance   provided   for   or
contemplated  by this Article can be under Lessee's  blanket
insurance coverage and shall name Lessor, Lessor's corporate
general  partner  and Robert P. Johnson, as  the  individual
general  partner,  respectively, of Lessor,  and  Lessee  as
additional named insured, as their respective interests  may
appear,  and  shall  provide that  the  policies  cannot  be
canceled,  terminated, changed, or modified  without  thirty
(30)  days written notice to the parties.  In addition,  all
of   such  policies  shall  contain  endorsements   by   the
respective  insurance  companies  waiving  all   rights   of
subrogation,   if  any,  against  Lessor.    All   insurance
companies  providing coverages must be rated "A-" or  better
by  Best's  Key Rating Guide (the most current edition),  or
similar quality under a successor guide if Best's Key Rating
shall  cease  to  be published. Lessee shall provide  Lessor
with legible copies of any and all policies on or before the
Occupancy  Date.  No  less than fifteen (15)  business  days
prior  to expiration of such policies, Lessee shall  provide
Lessor   with   legible  copies  of  any  and  all   renewal
Certificates of Insurance, if the terms of the Policies have
not  changed, and copies of such policies if the  same  have
changed.  Lessee agrees that it will not settle any property
insurance claims affecting the Leased Premises in excess  of
$100,000  without  Lessor's  prior  written  consent,   such
consent not to be unreasonably withheld or delayed.   Lessor
shall consent, where Lessor's consent is required hereunder,
to any settlement of an insurance claim wherein Lessee shall
confirm in writing with evidence reasonably satisfactory  to
Lessor  that  Lessee  has  sufficient  funds  available   to
complete the rebuilding of the Premises.

   (E)  Lessee  shall  defend, indemnify,  and  hold  Lessor
harmless  against any and all claims, damages, and  lawsuits
arising  after  the  Occupancy Date of this  Lease  and  any
orders,  decrees or judgments which may be entered  therein,
brought  for damages or alleged damages resulting  from  any
injury  to person or property or from loss of life sustained
in  or  about  the Leased Premises, unless  such  damage  or
injury results from the intentional misconduct or the  gross
negligence  of  Lessor  and Lessee  agrees  to  save  Lessor
harmless  from, and indemnify Lessor against,  any  and  all
injury,  loss, or damage, of whatever nature, to any  person
or  property caused by, or resulting from any act, omission,
or  negligence of Lessee or any employee or agent of Lessee.
In  addition, Lessee hereby releases Lessor from any and all
liability  for any loss or damage caused by fire or  any  of
the  extended coverage casualties, unless such fire or other
casualty   shall   be  brought  about  by  the   intentional
misconduct or gross negligence of Lessor.

   (F)  Lessor hereby waives any and all rights that it  may
have  to  recover from Lessee damages for any loss occurring
to  the Leased Premises by reason of any act or omission  of
Lessee;  provided, however, that this waiver is  limited  to
those losses for which Lessor is compensated by insurers, if
the  insurance required by this Lease is maintained.  Lessee
hereby  waives any and all right that it may have to recover
from  Lessor  damages for any loss occurring to  the  Leased
Premises  by  reason  of  any act  or  omission  of  Lessor;
provided,  however,  that this waiver is  limited  to  those
losses  for  which Lessee is, or should be if the  insurance
required herein is maintained, compensated by insurers.

ARTICLE 6.  TAXES, ASSESSMENTS AND UTILITIES

   (A)  Lessee shall be liable and agrees to pay the charges
for all public utility services rendered or furnished to the
Leased  Premises,  including heat, water, gas,  electricity,
sewer,  sewage  treatment  facilities  and  the  like,   all
personal   property  taxes,  real  estate   taxes,   special
assessments,  and municipal or government charges,  general,
ordinary  and  extraordinary,  of  every  kind  and   nature
whatsoever,  which  may  be  levied,  imposed,  or  assessed
against  the  Leased  Premises,  or  upon  any  improvements
thereon, at any time after the Occupancy Date of this  Lease
and   prior  to  the expiration of the term hereof,  or  any
Renewal Term, if exercised.

   (B)  Lessee  shall pay all real estate taxes, assessments
for  public improvements or benefits, and other governmental
impositions,  duties, and charges of every kind  and  nature
whatsoever  which  shall or may, during  the  term  of  this
Lease, be charged, laid, levied, assessed, or imposed  upon,
or  become a lien or liens upon the Leased Premises  or  any
part  thereof or upon the Rents payable hereunder (expressly
excluding general income taxes, inheritance taxes and estate
taxes   imposed  upon  Lessor).  Such  payments   shall   be
considered  as Rent paid by Lessee in addition to  the  Rent
defined  at  Article 4 hereof.  If due to a  change  in  the
method  of  taxation, a franchise tax or Rent tax (expressly
excluding general income taxes, inheritance taxes and estate
taxes imposed upon Lessor) shall be levied against Lessor in
substitution for or in lieu of any tax which would otherwise
constitute  a real estate tax, such tax shall  be  deemed  a
real estate tax for the purposes herein and shall be paid by
Lessee

   (C)   All  real  estate  taxes,  assessments  for  public
improvements  or  benefits, water rates and  charges,  sewer
rents,  and  other  governmental  impositions,  duties,  and
charges  which shall become payable for the first  and  last
tax  years of the term hereof shall be apportioned pro  rata
between  Lessor and Lessee in accordance with the respective
number  of  months  during which  each  party  shall  be  in
possession  of  the Leased Premises in said  respective  tax
years.   For  the purposes of this provision,  all  personal
property  taxes,  real estate taxes and special  assessments
shall be deemed to have been assessed in the year that  each
payment or any installment thereof is due.

   (D)  Lessee shall have the right to contest or review  by
legal  proceedings or in such other manner as may  be  legal
(which, if instituted, shall be conducted solely at Lessee's
own expense) any tax, assessment for public improvements  or
benefits,  or  other governmental imposition aforementioned,
upon  condition  that,  before instituting  such  proceeding
Lessee  shall  either (i) pay (under protest)  such  tax  or
assessments  for public improvements or benefits,  or  other
governmental  imposition, duties and charges aforementioned,
or  (ii)  post with Lessor alternative security satisfactory
to  Lessor, not to exceed 150% of the amount contested   and
the  potential  penalties and interest  thereon.   All  such
proceedings  shall  be begun as soon as reasonably  possible
after  the  imposition or assessment of any contested  items
and   shall   be  prosecuted  to  final  adjudication   with
reasonable   dispatch.   In  the  event  of  any  reduction,
cancellation, or discharge, Lessee shall pay the amount that
shall  be  finally  levied or assessed  against  the  Leased
Premises or adjudicated to be due and payable, and, if there
shall  be  any refund payable by the governmental  authority
with  respect  thereto, if Lessee has paid the  expenses  of
Lessor, if any, in such proceeding, Lessee shall be entitled
to  receive  and  retain  the  same,  subject,  however,  to
apportionment as provided during the first and last years of
the term of this Lease.

   (E)  Lessor,  within  sixty (60)  days  after  notice  to
Lessee  if  Lessee fails to commence such proceedings,  may,
but  shall not be obligated to, contest or review  by  legal
proceedings, or in such other manner as may be legal, and at
Lessor's  own  expense,  any  tax,  assessments  for  public
improvements and benefits, or other governmental  imposition
aforementioned, which shall not be contested or reviewed, as
aforesaid, by Lessee, and unless Lessee shall promptly  join
with  Lessor  in  such contest or review,  Lessor  shall  be
entitled  to  receive and retain any refund payable  by  the
governmental authority with respect thereto.

   (F)   Lessor  shall  not  be  required  to  join  in  any
proceeding  referred to in this Article, unless in  Lessee's
reasonable  opinion, the provisions of  any  law,  rule,  or
regulation at the time in effect shall require that  such  a
proceeding  be brought by and/or in the name of  Lessor,  in
which event Lessor shall upon written request, join in  such
proceedings  or permit the same to be brought in  its  name,
all at no cost or expense to Lessor.

ARTICLE 7.  PROHIBITION ON ASSIGNMENTS AND SUBLETTING; TAKE-
BACK RIGHTS

   (A)  Except  as  otherwise  expressly  provided  in  this
Article,  Lessee  shall  not, without  obtaining  the  prior
written consent of Lessor, in each instance:

        1.  assign or otherwise transfer this Lease, or  any
            part   of  Lessee's  right,  title  or  interest
            therein  (except by devise or bequest  upon  the
            death of a shareholder, but in such event,  such
            recipient  shall be bound by the  provisions  of
            this Article);

        2.  sublet  all  or any part of the Leased  Premises
            or  allow all or any part of the Leased Premises
            to  be  used  or  occupied by any other  Persons
            (herein  defined as a Party other  than  Lessee,
            be   it   a   corporation,  a  partnership,   an
            individual or other entity); or

        3.  mortgage,  pledge  or  otherwise  encumber  this
            Lease, or the Leased Premises.

   (B) For the purposes of this Article:

        1.  the  transfer of voting control of any class  of
            capital   stock  of  any  corporate  Lessee   or
            sublessee,  or  the transfer voting  control  of
            the total interest in any other person which  is
            a  Lessee  or  sublessee, however  accomplished,
            whether  in a single transaction or in a  series
            of  related or unrelated transactions, shall  be
            deemed  an assignment of this Lease, or of  such
            sublease,   as   the  case  may  be   (provided,
            however, transfers by bequest or devise  due  to
            the  death  of a shareholder shall  not  trigger
            the  application  of these provisions,  provided
            Lessor   is   given  notice  of  such   transfer
            immediately   after  the  disposition   of   the
            decedent's estate);

        2.  an  agreement by any other Person,  directly  or
            indirectly,   to  assume  Lessee's   obligations
            under this Lease shall be deemed an assignment;

        3.  any  Person to whom Lessee's interest under this
            Lease  passes by operation of law, or otherwise,
            shall  be  bound  by  the  provisions  of   this
            Article;

        4.  each  modification, amendment  or  extension  or
            any  sublease  to  which Lessor  has  previously
            consented shall be deemed a new sublease; and

        5.  Lessee shall present the signed consent to  such
            assignment    and/or   subletting    from    any
            guarantors of this Lease, such consent to be  in
            form and substance satisfactory to Lessor.

   Lessee  agrees  to furnish to Lessor upon demand  at  any
time   such   information  and  assurances  as  Lessor   may
reasonably  request that neither Lessee, nor any  previously
permitted  sublessee, has violated the  provisions  of  this
Article.

   (C)  If  Lessee agrees to assign this Lease or to  sublet
all  or  any  portion of the Leased Premises, Lessee  shall,
prior  to the effective date thereof (the "Effective Date"),
deliver to Lessor copies of any such proposed agreement  and
of  all  ancillary agreements with the proposed assignee  or
sublessee,  as applicable.  If Lessor in its sole discretion
(except   as  otherwise  specifically  limited   herein   in
paragraph (E) below) shall not have consented to a  proposed
sublease  or assignment, and Lessee shall attempt to  effect
such  transfer  without  Lessor's consent  or  in  spite  of
Lessor's  decision to not consent to such  transfer,  Lessor
shall  then have all of the following rights, any  of  which
Lessor may exercise by written notice to Lessee given within
thirty  (30)  days after Lessor receives the  aforementioned
documents:

        1.  with  respect to a proposed assignment  of  this
            Lease, the right to terminate this Lease on  the
            Effective  Date  as  if it were  the  Expiration
            Date of this Lease;

        2.  with  respect  to a proposed subletting  of  the
            entire  Leased Premises, the right to  terminate
            this  Lease on the Effective Date as if it  were
            the Expiration Date; or

        3.  with  respect to a proposed subletting  of  less
            than  the  entire Leased Premises, the right  to
            terminate  this Lease as to the portion  of  the
            Leased  Premises affected by such subletting  on
            the   Effective  Date,  as  if   it   were   the
            Expiration  Date,  in which  case  Lessee  shall
            promptly  execute  and  deliver  to  Lessor   an
            appropriate modification of this Lease  in  form
            satisfactory to Lessor in all respects.

        4.  with   respect  to  a  proposed  subletting   or
            proposed  assignment of this Lease, impose  such
            conditions  upon  Lessor's  consent  as   Lessor
            shall determine in its sole discretion.

   (D)  If Lessor exercises any of its options under Article
        7(C) above, (and if Lessor shall impose conditions upon its
        consent and Lessee shall fail to meet any conditions Lessor
        may impose upon its consent), Lessor may then lease the
        Leased Premises or any portion thereof to Lessee's proposed
        assignee or sublessee, as the case may be, without liability
        whatsoever to Lessee.

   (E)  Notwithstanding the provisions of this Article 7 above,
        or any other provisions of this Lease to the contrary,
        Lessee shall have the right to assign this Lease, or sublet
        the Leased Premises or any portion thereof, without the
        consent of, but with prior written notice to Lessor, to any
        corporation (a) with which Lessee may merge or consolidate
        (provided  Lessee is the surviving entity  and  such
        transaction does not involve directly or indirectly, along
        with all other transfers, issuance's, or sales, a transfer,
        issuance or sale of a majority of the voting stock of
        Lessee), or (b) which is on the date hereof a parent or
        which is a subsidiary of Lessee; provided, that said
        assignee assumes, in full, the obligations of Lessee under
        this Lease and Lessee and Guarantors remains primarily
        liable under this Lease; and further, if the County or the
        City where the Leased Premises are situate become a `dry'
        county or city, Lessee may, without the consent of, but with
        notice to Lessor, sublet the portion of the Leased Premises
        relating to the bar area and the sale of alcohol to any
        Texas non-profit corporation or association of persons
        wishing to organize a private club under appropriate Texas
        statutes and such corporation or association may jointly
        occupy the Leased Premises under a sublease from Lessee and
        Lessee may enter into a management agreement with such
        corporation or association without further approval from
        Lessor.  In addition, notwithstanding the provisions of this
        Article 7 above or any other provisions of this Lease to the
        contrary, the following transfers or issuances of shares of
        capital stock of Lessee shall not constitute an assignment
        of this Lease or require the consent of Lessor under this
        Article 7: (i) the issuance and sale of shares of capital
        stock of Lessee in connection with a public offering of such
        stock (provided such issuance and sale does not involve the
        issuance, sale, or transfer of a majority of the voting
        stock of Lessee); (ii) the transfer of outstanding shares to
        a  parent which is a parent on the date hereof or  a
        subsidiary of Lessee, provided such entity is or becomes a
        guarantor of this Lease; (iii) the acquisition by Creed L.
        Ford III or Norman J. Abdallah of additional shares of
        capital stock from each other, from other shareholders, or
        as a result of new issuances of capital stock of Lessee; or
        (iv) the transfer of shares of capital stock by Creed L.
        Ford  or Norman J. Abdallah to family trusts, family
        partnerships, or similar vehicles set up for either of their
        benefit or for the benefit of any family member, or the
        transfer by them of shares of capital stock  to  any
        corporation, partnership, limited liability company, or
        other  entity in which they individually, or in  the
        aggregate, own at least a majority of the  ownership
        interests.

ARTICLE 8.  REPAIRS AND MAINTENANCE

   (A)  Lessee covenants and agrees to keep and maintain  in
good  order, condition and repair the interior and  exterior
of  the Leased Premises during the term of the Lease, or any
renewal terms, and further agrees that Lessor shall be under
no obligation to make any repairs or perform any maintenance
to the Leased Premises.  Lessee covenants and agrees that it
shall   be   responsible   for  all  repairs,   alterations,
replacements,  or  maintenance  of,  including  but  without
limitation to or of:  The interior and exterior portions  of
all  doors; door checks and operators; windows; plate glass;
plumbing;  water and sewage facilities; fixtures; electrical
equipment; interior walls; ceilings; signs; roof; structure;
interior building appliances and similar equipment;  heating
and  air conditioning equipment; and any equipment owned  by
Lessor  and  leased  to  Lessee hereunder,  as  itemized  on
Exhibit  B  attached  hereto  and  incorporated  herein   by
reference, if any; and further agrees to replace any of said
equipment  when  necessary.  Lessee  further  agrees  to  be
responsible  for,  at its own expense,  snow  removal,  lawn
maintenance,  landscaping, maintenance of  the  parking  lot
(including   parking  lines,  seal  coating,  and   blacktop
surfacing), and other similar items.

   (B)  If  Lessee  refuses  or  neglects  to  commence   or
complete  repairs promptly and adequately, Lessor may  cause
such repairs to be made, but shall not be required to do so,
and Lessee shall pay the cost thereof to Lessor upon demand.
It  is  understood  that Lessee shall pay all  expenses  and
maintenance  and repair during the term of this  Lease.   If
Lessee  is not then in default hereunder, Lessee shall  have
the  right  to make repairs and improvements to  the  Leased
Premises  without the consent of Lessor if such repairs  and
improvements  do  not  exceed One Hundred  Thousand  Dollars
($100,000.00), provided such repairs or improvements do  not
affect the structural integrity of the Leased Premises.  Any
repairs  or  improvements in excess of One Hundred  Thousand
Dollars  ($100,000.00) or affecting the structural integrity
of  the  Leased  Premises may be done only  with  the  prior
written   consent  of  Lessor,  such  consent  not   to   be
unreasonably  withheld  or  delayed.   All  alterations  and
additions to the Leased Premises shall be made in accordance
with all applicable laws and shall remain for the benefit of
Lessor.   In the event of making such alterations as  herein
provided,  Lessee  further  agrees  to  indemnify  and  save
harmless  Lessor from all expense, liens, claims or  damages
to  either persons or property or the Leased Premises  which
may arise out of or result from the undertaking or making of
said  repairs,  improvements, alterations or  additions,  or
Lessee's   failure  to  make  said  repairs,   improvements,
alterations or additions.

ARTICLE 9.  COMPLIANCE WITH LAWS AND REGULATIONS

   Lessee  will comply with all statutes, ordinances, rules,
orders, regulations and requirements of all federal,  state,
city  and local governments, and with all rules, orders  and
regulations  of  the applicable Board of  Fire  Underwriters
that affect the use of the improvements.  Lessee will comply
with  all  easements, restrictions, and covenants of  record
against  or affecting the Leased Premises and any  franchise
agreements required for operation of the Leased Premises  in
accordance with Article 14 hereof.

ARTICLE l0.  SIGNS

   Lessee  shall  have the right to install and  maintain  a
sign  or signs advertising Lessee's business, provided  that
the signs conform to law, and further provided that the sign
or signs conform specifically to the written requirements of
the appropriate governmental authorities.

ARTICLE 11.  SUBORDINATION

   (A)  Lessor  reserves the right and privilege to  subject
and  subordinate this Lease at all times to the lien of  any
mortgage  or mortgages now or hereafter placed upon Lessor's
interest  in  the  Leased  Premises  and  on  the  land  and
buildings  of which said premises are a part,  or  upon  any
buildings hereafter placed upon the land of which the Leased
Premises  are a part, provided such mortgagee shall  execute
its  standard  form, commercially reasonable  subordination,
attornment  and non-disturbance agreement, such form  to  be
consistent   with  other  such  forms  used  by   commercial
mortgagees in the industry.  Lessor also reserves the  right
and  privilege to subject and subordinate this Lease at  all
times  to  any  and  all  advances to  be  made  under  such
mortgages,  and  all  renewals,  modifications,  extensions,
consolidations,  and  replacements  thereof,  provided  such
mortgagee  shall  execute  its standard  form,  commercially
reasonable  subordination,  attornment  and  non-disturbance
agreement, such form to be consistent with other such  forms
used by commercial mortgagees in the industry.

   (B)  Lessee covenants and agrees to execute and  deliver,
upon demand, such further commercially reasonable instrument
or  instruments  subordinating this Lease on  the  foregoing
basis to the lien of any such mortgage or mortgages as shall
be  desired by Lessor and any proposed mortgagee or proposed
mortgagees,  provided  such  mortgagee  shall  execute   its
standard   form,   commercially  reasonable   subordination,
attornment  and non-disturbance agreement, such form  to  be
consistent   with  other  such  forms  used  by   commercial
mortgagees in the industry .

ARTICLE l2.  CONDEMNATION OR EMINENT DOMAIN

   (A)  If the whole of the Leased Premises are taken by any
public  authority under the power of eminent domain,  or  by
private  purchase  in lieu thereof, then  this  Lease  shall
automatically   terminate  upon  the  date   possession   is
surrendered, and Rent shall be paid up to that day.  If  any
part  of the Leased Premises shall be so taken as to  render
the remainder thereof materially unusable in the opinion  of
a  licensed third party contractor or architect selected  by
Lessee  and approved by Lessor, for the purposes  for  which
the  Leased Premises were leased, then Lessee shall have the
right to terminate this Lease on thirty (30) days notice  to
the  Lessor given within ninety (90) days after the date  of
such  taking.  In the event that this Lease shall  terminate
or  be terminated, the Rent shall be paid up to the day that
possession was surrendered.

   (B)  If any part of the Leased Premises shall be so taken
such   that  it  does  not  render  the  remainder   thereof
materially  unusable for the purposes for which  the  Leased
Premises  were  leased, in the opinion of a  licensed  third
party  contractor  or  architect  selected  by  Lessee   and
approved by Lessor, then Lessee shall, with the use  of  all
of  the  condemnation  proceeds (to  be  made  available  by
Lessor, immediately if such proceeds are less than $100,000,
or if in excess of $100,000, under a commercially reasonable
construction draw procedure in payment of invoices for  work
performed  submitted  by  Lessee  or  its  contractors)  but
otherwise  at  Lessee's own cost and  expense,  restore  the
remaining  portion  of  the Leased Premises  to  the  extent
necessary to render it reasonably suitable for the  purposes
for  which  it  was leased.  Provided, however,  Lessee  may
elect  to  replace  the  Leased Premises  with  a  different
restaurant  concept,  subject  to  Lessor's  prior   written
approval, which approval shall not be unreasonably  withheld
or  delayed,  and further that Lessee shall not be  required
(unless  Lessee so elects) to repair or restore  the  Leased
Premises if the Term or any Renewal Term shall expire within
two  years  of  such  partial taking.  Lessee  shall  notify
Lessor of Lessee's election to not so restore or repair  the
Leased  Premises after such a partial taking within 60  days
of notice of such taking.  If Lessee elects to not make such
repair  or  restoration,  this Lease  shall  terminate  upon
Lessor's   receipt  of  Lessee's  notice   of   termination.
Otherwise, if Lessee so elects or is required to  repair  or
restore  the Leased Premises, Lessee shall make all  repairs
to  the building in which the Leased Premises is located  to
the  extent necessary to constitute the building a  complete
architectural unit. Provided, however, that such work  shall
not  exceed  the scope of the work required to  be  done  by
Lessee  in  originally  constructing  such  building  unless
Lessee shall demonstrate to Lessor's reasonable satisfaction
the  availability of funds to complete such work.  Provided,
further,  the  cost thereof to Lessor shall not  exceed  the
proceeds  of its condemnation award, all to be done  without
any  adjustments  in Rent to be paid by  Lessee,  except  as
follows:  any  condemnation  proceeds  remaining  after  the
completion  of  the  repair  or restoration  of  the  Leased
Premises shall be paid to Lessor. This lease shall be deemed
amended  to  reflect the taking in the legal description  of
the Leased Premises.

   (C)  All compensation awarded or paid upon such total  or
partial taking of the Leased Premises shall belong to and be
the  property of Lessor without any participation by Lessee,
whether  such  damages shall be awarded as compensation  for
diminution  in value to the leasehold or to the fee  of  the
premises  herein leased.  Nothing contained herein shall  be
construed  to  preclude  Lessee from prosecuting  any  claim
directly   against   the  condemning   authority   in   such
proceedings   for:   Loss  of  business;   interruption   of
business;  moving expenses; damage to or loss  of  value  or
cost of removal of inventory, trade fixtures, furniture, and
other  personal  property  belonging  to  Lessee;  provided,
however,  that  no  such claim shall diminish  or  otherwise
adversely  affect  Lessor's award or the award  of  any  fee
mortgagee.

ARTICLE l3.  RIGHT TO INSPECT

   Lessor  reserves  the right to enter  upon,  inspect  and
examine  the  Leased  Premises at any time  during  business
hours,  after reasonable notice to Lessee, and Lessee agrees
to  allow Lessor free access to the Leased Premises to  show
the  premises.  Upon default by Lessee or at any time within
one   hundred  eighty  (180)  days  of  the  expiration   or
termination of the Lease, Lessee agrees to allow  Lessor  to
then  place  "For Sale" or "For Rent" signs  on  the  Leased
Premises.

ARTICLE l4.  EXCLUSIVE USE

   After  the  Occupancy Date, Lessee expressly  agrees  and
warrants  that the Leased Premises will be used  exclusively
as  a  Johnny  Carino's Country Italian Restaurant  (or  any
derivative  of  such  name  as Lessee  may  use)  or,  after
obtaining  Lessor's prior written consent, such consent  not
to  be unreasonably withheld or delayed, other casual dining
sit-down  restaurant.  Lessee acknowledges and  agrees  that
any  other  use without the prior written consent of  Lessor
will  constitute a default under and a violation and  breach
of  this Lease.  Lessee agrees:  To open for business on the
first  day  in respect of which Rent is payable; to  operate
all  of the Leased Premises during the Term or Renewal Terms
during regular and customary hours for businesses similar to
the  permitted exclusive use stated herein, unless prevented
from  doing  so  by causes beyond Lessee's control;  and  to
conduct its business in a prudent and reputable manner.

ARTICLE l5.  DESTRUCTION OF PREMISES

   If,  during  the term of this Lease, the Leased  Premises
are   totally  or  partially  destroyed  by  fire  or  other
elements,  within a reasonable time (but in no event  longer
than  one  hundred  eighty (180) days  and  subject  to  the
provisions  herein below), Lessee shall repair  and  restore
the improvements so damaged or destroyed as nearly as may be
practical  to  their  condition immediately  prior  to  such
casualty.   All  rents  payable by Lessee  shall  be  abated
during  the  period of repair and restoration to the  extent
that Lessor shall be compensated by the proceeds of the rent
loss   insurance  required  to  be  maintained   by   Lessee
hereunder.

   Provided Lessee is not in default hereunder (and  retains
according  to  the terms hereof the right to rebuild),  then
with the Lessor's prior written consent (if the repairs will
exceed the amounts set forth in Article 8(B)), which consent
shall  not be unreasonably withheld or delayed, Lessee shall
have  the  right  to promptly and in good faith  settle  and
adjust  any  claim  under such insurance policies  with  the
insurance  company or companies on the amounts  to  be  paid
upon  the  loss.  The insurance proceeds shall  be  used  to
reimburse  Lessee for the cost of rebuilding or  restoration
of  the  Leased Premises.  The Leased Premises shall  be  so
restored or rebuilt so as to be of at least equal value  and
substantially the same character as prior to such damage  or
destruction.  Provided, however, Lessee may elect to replace
the  Leased  Premises  with a different  restaurant  concept
subject  to Lessor's prior written approval, which  approval
shall  not  be  unreasonably withheld or  delayed.   If  the
insurance  proceeds  are  less  than  One  Hundred  Thousand
Dollars  ($100,000), they shall be paid to Lessee  for  such
repair  and  restoration.   If the  insurance  proceeds  are
greater  than  or  equal  to  One Hundred  Thousand  Dollars
($100,000),  they  shall be deposited by Lessee  and  Lessor
into   a  customary  construction  escrow  at  a  nationally
recognized  title insurance company, or at Lessee's  option,
with  Lessor  ("Escrowee") and shall be made available  from
time  to  time  to  Lessee for such repair and  restoration.
Such  proceeds  shall  be disbursed in conformity  with  the
terms   and   conditions   of   a  commercially   reasonable
construction  loan  agreement.   Lessee  shall,  in   either
instance, deliver to Lessor or Escrowee (as the case may be)
satisfactory  evidence of the estimated cost  of  completion
together  with  such  architect's certificates,  waivers  of
lien,  contractor's sworn statements and other  evidence  of
cost  and  of  payments  as  the  Lessor  or  Escrowee   may
reasonably  require and approve.  If the estimated  cost  of
the  work  exceeds Twenty-Five Percent (25%) of the original
cost to Lessor to acquire its interest in the Lease Premises
from   Lessee,  all  plans  and  specifications   for   such
rebuilding or restoration shall be subject to the reasonable
approval of Lessor.

   Any  insurance proceeds remaining with Escrowee after the
completion  of the repair or restoration shall  be  paid  to
Lessor.

   If  the  proceeds  from the insurance  are  insufficient,
after   review   of   the  bids  for  completion   of   such
improvements,  or  should  become  insufficient  during  the
course  of construction, to pay for the total cost of repair
or restoration, Lessee shall, prior to commencement of work,
demonstrate    to    Escrowee   and   Lessor's    reasonable
satisfaction,  the availability of such funds  necessary  to
complete construction and Lessee shall deposit the same with
Escrowee  for  disbursement under  the  construction  escrow
agreement.   Provided,  further,  that  should  the   Leased
Premises  be  damaged or destroyed to the  extent  of  fifty
(50%)  percent of its value or such that Lessee cannot carry
on  business  as  a  casual dining  restaurant  without  (in
Lessor's  reasonable  opinion) being closed  for  more  than
sixty   (60)  days  (which  duration  of  closure   may   be
established  by  Lessee by the affidavit of  an  independent
third  party contractor as to the estimated time of  repair)
during  the  last two years of the remaining  term  of  this
Lease  or  any  of the option terms of this  Lease,  if  any
further options to renew remain, Lessee may elect within  30
days  of  such  damage, to then exercise at  least  one  (1)
option to renew this Lease so that the remaining term of the
Lease  is  not  less  than five (5) years  in  order  to  be
entitled  to  such  insurance proceeds  for  restoration  or
rebuilding.    Absent  such  election,  this   Lease   shall
terminate upon Lessor's receipt of the insurance proceeds in
the  amount  estimated  to restore  or  rebuild  the  Leased
Premises.

ARTICLE l6.  ACTS OF DEFAULT

   (A)  Each  of the following shall be deemed a default  by
Lessee and a breach of this Lease:

        1.  Failure   to  pay  the  Rent  or  any   monetary
            obligation herein reserved, or any part  thereof
            when   the   same  shall  be  due  and  payable.
            Interest  and  late charges for failure  to  pay
            Rent  when due shall accrue if Lessee shall fail
            to  make  payment within five days after  notice
            to  Lessee that Rent has not been paid.   Lessee
            shall  be granted five days after written notice
            to  cure  such failure to pay the  Rent  or  any
            other monetary obligation herein reserved.

        2.  Failure to do, observe, keep and perform any  of
            the    other   terms,   covenants,   conditions,
            agreements  and provisions in this Lease  to  be
            done,  observed, kept and performed  by  Lessee;
            provided,   however,  that  Lessee  shall   have
            Thirty  (30)  days  after  written  notice  from
            Lessor  within  which to cure such  default,  or
            such  longer time as may be reasonably necessary
            if  such  default  cannot  reasonably  be  cured
            within   Thirty   (30)  days,   if   Lessee   is
            diligently pursuing a course of conduct that  in
            Lessor's   reasonable  opinion  is  capable   of
            curing  such  default, but  in  any  event  such
            longer  time  shall  not exceed  90  days  after
            written   notice  from  Lessor  of  the  default
            hereunder.

        3.  The  abandonment of the premises by Lessee,  the
            adjudication  of  Lessee  as  a  bankrupt,   the
            making  by  Lessee of a general  assignment  for
            the  benefit of creditors, the taking by  Lessee
            of  the  benefit of any insolvency act  or  law,
            the  appointment  of  a  permanent  receiver  or
            trustee  in  bankruptcy for Lessee property,  or
            the  appointment of a temporary  receiver  which
            is  not  vacated or set aside within sixty  (60)
            days from the date of such appointment.

ARTICLE l7.  TERMINATION FOR DEFAULT

   In  the event of any uncured default by Lessee and at any
time  thereafter,  Lessor may serve a  written  notice  upon
Lessee  that  Lessor elects to terminate this  Lease.   This
Lease  shall then terminate on the date so specified  as  if
that  date had been originally fixed as the expiration  date
of  the  term herein granted, provided, however, that Lessee
shall  have  continuing liability for future rents  for  the
remainder  of  the  original term and any exercised  renewal
term as set forth in Article 19, notwithstanding any earlier
termination  of the Lease hereunder, preserving unto  Lessor
the benefit of its bargained-for rental payments.

ARTICLE l8.  LESSOR'S RIGHT OF RE-ENTRY

   In  the  event  that this Lease shall  be  terminated  as
hereinbefore   provided,  or  by  summary   proceedings   or
otherwise,  or in the event of an uncured default  hereunder
by  Lessee,  or in the event that the premises or  any  part
thereof,  shall be abandoned by Lessee, then Lessor  or  its
agents, servants or representatives, may immediately  or  at
any  time thereafter, re-enter and resume possession of  the
premises  or  any part thereof, and remove all  persons  and
property therefrom, either by summary dispossess proceedings
or by a suitable action or proceeding at law, or by force or
otherwise without being liable for any damages therefor.

ARTICLE l9.  LESSEE'S CONTINUING LIABILITY

   (A)  Should Lessor elect to re-enter as provided in  this
Lease  or  should  it  take  possession  pursuant  to  legal
proceedings or pursuant to any notice provided for  by  law,
it  may either (i) terminate this Lease or (ii) it may  from
time to time, without terminating the contractual obligation
of   Lessee  to  pay  Rent  under  this  Lease,  make   such
alterations  and repairs as may be necessary  to  relet  the
Leased Premises or any part thereof for such Term or Renewal
Terms, at such Rent or Rents, and upon such other terms  and
conditions  as  Lessor  in  its  sole  discretion  may  deem
advisable.   Termination of Lessee's right to possession  by
Court  Order shall be sufficient evidence of the termination
of  Lessee's  possessory rights under this  Lease,  and  the
filing  of  such an Order shall be notice of the termination
of   Lessee's  Option  to  Purchase  as  set  forth  in  any
Memorandum of Lease of record.

   (B)  Upon each such reletting, without termination of the
contractual  obligation of Lessee to  pay  Rent  under  this
Lease,  all  rents  received by Lessor from  such  reletting
shall be applied as follows:

        1.First, to the payment of any indebtedness other than
          Rent due hereunder from Lessee to Lessor;

        2.Second, to the payment of any costs and expenses of
          such reletting, including brokerage fees and attorney's
          fees and of costs of such alterations and repairs;

        3.Third, to the payment of Rent and other monetary
          obligations due and unpaid hereunder;

        4.Finally, the residue, if any, shall be held by Lessor
          and applied in payment of future Rent as the same may
          become due and payable hereunder.

If  such rents received from such reletting during any month
are  less  than that to be paid during that month by  Lessee
hereunder,  Lessee shall pay any such deficiency to  Lessor.
Such  deficiency shall be calculated and paid  monthly.   No
such  re-entry or taking possession of such Leased  Premises
by  Lessor shall be construed as an election on its part  to
terminate Lessee's contractual obligations under this  Lease
respecting the payment of rent and obligations for the costs
of  repair and maintenance unless a written notice  of  such
intention be given to Lessee.

   (C)    Notwithstanding   any   such   reletting   without
termination,  Lessor  may at any time  thereafter  elect  to
terminate this Lease for any breach.

   (D)  In  addition to any other remedies Lessor  may  have
with  this  Article 19, Lessor may recover from  Lessee  all
damages  it  may  incur by reason of any breach,  including:
The  cost  of recovering and reletting the Leased  Premises;
reasonable   attorney's  fees;  and,   the   present   value
(discounted at a rate of 10% per annum) of the excess of the
amount  of  Rent and charges equivalent to Rent reserved  in
this  Lease  for  the remainder of the Term  over  the  then
reasonable rent value of the Leased Premises (or the  actual
rents  receivable by Lessor, if relet) for the remainder  of
the  Term, all of which amounts shall be immediately due and
payable  from Lessee to Lessor in full.  In the  event  that
the rent obtained from such alternative or substitute tenant
is more than the Rent which Lessee is obligated to pay under
this  Lease,  then  such  excess shall  be  paid  to  Lessor
provided  that Lessor shall credit such excess  against  the
outstanding  obligations of Lessee due pursuant  hereto,  if
any.

   (E)  It is the object and purpose of this Article 19 that
Lessor shall be kept whole and shall suffer no damage by way
of  non-payment  of  Rent or by way of diminution  in  Rent.
Lessee waives and will waive all rights to trial by jury  in
any  summary proceedings or in any action brought to recover
Rent  herein  that  may  hereafter be instituted  by  Lessor
against  Lessee  in respect to the Leased Premises.   Lessee
hereby  waives  any rights of re-entry it may  have  or  any
rights  of redemption or rights to redeem this Lease upon  a
termination of this Lease.

ARTICLE 20.  PERSONALTY, FIXTURES AND EQUIPMENT

(A)          All building fixtures, building machinery,  and
building equipment used in connection with the operation  of
the  Leased Premises including, but not limited to, heating,
electrical  wiring,  lighting,  ventilating,  plumbing,  air
conditioning systems, and the equipment owned by Lessor  and
leased  to  Lessee hereunder as specifically  set  forth  on
Exhibit  B  attached  hereto  and  incorporated  herein   by
reference  shall  be  the property  of  Lessor.   All  trade
fixtures  and  all other fixtures and articles  of  personal
property  owned  by  Lessee shall  remain  the  property  of
Lessee.  Lessor hereby acknowledges and agrees that  it  has
no   contractual  lien,  and  hereby  waives  any  statutory
landlord's  lien that Lessor might have, on the property  of
Lessee.

   (B)  Lessee  shall  furnish  and  pay  for  any  and  all
equipment, furniture, trade fixtures, and signs, except  for
such  items,  if any, described in Article 20(A)  above,  as
owned by Lessor.

   (C)  At  the end of the term of this Lease, the  property
described  at Article 20(B) above, after written  notice  to
Lessor  given at least ten (10) days prior thereto,  may  be
removed  from  the Leased Premises by Lessee  regardless  of
whether  or  not  such property is attached  to  the  Leased
Premises so as to constitute a "fixture" within the  meaning
of  the  law; however, all damages and repairs to the Leased
Premises which may be caused by the removal of such property
shall be paid for by Lessee.

ARTICLE 2l.  LIENS

   Lessee  shall not do or cause anything to be done whereby
the  Leased Premises may be encumbered by any mechanic's  or
other  liens.   Whenever and as often as any  mechanic's  or
other  lien is filed against said Leased Premises purporting
to be for labor or materials furnished or to be furnished to
Lessee, Lessee shall remove the lien of record by payment or
by  bonding with a surety company authorized to do  business
in the state in which the property is located, within twenty
(20) days from the date of the filing of said mechanic's  or
other  lien  and  delivery of notice thereof  to  Lessee  of
Lessee's obligation under this Lease.  Should Lessee fail to
take the foregoing steps within said twenty (20) day period,
Lessor shall have the right, among other things, to pay said
lien without inquiring into the validity thereof, and Lessee
shall  forthwith  reimburse Lessor  for  the  total  expense
incurred  by it in discharging said lien as additional  Rent
hereunder.

ARTICLE 22.  NO WAIVER BY LESSOR EXCEPT IN WRITING

   No   agreement  to  accept  a  surrender  of  the  Leased
Premises or termination of this Lease shall be valid  unless
in  writing signed by Lessor.  The delivery of keys  to  any
employee of Lessor or Lessor's agents shall not operate as a
termination  of  the Lease or a surrender of  the  premises.
The  failure of Lessor to seek redress for violation of  any
rule  or  regulation, shall not prevent  a  subsequent  act,
which  would  have originally constituted a violation,  from
having  all  the force and effect of an original  violation.
Neither  payment by Lessee or receipt by Lessor of a  lesser
amount than the Rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated Rent.   Nor
shall  any  endorsement or statement on any  check  nor  any
letter  accompanying any check or payment as Rent be  deemed
an accord and satisfaction.  Lessor may accept such check or
payment  without prejudice to Lessor's right to recover  the
balance of such Rent or pursue any other remedy provided  in
this  Lease.   This  Lease  contains  the  entire  agreement
between  the parties, and any executory agreement  hereafter
made  shall  be  ineffective to  change  it,  modify  it  or
discharge  it,  in whole or in part, unless  such  executory
agreement is in writing and signed by the party against whom
enforcement  of  the change, modification  or  discharge  is
sought.

ARTICLE 23.  QUIET ENJOYMENT

   Lessor  covenants that Lessee, upon paying the  Rent  set
forth  in  Article 4 and all other sums herein  reserved  as
Rent  and  upon  the  due  performance  of  all  the  terms,
covenants,  conditions and agreements  herein  contained  on
Lessee's part to be kept and performed, shall have, hold and
enjoy  the  Leased Premises free from molestation, eviction,
or  disturbance by Lessor, or by any other person or persons
lawfully  claiming the same, and that Lessor has good  right
to  make  this  Lease  for the full term granted,  including
renewal periods.

ARTICLE 24.  BREACH - PAYMENT OF COSTS AND ATTORNEYS' FEES

   Each  party  agrees to pay and discharge  all  reasonable
costs, and actual attorneys' fees, including but not limited
to  attorney's fees incurred at the trial level and  in  any
appellate or bankruptcy proceeding, and expenses that  shall
be  incurred  by  the  prevailing  party  in  enforcing  the
covenants,  conditions and terms of this Lease or  defending
against an alleged breach, including the costs of reletting.
Such  costs,  attorney's fees, and expenses if  incurred  by
Lessor  shall  be  considered as Rent as due  and  owing  in
addition to any Rent defined in Article 4 hereof.

ARTICLE 25.  ESTOPPEL CERTIFICATES

   Either  party to this Lease will, at any time,  upon  not
less  than  ten (l0) days prior request by the other  party,
execute, acknowledge and deliver to the requesting  party  a
statement  in writing, executed by an executive  officer  of
such  party, certifying that:  (a) this Lease is  unmodified
(or  if modified then disclosure of such modification  shall
be  made);  (b) this Lease is in full force and effect;  (c)
the date to which the Rent and other charges have been paid;
and  (d)  to the knowledge of the signer of such certificate
that the other party is not in default in the performance of
any  covenant,  agreement  or condition  contained  in  this
Lease,  or  if  a default does exist, specifying  each  such
default  of  which  the signer may have  knowledge.   It  is
intended that any such statement delivered pursuant to  this
Article  may be relied upon by any prospective purchaser  or
mortgagee  of  the Leased Premises or any assignee  of  such
mortgagee or a purchaser of the leasehold estate.

ARTICLE 26.  FINANCIAL STATEMENTS

   During  the  term of this Lease, Lessee will, within  one
hundred  twenty (120) days after the end of Lessee's  fiscal
year, furnish Lessor with Lessee's financial statements  (in
SEC  Form  10-K,  if  available).  The financial  statements
shall  be  prepared  in conformity with  generally  accepted
accounting principles (GAAP) and shall be certified as  true
and   correct  by  the  chief  financial  officer  or  other
authorized  officer  of Lessee.  Lessee shall  also  provide
Lessor  with  financial statements for the  Leased  Premises
within  120  days  after the end of each  Lease  Year.   The
financial statements for the Leased Premises do not need  to
be  prepared  by an independent certified public accountant,
but  shall  be  certified as true and correct by  the  chief
financial  officer  or other authorized officer  of  Lessee.
Additionally,  during  the term of the  Lease,  Lessee  will
within forty-five (45) days from the end of each quarter  of
each  fiscal  year,  furnish Lessor with Lessee's  financial
statements  (in  SEC Form 10-Q if available)  and  financial
statements of the Leased Premises for such quarter.   Lessor
shall  have  the right to require such financial  statements
for  the  Lessee and the Leased Premises on a monthly  basis
after  the  occurrence  of  a default  in  any  Lease  Year.
Provided, however, if Lessee shall not commit a default  for
twelve  consecutive months, Lessor's right to  require  such
monthly  financial statements shall terminate  until  Lessee
shall again commit a default in any given Lease Year.   Said
quarterly  (or  monthly, if required  by  Lessor)  financial
statements  do  not  need to be prepared by  an  independent
certified public accountant, but shall be certified as  true
and   correct  by  the  chief  financial  officer  or  other
authorized  officer  of  Lessee.  The  financial  statements
shall  conform  to  GAAP, and include a  balance  sheet  and
related  statements of operations, statement of cash  flows,
statement  of changes in shareholder's equity,  and  related
notes to financial statements, if any.

ARTICLE 27.  MORTGAGE

   Lessee    does   hereby   agree   to   make    reasonable
modifications  of this Lease requested by any  Mortgagee  of
record from time to time provided such modifications are not
substantial  and  do  not  increase  any  of  the  Rents  or
materially modify any of the elements of this Lease.

ARTICLE 28.  OPTION TO RENEW

   If  this  Lease is not previously canceled or  terminated
and if Lessee is not then in default, then Lessee shall have
the  option to renew this Lease upon the same conditions and
covenants  contained in this Lease for Three (3) consecutive
periods  of Five (5) years each (singularly "Renewal Term").
Rent  during  each  Lease  Year of any  Renewal  Term  shall
increase by 1.5% of the Rent payable for the preceding Lease
Year.

   The   first  Renewal  Term  will  commence  on  the   day
following  the date the original Term expires and successive
Renewal Terms will commence on the day of following the last
day of the then expiring Renewal Term.  Lessee must give one
hundred  twenty (l20) days written notice to Lessor  of  its
intent  to  exercise this option prior to the expiration  of
the  original Term of this Lease or any Renewal Term, as the
case may be.

ARTICLE 29.  MISCELLANEOUS PROVISIONS

(A)  All  notices, consents, approvals, or other instruments
     required or permitted to be given by either party pursuant
     to this Lease shall be in writing and given by (i) hand
     delivery, (ii) facsimile, (iii) express overnight delivery
     service or (iv) certified or registered mail, return receipt
     requested, and shall be deemed to have been delivered upon
     (a) receipt, if hand delivered, (b) confirmed transmission,
     if delivered by facsimile, (c) the next business day, if
     delivered by express overnight delivery service, or (d) the
     third business day following the day of deposit of such
     notice with the United State Postal Service, if sent by
     certified or registered mail, return receipt requested.
     Notices shall be provided to the parties and addresses (or
     facsimile numbers, as applicable) specified on the first
     page hereof.

(B)  The  terms, conditions and covenants contained in  this
     Lease  and  any riders and plans attached hereto  shall
     bind and inure to the benefit of Lessor and Lessee  and
     their     respective    successors,    heirs,     legal
     representatives, and assigns.

(B)  This Lease shall be governed by and construed under the
     laws of the State where the Leased Premises are situate.

(D)  In  the event that any provision of this Lease shall be
     held  invalid or unenforceable, no other provisions  of
     this  Lease shall be affected by such holding, and  all
     of   the  remaining  provisions  of  this  Lease  shall
     continue  in  full  force and effect  pursuant  to  the
     terms hereof.

(E)  The  Article captions are inserted only for convenience
     and  reference, and are not intended, in  any  way,  to
     define,   limit,  describe  the  scope,   intent,   and
     language of this Lease or its provisions.

(F)  In  the  event  Lessee  remains in  possession  of  the
     premises  herein  leased after the expiration  of  this
     Lease  and  without the execution of a  new  lease,  it
     shall  be  deemed to be occupying said  premises  as  a
     tenant   from  month-to-month,  subject  to   all   the
     conditions, provisions, and obligations of  this  Lease
     insofar   as   the   same  can  be  applicable   to   a
     month-to-month   tenancy  except   that   the   monthly
     installment  of  Rent shall be increased  150%  of  the
     amount due on the last month prior to such expiration.

(G)  If  any  installment of Rent (whether lump sum, monthly
     installments,  or  any other monetary amounts  required
     by  this  Lease  to  be paid by Lessee  and  deemed  to
     constitute Rent hereunder) shall not be paid  when  due
     and  shall  remain unpaid for five days  after  written
     notice  to Lessee, or financial statements required  to
     be  delivered  hereunder by Lessee  remain  undelivered
     when  due for five days after written notice to Lessee,
     Lessor  shall  have the right to charge Lessee  a  late
     charge  of $250.00 per month for each month (or portion
     thereof)  that  any amount of Rent installment  remains
     unpaid    or    such   financial   statements    remain
     undelivered.

(H)  Any   part  of  the  Leased  Premises  (excluding   the
     Building)  may  be conveyed by Lessor  for  private  or
     public  non-exclusive easement purposes  at  any  time,
     provided  such  easement does not  interfere  with  the
     business  of  Lessee and provided Lessor has  delivered
     to   Lessee  written  notification,  together  with   a
     description  of  the  location  and  reason  for   such
     easement,  at  least 30 days prior to such  conveyance.
     In  such  event  Lessor shall,  at  its  own  cost  and
     expense,  restore the remaining portion of  the  Leased
     Premises   to  the  extent  necessary  to   render   it
     reasonably suitable for the purposes for which  it  was
     leased,  all to be done without adjustments in Rent  to
     be  paid  by  Lessee.  All proceeds from any conveyance
     of an easement shall belong solely to Lessor.

(I)  For  the  purpose of this Lease, the term "Rent"  shall
     be  defined  as  Rent under Article 4,  and  any  other
     monetary amounts required by this Lease to be  paid  by
     Lessee.

(J)        Lessee  agrees to cooperate with Lessor to  allow
     Lessor to obtain and use at Lessor's expense promotional
     photographs of the Leased Premises.

(K)        The  Prior Lease is hereby terminated and  of  no
   further force and effect and is superceded in its entirety
   by this Lease.

ARTICLE 30.  REMEDIES

   NON-EXCLUSIVITY.    Notwithstanding  anything   contained
herein  it is the intent of the parties that the rights  and
remedies contained herein shall not be exclusive but  rather
shall  be  cumulative  along with  all  of  the  rights  and
remedies  of  the  parties which they may  have  at  law  or
equity.

ARTICLE 31.  HAZARDOUS MATERIALS INDEMNITY

   Lessee covenants, represents and warrants to Lessor,  its
successors and assigns, (i) that (except for items  normally
used by Lessee in the course of restaurant operations and in
such case, such items are used and stored in accordance with
applicable  law or regulation) it has not used or  permitted
and  will not use or permit the Leased Premises to be  used,
whether  directly or through contractors, agents or tenants,
and  to  the  best  of  Lessee's  knowledge  and  except  as
disclosed to Lessor in writing, the Leased Premises has  not
at  any  time  been  used for the generating,  transporting,
treating, storage, manufacture, emission of, or disposal  of
any  dangerous,  toxic  or hazardous pollutants,  chemicals,
wastes or substances as defined in the Federal Comprehensive
Environmental  Response Compensation and  Liability  Act  of
1980  ("CERCLA"),  the  Federal  Resource  Conservation  and
Recovery  Act of 1976 ("RCRA"), or any other federal,  state
or   local   environmental   laws,  statutes,   regulations,
requirements  and  ordinances ("Hazardous Materials");  (ii)
that  to the best of Lessee's knowledge, there have been  no
investigations or reports involving Lessee,  or  the  Leased
Premises  by  any governmental authority which  in  any  way
pertain  to  Hazardous Materials (iii) that to the  best  of
Lessee's knowledge the operation of the Leased Premises  has
not  violated  and is not currently violating  any  federal,
state  or  local  law, regulation, ordinance or  requirement
governing  Hazardous Materials; (iv) that  to  the  best  of
Lessee's knowledge the Leased Premises is not listed in  the
United  States  Environmental Protection  Agency's  National
Priorities List of Hazardous Waste Sites nor any other list,
schedule, log, inventory or record of Hazardous Materials or
hazardous  waste  sites, whether maintained  by  the  United
States Government or any state or local agency; and (v) that
the  Leased Premises will not contain any formaldehyde, urea
or asbestos, except as may have been disclosed in writing to
Lessor  by  Lessee at the time of execution and delivery  of
this  Lease.   Lessee  agrees  to  indemnify  and  reimburse
Lessor, its successors and assigns, for:

(a)  any  loss,  damage, expense or cost arising out  of  or
     incurred by Lessor which is the result of a breach  of,
     misstatement  of  or  misrepresentation  of  the  above
     covenants, representations and warranties, and

(b)  any  and  all  liability of any kind  whatsoever  which
     Lessor  may, for any cause and at any time, sustain  or
     incur  by  reason of Hazardous Materials discovered  on
     the  Leased Premises during the term hereof  or  placed
     or released on the Leased Premises by Lessee;

together  with  all attorneys' fees, costs and disbursements
incurred  in  connection  with the  defense  of  any  action
against  Lessor arising out of the above.  These  covenants,
representations  and warranties shall be  deemed  continuing
covenants, representations and warranties for the benefit of
Lessor,  and any successors and assigns of Lessor and  shall
survive expiration or sooner termination of this Lease.  The
amount  of  all  such indemnified loss, damage,  expense  or
cost,  shall  bear interest thereon at twelve percent  (12%)
per  annum  and shall become immediately due and payable  in
full  on  demand  of  Lessor, its  successors  and  assigns.
Lessee  shall  not be responsible for any liabilities  under
this  Article  if the liability results from  activities  of
Lessor or any agent, employee, or contractor of Lessor.

ARTICLE 32.  ESCROWS

     Upon  the  occurrence of a third default in any  twelve
month  period  by  Lessee, or upon the request  of  Lessor's
mortgagee, if any, Lessee shall deposit with Lessor  on  the
first  day  of  each  and every month, an  amount  equal  to
one-twelfth  (1/12th) of the estimated  annual  real  estate
taxes,  assessments  and insurance ("Charges")  due  on  the
Leased   Premises,   or  such  higher   amounts   reasonably
determined by Lessor as necessary to accumulate such amounts
to  enable Lessor to pay all charges due and owing at  least
thirty (30) days prior to the date such amounts are due  and
payable.  If  Lessee is depositing into  such  escrow  as  a
result  of  its  third  default in any  given  twelve  month
period,  and Lessee shall not commit a default for a  period
of  24 months from the commencement of such escrowing,  such
escrow shall be discontinued unless renewed according to the
terms  hereof for the occurrence of a third default  in  any
twelve  month  period,  or  upon  the  request  of  Lessor's
mortgagee.

   From  time to time out of such deposits Lessor will, upon
the  presentation to Lessor by Lessee of the bills therefor,
pay the Charges or will upon presentation of receipted bills
therefor, reimburse Lessee for such payments made by Lessee.
In the event the deposits on hand shall not be sufficient to
pay  all of the estimated Charges when the same shall become
due  from time to time or the prior payments shall  be  less
than  the  currently estimated monthly amounts, then  Lessee
shall  pay to Lessor on demand any amount necessary to  make
up  the deficiency. The excess of any such deposits shall be
credited  to subsequent payments to be made for such  items.
If  a  default or an event of default shall occur under  the
terms  of  this  Lease, Lessor may, at its  option,  without
being  required so to do, apply any Deposit on hand to  cure
the default, in such order and manner as Lessor may elect.

ARTICLE 33.  NET LEASE

   It  is  the intent of the parties hereto that this  Lease
shall  be a net lease and that the Rent defined pursuant  to
Article 4 should be a net Rent paid to Lessor.  Any and  all
other  expenses  including but not limited to,  maintenance,
repair, insurance, taxes, and assessments, shall be paid  by
Lessee.

ARTICLE 34.  RIGHT OF FIRST REFUSAL

   Lessor,  for  itself, its successors and assigns,  hereby
gives  and  grants to Lessee a right of first  refusal  (the
"Option")  to purchase the Leased Premises, subject  to  the
following terms and conditions:

(A)  Duration  of  Option.  The Option and  all  rights  and
privileges  of  Lessee hereunder shall be in force  for  the
term of this Lease until the expiration of Lessee's right to
possession.

(B)  Manner of Exercising Option.  If Lessor shall desire to
sell  the  Leased  Premises (subject to the  terms  of  this
Lease),  Lessor shall give Lessee written notice of Lessor's
intention  to sell Lessor's interest in the Leased Premises.
Such notice ("Lessor's Notice") shall state a price at which
(or  greater) Lessor intends to sell all or a portion of its
interest.    For  twenty (20) business  days  following  the
giving  of  such  notice, Lessee shall have  the  option  to
purchase  the Lessor's interest at the price in cash  stated
in  the  Lessor's Notice.  A written notice in substantially
the following form, addressed to Lessor and signed by Lessee
and  given,  in  accordance with the provisions  of  Article
29(A)  hereof, within the period for exercising the  Option,
submitted with a bank cashier's check or money order payable
to  the  order  of  Lessor in the amount of $25,000.00  (the
"Earnest  Money") shall be an effective exercise of Lessee's
Option, to wit:

                           (date)

"We  hereby  exercise  the Option to purchase  the  property
commonly known as Carino's, Laredo, Texas, pursuant  to  the
Right  of First Refusal contained in that certain Net  Lease
Agreement between us pertaining to said premises."

(C)   Terms  of  Sale  if Option Exercised.   Upon  Lessee's
exercise of the Option in accordance with the provisions  of
subparagraph (B) hereof, Lessor shall be obligated  to  sell
and  convey by recordable warranty deed, good and marketable
title  to  the Leased Premises subject only to  the  matters
affecting title which were of record at the time Lessor came
into  title  to the Leased Premises and those matters  which
Lessee  created, suffered or permitted to accrue during  the
term  hereof, and Lessee shall be obligated to purchase  the
Premises upon the following terms and conditions:

(i)  Price.   The  price "Purchase Price"  at  which  Lessor
     shall   sell  and  Lessee  shall  purchase  the  Leased
     Premises shall be the price stated in Lessor's Notice.

(ii) Closing.   Closing shall be thirty (30) days after  the
     expiration  of the twenty days within which Lessee  may
     exercise its Option, unless the parties mutually  agree
     otherwise.   The  Purchase Price less  credit  for  the
     Earnest  Money  shall  be tendered  in  cash  or  other
     certified funds by Lessee at Closing.

(iii)     Evidence  of Title.  Not less than ten  (10)  days
     prior to closing, Lessee shall obtain a commitment  for
     an  TLTA owner's policy of title insurance dated within
     thirty  (30)  days  of the closing date,  issued  by  a
     nationally recognized title insurance company  selected
     by  Lessor (the "Title Company") in the amount  of  the
     Purchase  Price  determined  pursuant  to  subparagraph
     (C)(i)  above,  naming Lessee as the proposed  insured,
     and  covering  the  fee  simple  title  to  the  Leased
     Premises, and showing Lessor vested with good title  to
     the   Leased  Premises  subject  only  to  the  matters
     affecting  title  which  were of  record  at  the  time
     Lessor  came  into  title to the  Leased  Premises  and
     those   matters  which  Lessee  created,  suffered   or
     permitted  to  accrue  during the  term  hereof.   Such
     title  commitment shall be conclusive evidence of  good
     title.

(iv) Prorations.  Lessor shall pay the cost of the aforesaid
     title  policy and any and all state and municipal taxes
     imposed by law on the transfer of the title to the Leased
     Premises, or the transaction pursuant to which such transfer
     occurs.  Water, sewer and other utility charges, if any,
     which are not metered, driveway permit charges, if any,
     general real estate taxes, and other similar items, shall be
     adjusted ratably as of the Closing, except to the extent
     otherwise settled between the parties pursuant to other
     provisions of this Lease.  No portion of the Base Rent paid
     by Lessee shall be credited toward the Purchase Price but
     Lessee shall be given a credit for rent prepaid for any
     period after the Closing.

(v)  Escrow  Closing.  At the election of Lessor  or  Lessee
     upon notice to the other party not less than five (5) days
     prior to the Closing, this sale shall be closed through an
     escrow  with the Title Company, in accordance with  the
     general provisions of the usual form of Deed and  Money
     Escrow Agreement then is use by said company, with such
     special provisions inserted in the escrow agreement as may
     be  required to conform with this agreement.  Upon  the
     creation of such an escrow, anything herein to the contrary
     notwithstanding, paying of the purchase price and delivery
     of the deed shall be made through the escrow.  The cost of
     the escrow shall be divided equally between the Lessor and
     Lessee.  If for any reason other than Lessee's default, the
     transaction fails to close, the Earnest Money shall  be
     returned to Lessee forthwith.

     (vi)Remedies on Default.  If Lessee defaults under  the
     provisions  of  this subparagraph 34(C),  Lessor  shall
     have   the  right  to  annul  the  provisions  of  this
     paragraph  34 by giving Lessee notice of such election,
     provided that Lessor has first notified Lessee of  such
     default  and Lessee has failed to cure the same  within
     ten  (10) days after such notice.  Upon Lessor's notice
     of  annulment in accordance herewith, the Earnest Money
     shall  be  forfeited and paid to Lessor  as  liquidated
     damages,  which  shall be Lessor's sole  and  exclusive
     remedy.   If  Lessor defaults under the  provisions  of
     this  subparagraph 34(C) and fails to cure such default
     within  ten (10) days after being notified of the  same
     by  Lessee,  then in such event, (i) the Earnest  Money
     at  Lessee's election and immediately upon  its  demand
     shall  be  returned to Lessee, which return shall  not,
     however, in any way release or absolve Lessor from  its
     obligations   hereunder  and  (ii)  Lessee   shall   be
     entitled  to  all remedies (both legal  and  equitable)
     the  law  (both statutory and decisional) of the  state
     in  which  the  Leased Premises are  situated  provides
     without  first  having to tender  the  balance  of  the
     purchase  price  as a condition precedent  thereof  and
     without having to make any election of such remedies.

(D)  Effect of Option on Lease.  If the Option is exercised,
this Lease shall continue in full force and effect until the
Closing  hereinabove  specified.  If  for  any  reason  such
Closing  fails to occur, this Lease shall continue  in  full
force  and  effect,  except that if the provisions  of  this
paragraph  34  are  annulled by Lessor, in  accordance  with
subparagraph  34(C)(vi), by reason of a default  by  Lessee,
this Lease shall continue but without the provisions of this
paragraph 34 being a part hereof.

(E) If Lessee fails to exercise its Option, Lessor shall  be
free  to  sell  all or any portion of its  interest  in  the
Leased  Premises for six months following the expiration  of
the twenty days within which Lessee may exercise its Option,
provided that Lessor shall sell its interest or any  portion
thereof for a price (pro-rata for a partial interest)  equal
to  or  greater than the price set forth in Lessor's Notice.
This  Right of First Refusal shall survive any sale  of  the
Leased  Premises and shall apply to any subsequent  sale  or
potential sale by Lessor or its assigns.

IN  WITNESS  WHEREOF,  Lessor and Lessee  have  respectively
signed  and  sealed this Lease as of the day and year  first
above written.

LESSEE:   KONA RESTAURANT GROUP, INC.

          By:/s/ Sheri Strehle         Sheri Strehle
                                  [Print Name of Signatory]

          Its: Chief Financial Officer

LESSOR:

AEI Income & Growth Fund XXI Limited Partnership

BY:  AEI Fund Management XXI, Inc.

By:  /s/ Robert P Johnson
         Robert P. Johnson, President

                          EXHIBIT A

TRACT 1: LOT 8A, BLOCK 1, NORTH CREEK PLAZA PHASE 2

                         Field Notes
                             Of
          Lot 8a-Block 1, North Creek Plaza Phase 2
 1.2788 Acre Tract-Porcion 24-Abstract 268-Toribia Radiguez
                      Original Grantee
             City of Laredo, Webb County, Texas

Being  a tract of land that is calculated to contain  1.2788
acres,  more  or less, being a part of Porcion 24,  Abstract
268,  Taribia  Rodriguez Original Grantee, situated  in  the
City  of Laredo, Webb County, Texas, this 1.2788 acre  tract
is  identified as Lot 8A, Block 1, as per the Replat of  Lot
8,  Block  1, North Creek Plaza Phase 2 that is recorded  in
Volume  13,  Page  24 of the Plat Records  of  Webb  County,
Texas, and Lot 9A, Block 1, North Creek Plaza Phase 2 as per
the  Replat of Lots 9A, 9B, 9C and 11A, Block 1, North Creek
Plaza  Phase  2 into Lot 8A and Lot 9D, Block 1 North  Creek
Plaza Phase 2 which is recorded in Volume 18, Page 78 of the
Plat Records of Webb County, Texas this 1.2788 acre tract is
more  particularly described by metes and bounds as follows,
to wit:

BEGINNING  at  an  "X:" mark that was found  in  a  concrete
sidewalk  on  the easterly right-of-way line  of  Interstate
Highway No. 35 (variable right-of-way width, minimum width =
400 feet), this being a southwesterly exterior corner of Lot
9F,  Block 1, North Creek Plaza Phase 2 as per this  Repolat
that  is  recorded in Volume 19, Page 40 of the Plat Records
of  Webb  County, Texas, this being the northwest corner  of
the  aforementioned Lot 8A, Block 1, North Creek Plaza Phase
2, and the northwest corner of this 1.2788 acre tract:

THENCE North 89 57 02 East 245.77 feet with a southerly line
of Lot 9F, Block 1 North Creek Plaza Phase 2, the north line
of  Lot 8A and the north line hereof, to a 1/2 inch diameter
iron  rod  that was found at an interior corner of said  Lot
9F,  the northeast corner of the aforementioned Lot 8A,  and
the north east corner of this tract:

THENCE South 00 02 58 East 222.48 feet with a westerly  line
of  said  Lot 9F and the east line of said Lot 8A, the  east
line hereof, to a 1/2 inch diameter iron rod that was set to
replace a bent 1/2 inch diameter iron rod that was found  at
an  interior corner of said Lot 9F the southeast  corner  of
the  aforementioned Lot 8A, and the southeast corner of this
tract:

THENCE South 89 57 02 West with a north line of said Lot  9F
and  the south line of said Lot 8A, passing at 59.38 feet  a
northwesterly  exterior  corner  of  said  Lot  9F  and  the
northeast corner of Lot 7, Block 1, North Creek Plaza  Phase
2  as  shown on the plat that is recorded in Volume 12, Page
24 of the Plat Records of Webb County, Texas, and continuing
on  with the north line of said Lot 7 and the south line  of
said Lot 8A, the south line hereof, 254.91 feet in all to  a
1/2  inch  diameter iron rod that was found on the  easterly
right-of-way  line  of Interstate Highway  No.  35  for  the
northwest corner of said Lot 7, the southwest corner of said
Lot 8A, and the southwest corner of this tract:

THENCE  North  02 18 09 East 222.67 Feet with  the  easterly
right-of-way  line  of Interstate Highway  No.  35  and  the
westerly  line of said Lot 8A, the westerly line hereof,  to
the  PLACE OF BEGINNING and containing 1.2788 acres of land,
more or less.

TRACT 1-A (EASEMENT)

Together  with  and subject to Easement Estates  created  by
that  certain Operation and Easement Agreement that is dated
September  17,  1991, executed by and between Dayton  Hudson
Corporation,  and Codam Investments and Del Mar  Investments
Group, Agreement effective as of August 7, 1992, executed by
and  between  Albertson's Inc., Dayton  Hudson  corporation,
Codam Investments, and Del mar Investment Group, recorded in
Volume  51  Pages 225-278, Official Public Records  of  Webb
County, Texas: recorded in Volume 51, Page 279-338, Official
Public  Records of Webb Coutny, Texas,: recorded  in  Volume
51,  Pages  339-399, Official Public Records of Webb  County
Texas:  2nd Amendment recorded in Volume 149, Pages  46-540,
Official Public Records of Webb County, Texas: 3rd Amendment
recorded  in  Volume  701,  Pages 615-619,  Official  Public
Records  of  Webb County, Texas: 4th Amendment  recorded  in
Volume  730, Pages 676-697, Official Public Records of  Webb
County, Texas.

TRACT II-B (EASEMENT)

Together  with and subject to a non-exclusive  easement  for
ingress  and  Egress  over  and upon  the  Grantor's  parcel
described on Exhibit "C" of Easement for Ingress and  Egress
dated   September  17,  1991,  executed  by  Dayton   Hudson
Corporation to Codam Investments and recorded in Volume 1509
pages  64-76  of the Real Property Records of  Webb  County,
Texas:  Amended  in  Instrument dated  August  7,  1992  and
recorded  in  Volume 51 Page 207-211 of the Official  Public
Records  of Webb County, Texas, and Volume 55, Pages 475-479
of the Official Public Records of Webb County, Texas.

TRACT III-C (EASEMENT)

Together  with and subject to a non-exclusive  easement  for
vehicular and pedestrian Ingress and egress over and  across
the  Easement Parcels described in Easement Agreement  dated
January 29, 1999, executed by and between NCG Phase II, Ltd.
and  North  Creek  Group, Ltd., and Kona  Restaurant  Group,
Inc.,  recorded in Volume 730, Pages 725-734 of the Official
Public Records of Webb County, Texas.<PAGE>

                                                                     EXHIBIT 4.1

                                                                  EXECUTION COPY

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                                    Depositor

                             OCWEN FEDERAL BANK FSB,
                                    Servicer

                        GREENPOINT MORTGAGE FUNDING INC.
                                    Servicer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                          Dated as of December 1, 2003

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

                              TERWIN MORTGAGE TRUST
                 ASSET-BACKED CERTIFICATES, SERIES TMTS 2003-8HE

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                      PAGE
<S>                                                                                                                   <C>
ARTICLE I     DEFINITIONS........................................................................................       1
ARTICLE II    CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.......................................      42
    SECTION 2.01.      Conveyance of Mortgage Loans..............................................................      42
    SECTION 2.02.      Acceptance by Trustee of the Mortgage Loans...............................................      44
    SECTION 2.03.      Representations, Warranties and Covenants of the Depositor................................      46
    SECTION 2.04.      Representations and Warranties of the Servicers...........................................      49
    SECTION 2.05.      Substitutions and Repurchases of Mortgage Loans which are not "Qualified Mortgages".......      51
    SECTION 2.06.      Authentication and Delivery of Certificates...............................................      52
    SECTION 2.07.      REMIC Elections...........................................................................      52
    SECTION 2.08.      Covenants of the Servicers................................................................      55
    SECTION 2.09.      Permitted Activities of the Trust.........................................................      55
    SECTION 2.10.      Qualifying Special Purpose Entity.........................................................      56
ARTICLE III   ADMINISTRATION AND SERVICING  OF MORTGAGE LOANS....................................................      56
    SECTION 3.01.      Servicer to Service Mortgage Loans........................................................      56
    SECTION 3.02.      Servicing and Subservicing; Enforcement of the Obligations of Servicer....................      57
    SECTION 3.03.      Rights of the Depositor and the Trustee in Respect of the Servicer........................      58
    SECTION 3.04.      Trustee to Act as Servicer................................................................      58
    SECTION 3.05.      Collection of Mortgage Loan Payments; Collection Account; Certificate Account.............      59
    SECTION 3.06.      Collection of Taxes, Assessments and Similar Items; Escrow Accounts.......................      62
    SECTION 3.07.      Access to Certain Documentation and Information Regarding the Mortgage Loans..............      62
    SECTION 3.08.      Permitted Withdrawals from the Collection Account and Certificate Account.................      63
    SECTION 3.09.      Servicing Transfer Dates..................................................................      65
    SECTION 3.10.      Maintenance of Hazard Insurance...........................................................      65
    SECTION 3.11.      Enforcement of Due-On-Sale Clauses; Assumption Agreements.................................      66
    SECTION 3.12.      Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds...............      67
    SECTION 3.13.      Trustee to Cooperate; Release of Mortgage Files...........................................      69
    SECTION 3.14.      Documents, Records and Funds in Possession of Servicer to be Held for the Trustee.........      70
    SECTION 3.15.      Servicing Compensation....................................................................      70
    SECTION 3.16.      Access to Certain Documentation...........................................................      71
    SECTION 3.17.      Annual Statement as to Compliance.........................................................      71
    SECTION 3.18.      Annual Independent Public Accountants' Servicing Statement; Financial Statements..........      71
    SECTION 3.19.      Duties and Removal of the Credit Risk Manager.............................................      71
    SECTION 3.20.      Periodic Filings..........................................................................      72
    SECTION 3.21.      Annual Certificate by Trustee.............................................................      73
    SECTION 3.22.      Annual Certificate by Servicer............................................................      73
    SECTION 3.23.      Prepayment Penalty Reporting Requirements.................................................      74
</TABLE>

                                       i
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                                      PAGE
<S>                                                                                                                   <C>
    SECTION 3.24.      Statements to the Trustee.................................................................      74
    SECTION 3.25.      Indemnification...........................................................................      74
    SECTION 3.26.      Nonsolicitation...........................................................................      75
    SECTION 3.27.      Maintenance of LPMI Policy................................................................      75
    SECTION 3.28.      Confidentiality...........................................................................      76
ARTICLE IV    DISTRIBUTIONS......................................................................................      76
    SECTION 4.01.      Advances..................................................................................      76
    SECTION 4.02.      Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.....      77
    SECTION 4.03.      Distributions on the REMIC Interests......................................................      77
    SECTION 4.04.      Distributions.............................................................................      77
    SECTION 4.05.      Monthly Statements to Certificateholders..................................................      81
ARTICLE V     THE CERTIFICATES...................................................................................      84
    SECTION 5.01.      The Certificates..........................................................................      84
    SECTION 5.02.      Certificate Register; Registration of Transfer and Exchange of Certificates...............      85
    SECTION 5.03.      Mutilated, Destroyed, Lost or Stolen Certificates.........................................      89
    SECTION 5.04.      Persons Deemed Owners.....................................................................      89
    SECTION 5.05.      Access to List of Certificateholders' Names and Addresses.................................      89
    SECTION 5.06.      Book-Entry Certificates...................................................................      89
    SECTION 5.07.      Notices to Depository.....................................................................      90
    SECTION 5.08.      Definitive Certificates...................................................................      90
    SECTION 5.09.      Maintenance of Office or Agency...........................................................      91
ARTICLE VI    THE DEPOSITOR AND THE SERVICERS....................................................................      91
    SECTION 6.01.      Respective Liabilities of the Depositor and the Servicers.................................      91
    SECTION 6.02.      Merger or Consolidation of the Depositor or the Servicers.................................      91
    SECTION 6.03.      Limitation on Liability of the Depositor, the Servicers and Others........................      92
    SECTION 6.04.      Limitation on Resignation of Servicer.....................................................      92
    SECTION 6.05.      Errors and Omissions Insurance; Fidelity Bonds............................................      93
    SECTION 6.06.      [RESERVED]................................................................................      93
    SECTION 6.07.      [RESERVED]................................................................................      93
    SECTION 6.08.      Limitation Upon Liability of the Credit Risk Manager......................................      93
ARTICLE VII   DEFAULT; TERMINATION OF SERVICER...................................................................      93
    SECTION 7.01.      Events of Default.........................................................................      93
    SECTION 7.02.      Trustee to Act; Appointment of Successor..................................................      95
    SECTION 7.03.      Notification to Certificateholders........................................................      96
ARTICLE VIII  CONCERNING THE TRUSTEE.............................................................................      96
    SECTION 8.01.      Duties of Trustee.........................................................................      96
    SECTION 8.02.      Certain Matters Affecting the Trustee.....................................................      97
    SECTION 8.03.      Trustee Not Liable for Mortgage Loans.....................................................      99
    SECTION 8.04.      Trustee May Own Certificates..............................................................      99
    SECTION 8.05.      Trustee's Fees............................................................................      99
    SECTION 8.06.      Indemnification of Trustee................................................................      99
    SECTION 8.07.      Eligibility Requirements for Trustee......................................................     100
    SECTION 8.08.      Resignation and Removal of Trustee........................................................     100
    SECTION 8.09.      Successor Trustee.........................................................................     101
</TABLE>

                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                                      PAGE
<S>                                                                                                                   <C>
    SECTION 8.10.      Merger or Consolidation of Trustee........................................................     101
    SECTION 8.11.      Appointment of Co-Trustee or Separate Trustee.............................................     101
    SECTION 8.12.      Tax Matters...............................................................................     102
ARTICLE IX    TERMINATION........................................................................................     104
    SECTION 9.01.      Termination upon Liquidation or Repurchase of all Mortgage Loans..........................     104
    SECTION 9.02.      Final Distribution on the Certificates....................................................     105
    SECTION 9.03.      Additional Termination Requirements.......................................................     106
ARTICLE X     MISCELLANEOUS PROVISIONS...........................................................................     107
    SECTION 10.01.     Amendment.................................................................................     107
    SECTION 10.02.     Counterparts..............................................................................     108
    SECTION 10.03.     Governing Law.............................................................................     108
    SECTION 10.04.     Intention of Parties......................................................................     108
    SECTION 10.05.     Notices...................................................................................     109
    SECTION 10.06.     Severability of Provisions................................................................     110
    SECTION 10.07.     Assignment................................................................................     110
    SECTION 10.08.     Limitation on Rights of Certificateholders................................................     110
    SECTION 10.09.     Inspection and Audit Rights...............................................................     111
    SECTION 10.10.     Certificates Nonassessable and Fully Paid.................................................     111
    SECTION 10.11.     [Reserved]................................................................................     111
    SECTION 10.12.     [Reserved]................................................................................     111
    SECTION 10.13.     [Reserved]................................................................................     111
    SECTION 10.14.     Assignment; Sales; Advance Facilities.....................................................     111
</TABLE>

<TABLE>
<S>            <C>
EXHIBIT A      FORMS OF CERTIFICATES
EXHIBIT B      MORTGAGE LOAN SCHEDULE
EXHIBIT C      SCHEDULE OF MORTGAGE LOANS WITH NO PREPAYMENT ENFORCEMENT
EXHIBIT D      FORM OF CUSTODIAN CERTIFICATION
EXHIBIT E-1    FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
EXHIBIT E-2    FORM OF TRANSFEROR'S AFFIDAVIT
EXHIBIT F      FORM OF TRANSFEROR CERTIFICATE
EXHIBIT G      FORM OF INVESTMENT LETTER
EXHIBIT H      FORM OF RULE 144A LETTER
EXHIBIT I      REQUEST FOR RELEASE
EXHIBIT J      [RESERVED]
EXHIBIT K      FORM OF OFFICER'S CERTIFICATE OF THE TRUSTEE
EXHIBIT L      FORM OF OFFICER'S CERTIFICATE OF SERVICER
EXHIBIT M      CUSTODIAL AGREEMENT
EXHIBIT N      FORM OF CAP CONTRACT
</TABLE>

                                      iii
<PAGE>

         POOLING AND SERVICING AGREEMENT, dated as of December 1, 2003, among
MERRILL LYNCH MORTGAGE INVESTORS, INC., a Delaware corporation, as depositor
(the "Depositor"), OCWEN FEDERAL BANK FSB, a federally chartered savings bank,
as a servicer ("Ocwen" or a "Servicer"), GREENPOINT MORTGAGE FUNDING INC., a New
York corporation, as a servicer ("GreenPoint" or a "Servicer") and WELLS FARGO
BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee
(the "Trustee").

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. It is intended that the Trust Fund
for federal income tax purposes will include (i) three real estate mortgage
investment conduits, (ii) the right to receive (x) proceeds from prepayment
penalties on the Mortgage Loans, (y) amounts paid by the Servicer or the Seller
in respect of prepayment charges pursuant to this Agreement and (z) amounts
received in respect of any indemnification paid as a result of a prepayment
charge being unenforceable in breach of the representations and warranties set
forth in the Transfer Agreement, (iii) the Cap Contracts and the Cap Contract
Account and (iv) the grantor trusts described in Section 2.07 hereof. REMIC 1
will consist of all of the assets constituting the Trust Fund (other than the
assets described in clauses (ii), (iii) and (iv) above, the REMIC 1 Regular
Interests and the REMIC 2 Regular Interests) and will be evidenced by the REMIC
1 Regular Interests (which will be uncertificated and will represent the
"regular interests" in REMIC 1) and the Class LTR Interest as the single
"residual interest" in REMIC 1. The Trustee will hold the REMIC 1 Regular
Interests. REMIC 2 will consist of the REMIC 1 Regular Interests and will be
evidenced by the REMIC 2 Regular Interests (which will represent the "regular
interests" in REMIC 2) and the Class MTR Interest as the single "residual
interest" in REMIC 2. The Trustee will hold the REMIC 2 Regular Interests. The
Upper Tier REMIC will consist of the REMIC 2 Regular Interests and will be
evidenced by the REMIC Regular Interests (which will represent the "regular
interests" in the Upper Tier REMIC) and the Residual Interest as the single
"residual interest" in the Upper Tier REMIC. The Class R Certificate will
represent beneficial ownership of the Class LT1-R Interest, the Class LT2-R
Interest and the Residual Interest. The "latest possible maturity date" for
federal income tax purposes of all interests created hereby will be the Latest
Possible Maturity Date.

         All covenants and agreements made by the Seller in the Sale Agreement
and by the Depositor and the Trustee herein with respect to the Mortgage Loans
and the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates.

         In consideration of the mutual agreements herein contained, the
Depositor, Ocwen, GreenPoint and the Trustee hereby agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

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

         Accepted Servicing Practices: The Servicer's normal servicing
practices, which will conform to the mortgage servicing practices of prudent
mortgage lending institutions which service for their own account mortgage loans
of the same type as the Mortgages Loans in the jurisdictions in which the
related Mortgaged Properties are located.

         Accrual Period: With respect to each Class of Certificates and any
Distribution Date, the period commencing on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date) and ending on the day immediately preceding such Distribution Date. All
calculations of interest on each Class of Certificates will be made on the basis
of the actual number of days elapsed in the related Accrual Period and a 360 day
year.

<PAGE>

         Adjustable Rate Mortgage Loan: A Mortgage Loan identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable.

         Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.

         Advance: The aggregate of the advances required to be made by a
Servicer with respect to any Distribution Date pursuant to Section 4.01, the
amount of any such advances being equal to the sum of the aggregate of payments
of principal (except with respect to Mortgage Loans secured by a second lien on
real property) and interest (net of the Servicing Fee Rate) on the Mortgage
Loans that were due during the applicable Due Period and not received as of the
close of business on the related Determination Date, less the aggregate amount
of any such Delinquent payments that the Servicer has determined would
constitute a Non-Recoverable Advance were an advance to be made with respect
thereto; provided, however, that with respect to any Mortgage Loan that has been
converted to an REO Property, the obligation to make Advances shall only be to
payments of interest.

         Advance Facility: A financing or other facility as described in Section
10.14(a).

         Advance Facility Notice: As defined in Section 10.14(b).

         Advance Financing Person: As defined in Section 10.14(a).

         Advance Reimbursement Amounts: As defined in Section 10.14(b).

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

         Aggregate Certificate Principal Balance: For any date of determination,
the sum of the Class A Certificate Principal Balance, the Class R Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance, the Class M-3 Certificate Principal Balance, the
Class B-1 Certificate Principal Balance, the Class B-2 Certificate Principal
Balance and the Class B-3 Certificate Principal Balance, in each case as of such
date of determination.

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

         Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which, the sum of (i) the Aggregate Certificate Principal
Balance and (ii) the Class C Certificate Principal Balance after distributions
of principal on such Distribution Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date.

         Appraised Value: With respect to a Mortgage Loan the proceeds of which
were used to purchase the related Mortgaged Property, the "Appraised Value" of a
Mortgaged Property is the lesser of (1) the appraised value based on an
appraisal made for the Seller by an independent fee appraiser at the time of the
origination of the related Mortgage Loan, and (2) the sales price of such
Mortgaged Property at such time of origination. With respect to a Mortgage Loan
the proceeds of which were used to refinance an existing mortgage loan, the
"Appraised Value" is the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.

                                      -2-
<PAGE>

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

         Available Funds Cap: As of any Distribution Date with respect to the
Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates, a per annum rate equal to the product of (x) 12 times the quotient
obtained by dividing the excess of (i) the total scheduled interest on the
Mortgage Loans based on the Mortgage Rates as of the related Due Date, over the
(ii) the related Servicing Fees, Trustee Fee, Credit Risk Manager Fee and
premiums on the related LPMI Policy divided by the Aggregate Certificate
Principal Balance as of the first day of the applicable Accrual Period and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the related Accrual Period.

         Balloon Loan: A Mortgage Loan having an original term to stated
maturity of approximately 15 years which provides for level monthly payments of
principal and interest based on a 30-year amortization schedule, with a balloon
payment of the remaining outstanding principal balance due on such Mortgage Loan
at its stated maturity.

         Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each of the Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class
B-2, Class B-3 and Class S Certificates constitutes a Class of Book-Entry
Certificates.

         Business Day: Any day other than (1) a Saturday or a Sunday, or (2) a
day on which banking institutions in the State of California, State of Maryland,
State of Minnesota, State of Delaware, State of Florida, State of New Jersey or
the City of New York, New York are authorized or obligated by law or executive
order to be closed.

         Cap Contract: Each of the amended confirmation and agreement and any
related confirmation thereto, between the Trust and the Cap Contract
Counterparty (in the form of Exhibit N hereto).

         Cap Contract Account: A separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.04(j) in the name of the Trustee
for the benefit of the Trust Fund and designated "Wells Fargo Bank Minnesota,
National Association, as trustee, in trust for registered holders of Terwin
Mortgage Trust, Asset-Backed Certificates, Series TMTS 2003-8HE." Funds in the
Cap Contract Account shall be held in trust for the Trust Fund for the uses and
purposes set forth in this Agreement.

         Cap Contract Counterparty: Bear Stearns Financial Products, Inc.

         Cap Contract Notional Balance: With respect to any Distribution Date
and Cap Contract FXNCC5645-BXNE123704, the Cap Contract Notional Balance set
forth in Cap Table #1 below for such Distribution Date and with respect to any
Distribution Date and Cap Contract FXNCC5645-BXNE118693, the Cap Contract
Notional Balance set forth in Cap Table #2 below for such Distribution Date:

                                      -3-
<PAGE>

                         ONE-MONTH LIBOR CAP TABLE - #1

<TABLE>
<CAPTION>
    BEGINNING                                NOTIONAL        1ML LOWER     1ML UPPER
     ACCRUAL           ENDING ACCRUAL       BALANCE ($)    COLLAR (%)(1)   COLLAR (%)
------------------   ------------------   --------------   -------------   ----------
<S>                  <C>                  <C>              <C>             <C>
December 29, 2003    January 25, 2004     190,674,816.74      6.37834       10.00000
January 25, 2004     February 25, 2004    187,601,654.85      6.37887       10.00000
February 25, 2004    March 25, 2004       184,441,816.03      6.37937       10.00000
March 25, 2004       April 25, 2004       181,192,627.43      6.37984       10.00000
April 25, 2004       May 25, 2004         177,852,267.91      6.38029       10.00000
May 25, 2004         June 25, 2004        174,419,840.26      6.38070       10.00000
June 25, 2004        July 25, 2004        170,895,275.39      6.39267       10.00000
July 25, 2004        August 25, 2004      167,279,742.45      6.39295       10.00000
August 25, 2004      September 25, 2004   163,574,895.84      6.39321       10.00000
September 25, 2004   October 25, 2004     159,801,373.22      6.39343       10.00000
October 25, 2004     November 25, 2004    156,067,430.74      6.39363       10.00000
November 25, 2004    December 25, 2004    152,422,547.26      6.39383       10.00000
December 25, 2004    January 25, 2005     148,864,546.78      6.40483       10.00000
January 25, 2005     February 25, 2005    145,391,546.08      6.40499       10.00000
February 25, 2005    March 25, 2005       142,001,225.63      6.40607       10.00000
March 25, 2005       April 25, 2005       138,691,588.46      6.40622       10.00000
April 25, 2005       May 25, 2005         135,460,647.78      6.40637       10.00000
May 25, 2005         June 25, 2005        132,306,486.51      6.40652       10.00000
June 25, 2005        July 25, 2005        129,227,235.23      6.41719       10.00000
July 25, 2005        August 25, 2005      126,221,246.24      6.41730       10.00000
August 25, 2005      September 25, 2005   123,286,558.53      6.41789       10.00000
September 25, 2005   October 25, 2005     120,421,446.86      6.41800       10.00000
October 25, 2005     November 25, 2005    117,624,213.89      6.41811       10.00000
November 25, 2005    December 25, 2005    114,893,212.30      6.54151       10.00000
December 25, 2005    January 25, 2006     112,228,629.62      7.46363       10.00000
January 25, 2006     February 25, 2006    109,639,716.53      7.45903       10.00000
February 25, 2006    March 25, 2006       107,111,597.74      7.45492       10.00000
March 25, 2006       April 25, 2006       104,642,816.94      7.45033       10.00000
April 25, 2006       May 25, 2006         102,231,942.58      7.44576       10.00000
May 25, 2006         June 25, 2006         99,877,584.17      7.48618       10.00000
June 25, 2006        July 25, 2006         97,578,797.19      7.83987       10.00000
July 25, 2006        August 25, 2006       95,336,843.24      7.83356       10.00000
August 25, 2006      September 25, 2006    93,147,267.62      7.82774       10.00000
September 25, 2006   October 25, 2006      91,008,821.58      7.82146       10.00000
October 25, 2006     November 25, 2006     88,920,278.96      7.81519       10.00000
November 25, 2006    December 25, 2006     86,880,447.72      7.85607       10.00000
December 25, 2006    January 25, 2007      84,888,504.93      8.39610       10.00000
January 25, 2007     February 25, 2007     82,947,379.24      8.38920       10.00000
February 25, 2007    March 25, 2007        81,051,349.03      8.38051       10.00000
March 25, 2007       April 25, 2007        79,199,319.81      8.37159       10.00000
April 25, 2007       May 25, 2007          77,390,245.00      8.36269       10.00000
May 25, 2007         June 25, 2007         75,623,105.34      8.39531       10.00000
June 25, 2007        July 25, 2007         73,897,121.24      8.65096       10.00000
July 25, 2007        August 25, 2007       72,212,498.21      8.64560       10.00000
August 25, 2007      September 25, 2007    70,566,858.40      8.63540       10.00000
September 25, 2007   October 25, 2007      68,959,242.30      8.62522       10.00000
October 25, 2007     November 25, 2007     67,388,751.41      8.61506       10.00000
November 25, 2007    December 25, 2007     65,854,508.90      8.60599       10.00000
December 25, 2007    January 25, 2008      64,355,665.86      8.65800       10.00000
January 25, 2008     February 25, 2008     62,891,729.18      8.64827       10.00000
February 25, 2008    March 25, 2008        61,461,522.37      8.64196       10.00000
March 25, 2008       April 25, 2008        60,064,270.12      8.63162       10.00000
April 25, 2008       May 25, 2008          58,699,173.24      8.62130       10.00000
May 25, 2008         June 25, 2008         57,365,475.34      8.61152       10.00000
June 25, 2008        July 25, 2008         56,062,440.84      8.66160       10.00000
July 25, 2008        August 25, 2008       54,789,603.94      8.65109       10.00000
August 25, 2008      September 25, 2008    53,545,992.18      8.64061       10.00000
September 25, 2008   October 25, 2008      52,330,919.94      8.63406       10.00000
October 25, 2008     November 25, 2008     51,143,734.97      8.64605       10.00000
November 25, 2008    December 25, 2008     49,983,905.57      8.67022       10.00000
December 25, 2008    January 25, 2009      48,850,909.21      8.71694       10.00000
January 25, 2009     February 25, 2009     47,744,179.24      8.70599       10.00000
February 25, 2009    March 25, 2009        46,662,763.33      8.69508       10.00000
March 25, 2009       April 25, 2009        45,606,070.33      8.68420       10.00000
April 25, 2009       May 25, 2009          44,573,523.31      8.67576       10.00000
May 25, 2009         June 25, 2009         43,564,567.26      8.67330       10.00000
June 25, 2009        July 25, 2009         42,578,682.63      8.66556       10.00000
July 25, 2009        August 25, 2009       41,615,305.14      8.65475       10.00000
August 25, 2009      September 25, 2009    40,673,897.68      8.64397       10.00000
September 25, 2009   October 25, 2009      39,753,949.11      8.63323       10.00000
October 25, 2009     November 25, 2009     38,854,960.52      8.62252       10.00000
November 25, 2009    December 25, 2009     37,976,444.88      8.61194       10.00000
</TABLE>

                                      -4-
<PAGE>

<TABLE>
<CAPTION>
    BEGINNING                                NOTIONAL        1ML LOWER     1ML UPPER
     ACCRUAL           ENDING ACCRUAL       BALANCE ($)    COLLAR (%)(1)   COLLAR (%)
------------------   ------------------   --------------   -------------   ----------
<S>                  <C>                  <C>              <C>             <C>
December 25, 2009    January 25, 2010      37,117,927.10      8.60130       10.00000
January 25, 2010     February 25, 2010     36,278,942.71      8.59070       10.00000
February 25, 2010    March 25, 2010        35,459,038.63      8.58013       10.00000
March 25, 2010       April 25, 2010        34,657,772.59      8.56960       10.00000
April 25, 2010       May 25, 2010          33,874,712.78      8.55911       10.00000
May 25, 2010         June 25, 2010         33,109,437.67      8.54865       10.00000
June 25, 2010        July 25, 2010         32,361,535.73      8.53823       10.00000
July 25, 2010        August 25, 2010       31,630,605.24      8.52785       10.00000
August 25, 2010      September 25, 2010    30,916,253.92      8.51750       10.00000
September 25, 2010   October 25, 2010      30,218,098.85      8.50720       10.00000
October 25, 2010     November 25, 2010     29,535,766.13      8.49693       10.00000
November 25, 2010    December 25, 2010     28,868,890.71      8.48670       10.00000
December 25, 2010    January 25, 2011      28,217,116.22      8.48108       10.00000
January 25, 2011     February 25, 2011     27,580,119.74      8.47090       10.00000
February 25, 2011    March 25, 2011        26,957,535.11      8.46075       10.00000
March 25, 2011       April 25, 2011        26,349,030.55      8.45065       10.00000
April 25, 2011       May 25, 2011          25,754,282.25      8.44058       10.00000
May 25, 2011         June 25, 2011         25,172,973.95      8.43056       10.00000
June 25, 2011        July 25, 2011         24,604,796.85      8.42057       10.00000
July 25, 2011        August 25, 2011       24,049,449.42      8.41062       10.00000
August 25, 2011      September 25, 2011    23,506,637.23      8.40072       10.00000
September 25, 2011   October 25, 2011      22,976,072.78      8.39085       10.00000
October 25, 2011     November 25, 2011     22,457,475.31      8.38102       10.00000
November 25, 2011    December 25, 2011     21,950,570.62      8.37124       10.00000
December 25, 2011    January 25, 2012      21,455,091.00      8.36149       10.00000
January 25, 2012     February 25, 2012     20,970,774.98      8.35179       10.00000
February 25, 2012    March 25, 2012        20,497,367.21      8.34212       10.00000
March 25, 2012       April 25, 2012        20,034,618.37      8.33250       10.00000
April 25, 2012       May 25, 2012          19,582,284.94      8.32292       10.00000
May 25, 2012         June 25, 2012         19,140,129.06      8.31338       10.00000
</TABLE>

(1)      With respect to any Distribution Date, if One-Month LIBOR (subject to a
cap equal to the 1ML Upper Collar) exceeds the 1ML Lower Collar, the Trust Fund
will receive payments pursuant to the Cap Contract.

                         ONE-MONTH LIBOR CAP TABLE - #2

<TABLE>
<CAPTION>
    BEGINNING                                NOTIONAL        1ML LOWER     1ML UPPER
     ACCRUAL           ENDING ACCRUAL       BALANCE ($)    COLLAR (%)(1)   COLLAR (%)
------------------   ------------------   --------------   -------------   ----------
<S>                  <C>                  <C>              <C>             <C>
December 29, 2003    January 25, 2004      78,193,717.27      6.37834       10.00000
January 25, 2004     February 25, 2004     76,933,448.89      6.37887       10.00000
February 25, 2004    March 25, 2004        75,637,632.48      6.37937       10.00000
March 25, 2004       April 25, 2004        74,305,174.72      6.37984       10.00000
April 25, 2004       May 25, 2004          72,935,328.71      6.38029       10.00000
May 25, 2004         June 25, 2004         71,527,726.53      6.38070       10.00000
June 25, 2004        July 25, 2004         70,082,339.85      6.39267       10.00000
July 25, 2004        August 25, 2004       68,599,648.15      6.39295       10.00000
August 25, 2004      September 25, 2004    67,080,329.86      6.39321       10.00000
September 25, 2004   October 25, 2004      65,532,848.25      6.39343       10.00000
October 25, 2004     November 25, 2004     64,001,598.02      6.39363       10.00000
November 25, 2004    December 25, 2004     62,506,869.98      6.39383       10.00000
December 25, 2004    January 25, 2005      61,047,771.72      6.40483       10.00000
January 25, 2005     February 25, 2005     59,623,530.99      6.40499       10.00000
February 25, 2005    March 25, 2005        58,233,196.49      6.40607       10.00000
March 25, 2005       April 25, 2005        56,875,949.42      6.40622       10.00000
April 25, 2005       May 25, 2005          55,550,974.92      6.40637       10.00000
May 25, 2005         June 25, 2005         54,257,486.80      6.40652       10.00000
June 25, 2005        July 25, 2005         52,994,718.52      6.41719       10.00000
July 25, 2005        August 25, 2005       51,761,994.33      6.41730       10.00000
August 25, 2005      September 25, 2005    50,558,510.04      6.41789       10.00000
September 25, 2005   October 25, 2005      49,383,558.12      6.41800       10.00000
October 25, 2005     November 25, 2005     48,236,442.56      6.41811       10.00000
November 25, 2005    December 25, 2005     47,116,487.77      6.54151       10.00000
December 25, 2005    January 25, 2006      46,023,770.68      7.46363       10.00000
January 25, 2006     February 25, 2006     44,962,084.86      7.45903       10.00000
February 25, 2006    March 25, 2006        43,925,330.17      7.45492       10.00000
March 25, 2006       April 25, 2006        42,912,909.33      7.45033       10.00000
April 25, 2006       May 25, 2006          41,924,235.35      7.44576       10.00000
May 25, 2006         June 25, 2006         40,958,737.92      7.48618       10.00000
June 25, 2006        July 25, 2006         40,016,029.78      7.83987       10.00000
July 25, 2006        August 25, 2006       39,096,628.23      7.83356       10.00000
August 25, 2006      September 25, 2006    38,198,706.49      7.82774       10.00000
</TABLE>

                                      -5-
<PAGE>

<TABLE>
<CAPTION>
    BEGINNING                                NOTIONAL        1ML LOWER     1ML UPPER
     ACCRUAL           ENDING ACCRUAL       BALANCE ($)    COLLAR (%)(1)   COLLAR (%)
------------------   ------------------   --------------   -------------   ----------
<S>                  <C>                  <C>              <C>             <C>
September 25, 2006   October 25, 2006      37,321,752.45      7.82146       10.00000
October 25, 2006     November 25, 2006     36,465,263.28      7.81519       10.00000
November 25, 2006    December 25, 2006     35,628,750.12      7.85607       10.00000
December 25, 2006    January 25, 2007      34,811,875.51      8.39610       10.00000
January 25, 2007     February 25, 2007     34,015,840.45      8.38920       10.00000
February 25, 2007    March 25, 2007        33,238,298.58      8.38051       10.00000
March 25, 2007       April 25, 2007        32,478,801.04      8.37159       10.00000
April 25, 2007       May 25, 2007          31,736,918.64      8.36269       10.00000
May 25, 2007         June 25, 2007         31,012,233.41      8.39531       10.00000
June 25, 2007        July 25, 2007         30,304,425.64      8.65096       10.00000
July 25, 2007        August 25, 2007       29,613,579.60      8.64560       10.00000
August 25, 2007      September 25, 2007    28,938,720.17      8.63540       10.00000
September 25, 2007   October 25, 2007      28,279,453.86      8.62522       10.00000
October 25, 2007     November 25, 2007     27,635,412.20      8.61506       10.00000
November 25, 2007    December 25, 2007     27,006,235.63      8.60599       10.00000
December 25, 2007    January 25, 2008      26,391,575.99      8.65800       10.00000
January 25, 2008     February 25, 2008     25,791,231.08      8.64827       10.00000
February 25, 2008    March 25, 2008        25,204,718.43      8.64196       10.00000
March 25, 2008       April 25, 2008        24,631,720.11      8.63162       10.00000
April 25, 2008       May 25, 2008          24,071,908.36      8.62130       10.00000
May 25, 2008         June 25, 2008         23,524,973.00      8.61152       10.00000
June 25, 2008        July 25, 2008         22,990,612.36      8.66160       10.00000
July 25, 2008        August 25, 2008       22,468,635.45      8.65109       10.00000
August 25, 2008      September 25, 2008    21,958,643.46      8.64061       10.00000
September 25, 2008   October 25, 2008      21,460,355.22      8.63406       10.00000
October 25, 2008     November 25, 2008     20,973,503.26      8.64605       10.00000
November 25, 2008    December 25, 2008     20,497,869.53      8.67022       10.00000
December 25, 2008    January 25, 2009      20,033,239.74      8.71694       10.00000
January 25, 2009     February 25, 2009     19,579,381.51      8.70599       10.00000
February 25, 2009    March 25, 2009        19,135,904.32      8.69508       10.00000
March 25, 2009       April 25, 2009        18,702,565.73      8.68420       10.00000
April 25, 2009       May 25, 2009          18,279,129.14      8.67576       10.00000
May 25, 2009         June 25, 2009         17,865,366.97      8.67330       10.00000
June 25, 2009        July 25, 2009         17,461,066.14      8.66556       10.00000
July 25, 2009        August 25, 2009       17,065,995.25      8.65475       10.00000
August 25, 2009      September 25, 2009    16,679,934.03      8.64397       10.00000
September 25, 2009   October 25, 2009      16,302,672.88      8.63323       10.00000
October 25, 2009     November 25, 2009     15,934,007.20      8.62252       10.00000
November 25, 2009    December 25, 2009     15,573,737.25      8.61194       10.00000
December 25, 2009    January 25, 2010      15,221,668.22      8.60130       10.00000
January 25, 2010     February 25, 2010     14,877,609.62      8.59070       10.00000
February 25, 2010    March 25, 2010        14,541,375.65      8.58013       10.00000
March 25, 2010       April 25, 2010        14,212,784.94      8.56960       10.00000
April 25, 2010       May 25, 2010          13,891,660.42      8.55911       10.00000
May 25, 2010         June 25, 2010         13,577,829.21      8.54865       10.00000
June 25, 2010        July 25, 2010         13,271,122.57      8.53823       10.00000
July 25, 2010        August 25, 2010       12,971,375.72      8.52785       10.00000
August 25, 2010      September 25, 2010    12,678,427.83      8.51750       10.00000
September 25, 2010   October 25, 2010      12,392,121.83      8.50720       10.00000
October 25, 2010     November 25, 2010     12,112,304.42      8.49693       10.00000
November 25, 2010    December 25, 2010     11,838,825.89      8.48670       10.00000
December 25, 2010    January 25, 2011      11,571,540.08      8.48108       10.00000
January 25, 2011     February 25, 2011     11,310,314.59      8.47090       10.00000
February 25, 2011    March 25, 2011        11,054,999.22      8.46075       10.00000
March 25, 2011       April 25, 2011        10,805,457.96      8.45065       10.00000
April 25, 2011       May 25, 2011          10,561,557.99      8.44058       10.00000
May 25, 2011         June 25, 2011         10,323,169.62      8.43056       10.00000
June 25, 2011        July 25, 2011         10,090,166.22      8.42057       10.00000
July 25, 2011        August 25, 2011        9,862,424.13      8.41062       10.00000
August 25, 2011      September 25, 2011     9,639,822.61      8.40072       10.00000
September 25, 2011   October 25, 2011       9,422,243.76      8.39085       10.00000
October 25, 2011     November 25, 2011      9,209,572.43      8.38102       10.00000
November 25, 2011    December 25, 2011      9,001,696.19      8.37124       10.00000
December 25, 2011    January 25, 2012       8,798,505.25      8.36149       10.00000
January 25, 2012     February 25, 2012      8,599,892.39      8.35179       10.00000
February 25, 2012    March 25, 2012         8,405,752.89      8.34212       10.00000
March 25, 2012       April 25, 2012         8,215,984.50      8.33250       10.00000
April 25, 2012       May 25, 2012           8,030,487.35      8.32292       10.00000
May 25, 2012         June 25, 2012          7,849,163.92      8.31338       10.00000
</TABLE>

(1)      With respect to any Distribution Date, if One-Month LIBOR (subject to a
cap equal to the 1ML Upper Collar) exceeds the 1ML Lower Collar, the Trust Fund
will receive payments pursuant to the Cap Contract.

         Cap Contract Termination Date: The Distribution Date in June 2012.

                                      -6-
<PAGE>

         Certificate: Any one of the certificates of any Class executed by the
Trustee and authenticated by the Trustee in substantially the forms attached
hereto as Exhibit A.

         Certificate Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(e) in the name of the Trustee
for the benefit of the Certificateholders and designated "Wells Fargo Bank
Minnesota, National Association, as trustee, in trust for registered holders of
Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS 2003-8HE." Funds
in the Certificate Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement.

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

         Certificate Principal Balance: As to any Certificate (other than the
Class S) and as of any Distribution Date, the Initial Certificate Principal
Balance of such Certificate less the sum of (1) all amounts distributed with
respect to such Certificate in reduction of the Certificate Principal Balance
thereof on previous Distribution Dates pursuant to Section 4.04, and (2) any
Applied Realized Loss Amounts allocated to such Certificate on previous
Distribution Dates pursuant to Section 4.04(i). On each Distribution Date,
after all distributions of principal on such Distribution Date, a portion of
the Class C Interest Carry Forward Amount in an amount equal to the excess of
the Overcollateralization Amount on such Distribution Date over the
Overcollateralization Amount as of the preceding Distribution Date (or, in the
case of the first Distribution Date, the initial Overcollateralization Amount
(based on the Stated Principal Balance of the Mortgage Loans as of the Cut-Off
Date)) will be added to the aggregate Certificate Principal Balance of the
Class C Certificates (on a pro rata basis).

         Certificate Register: The register maintained pursuant to Section 5.02
hereof.

         Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository) in the case of any Class of Regular Certificates or the Class R
Certificate, except that solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the Depositor or
any Affiliate of the Depositor shall be deemed not to be Outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
Person (including the Depositor) owns 100% of the Percentage Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be Outstanding
for purposes of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Trustee is entitled to rely conclusively on a certification of
the Depositor or any Affiliate of the Depositor in determining which
Certificates are registered in the name of an Affiliate of the Depositor.

         Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.

         Class A Certificate: Any Certificate designated as a "Class A
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

                                      -7-
<PAGE>

         Class A Certificate Principal Balance: For any date of determination,
the Class A Certificate Principal Balance.

         Class A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A Pass-Through Rate on
the Class A Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class A Current Interest or a Class A Interest Carry
Forward Amount that is recovered as a voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest Shortfall allocated on such
Distribution Date to the Class A Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

         Class A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class A
Certificates with respect to Class A Current Interest and Class A Current
Interest Carry Forward Amounts on such prior Distribution Dates and (2) interest
on such excess (to the extent permitted by applicable law) at the Class A
Pass-Through Rate for the related Accrual Period.

         Class A Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.470% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.940% per annum.

         Class A Pass-Through Rate: For the first Distribution Date, 1.590% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A Margin, (2) the Weighted Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.

         Class A Principal Distribution Amount: With respect to any Distribution
Date (1) prior to the Stepdown Date or any Distribution Date on which a Trigger
Event exists, 100% of the Principal Distribution Amount for such Distribution
Date and (2) on or after the Stepdown Date where a Trigger Event does not exist,
the excess of (A) the sum of the Class A Certificate Principal Balance and the
Class R Certificate Principal Balance immediately prior to such Distribution
Date over (B) the lesser of (i) 66.50% of the Stated Principal Balance of the
Mortgage Loans as of the end of the immediately preceding Due Period and (ii)
the excess of the Stated Principal Balance of the Mortgage Loans as of the end
of the immediately preceding Due Period over $1,344,343; provided, however, that
in no event will the Class A Principal Distribution Amount with respect to any
Distribution Date exceed the aggregate Certificate Principal Balance of the
Class A Certificates and Class R Certificate.

         Class B Certificates: Any of the Class B-1, Class B-2 and Class B-3
Certificates.

         Class B-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-1 Certificates.

         Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class B-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-1
Certificates.

         Class B-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-1 Pass-Through Rate on
the Class B-1 Certificate Principal Balance as of

                                      -8-
<PAGE>

the first day of such Accrual Period (after giving effect to all distributions
of principal made or deemed to be made as of such first day) plus the portion of
any previous distributions on such Class in respect of Class B-1 Current
Interest or a Class B-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class B-1 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

         Class B-1 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class B-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-1 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class B-1 Pass-Through Rate for the
related Accrual Period.

         Class B-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.150% per annum and, as of any
Distribution Date after the Optional Termination Date, 3.225% per annum.

         Class B-1 Pass-Through Rate: For the first Distribution Date, 3.270%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class B-1 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         Class B-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class R Certificate Principal Balance, the Class M-1
Certificate Principal Balance, the Class M-2 Certificate Principal Balance and
the Class M-3 Certificate Principal Balance have been reduced to zero and a
Trigger Event exists, or as long as a Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class R Certificate Principal Balance (after taking
into account distributions of the Class R Principal Distribution Amount on such
Distribution Date), (C) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (D) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date), (E) the Class M-3 Certificate Principal
Balance (after taking into account distributions of the Class M-3 Principal
Distribution Amount on such Distribution Date), and (F) the Class B-1
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 92.90% of the Stated Principal Balances of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period over $1,344,343. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each of the Class A Certificates, Class R Certificates and
Class M Certificates has been reduced to zero, the Class B-1 Principal
Distribution Amount will equal the lesser of (x) the outstanding Certificate
Principal Balance of the Class B-1 Certificates and (y) 100% of the Principal
Distribution Amount remaining after any distributions on such Class A, Class R,
Class M-1, Class M-2, and Class M-3 Certificates and (II) in no event will the
Class B-1 Principal Distribution Amount with respect to any Distribution Date
exceed the Class B-1 Certificate Principal Balance.

         Class B-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-1 Applied Realized Loss Amount over (2) the sum of all
distributions in reduction of the Class B-1 Applied Realized Loss Amounts on all
previous Distribution Dates.

                                      -9-
<PAGE>

         Class B-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-2 Certificates.

         Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class B-2-Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-2
Certificates.

         Class B-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-2 Pass-Through Rate on
the Class B-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class B-2 Current Interest or a Class B-2 Interest
Carry Forward Amount that is recovered as a voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest Shortfall allocated on such
Distribution Date to the Class B-2 Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

         Class B-2 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class B-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-2 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class B-2 Pass-Through Rate for the
related Accrual Period.

         Class B-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 2.750% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.125% per annum.

         Class B-2 Pass-Through Rate: For the first Distribution Date, 3.870%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class B-2 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         Class B-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, the Class R Certificate Principal Balance, the Class M-1
Certificate Principal Balance, the Class M-2 Certificate Principal Balance, the
Class M-3 Certificate Principal Balance, and the Class B-1 Certificate Principal
Balance have been reduced to zero and a Trigger Event exists, or as long as a
Trigger Event does not exist, the excess of (1) the sum of (A) the Class A
Certificate Principal Balance (after taking into account distributions of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
R Certificate Principal Balance (after taking into account distributions of the
Class R Principal Distribution Amount on such Distribution Date), (C) the Class
M-1 Certificate Principal Balance (after taking into account distributions of
the Class M-1 Principal Distribution Amount on such Distribution Date), (D) the
Class M-2 Certificate Principal Balance (after taking into account distributions
of the Class M-2 Principal Distribution Amount on such Distribution Date), (E)
the Class M-3 Certificate Principal Balance (after taking into account
distributions of the Class M-3 Principal Distribution Amount on such
Distribution Date), (F) the Class B-1 Certificate Principal Balance (after
taking into account distributions of the Class B-1 Principal Distribution Amount
on such Distribution Date) and (G) the Class B-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 95.10% of
the Stated Principal Balances of the Mortgage

                                      -10-
<PAGE>

Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period over $1,344,343. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each of the Class A Certificates, Class R Certificates,
Class M Certificates and Class B-1 Certificates has been reduced to zero, the
Class B-2 Principal Distribution Amount will equal the lesser of (x) the
outstanding Certificate Principal Balance of the Class B-2 Certificates and (y)
100% of the Principal Distribution Amount remaining after any distributions on
such Class A, Class R, Class M-1, Class M-2, Class M-3 and Class B-1
Certificates and (II) in no event will the Class B-2 Principal Distribution
Amount with respect to any Distribution Date exceed the Class B-2 Certificate
Principal Balance.

         Class B-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-2 Applied Realized Loss Amount over (2) the sum of all
distributions in reduction of the Class B-2 Applied Realized Loss Amounts on all
previous Distribution Dates.

         Class B-3 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class B-3 Certificates.

         Class B-3 Certificate: Any Certificate designated as a "Class B-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class B-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class B-3
Certificates.

         Class B-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class B-3 Pass-Through Rate on
the Class B-3 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class B-3 Current Interest or a Class B-3 Interest
Carry Forward Amount that is recovered as a voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest Shortfall allocated on such
Distribution Date to the Class B-3 Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

         Class B-3 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class B-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
B-3 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class B-3 Pass-Through Rate for the
related Accrual Period.

         Class B-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 3.000% per annum and, as of any
Distribution Date after the Optional Termination Date, 4.500% per annum.

         Class B-3 Pass-Through Rate: For the first Distribution Date, 4.120%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class B-3 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         Class B-3 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A

                                      -11-
<PAGE>

Certificate Principal Balance, Class R Certificate Principal Balance, the Class
M-1 Certificate Principal Balance, the Class M-2 Certificate Principal Balance,
the Class M-3 Certificate Principal Balance, the Class B-1 Certificate Principal
Balance and the Class B-2 Certificate Principal Balance have been reduced to
zero and a Trigger Event exists, or as long as a Trigger Event does not exist,
the excess of (1) the sum of (A) the Class A Certificate Principal Balance
(after taking into account distributions of the Class A Principal Distribution
Amount on such Distribution Date), (B) the Class R Certificate Principal Balance
(after taking into account distributions of the Class R Principal Distribution
Amount on such Distribution Date), (C) the Class M-1 Certificate Principal
Balance (after taking into account distributions of the Class M-1 Principal
Distribution Amount on such Distribution Date), (D) the Class M-2 Certificate
Principal Balance (after taking into account distributions of the Class M-2
Principal Distribution Amount on such Distribution Date), (E) the Class M-3
Certificate Principal Balance (after taking into account distributions of the
Class M-3 Principal Distribution Amount on such Distribution Date), (F) the
Class B-1 Certificate Principal Balance (after taking into account distributions
of the Class B-1 Principal Distribution Amount on such Distribution Date), (G)
the Class B-2 Certificate Principal Balance immediately prior to such
Distribution Date and (H) the Class B-3 Certificate Principal Balance (after
taking into account distributions of the Class B-3 Principal Distribution Amount
on such Distribution Date) over (2) the lesser of (A) 97.30% of the Stated
Principal Balances of the Mortgage Loans as of the end of the immediately
preceding Due Period and (B) the excess of the Stated Principal Balances of the
Mortgage Loans as of the end of the immediately preceding Due Period over
$1,344,343. Notwithstanding the foregoing, (I) on any Distribution Date prior to
the Stepdown Date on which the Certificate Principal Balance of each Class of
Class A Certificates, Class R Certificates, Class M Certificates, Class B-1
Certificates and Class B-2 Certificates has been reduced to zero, the Class B-3
Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class B-3 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A,
Class R, Class M-1, Class M-2, Class M-3, Class B-1 and Class B-2 Certificates
and (II) in no event will the Class B-3 Principal Distribution Amount with
respect to any Distribution Date exceed the Class B-3 Certificate Principal
Balance.

         Class B-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class B-3 Applied Realized Loss Amount over (2) the sum of all
distributions in reduction of the Class B-3 Applied Realized Loss Amounts on all
previous Distribution Dates.

         Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class C Applied Realized Loss Amount: As of any Distribution Date, the
sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class C Certificates.

         Class C Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class C Certificates.

         Class C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class C Distributable Interest
Rate on a notional amount equal to the aggregate of the aggregate principal
balance of the REMIC 1 Regular Interests immediately prior to such Distribution
Date (such amount of interest representing 100 percent of the interest payments
on the Class LT2-C Interest), plus the interest portion of any previous
distributions on such Class that is recovered as a voidable preference by a
trustee in bankruptcy, less any Non-Supported Interest Shortfall allocated on
such Distribution Date to the Class C Certificates.

                                      -12-
<PAGE>

         Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the REMIC 1 Regular Interests over (b)
two times the weighted average of the interest rates on the REMIC 1 Regular
Interests (treating for purposes of this clause (b) the interest rate on each of
the REMIC 1 Marker Classes as being capped at the interest rate of the
Corresponding REMIC 2 Interest and treating the Class LT1-Z Interest as being
capped at zero). The averages described in the preceding sentence shall be
weighted on the basis of the respective principal balances of the REMIC 1
Regular Interests immediately prior to any date of determination.

         Class C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class C Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class C
Certificates with respect to interest on such prior Distribution Dates or added
to the aggregate Certificate Principal Balance of the Class C Certificates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Net Rate.

         Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of all
distributions in reduction of the Class C Applied Realized Loss Amount on all
previous Distribution Dates.

         Class LT1-A Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-AR Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-B1 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-B2 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-B3 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-M1 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-M2 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-M3 Interest: An uncertificated regular interest in REMIC 1
with an initial principal balance equal to 50% of the initial principal balance
of its Corresponding REMIC 2 Interest and an interest rate equal to the Net
Rate.

         Class LT1-R Interest: The sole Class of "residual interest" in REMIC 1,
as described in the Preliminary Statement and in Section 2.07.

                                      -13-
<PAGE>

         Class LT1-Z Interest: An uncertificated regular interest in the REMIC 1
with an initial principal balance equal to the excess of (i) the aggregate
principal balances of the Mortgage Loans over (ii) the aggregate principal
balances of the REMIC 1 Marker Classes and an interest rate equal to the Net
Rate.

         Class LT2-A Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class A Margin and (y) 1.80% plus the Class A
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 1.590%.

         Class LT2-AR Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class R Margin and (y) 1.80% plus the Class R
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 1.590%.

         Class LT2-B1 Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class B-1 Margin and (y) 1.80% plus the Class B-1
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 3.270%.

         Class LT2-B2 Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class B-2 Margin and (y) 1.80% plus the Class B-2
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 3.870%.

         Class LT2-B3 Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class B-3 Margin and (y) 1.80% plus the Class B-3
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 4.120%.

         Class LT2-C Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the excess of the principal balance
of the Mortgage Loans over the aggregate Certificate Principal Balance of the
Class A Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates and Class R Certificates and bearing interest on a notional amount
equal to the aggregate of the Principal Balances of the Mortgage Loans
outstanding as of the beginning of the related Accrual Period at a rate equal to
the Class LT2-C Interest Rate.

         Class LT2-C Interest Rate: The excess, if any, of (a) the weighted
average of the interest rates on the REMIC 1 Regular Interests over (b) two
times the weighted average of the interest rates on the REMIC 1 Regular
Interests (treating for purposes of this clause (b) the interest rate on each of
the REMIC 1 Marker Classes as being capped at the interest rate on the
Corresponding REMIC 2 Interest and treating the Class LT1-Z Interest as being
capped at zero. The averages described in the preceding sentence shall be
weighted on the basis of the respective principal balances of the REMIC 1
Regular Interests immediately prior to any date of determination.

                                      -14-
<PAGE>

         Class LT2-M1 Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class M-1 Margin and (y) 1.80% plus the Class M-1
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 1.820%.

         Class LT2-M2 Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class M-2 Margin and (y) 1.80% plus the Class M-2
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 2.720%.

         Class LT2-M3 Interest: An uncertificated regular interest in REMIC 2
with an initial principal balance equal to the initial principal balance of the
Related Certificates and bearing interest at the lesser of (i) the greater of
(x) One-Month LIBOR plus the Class M-3 Margin and (y) 1.80% plus the Class M-3
Margin and (ii) the Net Rate. For the first Distribution Date, the percentage
described in clause (i) of the preceding sentence will equal 2.820%.

         Class LT2-R Interest: The sole Class of "residual interest" in REMIC 2,
as described in the Preliminary Statement and Section 2.07.

         Class M Certificates: Any of the Class M-1, Class M-2 and Class M-3
Certificates.

         Class M-1 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-1 Certificates.

         Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class M-1 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-1
Certificates.

         Class M-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class M-1 Current Interest or a Class M-1 Interest
Carry Forward Amount that is recovered as a voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest Shortfall allocated on such
Distribution Date to the Class M-1 Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

         Class M-1 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-1 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class M-1 Pass-Through Rate for the
related Accrual Period.

                                      -15-
<PAGE>

         Class M-1 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.700% per annum and, as of any
Distribution Date after the Optional Termination Date, 1.050% per annum.

         Class M-1 Pass-Through Rate: For the first Distribution Date, 1.820%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-1 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         Class M-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance and the Class R Certificate Principal Balance have been
reduced to zero and a Trigger Event exists, or as long as a Trigger Event does
not exist, the excess of (1) the sum of (A) the Class A Certificate Principal
Balance (after taking into account distributions of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class R Certificate
Principal Balance (after taking into account distributions of the Class R
Principal Distribution Amount on such Distribution Date) and (C) the Class M-1
Certificate Principal Balance immediately prior to such Distribution Date over
(2) the lesser of (A) 78.50% of the Stated Principal Balances of the Mortgage
Loans as of the end of the immediately preceding Due Period and (B) the excess
of the Stated Principal Balances for the Mortgage Loans as of the end of the
immediately preceding Due Period over $1,344,343. Notwithstanding the foregoing,
(I) on any Distribution Date prior to the Stepdown Date on which the Certificate
Principal Balance of each of the Class A Certificates and Class R Certificates
has been reduced to zero, the Class M-1 Principal Distribution Amount will equal
the lesser of (x) the outstanding Certificate Principal Balance of the Class M-1
Certificates and (y) 100% of the Principal Distribution Amount remaining after
any distributions on such Class A Certificates and Class R Certificates and (II)
in no event will the Class M-1 Principal Distribution Amount with respect to any
Distribution Date exceed the Class M-1 Certificate Principal Balance.

         Class M-1 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-1 Applied Realized Loss Amount over (2) the sum of all
distributions in reduction of the Class M-1 Applied Realized Loss Amounts on all
previous Distribution Dates.

         Class M-2 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-2 Certificates.

         Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class M-2 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-2
Certificates.

         Class M-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class M-2 Current Interest or a Class M-2 Interest
Carry Forward Amount that is recovered as a voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest Shortfall allocated on such
Distribution Date to the Class M-2 Certificates. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

                                      -16-
<PAGE>

         Class M-2 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-2 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class M-2 Pass-Through Rate for the
related Accrual Period.

         Class M-2 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.600% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.400% per annum.

         Class M-2 Pass-Through Rate: For the first Distribution Date, 2.720%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-2 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         Class M-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class R Certificate Principal Balance and the Class M-1
Certificate Principal Balance have been reduced to zero and a Trigger Event
exists, or as long as a Trigger Event does not exist, the excess of (1) the sum
of (A) the Class A Certificate Principal Balance (after taking into account
distributions of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class R Certificate Principal Balance (after taking into account
distributions of the Class R Principal Distribution Amount on such Distribution
Date), (C) the Class M-1 Certificate Principal Balance (after taking into
account distributions of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (D) the Class M-2 Certificate Principal Balance
immediately prior to such Distribution Date over (2) the lesser of (A) 87.50% of
the Stated Principal Balances of the Mortgage Loans as of the end of the
immediately preceding Due Period and (B) the excess of the Stated Principal
Balances of the Mortgage Loans as of the end of the immediately preceding Due
Period over $1,344,343. Notwithstanding the foregoing, (I) on any Distribution
Date prior to the Stepdown Date on which the Certificate Principal Balance of
each Class of Class A Certificates, Class R Certificates and the Class M-1
Certificates has been reduced to zero, the Class M-2 Principal Distribution
Amount will equal the lesser of (x) the outstanding Certificate Principal
Balance of the Class M-2 Certificates and (y) 100% of the Principal Distribution
Amount remaining after any distributions on such Class A, Class R and Class M-1
Certificates and (II) in no event will the Class M-2 Principal Distribution
Amount with respect to any Distribution Date exceed the Class M-2 Certificate
Principal Balance.

         Class M-2 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-2 Applied Realized Loss Amount over (2) the sum of all
distributions in reduction of the Class M-2 Applied Realized Loss Amounts on all
previous Distribution Dates.

         Class M-3 Applied Realized Loss Amount: As of any Distribution Date,
the sum of all Applied Realized Loss Amounts with respect to the Mortgage Loans
which have been applied to the reduction of the Certificate Principal Balance of
the Class M-3 Certificates.

         Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class M-3 Certificate Principal Balance: As of any date of
determination, the aggregate Certificate Principal Balance of the Class M-3
Certificates.

          Class M-3 Current Interest: As of any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-3 Pass-Through
Rate on the Class M-3 Certificate Principal Balance as of

                                      -17-
<PAGE>

the first day of such Accrual Period (after giving effect to all distributions
of principal made or deemed to be made as of such first day) plus the portion of
any previous distributions on such Class in respect of Class M-3 Current
Interest or a Class M-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class M-3 Certificates. For
purposes of calculating interest, principal distributions on a Distribution Date
will be deemed to have been made on the first day of the Accrual Period in which
such Distribution Date occurs.

         Class M-3 Interest Carry Forward Amount: As of any Distribution Date,
the sum of (1) the excess of (A) the Class M-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
M-3 Certificates with respect to Current Interest or Interest Carry Forward
Amounts on such prior Distribution Dates and (2) interest on such excess (to the
extent permitted by applicable law) at the Class M-3 Pass-Through Rate for the
related Accrual Period.

         Class M-3 Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 1.700% per annum and, as of any
Distribution Date after the Optional Termination Date, 2.550% per annum.

         Class M-3 Pass-Through Rate: For the first Distribution Date, 2.820%
per annum. As of any Distribution Date thereafter, the least of (1) One-Month
LIBOR plus the Class M-3 Margin, (2) the Weighted Maximum Rate Cap and (3) the
Available Funds Cap for such Distribution Date.

         Class M-3 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date, 100% of the Principal
Distribution Amount for such Distribution Date if the Class A Certificate
Principal Balance, Class R Certificate Balance, Class M-1 Certificate Principal
Balance and Class M-2 Certificate Principal Balance has been reduced to zero and
a Trigger Event exists, or as long as a Trigger Event does not exist, the excess
of (1) the sum of (A) the Class A Certificate Principal Balance (after taking
into account distributions of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class R Certificate Principal Balance (after taking
into account distributions of the Class R Principal Distribution Amount on such
Distribution Date), (C) the Class M-1 Certificate Principal Balance (after
taking into account distributions of the Class M-1 Principal Distribution Amount
on such Distribution Date), (D) the Class M-2 Certificate Principal Balance
(after taking into account distributions of the Class M-2 Principal Distribution
Amount on such Distribution Date) and (E) the Class M-3 Certificate Principal
Balance immediately prior to such Distribution Date over (2) the lesser of (A)
90.50% of the Stated Principal Balances of the Mortgage Loans as of the end of
the immediately preceding Due Period and (B) the excess of the Stated Principal
Balances for the Mortgage Loans as of the end of the immediately preceding Due
Period over $1,344,343. Notwithstanding the foregoing, (I) on any Distribution
Date prior to the Stepdown Date on which the Certificate Principal Balance of
each of the Class A Certificates, the Class R Certificates, the Class M-1
Certificates and the Class M-2 Certificates has been reduced to zero, the Class
M-3 Principal Distribution Amount will equal the lesser of (x) the outstanding
Certificate Principal Balance of the Class M-3 Certificates and (y) 100% of the
Principal Distribution Amount remaining after any distributions on such Class A,
Class R, Class M-1 and Class M-2 Certificates and (II) in no event will the
Class M-3 Principal Distribution Amount with respect to any Distribution Date
exceed the Class M-3 Certificate Principal Balance.

         Class M-3 Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class M-3 Applied Realized Loss Amount over (2) the sum of all
distributions in reduction of the Class M-3 Applied Realized Loss Amounts on all
previous Distribution Dates.

         Class R Certificate: Any Certificate designated as a "Class R
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

                                      -18-
<PAGE>

         Class R Certificate Principal Balance: As of any date of determination,
the aggregate Certificate Principal Balance of the Class R Certificate.

         Class R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class R Pass-Through Rate on
the Class R Certificate Principal Balance as of the first day of such Accrual
Period (after giving effect to all distributions of principal made or deemed to
be made as of such first day) plus the portion of any previous distributions on
such Class in respect of Class R Current Interest or a Class R Interest Carry
Forward Amount that is recovered as a voidable preference by a trustee in
bankruptcy, less any Non-Supported Interest Shortfall allocated on such
Distribution Date to the Class R Certificate. For purposes of calculating
interest, principal distributions on a Distribution Date will be deemed to have
been made on the first day of the Accrual Period in which such Distribution Date
occurs.

         Class R Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class R Current Interest with respect to prior
Distribution Dates over (B) the amount actually distributed to the Class R
Certificate with respect to Current Interest or Interest Carry Forward Amounts
on such prior Distribution Dates and (2) interest on such excess (to the extent
permitted by applicable law) at the Class R Pass-Through Rate for the related
Accrual Period.

         Class R Margin: As of any Distribution Date up to and including the
Optional Termination Date for the Certificates, 0.470% per annum and, as of any
Distribution Date after the Optional Termination Date, 0.940% per annum.

         Class R Pass-Through Rate: For the first Distribution Date, 1.590% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class R Margin, (2) the Weighted Maximum Rate Cap and (3) the Available
Funds Cap for such Distribution Date.

         Class S Certificate: Any Certificate designated as a "Class S
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.

         Class S Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class S Pass-Through Rate on
the Class S Notional Balance as of the first day of such Accrual Period (after
giving effect to all distributions of principal made or deemed to be made as of
such first day) plus the interest portion of any previous distributions in
respect of Class S Current Interest or Class S Interest Carry Forward Amounts
that is recovered as a voidable preference by a trustee in bankruptcy, less any
Non-Supported Interest Shortfall allocated on such Distribution Date to the
Class S Certificates. For purposes of calculating interest, principal
distributions on a Distribution Date will be deemed to have been made on the
first day of the Accrual Period in which such Distribution Date occurs.

         Class S Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class S Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class S Certificates with
respect to Current Interest or Interest Carry Forward Amounts on such prior
Distribution Dates.

         Class S Notional Amount: For any Distribution Date, the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3 and Class R Certificates immediately prior to
such Distribution Date.

         Class S Pass-Through Rate: As of any Distribution Date, the greater of
(1) 1.80% minus One-Month LIBOR and (2) 0.00%; provided, however, the rate on
the Class S Certificates with respect to the portion of the notional balance of
the Class S Certificates that corresponds to each Class of Offered

                                      -19-
<PAGE>

Certificates will be subject to a cap equal to the excess of (x) the Net Rate
(multiplied by a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days in the related Accrual Period) over (y)
One-Month LIBOR plus the applicable margin for such Class of Offered
Certificates.

         Client Data: The nonpublic personal information (as defined in 15
U.S.C. Section  6809(4)) of the Depositor's or its Affiliates' clients or
prospective clients received by a Receiving Party under or in connection with
this Agreement, including, but not limited to (i) a Person's name, address,
e-mail address, IP address, telephone number and/or social security number, (ii)
the fact that an individual has a relationship with the Depositor or its
Affiliates, or (iii) an individual's account information.

         Closing Date: December 29, 2003.

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

         Collection Account: A separate Eligible Account created and initially
maintained by a Servicer pursuant to Section 3.05(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Ocwen Federal Bank
FSB, in trust for registered holders of Terwin Mortgage Trust, Asset-Backed
Certificates, Series TMTS 2003-8HE" in the case of Ocwen, or "GreenPoint
Mortgage Funding Inc., in trust for registered holders of Terwin Mortgage Trust,
Asset-Backed Certificates, Series TMTS 2003-8HE" in the case of Green Point.
Funds in a Collection Account shall be held in trust for the Certificateholders
for the uses and purposes set forth in this Agreement.

         Combined Loan-to-Value Ratio: For any Mortgage Loan in a second lien
position, the fraction, expressed as a percentage, the numerator of which is the
sum of (1) the original principal balance of the related Mortgage Loan and (2)
any outstanding principal balances of Mortgage Loans the liens on which are
senior to the lien on such related Mortgage Loan (such sum calculated at the
date of origination of such related Mortgage Loan) and the denominator of which
is the lesser of (A) the Appraised Value of the related Mortgaged Property and
(B) the sales price of the related Mortgaged Property at time of origination.

         Compensating Interest: With respect to any Mortgage Loan and any
Distribution Date, an amount equal to the portion of any Prepayment Interest
Shortfalls required to be deposited in the related Collection Account by a
Servicer pursuant to Section 4.02 hereof.

         Corresponding REMIC 2 Interests: With respect to the Class LT1-A
Interest, the Class LT2-A Interest. With respect to the Class LT1-M1 Interest,
the Class LT2-M1 Interest. With respect to the Class LT1-M2 Interest, the Class
LT2-M2 Interest. With respect to the Class LT1-M3 Interest, the Class LT2-M3
Interest. With respect to the Class LT1-B1 Interest, the Class LT2-B1 Interest.
With respect to the Class LT1-B2 Interest, the Class LT2-B2 Interest. With
respect to the Class LT1-B3 Interest, the Class LT2-B3 Interest. With respect to
the Class LT1-AR Interest, the Class LT2-AR Interest.

         Credit Risk Management Agreement: The Credit Risk Management Agreement
dated as of December 29, 2003 between Ocwen and the Credit Risk Manager and any
other such agreement entered into by GreenPoint and the Credit Risk Manager, if
any.

         Credit Risk Manager: The Murrayhill Company, a Colorado corporation, or
its successor in interest.

         Credit Risk Manager Fee: The fee payable on each Distribution Date to
the Credit Risk Manager as compensation for all services rendered by it in
exercise and performance of any of the powers and duties of the Credit Risk
Manager under a Credit Risk Management Agreement, which amount shall equal

                                      -20-
<PAGE>

one-twelfth of the product of (1) the Credit Risk Manager Fee Rate and (2) the
Stated Principal Balance of the Mortgage Loans subject to a Credit Risk
Management Agreement as of the first day of the related Due Period.

         Credit Risk Manager Fee Rate: 0.015% per annum.

         Current Interest: Any of the Class A Current Interest, the Class R
Current Interest, the Class M-1 Current Interest, the Class M-2 Current
Interest, the Class M-3, Current Interest Class B-1 Current Interest, the Class
B-2 Current Interest, the Class B-3 Current Interest, the Class C Current
Interest and the Class S Current Interest.

         Custodial Agreement: The Custodial Agreement, dated as of December 29,
2003, among the Trustee, the Custodian and the Seller, a copy of which is
attached hereto as Exhibit M.

         Custodian: Deutsche Bank National Trust Company, or any successor
thereto.

         Cut-off Date: December 1, 2003.

         Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the calendar day
immediately preceding the Cut-off Date after application of all payments of
principal due on or prior to the Cut-off Date, whether or not received, and all
Principal Prepayments received prior to the Cut-off Date, but without giving
effect to any installments of principal received in respect of Due Dates on and
after the Cut-off Date.

         Definitive Certificates: As defined in Section 5.06.

         Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.

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

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

         Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation, or its successor in interest.

         Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.

                                      -21-
<PAGE>

         Depository Agreement: With respect to Classes of Book-Entry
Certificates, the agreement among the Trustee and the initial Depository.

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

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

         Disqualified Organization: (1) the United States, any state or
political subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (2) any
organization (other than a cooperative described in Section 521 of the Code)
which is exempt from tax under Chapter 1 of Subtitle A of the Code unless such
organization is subject to the tax imposed by Section 511 of the Code and (3)
any organization described in Section 1381(a)(2)(C) of the Code.

         Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in January 2004.

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

         Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs (or, in the case of the first Distribution Date,
beginning on the Cut-off Date) and ending on the first day of the month in which
such Distribution Date occurs.

         Eligible Account: An account that is (1) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (2) maintained
with the corporate trust department of a bank which (A) has a rating of at least
Baa3 or P-3 by Moody's and (B) is either the Depositor or the corporate trust
department of a national bank or banking corporation which has a rating of at
least A-1+ by S&P or P-1 by Moody's, or (iii) an account or accounts the
deposits in which are fully insured by the FDIC, or (iv) an account or accounts,
acceptable to each Rating Agency without reduction or withdrawal of the rating
of any Class of Certificates, as evidenced in writing, by a depository
institution in which such accounts are insured by the FDIC (to the limit
established by the FDIC), the uninsured deposits in which accounts are otherwise
secured such that, as evidenced by an Opinion of Counsel delivered to and
acceptable to the Trustee and each Rating Agency, the Certificateholders have a
claim with respect to the funds in such account and a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (v) maintained at an eligible institution whose commercial paper,
short-term debt or other short-term deposits are rated at least A-1 by S&P and
P-1 by Moody's, or (vi) maintained with a federal or state chartered depository
institution the deposits in which are insured by the FDIC to the applicable
limits and the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated A-1 by
S&P or Prime-1 by Moody's at the time any deposits are held on deposit therein,
or (vii) otherwise acceptable to each Rating Agency, as evidenced by a letter
from each Rating Agency to the Trustee.

                                      -22-

<PAGE>

         ERISA: The Employee Retirement Income Security Act of 1974, including
any successor or amendatory provisions.

         ERISA Restricted Certificates: The Class C and Class R Certificates,
and any other Certificate, unless such other Certificate shall have received a
rating from a Rating Agency at the time of a transfer of such other Certificate
that is in one of the four highest generic rating categories.

         Event of Default:  As defined in Section 7.01 hereof.

         Excess Interest: On any Distribution Date, for the Class A
Certificates, Class R Certificate, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, the excess, if any, of (1) the amount of
interest such Class of Certificates is entitled to receive on such Distribution
Date at its Pass-Through Rate over (2) the amount of interest such Class of
Certificates would have been entitled to receive on such Distribution Date had
the Pass-Through Rate for such Class been the REMIC Pass-Through Rate.

         Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (1) the unpaid principal balance of
such Liquidated Loan as of the date of such liquidation plus (2) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Servicer) up to the Due Date in
the month in which such Liquidation Proceeds are required to be distributed on
the unpaid principal balance of such Liquidated Loan outstanding during each Due
Period as to which such interest was not paid or advanced.

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

         Extra Principal Distribution Amount: With respect to any Distribution
Date, (1) prior to the Stepdown Date, the excess of (A) the sum of (i) the
Aggregate Certificate Principal Balance immediately preceding such Distribution
Date reduced by the Principal Funds with respect to such Distribution Date and
(ii) $3,629,725 over (B) the Pool Stated Principal Balances of the Mortgage
Loans as of such Distribution Date and (2) on and after the Stepdown Date, (A)
the sum of (i) the Aggregate Certificate Principal Balance immediately preceding
such Distribution Date, reduced by the Principal Funds with respect to such
Distribution Date and (ii) the greater of (a) 2.70% of the Pool Stated Principal
Balances of the Mortgage Loans and (b) $1,344,343 less (B) the Pool Stated
Principal Balances of the Mortgage Loans as of such Distribution Date; provided,
however, that if on any Distribution Date a Trigger Event is in effect, the
Extra Principal Distribution Amount will not be reduced to the applicable
percentage of the then-current Pool Stated Principal Balance of the Mortgage
Loans (and will remain fixed at the applicable percentage of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Due Date immediately
prior to the Trigger Event) until the next Distribution Date on which the
Trigger Event is not in effect.

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

         Federal Funds Rate: The interest rate at which depository institutions
lend balances at the Federal Reserve to other depository institutions overnight.

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

         Final Servicing Transfer Date: The date on which the servicing rights
with respect to all of the Mortgage Loans serviced by GreenPoint have been
transferred to Ocwen, which is expected to be on or about February 1, 2004.

                                      -23-

<PAGE>

         Fixed Rate Mortgage Loan: A Mortgage Loan identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is fixed.

         Floating Rate Certificate Carryover: With respect of a Distribution
Date, in the event that the Pass-Through Rate for a Class of Offered
Certificates is based upon the Available Funds Cap, the excess of (x) the amount
of interest that such Class would have been entitled to receive on such
Distribution Date had the Pass-Through Rate for that Class not been calculated
based on the Available Funds Cap, up to but not exceeding the greater of (a)
the Weighted Maximum Rate Cap or (b) the Upper Collar over (y) the amount of
interest payable on such Class on such Distribution Date based on the Available
Funds Cap, up to but not exceeding the greater of (a) the Weighted Maximum Rate
Cap or (b) the Upper Collar, together with (i) the unpaid portion of any such
excess from prior Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate for such Class, without giving effect to the
Available Funds Cap) and (ii) any amount previously distributed with respect to
Floating Rate Certificate Carryover for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.

         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.

         Grantor Trusts:  The grantor trusts described in Section 2.07 hereof.

         GreenPoint: GreenPoint Mortgage Funding Inc.

         Gross Margin: The percentage set forth in the related Mortgage Note for
each of the Adjustable Rate Mortgage Loans which is to be added to the
applicable index for use in determining the Mortgage Rate on each Adjustment
Date, and which is set forth in the Mortgage Loan Schedule for each Adjustable
Rate Mortgage Loan.

         Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.

         Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date as set forth in Section 5.01 hereof.

         Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.

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

         Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.

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

         Interest Carry Forward Amount: Any of the Class A Interest Carry
Forward Amount, the Class R Interest Carry Forward Amount, the Class S Interest
Carry Forward Amount, the Class M-1 Interest Carry

                                      -24-

<PAGE>

Forward Amount, the Class M-2 Interest Carry Forward Amount, the Class M-3
Interest Carry Forward Amount, the Class B-1 Interest Carry Forward Amount, the
Class B-2 Interest Carry Forward Amount or the Class B-3 Interest Carry Forward
Amount, as the case may be.

         Interest Determination Date: With respect to the Certificates, (i) for
any Accrual Period other than the first Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period and (ii) for the
first Accrual Period, December 24, 2003.

         Interest Funds: With respect to any Distribution Date, the sum, without
duplication, of (1) all scheduled interest due during the related Due Period and
received before the related Servicer Remittance Date or advanced on or before
the related Servicer Remittance Date less the Servicing Fees, the Trustee Fee,
the Credit Risk Manager Fee and any fees paid by the Servicer on the related
LPMI Policy, (2) all Advances relating to interest with respect to the Mortgage
Loans, (3) all Compensating Interest with respect to the Mortgage Loans, (4)
Liquidation Proceeds with respect to the Mortgage Loans (to the extent such
Liquidation Proceeds relate to interest) collected during the related Prepayment
Period and (5) proceeds of any purchase pursuant to Sections 2.02, 2.03 or 9.01
(to the extent such proceeds relate to interest) less (A) all Non-Recoverable
Advances relating to interest and (B) all other amounts reimbursable to the
Servicer and the Trustee or to the Custodian pursuant to this Agreement and
allocable to interest.

         Latest Possible Maturity Date: The first Distribution Date following
the third anniversary of the scheduled maturity date of the Mortgage Loan in the
Trust Fund having the latest scheduled maturity date as of the Cut-off Date.

         Lender:  As defined in Section 10.14(a).

         LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.

         Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which a Servicer has certified (in accordance with Section
3.12) in the related Prepayment Period that it has received all amounts it
expects to receive in connection with such liquidation.

         Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale, sale by the Servicer pursuant
to this Agreement or otherwise or amounts received in connection with any
condemnation or partial release of a Mortgaged Property and any other proceeds
received in connection with an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees, Servicing Advances and any other expenses
related to such Mortgage Loan.

         Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the lesser
of (X) the Appraised Value of the related Mortgaged Property and (Y) the sales
price of the related Mortgaged Property at the time of origination.

         Losses: Any losses, claims, damages, liabilities or expenses
collectively.

         LPMI: Mortgage insurance policies, which are provided by an LPMI
Insurer and have premiums that are paid by a Servicer.

                                      -25-

<PAGE>

         LPMI Insurer:  MGIC, PMI or Radian

         LPMI Loan: A Mortgage Loan covered by an LPMI Policy, as set forth in
the Mortgage Loan Schedule or otherwise identified to a Servicer in writing.

         LPMI Policy: A policy of primary mortgage insurance issued by a LPMI
Insurer pursuant to which the related premium is to be paid by a Servicer from
payments of interest made by the Mortgagor.

         Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note and with respect to each Fixed Rate Mortgage Loan, the rate of interest set
forth in the related Mortgage Note.

         Maximum Net Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note and with respect to each Fixed Rate Mortgage Loan, the rate of
interest set forth in the related Mortgage Note, minus, in each case, (i) the
applicable Servicing Fee Rate (determined as though the Servicing Transfer Date
had occurred for each Mortgage Loan), (ii) the Trustee Fee Rate and (iii) the
premium rate on any related LPMI Policy.

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

         MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.

         MERS System: The system of recording transfers of mortgage
electronically maintained by MERS.

         MGIC: Mortgage Guaranty Insurance Corporation, a Wisconsin stock
insurance corporation, or successor in interest.

         MIN:  The loan number for any MERS Loan.

         Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.

         Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.

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

         MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.

         Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust
or other instrument creating a first or second lien or a first or second
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note.

         Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.

         Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Properties), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property. Any mortgage
loan that was

                                      -26-

<PAGE>

intended by the parties hereto to be transferred to the Trust Fund as indicated
by such Mortgage Loan Schedule which is in fact not so transferred for any
reason shall continue to be a Mortgage Loan hereunder until the Purchase Price
with respect thereto has been paid to the Trust Fund; provided that Ocwen shall
have no obligation to service any Mortgage Loan unless it is transferred to
Ocwen on the Servicing Transfer Date.

         Mortgage Loan Schedule: The lists of Mortgage Loans (as from time to
time amended by the Seller to reflect the deletion of Deleted Mortgage Loans and
the addition of Replacement Mortgage Loans pursuant to the provisions of this
Agreement) transferred to the Trustee as part of the Trust Fund and from time to
time subject to this Agreement, attached hereto as Exhibit B, setting forth the
following information with respect to each Mortgage Loan:

         (i)      the loan number;

         (ii)     the unpaid principal balance of the Mortgage Loans;

         (iii)    the Initial Mortgage Rate;

         (iv)     the maturity date and the months remaining before maturity
                  date;

         (v)      the original principal balance;

         (vi)     the Cut-off Date Principal Balance;

         (vii)    the first payment date of the Mortgage Loan;

         (viii)   the Loan-to-Value Ratio at origination with respect to a first
                  lien Mortgage Loan, or the Combined Loan-to-Value Ratio with
                  respect to a second lien Mortgage Loan;

         (ix)     a code indicating whether the residential dwelling at the time
                  of origination was represented to be owner-occupied;

         (x)      a code indicating the property type;

         (xi)     with respect to each Adjustable Rate Mortgage Loan:

                  (a)      the frequency of each Adjustment Date;

                  (b)      the next Adjustment Date;

                  (c)      the Maximum Mortgage Rate;

                  (d)      the Minimum Mortgage Rate;

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

                  (f)      the related Periodic Rate Cap;

                  (g)      the Gross Margin;

         (xiii)   location of the related Mortgaged Property;

                                      -27-

<PAGE>

         (xiv)    a code indicating whether a prepayment penalty is applicable
                  and, if so, the term of such prepayment penalty;

         (xv)     code indicating if the Mortgage Loan is covered by LPMI and
                  identifying the related insurer; and

         (xvi)    the LPMI premium rate.

         Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan
and all amendments, modifications and attachments thereto.

         Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.

         Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.

         Mortgaged Property: The underlying property securing a Mortgage Loan.

         Mortgagor: The obligor on a Mortgage Note.

         Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the then current Mortgage Rate less the sum of (i) the
Trustee Fee Rate, (ii) and any applicable LPMI premium payable by the Servicer,
(iii) the applicable Servicing Fee Rate and (iv) the Credit Risk Manager Fee
Rate.

         Net Rate: With respect to any Distribution Date, the per annum rate
equal to the product of (x) 12 and (y) the amount determined by dividing the
excess of (i) the total scheduled interest on the Mortgage Loans based on the
Mortgage Rates in effect on the related Due Date over (ii) the Servicing Fees,
the Trustee Fee, the Credit Risk Manager Fee and premiums paid by a Servicer on
the related LPMI Policy, by the aggregate Stated Principal Balance of the
Mortgage Loans as of the preceding Distribution Date (or the Cut-off Date, if
there is no preceding Distribution Date), multiplying the result by a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the related Accrual Period.

         Non-Recoverable Advance: Any portion of an Advance previously made or
proposed to be made by a Servicer that, in the good faith judgment of the
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or other proceeds related to the Mortgage Loan.

         Non-Recoverable Servicing Advance: Any portion of a Servicing Advance
previously made or proposed to be made by a Servicer that, in the good faith
judgment of the Servicer, will not or, in the case of a current Servicing
Advance, would not, be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or other proceeds related to the
Mortgage Loan.

         Non-Supported Interest Shortfall: As defined in Section 4.02.

         Ocwen: Ocwen Federal Bank FSB, a federally chartered savings bank, or
its successor in interest.

         Offered Certificates: The Class A, Class S, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2, Class B-3 and Class R Certificate.

                                      -28-

<PAGE>

         Officer's Certificate: A certificate (1) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a vice president (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor, Ocwen,
GreenPoint or the Trustee (or any other officer customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with a particular subject) or (2),
if provided for in this Agreement, signed by a Servicing Officer, as the case
may be, and delivered to the Depositor, Ocwen, GreenPoint or the Trustee, as the
case may be, as required by this Agreement.

         One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of (a) the offered rates for one-month United States dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Trustee as follows:

                  (i)      If on such Interest Determination Date two or more
                           Reference Banks provide such offered quotations,
                           One-Month LIBOR for the related Accrual Period shall
                           be the arithmetic mean of such offered quotations
                           (rounded upwards if necessary to the nearest whole
                           multiple of 0.03125%).

                  (ii)     If on such Interest Determination Date fewer than two
                           Reference Banks provide such offered quotations,
                           One-Month LIBOR for the related Accrual Period shall
                           be the higher of (i) One-Month LIBOR as determined on
                           the previous Interest Determination Date and (ii) the
                           Reserve Interest Rate.

         Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor, Ocwen, GreenPoint or the Trustee, reasonably acceptable to
each addressee of such opinion; provided, however, that with respect to Section
6.04 or 10.01, or the interpretation or application of the REMIC Provisions,
such counsel must (1) in fact be independent of the Depositor, Ocwen, GreenPoint
or the Trustee, (2) not have any direct financial interest in the Depositor,
Ocwen, GreenPoint or the Trustee or in any affiliate of any, and (3) not be
connected with the Depositor, Ocwen, GreenPoint or the Trustee as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.

         Optional Termination: The termination of the Trust Fund hereunder
pursuant to Section 9.01 hereof.

         Optional Termination Date: The Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage Loans is equal to or less than 10% of
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date.

         Optional Termination Price: In the case of an Optional Termination
effected by Ocwen, as of any Distribution Date on or after the Optional
Termination Date, an amount equal to the sum of (A) the Certificate Principal
Balance of the Offered Certificates, plus accrued interest thereon, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Trustee or the
Servicers and any unreimbursed Servicing Fees, Advances, Servicing Advances and
Trustee Fees (including any costs and

                                      -29-

<PAGE>

expenses incurred in connection with the Optional Termination), (C) the
Certificate Principal Balance of the Class C Certificates, plus accrued interest
thereon, (D) accrued interest on the Class S Certificates and (E) any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund in
connection with any violation relating to any of the Mortgage Loans of any
predatory or abusive lending law.

         OTS:  The Office of Thrift Supervision.

         Outsourcer: As defined in Section 3.02(c).

         Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except: (1) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (2) Certificates in exchange for
which or in lieu of which other Certificates have been executed by the Trustee
and delivered by the Trustee pursuant to this Agreement.

         Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Due Period.

         Overcollateralization Amount: As of any date of determination, the
excess of (1) the Stated Principal Balance of the Mortgage Loans over (2) the
Certificate Principal Balance of the Certificates (other than the Class C
Certificates).

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

         Pass-Through Margin: With respect to the Class A Certificates, the
Class A Margin; with respect to the Class M-1 Certificates, the Class M-1
Margin; with respect to the Class M-2 Certificates, the Class M-2 Margin; with
respect to the Class M-3 Certificates, the Class M-3 Margin; with respect to the
Class B-1 Certificates, the Class B-1 Margin; with respect to the Class B-2
Certificates, the Class B-2 Margin; with respect to the Class B-3 Certificates,
the Class B-3 Margin; and with respect to the Class R Certificate, the Class R
Margin.

         Pass-Through Rate: With respect to the Class A Certificates, the Class
A Pass-Through Rate; with respect to the Class M-1 Certificates, the Class M-1
Pass-Through Rate; with respect to the Class M-2 Certificates, the Class M-2
Pass-Through Rate; with respect to the Class M-3 Certificates, the Class M-3
Pass-Through Rate; with respect to the Class B-1 Certificates, the Class B-1
Pass-Through Rate; with respect to the Class B-2 Certificates, the Class B-2
Pass-Through Rate; with respect to the Class B-3 Certificates, the Class B-3
Pass-Through Rate; with respect to the Class S Certificates, the Class S
Pass-Through Rate; and, with respect to the Class R Certificate, the Class R
Pass-Through Rate.

         Percentage Interest:  With respect to:

                  (i)      any Class, the percentage interest in the undivided
                           beneficial ownership interest evidenced by such Class
                           which shall be equal to the Class Certificate
                           Principal Balance of such Class divided by the Class
                           Principal Balance of all Classes; and

                  (ii)     any Certificate, the Percentage Interest evidenced
                           thereby of the related Class shall equal the
                           percentage obtained by dividing the Denomination

                                      -30-

<PAGE>

                           of such Certificate by the aggregate of the
                           Denominations of all Certificates of such Class.

         Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan and the
related Mortgage Note, the provision therein that limits permissible increases
and decreases in the Mortgage Rate on any Adjustment Date.

         Permitted Activities: The primary activities of the trust created
pursuant to this Agreement which shall be:

                  (i)      holding Mortgage Loans transferred from the Depositor
                           and other assets of the Trust Fund, including the Cap
                           Contracts and any credit enhancement and passive
                           derivative financial instruments that pertain to
                           beneficial interests issued or sold to parties other
                           than the Depositor, its Affiliates, or its agents;

                  (ii)     issuing Certificates and other interests in the
                           assets of the Trust Fund;

                  (iii)    receiving collections on the Mortgage Loans and the
                           Cap Contracts and making payments on such
                           Certificates and interests in accordance with the
                           terms of this Agreement; and

                  (iv)     engaging in other activities that are necessary or
                           incidental to accomplish these limited purposes,
                           which activities cannot be contrary to the status of
                           the Trust Fund as a qualified special purpose entity
                           under existing accounting literature.

         Permitted Investments: At any time, any one or more of the following
obligations and securities:

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

                  (ii)     general obligations of or obligations guaranteed by
                           any state of the United States or the District of
                           Columbia receiving the highest long-term debt rating
                           of each Rating Agency rating the Certificates;

                  (iii)    commercial or finance company paper, other than
                           commercial or finance company paper issued by the
                           Depositor, the Trustee or any of its Affiliates,
                           which is then receiving the highest commercial or
                           finance company paper rating of each such Rating
                           Agency;

                  (iv)     certificates of deposit, demand or time deposits, or
                           bankers' acceptances (other than banker's acceptances
                           issued by the Trustee or any of its Affiliates)
                           issued by any depository institution or trust company
                           incorporated under the laws of the United States or
                           of any state thereof and subject to supervision and
                           examination by federal and/or state banking
                           authorities, provided that the commercial paper
                           and/or long term unsecured debt obligations of such
                           depository institution or trust company are then
                           rated one of the two highest long-term and the
                           highest short-term ratings of each such Rating Agency
                           for such securities;

                                      -31-

<PAGE>

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

                  (vi)     guaranteed reinvestment agreements issued by any
                           bank, insurance company or other corporation rated in
                           the two highest long-term or the highest short-term
                           ratings of each Rating Agency containing, at the time
                           of the issuance of such agreements, such terms and
                           conditions as will not result in the downgrading or
                           withdrawal of the rating then assigned to the
                           Certificates by any such Rating Agency as evidenced
                           by a letter from each Rating Agency;

                  (vii)    repurchase obligations with respect to any security
                           described in clauses (i) and (ii) above, in either
                           case entered into with a depository institution or
                           trust company (acting as principal) described in
                           clause (v) above;

                  (viii)   securities (other than stripped bonds, stripped
                           coupons or instruments sold at a purchase price in
                           excess of 115% of the face amount thereof) bearing
                           interest or sold at a discount issued by any
                           corporation, other than the Trustee or any of its
                           Affiliates, incorporated under the laws of the United
                           States or any state thereof which, at the time of
                           such investment, have one of the two highest long
                           term ratings of each Rating Agency;

                  (ix)     interests in any money market fund (including those
                           managed or advised by the Trustee or any of its
                           affiliates) which at the date of acquisition of the
                           interests in such fund and throughout the time such
                           interests are held in such fund has the highest
                           applicable long term rating by each such Rating
                           Agency rating such fund; and

                  (x)      short term investment funds sponsored by any trust
                           company or national banking association incorporated
                           under the laws of the United States or any state
                           thereof, other than the Trustee or any of its
                           Affiliates, which on the date of acquisition has been
                           rated by each such Rating Agency in their respective
                           highest applicable rating category;

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or above par or (iii) is purchased at a deep discount; provided,
further, that no such instrument shall be a Permitted Investment (A) if such
instrument evidences principal and interest payments derived from obligations
underlying such instrument and the interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be redeemed at
a price below the purchase price (the foregoing clause (B) not to apply to
investments in units of money market funds pursuant to clause (ix) above); and
provided, further, (I) that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Servicer but not
yet deposited in the related Collection Account) may be invested in investments
(other than money market funds) treated as equity interests for Federal income
tax purposes, unless the Servicer shall receive an Opinion of Counsel, at the
expense of the party requesting that such investment be made, to the effect that
such investment will not adversely affect the status of the any REMIC provided
for herein as a REMIC under the Code or result in imposition of a tax on the
Trust Fund or any REMIC provided for herein and (II) any such investment must be
a "permitted investment"

                                      -32-

<PAGE>

within the meaning of Section 860G(a)(5) of the Code. Permitted Investments that
are subject to prepayment or call may not be purchased at a price in excess of
par.

         Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in Section 860E(c)(1) of the Code) with respect to a
Certificate, (iv) rural electric and telephone cooperatives described in Section
1381(a)(2)(C) of the Code, and (v) a Person that is not a citizen or resident of
the United States, a corporation or partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in or under the laws of the United States or any State
thereof or the District of Columbia or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, unless, in the case of this clause (v), such
Person has furnished the transferor, and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI or applicable successor form. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in Section 7701 of the Code. A corporation will not be
treated as an instrumentality of the United States or of any State thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such government unit.

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

         PMI: PMI Mortgage Insurance Co.

         Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances, as of such Distribution Date, of the
Mortgage Loans that were Outstanding Mortgage Loans as of such date.

         Prepayment Assumption: A rate of prepayment, as described in the
Prospectus Supplement in the definition of "Modeling Assumptions," relating to
the Certificates.

         Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment or
a Principal Prepayment in full (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03 or
9.01 hereof and other than a Principal Prepayment in full or in part on a
Mortgage Loan received during the period from and including the first day to and
including the 14th day of the month of such Distribution Date), the amount, if
any, by which (i) one month's interest at the applicable Net Mortgage Rate on
the Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date or in the case of a partial Principal Prepayment on the amount
of such prepayment exceeds (ii) the amount of interest paid or collected in
connection with such Principal Prepayment.

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

                                      -33-

<PAGE>

         Prepayment Period: As to any Distribution Date and Principal
Prepayments in full, the period beginning with the opening of business on the
15th day of the calendar month preceding the month in which such Distribution
Date occurs (or in the case of the first Distribution Date, beginning with the
opening of business on the Cut-off Date) and ending on the close of business on
the 14th day of the month in which such Distribution Date occurs. As to any
Distribution Date and Principal Prepayments in part, the calendar month
preceding the month in which such Distribution Date occurs.

         Principal Distribution Amount: With respect to each Distribution Date,
the sum of (i) the Principal Funds for such Distribution Date and (ii) any Extra
Principal Distribution Amount for such Distribution Date.

         Principal Funds: With respect to the Mortgage Loans and any
Distribution Date, the sum, without duplication, of (1) the scheduled principal
due during the related Due Period and received before the related Servicer
Remittance Date or advanced on or before the related Servicer Remittance Date,
(2) prepayments collected in the related Prepayment Period, (3) the Stated
Principal Balance of each Mortgage Loan that was purchased pursuant to Section
2.02 or 2.03 during the related Prepayment Period or pursuant to Section 9.01,
on the Business Day prior to such Distribution Date, (4) the amount, if any, by
which the aggregate unpaid principal balance of any Replacement Mortgage Loan is
less than the aggregate unpaid principal of the related Deleted Mortgage Loans
delivered by the Seller in connection with a substitution of a Mortgage Loan
pursuant to Section 2.03(c), (5) all Liquidation Proceeds collected during the
related Prepayment Period (to the extent that such Liquidation Proceeds related
to principal) and (6) all other collections and recoveries in respect of
principal during the related Prepayment Period less the sum of (A) all
Non-Recoverable Advances relating to principal with respect to the Mortgage
Loans and (B) all other amounts reimbursable to the Servicer, the Custodian and
the Trustee pursuant to this Agreement and that was not paid or reimbursed from
the Interest Funds with respect to the Distribution Date.

         Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including Mortgage Loans
purchased or repurchased under Sections 2.02, 2.03, 3.12 and 9.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Servicer in accordance with the terms of the
related Mortgage Note.

         Prospectus Supplement: The Prospectus Supplement dated December 24,
2003 relating to the public offering of the Class A, Class S, Class R, Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.

         PUD: A Planned Unit Development.

         Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller or the applicable Transferor, pursuant to Section 2.02
or 2.03 hereof or purchased by a Servicer pursuant to Section 3.12(c) hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan as of the date of such purchase together with any unreimbursed
Servicing Advances, (ii) accrued interest thereon at the applicable Mortgage
Rate from (a) the date through which interest was last paid by the Mortgagor to
(b) the Due Date in the month in which the Purchase Price is to be distributed
to Certificateholders and (iii) any unreimbursed costs, penalties and/or damages
incurred by the Trust Fund (or the Trustee on behalf of the Trust Fund) in
connection with any violation relating to such Mortgage Loan of any anti-
predatory or anti-abusive lending laws.

         Radian: Radian Guaranty Inc.

                                      -34-

<PAGE>

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

         Realized Loss: With respect to (1) a Liquidated Loan , the amount, if
any, by which the Stated Principal Balance and accrued interest thereon at the
Net Mortgage Rate exceeds the amount actually recovered by the Servicer with
respect thereto (net of reimbursement of Advances and Servicing Advances) at the
time such Mortgage Loan became a Liquidated Loan or (2) with respect to a
Mortgage Loan which is not a Liquidated Loan, any amount of principal that the
Mortgagor is no longer legally required to pay (except for the extinguishment of
debt that results from the exercise of remedies due to default by the
Mortgagor).

         Receiving Party: The meaning specified in Section 3.28 hereof.

         Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date).

         Reference Banks: Barclays Bank PLC, JPMorgan Chase Bank, Citibank,
N.A., Wells Fargo Bank Minnesota, National Association and NatWest, N.A.;
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) whose
quotations appear on the Reuters Screen LIBO Page on the relevant Interest
Determination Date and (iii) which have been designated as such by the Trustee.

         Regular Certificate: Any one of the Class A, Class S, Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.

         Related Certificates: With respect to the Class LT2-A Interest, the
Class A Certificates. With respect to the Class LT2-AR Interest, the Class R
Certificates. With respect to the Class LT2-B1 Interest, the Class B-1
Certificates. With respect to the Class LT2-B2 Interest, the Class B-2
Certificates. With respect to the Class LT2-B3 Interest, the Class B-3
Certificates. With respect to the Class LT2-M1 Interest, the Class M-1
Certificates. With respect to the Class LT2-M2 Interest, the Class M-2
Certificates. With respect to the Class LT2-M3 Interest, the Class M-3
Certificates.

         REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code. References herein to "the REMICs" or "a REMIC"
shall mean any of or, as the context requires, all of REMIC 1, REMIC 2 and the
Upper Tier REMIC.

         REMIC Pass-Through Rate: The Pass-Through Rate for a Class of
Certificates calculated by replacing "Available Funds Cap" in the definitions of
Class A Pass-Through Rate, Class M-1 Pass-Through Rate, Class M-2 Pass-Through
Rate, Class M-3 Pass-Through Rate, Class B-1 Pass-Through Rate, Class B-2
Pass-Through Rate, Class B-3 Pass-Through Rate and Class R Pass-Through Rate in
such definition with "Net Rate."

         REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings,

                                      -35-

<PAGE>

notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.

         REMIC Regular Interests: (i) the rights under each of the Certificates
(other than the Class C, Class S and Class R Certificates) other than the rights
in interest rate cap contracts described in Section 2.07, (ii) the
Uncertificated Class C Interest and (iii) the Upper Tier REMIC Class S
Components.

         REMIC 1: As described in the Preliminary Statement and Section 2.07.

         REMIC 1 Interests: Each of the Class LT1-A Interest, the Class LT1-AR
Interest, the Class LT1-M1 Interest, the Class LT1-M2 Interest, the Class LT1-M3
Interest, the Class LT1-B1 Interest, the Class LT1-B2 Interest, the Class LT1-B3
Interest, the Class LT1-Z Interest and the Class LT1-R Interest.

         REMIC 1 Marker Classes: Each of the Classes of REMIC 1 Regular
Interests other than the Class LT1-Z Interest.

         REMIC 1 Regular Interests: Each of the REMIC 1 Interests other than the
Class LT1-R Interest.

         REMIC 2: As described in the Preliminary Statement and Section 2.07.

         REMIC 2 Interests: Each of the Class LT2-A Interest, the Class LT2-AR
Interest, the Class LT2-M1 Interest, the Class LT2-M2 Interest, the Class LT2-M3
Interest, the Class LT2-B1 Interest, the Class LT2-B2 Interest, the Class LT2-B3
Interest, the Class LT2-C Interest and the Class LT2-R Interest.

         REMIC 2 Regular Interests: Each of the REMIC 2 Interests other than the
Class LT2-R Interest.

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

         Remittance Report:  The meaning specified in Section 4.04(i) hereof.

         Replacement Mortgage Loan: A Mortgage Loan substituted by the Depositor
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit I (1)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (2)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (A) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (B) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (C) have the same index and Periodic Rate Cap as that of
the Deleted Mortgage Loan and a Gross Margin not more than 1% per annum higher
or lower than that of the Deleted Mortgage Loan; (D) not permit conversion of
the related Mortgage Rate to a fixed Mortgage Rate and (F) currently be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (3) have a similar or higher FICO score or credit grade
than that of the Deleted Mortgage Loan; (4) have a Loan-to-Value Ratio (or
Combined Loan-to-Value Ratio, in the case of the Mortgage Loans in a second lien
position) no higher than that of the Deleted Mortgage Loan; (5) have a remaining
term to maturity no greater than (and not more than one year less than) that of
the Deleted Mortgage Loan; (6) provide for a prepayment charge on terms
substantially similar to those of the prepayment charge, if any, of the Deleted
Mortgage Loan; (7) have the same lien priority as the Deleted Mortgage Loan; (8)
constitute the same occupancy type as

                                      -36-

<PAGE>

the Deleted Mortgage Loan; and (9) comply with each representation and warranty
set forth in Section 2.03 hereof.

         Request for Release: The Request for Release of Documents submitted by
the Servicer to the Custodian, substantially in the form attached to the
Custodial Agreement (a copy of which is attached as Exhibit I hereto).

         Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.

         Required Loss Percentage: For any Distribution Date, the applicable
percentage for such Distribution Date set forth in the following table:

<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN         REQUIRED LOSS PERCENTAGE
------------------------------         ------------------------
<S>                                    <C>
January 2007 - December 2007           2.00% with respect to January
                                       2007, plus an additional 1/12th
                                       of 1.00% for each month thereafter

January 2008 -  December 2008          3.00% with respect to January
                                       2008, plus an additional 1/12th
                                       of 0.25% for each month thereafter

January 2009 - December 2009           3.25% with respect to January
                                       2009, plus an additional 1/12th
                                       of 0.25% for each month thereafter

January 2010 and thereafter            3.50%
</TABLE>

         Required Percentage: As of any Distribution Date following a Stepdown
Date, the quotient of (1) the excess of (A) the Stated Principal Balances of the
Mortgage Loans as of such Distribution Date, over (B) the Certificate Principal
Balance of the most senior Class of Certificates outstanding, prior to giving
effect to distributions to be made on such Distribution Date and (2) the Stated
Principal Balance of the Mortgage Loans as of such Distribution Date.

         Reserve Interest Rate: With respect to any Interest Determination Date,
the rate per annum that the Trustee determines to be (1) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 0.03125%) of the
one-month United States dollar lending rates which New York City banks selected
by the Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (2)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Trustee are quoting on such Interest Determination Date to leading
European banks.

         Residual Interest: An interest in the Upper Tier REMIC that is entitled
to all distributions of principal and interest on the Class R Certificate other
than (i) distributions in respect of the Class LT1-R Interest or the Class LT2-R
Interest and (ii) distributions to the extent attributable to any excess of the
interest rate on the Class R Certificate over the Net Rate.

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

                                      -37-

<PAGE>

         Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace such LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks.

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

         Sale Agreement: The Mortgage Loan Sale and Assignment Agreement dated
as of December 1, 2003 between the Depositor and the Seller.

         Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.

         Section 302 Requirements: Any rules or regulations promulgated pursuant
to the Sarbanes-Oxley Act of 2002 (as such may be amended from time to time).

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

         Seller: Terwin Advisors LLC, a Delaware limited liability company, or
its successor in interest.

         Servicer: Either of Ocwen Federal Bank FSB, a federally chartered
savings bank, or GreenPoint Mortgage Funding Inc. a New York corporation, or
their respective successors in interest, as applicable. Prior to the final
Servicing Transfer Date, references in this Agreement to the "Servicer" shall
mean either Ocwen Federal Bank FSB or GreenPoint Mortgage Funding Inc. or each
such servicer, as applicable.

         Servicer Advance Date: As to any Distribution Date, the related
Servicer Remittance Date.

         Servicer's Assignee:  As defined in Section 10.14(b).

         Servicer Remittance Date: With respect to any Distribution Date, the
first Business Day immediately preceding such Distribution Date.

         Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorney's fees and
disbursements) incurred in the performance by a Servicer of its servicing
obligations hereunder, including, but not limited to, the cost of (1) the
preservation, restoration and protection of a Mortgaged Property, including
without limitation advances in respect of real estate taxes and assessments, (2)
any collection, enforcement or judicial proceedings, including without
limitation foreclosures, collections and liquidations, (3) the conservation,
management, sale and liquidation of any REO Property, (4) compliance with the
obligations under Section 3.10 and (5) executing and recording instruments of
satisfaction, deeds of reconveyance or Assignments of Mortgage to the extent not
recovered from the Mortgagor or otherwise payable to the Servicer under this
Agreement; provided that the Servicer shall not be required to make any such
Servicing Advance with respect to any Mortgage Loan secured by a second lien on
real property.

         Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the applicable Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the preceding Distribution
Date or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the applicable Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
preceding Distribution Date for the period covered by such payment of interest.

                                      -38-

<PAGE>

         Servicing Fee Rate: As to any Mortgage Loan serviced by Ocwen, 0.50%
per annum and, as to any Mortgage Loan serviced by GreenPoint, 0.25% per annum.

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

         Servicing Rights Owner: A Servicer or an Affiliate of such Servicer
that has acquired or may acquire ownership of the servicing rights associated
with the servicing rights and obligations under this Agreement.

         Servicing Rights Pledgee: One or more lenders, selected by the Servicer
or Servicing Rights Owner, to which the Servicer may pledge and assign all of
its right, title and interest in, to and under this Agreement.

         Servicing Transfer Costs: In the event that the Servicer does not
reimburse the Trustee under the this Agreement, all reasonable out-of-pocket
costs associated with the transfer of servicing from the predecessor servicer,
including, without limitation, any such costs or expenses associated with the
termination of the predecessor servicer, the appointment of a successor
servicer, the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee or any successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the Trustee or successor servicer to
service the Mortgage Loans properly and effectively.

         Servicing Transfer Date: With respect to each Mortgage Loan that is
being serviced by GreenPoint on the Closing Date, the date on which the
servicing rights are transferred to Ocwen and with respect to any other Mortgage
Loan, the Closing Date.

         SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.

         SPV:  As defined in Section 10.14(a).

         Startup Date:  As defined in Section 2.07 hereof.

         Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (1) as of the Cut-off Date, the Cut-off Date Principal Balance
thereof, and (2) as of any Distribution Date, such Cut-off Date Principal
Balance, minus the sum of (A) the principal portion of the Scheduled Payments
(x) due with respect to such Mortgage Loan during each Due Period ending prior
to such Distribution Date and (y) that were received by the Servicer as of the
close of business on the Determination Date related to such Distribution Date or
with respect to which Advances were made on the Servicer Advance Date prior to
such Distribution Date and (B) all Principal Prepayments with respect to such
Mortgage Loan received on or prior to the last day of the related Prepayment
Period, and all Liquidation Proceeds to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business on
the last day of the related Due Period. Notwithstanding the foregoing, the
Stated Principal Balance of a Liquidated Loan shall be deemed to be zero.

         Stepdown Date: The later to occur of (1) the Distribution Date in
January 2007 or (2) the first Distribution Date on which (A) the Class A
Certificate Principal Balance (reduced by the Principal Funds

                                      -39-

<PAGE>

with respect to such Distribution Date) is less than or equal to (B) 66.50% of
the Stated Principal Balances of the Mortgage Loans as of such Distribution
Date.

         Subordinated Certificates: The Class M and Class B Certificates.

         Subservicing Agreement:  As defined in Section 3.02(a).

         Substitution Adjustment Amount: The meaning ascribed to such term
         pursuant to Section 2.03(c).

         Tax Matters Person: The Person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and Treasury
regulation Section 301.6231(a)(7)-1.

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

         Transfer Agreement: Any document pursuant to which the Seller acquired
any Mortgage Loan from the originator of such Mortgage Loan.

         Transferor: Any originator of a Mortgage Loan.

         Trigger Event: With respect to the Certificates after the Stepdown
Date, a Distribution Date on which (1) the quotient of (A) the aggregate Stated
Principal Balance of all Mortgage Loans which are 60 or more days Delinquent,
measured on a rolling three month basis (including, for the purposes of this
calculation, Mortgage Loans in foreclosure, REO Properties and Mortgage Loans
with respect to which the applicable Mortgagor is in bankruptcy) and (B) the
Stated Principal Balance of all Mortgage Loans with respect to such Distribution
Date, equals or exceeds the product of (i) 45.00% and (ii) Required Percentage
or (2) the quotient (expressed as a percentage) of (A) the aggregate Realized
Losses incurred from the Cut-off Date through the last day of the calendar month
preceding such Distribution Date and (B) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date exceeds the Required Loss Percentage.

         Trust Fund: The corpus of the trust (the "Terwin Mortgage Trust, Series
TMTS 2003-8HE") created hereunder consisting of (i) the Mortgage Loans and all
interest and principal received on or with respect thereto on and after the
Cut-off Date to the extent not applied in computing the Cut-off Date Principal
Balance thereof, exclusive of interest not required to be deposited in the
Collection Account; (ii) the Collection Account and the Certificate Account and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (v) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid property; and (vi) the Cap Contracts and Cap Contract
Account.

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

         Trustee Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to the product of one-twelfth of the Trustee Fee Rate and the
Stated Principal Balance of such Mortgage Loan.

         Trustee Fee Rate: 0.0165% per annum.

                                      -40-

<PAGE>

         Uncertificated Class C Interest: An uncertificated interest having (i)
the same rights to payments as the Class C Certificates, other than the rights
to payments of amounts with respect to the Cap Contracts, to Prepayment
Penalties received with respect to the Mortgage Loans, to amounts paid by the
Servicer or the Seller in respect of prepayment charges pursuant to this
Agreement and to amounts received in respect of any indemnification paid as a
result of a prepayment charge being unenforceable in breach of representations
and warranties set forth in the Transfer Agreement, and (ii) the rights to the
payments treated as distributed to the Class C Certificates under Section
2.07(d), provided, however, that such interest shall have no obligation to make
any payments treated as paid by the Class C Certificates pursuant to interest
rate cap agreements under Section 2.07(d).

         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 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), (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 United
States Persons.

         Upper Collar: With respect to each Distribution Date on which amounts
are received on the Cap Contracts, a rate equal to the lesser of One-Month
LIBOR and 10.000% per annum.

         Upper Tier REMIC Class S Components: Each of the Upper Tier REMIC Class
S-A Component, the Upper Tier REMIC Class S-AR Component, the Upper Tier REMIC
Class S-M1 Component, the Upper Tier REMIC Class S-M2 Component, the Upper Tier
REMIC Class S-M3 Component, the Upper Tier REMIC Class S-B1 Component the Upper
Tier REMIC Class S-B2 Component and the Upper Tier REMIC Class S-B3 Component.

         Upper Tier REMIC Class S-A Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-A Interest at a rate in excess of One-Month LIBOR plus the Class A
Margin. The Upper Tier REMIC Class S-A Component is represented by the Class S
Certificates.

         Upper Tier REMIC Class S-AR Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-AR Interest at a rate in excess of One-Month LIBOR plus the Class
R Margin. The Upper Tier REMIC Class S-AR Component is represented by the Class
S Certificates.

         Upper Tier REMIC Class S-B1 Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-B1 Interest at a rate in excess of One-Month LIBOR plus the Class
B-1 Margin. The Upper Tier REMIC Class S-B1 Component is represented by the
Class S Certificates.

         Upper Tier REMIC Class S-B2 Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-B2 Interest at a rate in excess of One-Month LIBOR plus the Class
B-2 Margin. The Upper Tier REMIC Class S-B2 Component is represented by the
Class S Certificates.

         Upper Tier REMIC Class S-B3 Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-B3 Interest at a rate in excess of One-Month LIBOR plus the Class
B-3 Margin. The Upper Tier REMIC Class S-B3 Component is represented by the
Class S Certificates.

                                      -41-

<PAGE>

         Upper Tier REMIC Class S-M1 Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-M1 Interest at a rate in excess of One-Month LIBOR plus the Class
M-1 Margin. The Upper Tier REMIC Class S-M1 Component is represented by the
Class S Certificates.

         Upper Tier REMIC Class S-M2 Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-M2 Interest at a rate in excess of One-Month LIBOR plus the Class
M-2 Margin. The Upper Tier REMIC Class S-M2 Component is represented by the
Class S Certificates.

         Upper Tier REMIC Class S-M3 Component: An interest-only "regular
interest" in the Upper Tier REMIC entitled to the interest, if any, payable on
the Class LT2-M3 Interest at a rate in excess of One-Month LIBOR plus the Class
M-3 Margin. The Upper Tier REMIC Class S-M3 Component is represented by the
Class S Certificates.

         USAP Report: A report in compliance with the Uniform Single Attestation
Program for Mortgage Bankers delivered in accordance with Section 3.18.

         Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any of the Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 90% to the Offered Certificates (other than the Class S
Certificates), 5% to the Class C Certificates and 5% to the Class S
Certificates, with the allocation among the Offered (other than the Class S
Certificates) Certificates to be in proportion to the Class Certificate
Principal Balance of each Class relative to the Class Certificate Principal
Balance of all other Classes. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.

         Weighted Maximum Rate Cap: As of any Distribution Date, a rate equal to
the product of (x) 12 times the quotient obtained by dividing the excess of (i)
the interest that would have been payable on the Mortgage Loans (based on their
Stated Principal Balances) at their Maximum Mortgage Rates during the related
Due Period over (ii) the related Servicing Fees, the Credit Risk Management Fee,
the Trustee Fee and premiums paid by the Servicer on the related LPMI Policy, by
the aggregate Stated Principal Balance of the Mortgage Loans and (y) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of the days in the related Accrual Period.

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

         SECTION 2.01 Conveyance of Mortgage Loans.

         The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and convey to the Trustee without
recourse all the right, title and interest of the Depositor in and to the assets
of the Trust Fund. Such assignment includes all interest and principal received
on or with respect to the Mortgage Loans on or after the Cut-off Date (other
than Scheduled Payments due on the Mortgage Loans on or before the Cut-off
Date).

         In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Trustee the following documents or instruments with
respect to each Mortgage Loan so assigned:

                                      -42-

<PAGE>

                  (A)      The Original Mortgage Note endorsed in blank or ,
         "Pay to the order of Wells Fargo Bank Minnesota, National Association,
         as trustee, without recourse" together with all riders thereto. The
         Mortgage Note shall include all intervening endorsements showing a
         complete chain of the title from the originator to the Transferor.

                  (B)      Except as provided below and for each Mortgage Loan
         that is not a MERS Loan, the original recorded Mortgage together with
         all riders thereto, with evidence of recording thereon, or, if the
         original Mortgage has not yet been returned from the recording office,
         a copy of the original Mortgage together with all riders thereto
         certified by the Transferor to be true copy of the original of the
         Mortgage that has been delivered for recording in the appropriate
         recording office of the jurisdiction in which the Mortgaged Property is
         located and in the case of each MERS Loan, the original Mortgage
         together with all riders thereto, noting the presence of the MIN of the
         Loan and either language indicating that the Mortgage Loan is a MOM
         Loan or if the Mortgage Loan was not a MOM Loan at origination, the
         original Mortgage and the assignment thereof to MERS, 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.

                  (C)      In the case of each Mortgage Loan that is not a MERS
         Loan, the original Assignment of each Mortgage, to "Wells Fargo Bank
         Minnesota, National Association, as trustee."

                  (D)      The original policy of title insurance (or a
         preliminary title report, commitment or binder if the original title
         insurance policy has not been received from the title insurance
         company).

                  (E)      Originals of any intervening assignments of the
         Mortgage, with evidence of recording thereon or, if the original
         intervening assignment has not yet been returned from the recording
         office, a copy of such assignment certified to be a true copy of the
         original of the assignment which has been sent for recording in the
         appropriate jurisdiction in which the Mortgaged Property is located.

                  (F)      Originals of all assumption and modification
         agreements, if any.

         If in connection with any Mortgage Loan, the Depositor cannot deliver
the Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording thereon, if
applicable, concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage or assumption, consolidation or modification,
as the case may be, has been delivered for recordation, the Depositor shall
deliver or cause to be delivered to the Trustee written notice stating that such
Mortgage or assumption, consolidation or modification, as the case may be, has
been delivered to the appropriate public recording office for recordation.
Thereafter, the Depositor shall deliver or cause to be delivered to the Trustee
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording indicated thereon,
if applicable, upon receipt thereof from the public recording office. To the
extent any required endorsement is not contained on a Mortgage Note or an
Assignment of Mortgage, the Depositor shall make or cause such endorsement to be
made.

         With respect to any Mortgage Loan, none of the Depositor, the Servicer
or the Trustee shall be obligated to cause to be recorded the Assignment of
Mortgage referred to in this Section 2.01. In the event that an Assignment of
Mortgage is not recorded, the Servicer shall have no liability for its failure
to receive and act on notices related to such Assignment of Mortgage.

                                      -43-

<PAGE>

         The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee on behalf of the
Certificateholders. Neither the Depositor nor the related Servicer shall take
any action inconsistent with such ownership and shall not claim any ownership
interest therein. The Depositor and the Servicer shall respond to any third
party inquiries with respect to ownership of the Mortgage Loans by stating that
such ownership is held by the Trustee on behalf of the Certificateholders.
Mortgage documents relating to the Mortgage Loans serviced by each Servicer and
not delivered to the Trustee are and shall be held in trust by the Servicer for
the benefit of the Trustee as the owner thereof and the Servicer's possession of
the contents of each Mortgage File so retained is for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Servicer is in a custodial capacity only. The Depositor agrees to take no action
inconsistent with the Trustee's ownership of the Mortgage Loans, to promptly
indicate to all inquiring parties that the Mortgage Loans have been sold and to
claim no ownership interest in the Mortgage Loans.

         It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from the Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of the Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of the
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.

         In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee for the benefit of the Certificateholders its rights and interests under
the Sale Agreement, including the Depositor's right, title and interest in the
representations and warranties contained in the Sale Agreement, the rights of
the Transfer Agreement described therein and the benefit of the repurchase
obligations and the obligation of the Seller contained in the Sale Agreement to
take, at the request of the Depositor or the Trustee, all action on its part
which is reasonably necessary to ensure the enforceability of a Mortgage Loan.
The Trustee hereby accepts such assignment, and shall be entitled to exercise
all rights of the Depositor under the Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over, deposit
and conveyance does not and is not intended to result in creation or assumption
by the Trustee of any obligation of the Depositor, the Seller, or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto.

         The parties hereto agree that the Custodian shall hold the Mortgage
Files on behalf of the Trustee. Notwithstanding any provision in this Agreement
to the contrary, the parties acknowledge and agree that all of the obligations
and duties of the (i) Depositor and the Servicer to deliver the documents to the
Trustee, including, without limitation, the Mortgage Files and Requests for
Release, shall be satisfied by the delivery of such documents to the Custodian,
and (ii) Trustee relating to any certifications to be delivered by with respect
to the Mortgage Files and the delivery of any Mortgage Files or documents in

                                      -44-

<PAGE>

such Mortgage Files upon receipt of Requests for Release shall be satisfied by
the performance of such obligations by the Custodian in accordance with the
provisions of the Custodial Agreement.

         SECTION 2.02 Acceptance by Trustee of the Mortgage Loans.

         Except as set forth in the Exception Report delivered contemporaneously
herewith (the "Exception Report"), the Trustee acknowledges receipt of the
initial certification delivered by the Custodian on the Closing Date in
accordance with the provisions of the Custodial Agreement and declares that it
holds and will hold any documents constituting a part of the Mortgage Files
delivered to it in trust for the use and benefit of all present and future
Certificateholders. The Depositor will cause the Seller to repurchase any
Mortgage Loan to which a material exception was taken in the Exception Report
unless such exception is cured to the satisfaction of the Trustee within 45
Business Days of the Closing Date.

         The Trustee acknowledges receipt of the Cap Contracts (a form of which
is attached hereto as Exhibit N), the Transfer Agreement and the Sale Agreement.

         The Trustee agrees, for the benefit of Certificateholders, to cause the
Custodian to review each Mortgage File delivered to it within 60 days after the
Closing Date to ascertain and to certify, within 70 days of the Closing Date, to
the Depositor, the Trustee and the Servicer that all documents required by
Section 2.01 have been executed and received, and that such documents relate to
the Mortgage Loans identified in Exhibit B-1 that have been conveyed to it. If
the Custodian finds any document or documents constituting a part of a Mortgage
File to be missing or defective (that is, mutilated, damaged, defaced or
unexecuted) in any material respect, the Custodian shall promptly (and in any
event within no more than five Business Days) after such finding so notify the
Servicer, the Seller and the Depositor. The Custodian shall have no obligation
to verify if the documents listed in Section 2.01(F) exist if such documents are
not delivered to it. In addition, the Trustee shall cause the Custodian to
include in its Certification to the Servicer, the Seller and the Depositor, a
list of the original Mortgages with evidence of recording thereon that have not
been received within 70 days of the Closing Date; if it has not been received
because of a delay caused by the public recording office where such Mortgage has
been delivered for recordation, the Depositor shall deliver or cause to be
delivered to the Trustee written notice stating that such Mortgage has been
delivered to the appropriate public recording office for recordation and
thereafter the Depositor shall deliver or cause to be delivered such Mortgage
with evidence of recording thereon upon receipt thereof from the public
recording office. The Trustee shall request that the Seller correct or cure such
omission, defect or other irregularity, or substitute a Mortgage Loan pursuant
to the provisions of Section 2.03(c), within 90 days from the date the Seller
was notified of such omission or defect and, if the Seller does not correct or
cure such omission or defect within such period, that the Seller purchase such
Mortgage Loan from the Trust Fund within 90 days from the date the Trustee
notified the Seller of such omission, defect or other irregularity at the
Purchase Price of such Mortgage Loan. The Purchase Price for any Mortgage Loan
purchased pursuant to this Section 2.02 shall be paid to the Trustee prior to
the related Servicing Transfer Date, and thereafter to the Servicer and
deposited by the Trustee or the Servicer, as applicable, in the Certificate
Account or Collection Account, as appropriate, promptly upon receipt, and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Custodian, upon receipt of a Request for Release, shall
promptly release to the Seller the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment, without
recourse, representation or warranty, as shall be provided to it by the Seller
and necessary to vest in the Seller or its designee, as the case may be, any
Mortgage Loan released pursuant hereto, and the Trustee shall have no further
responsibility with regard to such Mortgage Loan. It is understood and agreed
that the obligation of the Seller to purchase, cure or substitute any Mortgage
Loan as to which a material defect in or omission of a constituent document
exists shall constitute the sole remedy respecting such defect or omission
available to the Trustee on behalf of Certificateholders. The preceding sentence
shall not, however, limit any remedies available to

                                      -45-

<PAGE>

the Certificateholders, the Depositor, or the Trustee pursuant to the Sale
Agreement and any Transfer Agreement. The Trustee shall be under no duty or
obligation to inspect, review and examine such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable,
recordable or appropriate to the represented purpose, or that they have actually
been recorded, or that they are other than what they purport to be on their
face. The Servicer and the Trustee shall keep confidential the name of each
Mortgagor except as required by this Agreement and the Servicer and the Trustee
shall not solicit any such Mortgagor for the purpose of refinancing the related
Mortgage Loan; notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, or information obtained by the Servicer or
the Trustee from sources other than the other parties hereto, (ii) disclosure of
any and all information (A) if required to do so by any applicable law, rule or
regulation, (B) to any government agency or regulatory body having or claiming
authority to regulate or oversee any respects of the Servicer's or Trustee's
business or that of its affiliates, (C) pursuant to any subpoena, civil
investigation demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Servicer or the Trustee or any
affiliate or an officer, director, employer or shareholder thereof is a party or
(D) to any affiliate, independent or internal auditor, agent, employee or
attorney of the Servicer or the Trustee having a need to know the same, provided
that the Servicer or the Trustee advises such recipient of the confidential
nature of the information being disclosed, or (iii) any other disclosure
authorized by the Depositor.

         Within 70 days of the Closing Date, the Custodian shall deliver, based
solely upon a certification delivered to the Trustee by the Custodian, to the
Depositor and the Servicer, the Trustee's Certification, substantially in the
form of Exhibit D attached hereto, evidencing the completeness of the Mortgage
Files, with any exceptions noted thereto.

         The Seller shall deliver or cause the Custodian to deliver to the
Servicer copies of all trailing documents required to be included in the
Mortgage File at the same time the originals or certified copies thereof are
delivered to the Custodian, such documents including but not limited to the
mortgagee policy of title insurance and any mortgage loan document upon return
from the recording office. The Servicer shall not be responsible for any costs
incurred in obtaining such documents.

         SECTION 2.03 Representations, Warranties and Covenants of the
Depositor.

         (a) The Depositor hereby represents and warrants to the Servicers and
the Trustee as follows, as of the date hereof:

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

                  (ii)     The Depositor has the full corporate power and
         authority to execute, deliver and perform, and to enter into and
         consummate the transactions contemplated by, this Agreement and the
         Sale Agreement and has duly authorized, by all necessary corporate
         action on its part, the execution, delivery and performance of this
         Agreement and the Sale Agreement; and this Agreement and the Sale
         Agreement, assuming the due authorization, execution and delivery
         hereof by the other parties hereto, constitutes a legal, valid and
         binding obligation of the Depositor, enforceable against the Depositor
         in accordance with its terms, subject, as to enforceability, to (i)
         bankruptcy, insolvency, reorganization, moratorium and other similar
         laws affecting creditors' rights generally and (ii) general principles
         of equity, regardless of whether enforcement is sought in a proceeding
         in equity or at law.

                                      -46-

<PAGE>

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

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

                  (v)      No consent, approval, authorization or order of any
         court or governmental agency or body is required for the execution,
         delivery and performance by the Depositor of, or compliance by the
         Depositor with, this Agreement and the Sale Agreement or the
         consummation of the transactions contemplated hereby, or if any such
         consent, approval, authorization or order is required, the Depositor
         has obtained the same. The Depositor hereby represents and warrants to
         the Trustee with respect to each Mortgage Loan as of the Closing Date,
         and following the transfer of the Mortgage Loans to it by the Seller,
         the Depositor had good title to the Mortgage Loans and the Mortgage
         Notes were subject to no offsets, claims, liens, mortgage, pledge,
         charge, security interest, defenses or counterclaims.

         (b) The representations and warranties of each Transferor with respect
to the related Mortgage Loans in the applicable Transfer Agreement, which have
been assigned to the Trustee hereunder, were made as of the date specified in
the applicable Transfer Agreement (or underlying agreement, if such Transfer
Agreement is in the form of an assignment of a prior agreement). To the extent
that any fact, condition or event with respect to a Mortgage Loan constitutes a
breach of both (i) a representation or warranty of the applicable Transferor
under the applicable Transfer Agreement and (ii) a representation or warranty of
the Seller under the Sale Agreement, the Trustee shall enforce the obligations
of the Seller under the Sale Agreement and to the extent the Seller does not
fulfill its contracted obligations then the Trustee shall enforce the
obligations of the applicable Transferor under any applicable representation or
warranty made by it. The Trustee further acknowledges that the Depositor shall
have no obligation or liability with respect to any breach of any representation
or warranty with respect to the Mortgage Loans under any circumstances.

         (c) Upon discovery by any of the Depositor, the Servicers or the
Trustee of a breach of any of such representations and warranties that adversely
and materially affects the value of the related Mortgage Loan, prepayment
charges or the interests of the Certificateholders, the party discovering such
breach shall give prompt written notice to the other parties. Within 90 days of
the discovery of a breach of any representation or warranty, the applicable
Transferor or the Seller, as applicable, shall either (a) cure such breach in
all material respects, (b) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Trustee at the Purchase Price or (c) within
the two year period following the Closing

                                      -47-

<PAGE>

Date, substitute a Replacement Mortgage Loan for the affected Mortgage Loan. In
the event of discovery of a breach of any representation and warranty of any
Transferor or the Seller, the Trustee's rights shall be enforced under the
applicable Transfer Agreement and the Sale Agreement for the benefit of
Certificateholders. If a breach of the representations and warranties set forth
in the Transfer Agreement hereof exists solely due to the unenforceability of a
prepayment charge, the Trustee shall notify the Servicer thereof and not seek to
enforce the repurchase remedy provided for herein unless directed in writing to
do so by the Servicer. In the event of a breach of the representations and
warranties with respect to the Mortgage Loans set forth in a Transfer Agreement,
the Trustee shall enforce the right of the Trust Fund to be indemnified for such
breach of representation and warranty. In the event that such breach relates
solely to the unenforceability of a prepayment charge, amounts received in
respect of such indemnity up to the amount of such prepayment charge shall be
distributed pursuant to Section 4.04(b)(i). As provided in the Sale Agreement,
if the Transferor substitutes for a Mortgage Loan for which there is a breach of
any representations and warranties in the related Transfer Agreement which
adversely and materially affects the value of such Mortgage Loan and such
substitute mortgage loan is not a Replacement Mortgage Loan, under the terms of
the Sale Agreement, the Seller will, in exchange for such substitute Mortgage
Loan, (i) provide the applicable Purchase Price for the affected Mortgage Loan
or (ii) within two years of the Closing Date, substitute such affected Mortgage
Loan with a Replacement Mortgage Loan. Any such substitution shall not be
effected prior to the additional delivery to the Trustee of a Request for
Release substantially in the form of Exhibit I and shall not be effected unless
it is within two years of the Startup Date. The Seller indemnifies and holds the
Trust Fund, the Trustee, the Depositor, the Servicers and each Certificateholder
harmless against any and all taxes, claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Trust Fund, the Trustee, the Depositor, the
Servicers and any Certificateholder may sustain in connection with any actions
of the Seller relating to a repurchase of a Mortgage Loan other than in
compliance with the terms of this Section 2.03 and the Sale Agreement, to the
extent that any such action causes (i) any federal or state tax to be imposed on
the Trust Fund or any REMIC provided for herein, 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 860(d)(1) of
the Code, or (ii) any REMIC created hereunder to fail to qualify as a REMIC at
any time that any Certificate is outstanding. In furtherance of the foregoing,
if the Transferor or the Seller, as applicable, is not a member of MERS and
repurchases a Mortgage Loan which is registered on the MERS System, the
Transferor or the Seller, as applicable, at its own expense and without any
right of reimbursement, shall cause MERS to execute and deliver an assignment of
the Mortgage in recordable form to transfer the Mortgage from MERS to the
Transferor or the Seller, as applicable, and shall cause such Mortgage to be
removed from registration on the MERS System in accordance with MERS' rules and
regulations.

         With respect to any Mortgage Loan repurchased by the Seller pursuant to
the Sale Agreement or by any Transferor pursuant to the applicable Transfer
Agreement, the principal portion of the funds received by the Trustee in respect
of such repurchase of a Mortgage Loan will be considered a Principal Prepayment
and shall be deposited in the Certificate Account pursuant to Section 3.05. The
Trustee, upon receipt of the full amount of the Purchase Price for a Deleted
Mortgage Loan, or upon receipt by the Custodian of the Mortgage File for a
Replacement Mortgage Loan substituted for a Deleted Mortgage Loan, shall release
or cause to be released and reassign to the Seller or the applicable Transferor,
as applicable, the related Mortgage File for the Deleted Mortgage Loan and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be provided to the
Trustee and necessary to vest in such party or its designee or assignee title to
any Deleted Mortgage Loan released pursuant hereto, free and clear of all
security interests, liens and other encumbrances created by this Agreement,
which instruments shall be prepared by the related Servicer, and the Trustee
shall have no further responsibility with respect to the Mortgage File relating
to such Deleted Mortgage Loan.

                                      -48-

<PAGE>

         With respect to each Replacement Mortgage Loan to be delivered to the
Trustee (or its custodian) pursuant to the terms of this Article II in exchange
for a Deleted Mortgage Loan: (i) the applicable Transferor or the Seller, as
applicable, must deliver to the Trustee (or its custodian) the Mortgage File for
the Replacement Mortgage Loan containing the documents set forth in Section 2.01
along with a written certification certifying as to the Mortgage Loan satisfying
all requirements under the definition of Replacement Mortgage Loan and the
delivery of such Mortgage File and containing the granting language set forth in
Section 2.01; and (ii) the Depositor will be deemed to have made, with respect
to such Replacement Mortgage Loan, each of the representations and warranties
made by it with respect to the related Deleted Mortgage Loan. The Trustee shall
cause the Custodian to review the Mortgage File with respect to each Replacement
Mortgage Loan and certify to the Depositor that all documents required by
Section 2.01 have been executed and received.

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

         Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions.

         The Trustee shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans.
Upon such substitution by the Seller, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement and the Sale
Agreement, including all applicable representations and warranties thereof
included in the Sale Agreement as of the date of substitution.

         (d) It is understood and agreed that the representations, warranties
and indemnification (i) set forth in Section 2.03, (ii) of the Seller and the
Depositor set forth in the Sale Agreement and assigned to the Trustee by the
Depositor hereunder and (iii) of each Transferor, assigned by the Seller to the
Depositor pursuant to the Sale Agreement and assigned to the Trustee by the
Depositor hereunder shall each survive delivery of the Mortgage Files and the
Assignment of Mortgage of each Mortgage Loan to the Trustee and shall continue
throughout the term of this Agreement.

         (e) The Depositor shall deliver a copy of the Mortgage Loan Schedule to
each Servicer on the Closing Date.

                                      -49-

<PAGE>

         SECTION 2.04. Representations and Warranties of the Servicers.

         (a) Ocwen hereby represents and warrants to the Depositor, GreenPoint
and the Trustee as follows, as of the date hereof:

                  (i)      Ocwen is a federally chartered savings bank and is
         validly existing and in good standing under the laws of the United
         States and is duly authorized and qualified to transact any and all
         business contemplated by this Agreement to be conducted by Ocwen in any
         state in which a Mortgaged Property is located or is otherwise not
         required under applicable law to effect such qualification and, in any
         event, is in compliance with the doing business laws of any such state,
         to the extent necessary to ensure its ability to enforce each Mortgage
         Loan, to service the Mortgage Loans in accordance with the terms of
         this Agreement and to perform any of its other obligations under this
         Agreement in accordance with the terms hereof.

                  (ii)     Ocwen has the corporate power and authority and to
         service each Mortgage Loan, and to execute, deliver and perform, and to
         enter into and consummate the transactions contemplated by this
         Agreement and has duly authorized by all necessary corporate action on
         the part of Ocwen the execution, delivery and performance of this
         Agreement; and this Agreement, assuming the due authorization,
         execution and delivery hereof by the other parties hereto, constitutes
         a legal, valid and binding obligation of Ocwen, enforceable against
         Ocwen in accordance with its terms, except that (a) the enforceability
         hereof may be limited by bankruptcy, insolvency, moratorium,
         receivership and other similar laws relating to creditors' rights
         generally and (b) the remedy of specific performance and injunctive and
         other forms of equitable relief may be subject to equitable defenses
         and to the discretion of the court before which any proceeding therefor
         may be brought.

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

                  (iv)     Ocwen is an approved servicer of mortgage loans for
         Fannie Mae and is an approved servicer of mortgage loans for Freddie
         Mac.

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

                  (vi)     No consent, approval, authorization or order of any
         court or governmental agency or body is required for the execution,
         delivery and performance by Ocwen of, or compliance by Ocwen with, this
         Agreement or the consummation of the transactions

                                      -50-

<PAGE>

         contemplated hereby, or if any such consent, approval, authorization or
         order is required, Ocwen has obtained the same.

                  (vii)    Ocwen has fully furnished and will fully furnish (for
         the period it serviced the Mortgage Loans), in accordance with the Fair
         Credit Reporting Act and its implementing regulations, accurate and
         complete information (e.g., favorable and unfavorable) on its borrower
         credit files to Equifax, Experian and Trans Union Credit Information
         Company on a monthly basis.

         (b) GreenPoint hereby represents and warrants to the Depositor, Ocwen
and the Trustee as follows, as of the date hereof:

                  (i)      GreenPoint is a New York corporation and is validly
         existing and in good standing under the laws of the state of New York
         and is duly authorized and qualified to transact any and all business
         contemplated by this Agreement to be conducted by GreenPoint in any
         state in which a Mortgaged Property is located or is otherwise not
         required under applicable law to effect such qualification and, in any
         event, is in compliance with the doing business laws of any such state,
         to the extent necessary to ensure its ability to enforce each Mortgage
         Loan, to service the Mortgage Loans in accordance with the terms of
         this Agreement and to perform any of its other obligations under this
         Agreement in accordance with the terms hereof.

                  (ii)     GreenPoint has the corporate power and authority and
         to service each Mortgage Loan, and to execute, deliver and perform, and
         to enter into and consummate the transactions contemplated by this
         Agreement and has duly authorized by all necessary corporate action on
         the part of GreenPoint the execution, delivery and performance of this
         Agreement; and this Agreement, assuming the due authorization,
         execution and delivery hereof by the other parties hereto, constitutes
         a legal, valid and binding obligation of GreenPoint, enforceable
         against GreenPoint in accordance with its terms, except that (a) the
         enforceability hereof may be limited by bankruptcy, insolvency,
         moratorium, receivership and other similar laws relating to creditors'
         rights generally and (b) the remedy of specific performance and
         injunctive and other forms of equitable relief may be subject to
         equitable defenses and to the discretion of the court before which any
         proceeding therefor may be brought.

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

                  (iv)     GreenPoint is an approved servicer of mortgage loans
         for Fannie Mae and is an approved servicer of mortgage loans for
         Freddie Mac.

                                      -51-
<PAGE>

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

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

                  (vii)    GreenPoint has fully furnished and will fully furnish
         (for the period it serviced the Mortgage Loans), in accordance with the
         Fair Credit Reporting Act and its implementing regulations, accurate
         and complete information (e.g., favorable and unfavorable) on its
         borrower credit files to Equifax, Experian and Trans Union Credit
         Information Company on a monthly basis.

         SECTION 2.05. Substitutions and Repurchases of Mortgage Loans which are
not "Qualified Mortgages".

         Upon discovery by the Depositor, the related Servicer or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within 5 Business Days of discovery) give written
notice thereof to the other parties. In connection therewith, the Depositor
shall, at the Depositor's option, either (i) substitute, if the conditions in
Section 2.03(c) with respect to substitutions are satisfied, a Replacement
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan within 90 days of such discovery in the same manner as it would a
Mortgage Loan for a breach of representation or warranty contained in Section
2.03. The Trustee, upon the written direction of the Depositor, shall reconvey
to the Depositor the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section
2.03.

         SECTION 2.06. Authentication and Delivery of Certificates.

         The Trustee accepts the transfer and assignment to it of the Trust Fund
and, concurrently with such transfer and assignment, the Trustee has
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Mortgage Loans, Certificates duly authenticated by the Trustee in
authorized denominations evidencing ownership of the entire Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates and to
perform its duties set forth in this Agreement in accordance with the provisions
hereof.

         SECTION 2.07. REMIC Elections.

         (a) The Depositor hereby instructs and authorizes the Trustee to make
an appropriate election to treat each of REMIC 1, REMIC 2 and the Upper Tier
REMIC as a REMIC. The Trustee shall sign the returns providing for such
elections and such other tax or information returns which are required to be
signed by the Trustee under applicable law. This Agreement shall be construed so
as to carry out the intention of the parties that each of REMIC l, REMIC 2 and
the Upper Tier REMIC be treated as a REMIC at all times prior to the date on
which the Trust Fund is terminated.

                                      -52-

<PAGE>

         (b) The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Date" for purposes of the REMIC Provisions shall be the
Closing Date. Each REMIC's fiscal year shall be the calendar year.

         REMIC 1 shall consist of all of the assets of the Trust Fund (other
than (i) any proceeds of prepayment penalties, (ii) amounts paid by a Servicer
or the Seller in respect of prepayment charges or waivers thereof pursuant to
this Agreement, (iii) amounts received in respect of any indemnification paid as
a result of a prepayment charge being unenforceable in breach of the
representations and warranties set forth in the Transfer Agreement, (iv) the
interests issued by the REMICs provided for herein, (v) the Cap Contracts and
the Cap Contract Account and (vi) the grantor trusts described in this Section
2.07. REMIC 1 shall issue (i) the REMIC 1 Regular Interests, each of which shall
be designated as regular interests of such REMIC, and (ii) the Class LT1-R
Interest, which shall be designated as the sole Class of residual interest in
REMIC 1. Each of the REMIC 1 Regular Interests shall have the characteristics
set forth in its definition.

         The assets of REMIC 2 shall be the REMIC 1 Regular Interests. The REMIC
2 Regular Interests shall be designated as the regular interests in REMIC 2 and
the Class LT2-R Interest shall be designated as the sole Class of residual
interest in REMIC 2. Each of the REMIC 2 Regular Interests shall have the
characteristics set forth in its definition.

         The assets of the Upper Tier REMIC shall be the REMIC 2 Regular
Interests. The REMIC Regular Interests shall be designated as the regular
interests in the Upper Tier REMIC and the Residual Interest shall be designated
as the sole Class of residual interest in the Upper Tier REMIC. For federal
income tax purposes, the Pass-Through Rate on each REMIC Regular Interest (other
than the Uncertificated Class C Interest and the Upper Tier REMIC Class C
Components) and on the sole Class of residual interest in the Upper Tier REMIC
shall be subject to a cap equal to the Net Rate.

         The beneficial ownership of the Class LT1-R Interest, the Class LT2-R
Interest and the Residual Interest shall be represented by the Class R
Certificate. Neither the Class LT1-R Interest nor the Class LT2-R Interest shall
have a principal balance or bear interest.

         The interest rate for each REMIC 1 Interest and REMIC 2 Interest set
forth in the definition thereof shall be a per annum rate.

         (c) The "tax matters person" with respect to each REMIC for purposes of
the REMIC Provisions shall be the beneficial owner of the Class R Certificate;
provided, however, that the Holder of a Class R Certificate, by its acceptance
thereof, irrevocably appoints the Trustee as its agent and attorney-in-fact to
act as "tax matters person" with respect to each such REMIC for purposes of the
REMIC Provisions. If there is more than one beneficial owner of the Class R
Certificate, the "tax matters person" shall be the Person with the greatest
percentage interest in the Class R Certificate and, if there is more than one
such Person, shall be determined under Treasury regulation Section 1.860F-4(d)
and Treasury regulation Section 301.6231(a)(7)-1.

         (d) It is intended that (i) the rights of the Class A Certificates,
Class R Certificate, 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 to receive payments in respect of Excess Interest shall be treated
as rights in interest rate cap contracts written in favor of the holders of the
Class A Certificates, Class R Certificate, 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 by the Class C Certificateholders, and
such shall be accounted for as property held separate and apart from the regular
interests in the Upper Tier REMIC held by the holders of the Class A
Certificates, M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class

                                      -53-

<PAGE>

B-1 Certificates, Class B-2 Certificates and Class B-3 Certificates and the
residual interest in the Upper Tier REMIC held by the holder of the Class R
Certificate. This provision is intended to satisfy the requirements of Treasury
Regulations Section 1.860G-2(i) for the treatment of property rights coupled
with REMIC interests to be separately respected and shall be interpreted
consistently with such regulation. On each Distribution Date, to the extent that
any of the Class A Certificates, Class R Certificate, M-1 Certificates, Class
M-2 Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2
Certificates or Class B-3 Certificates receive payments of Excess Interest, such
amounts, to the extent not derived from payments received on the Cap Contract,
will be treated as distributed by the Upper Tier REMIC to the Class C
Certificates pro rata in payment of the amounts specified in Section 4.04(f) and
then paid to the relevant Class of Certificates pursuant to the related interest
cap agreement.

         (e) The parties intend that the portion of the Trust Fund consisting of
the Uncertificated Class C Interest, the Cap Contracts, the Cap Contract
Account, the rights to Prepayment Penalties received with respect to the
Mortgage Loans, to amounts paid by the Servicer or the Seller in respect of
prepayment charges pursuant to this Agreement and to amounts received in respect
of any indemnification paid as a result of a prepayment charge being
unenforceable in breach of the representations and warranties set forth in the
Transfer Agreement and the obligation of the holders of the Class C Certificates
to pay amounts of Excess Interest to the holders of the Class A Certificates,
Class R Certificate, 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 shall be treated as a "grantor trust" under the Code, and the
provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the holders of the Class C Certificates information regarding their
allocable share, if any, of the income with respect to such grantor trust, (ii)
file or cause to be filed with the Internal Revenue Service Form 1041 (together
with any necessary attachments) and such other forms as may be applicable and
(iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the holders of Class A Certificates, Class R
Certificate, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates, Class B-3
Certificates and Class C Certificates as may be applicable under the Code.

         (f) All payments of principal and interest at the Net Mortgage Rate on
each of the Mortgage Loans received from the Mortgage Loans (to the extent
constituting Interest Funds and Principal Funds for such Distribution Date)
shall be paid to the REMIC 1 Regular Interests until the principal balance of
all such interests have been reduced to zero and any losses allocated to such
interests have been reimbursed. Any excess amounts shall be distributed to the
Class LT1-R Interest. On each Distribution Date, an amount equal to 50% of the
increase in the Overcollateralization Amount shall be payable as a reduction of
the principal amounts of the REMIC 1 Marker Classes (with such amount allocated
among the REMIC 1 Marker Classes so that each REMIC 1 Marker Class will have its
principal reduced by an amount equal to 50% of any increase in the
Overcollateralization Amount that results in a reduction in the principal
balance of its Corresponding REMIC 2 Interest) and will be accrued and added to
the principal balance of the Class LT1-Z Interest. All payments of principal on
the Mortgage Loans shall be allocated 50% to the Class LT1-Z Interest and 50% to
the REMIC 1 Marker Classes (with principal payments allocated to each of the
REMIC 1 Marker Classes in an amount equal to 50% of the principal amounts
distributed to the Corresponding REMIC 2 Interests in reduction of their
principal amounts). Notwithstanding the preceding sentence, an amount equal to
the principal payments that result in a reduction in the Overcollateralization
Amount shall be treated as payable entirely to the Class LT1-Z Interest.
Realized Losses (other than Realized Losses that do not decrease the
Overcollateralization Amount and are not allocated to the Certificates) shall be
applied to the REMIC 1 Marker Classes and the Class LT1-Z Interest in such a way
that, after all distributions have been made on each Distribution Date, (i) the
principal balance of each of the REMIC 1 Marker Classes is equal to 50% of the
principal balance of the Corresponding REMIC 2 Interest and (ii) the principal
balance of the Class LT1-Z Interest is equal to the sum of (x) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and (y) 50% of

                                      -54-

<PAGE>

the Overcollateralization Amount. Each REMIC 1 Marker Class shall be entitled to
receive an amount equal to 50% of all amounts distributed to the Corresponding
REMIC 2 Interest in respect of unreimbursed amounts of Realized Losses. The
Class LT1-Z Interest shall be entitled to receive all other amounts distributed
to the Certificates in respect of unreimbursed amounts of Realized Losses.

         All payments of scheduled principal and prepayments on the Mortgage
Loans (to the extent constituting Interest Funds and Principal Funds for such
Distribution Date), and Realized Losses on the Mortgage Loans, shall be
allocated among the REMIC 2 Regular Interests in the same manner as such
payments or Realized Losses are allocated to the Related Certificates (treating
the Class S Certificates as Related Certificates with respect to each of the
Class LT2-A, Class LT2-M1, Class LT2-M2, Class LT2-M3, Class LT2-Bl, Class
LT2-B2, Class LT2-B3, and Class LT2-AR Interests in proportion to their
respective principal balances and treating the Class C Certificates as Related
Certificates with respect to the Class LT2-C Interest). Each REMIC 2 Regular
Interest shall be entitled to receive all amounts distributed to the Related
Certificates in respect of unreimbursed amounts of Realized Losses (treating the
Class S Certificates as Related Certificates with respect to each of the Class
LT2-A, Class LT2-M1, Class LT2-M2, Class LT2-M3, Class LT2-B1, Class LT2-B2,
Class LT2-B3 and LT2-AR Interests in proportion to their respective principal
balances and treating the Class C Certificates as Related Certificates with
respect to the Class LT2-C Interest).

         In the event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Trustee and the
Trust Fund against any and all Losses resulting from such negligence; provided,
however, that the Servicer shall not be liable for any such Losses attributable
to the action or inaction of the Trustee, the Depositor or the Holder of the
Class R Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of the Class R Certificate on which the
Servicer has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of the Class R Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Servicer have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).

         In the event that any REMIC provided for herein fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the Trust Fund against
any and all Losses resulting from such negligence; provided, however, that the
Trustee shall not be liable for any such Losses attributable to the action or
inaction of the Servicers, the Depositor or the Holder of the Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of the Class R Certificate on which the
Trustee has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of the Class R Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Trustee have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Trustee of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).

                                      -55-

<PAGE>

         SECTION 2.08. Covenants of the Servicers.

         (a) Ocwen hereby covenants to each of the other parties to this
Agreement as follows:

                  (i)      Ocwen shall comply in the performance of its
         obligations under this Agreement with all reasonable rules and
         requirements of the insurer under each Required Insurance Policy;

                  (ii)     no written information, certificate of an officer,
         statement furnished in writing or written report delivered to the
         Depositor or the Trustee, any affiliate of the Depositor or the Trustee
         and prepared by Ocwen pursuant to this Agreement will be inaccurate in
         any material respect, provided, however, that Ocwen shall not be
         responsible for inaccurate information provided to it by third parties.

         (b) GreenPoint hereby covenants to each of the other parties to this
Agreement as follows:

                  (i)      GreenPoint shall comply in the performance of its
         obligations under this Agreement with all reasonable rules and
         requirements of the insurer under each Required Insurance Policy;

                  (ii)     no written information, certificate of an officer,
         statement furnished in writing or written report delivered to the
         Depositor or the Trustee, any affiliate of the Depositor, or the
         Trustee and prepared by GreenPoint pursuant to this Agreement will be
         inaccurate in any material respect, provided, however, that GreenPoint
         shall not be responsible for inaccurate information provided to it by
         third parties.

         SECTION 2.09. Permitted Activities of the Trust. The Trust is created
for the object and purpose of engaging in the Permitted Activities. In
furtherance of the foregoing, the Trustee is hereby authorized and directed to
execute and deliver on behalf of the Trust, and to perform the duties and
obligations of the Trustee under, the Cap Contracts, in such form as the
Depositor shall direct or shall approve, the execution and delivery of such
agreement by the Depositor to be conclusive evidence of its approval thereof.

         SECTION 2.10. Qualifying Special Purpose Entity. For purposes of SFAS
140, the parties hereto intend that the Trust Fund shall be treated as a
"qualifying special purpose entity" as such term is used in SFAS 140 and any
successor rule thereto and its power and authority as stated in Section 2.09 of
this Agreement shall be limited in accordance with paragraph 35 or SFAS 140.

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

         SECTION 3.01. Servicer to Service Mortgage Loans.

         For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with Accepted Servicing
Practices. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related

                                      -56-

<PAGE>

Mortgages (but only in the manner provided in this Agreement), (iii) to collect
any Insurance Proceeds and other Liquidation Proceeds and (iv) subject to
Section 3.12(a), to effectuate foreclosure or other conversion of the ownership
of the Mortgaged Property securing any Mortgage Loan; provided that, subject to
Section 6.03, the Servicer shall not take any action that is inconsistent with
or prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan serviced by it under this Agreement or the rights and interests of
the other parties to this Agreement except as otherwise required by this
Agreement or by law. The Servicer shall represent and protect the interest of
the Trust Fund in the same manner as it currently protects its own interest in
mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan but in any case not in any manner that is a lesser
standard than that provided in the first sentence of this Section 3.01 and shall
not make or permit any modification, waiver or amendment of any term of any
Mortgage Loan which would cause any of the REMICs provided for herein to fail to
qualify as a REMIC or result in the imposition of any tax under Section 860G(a)
or 860G(d) of the Code. Without limiting the generality of the foregoing, the
Servicer, in its own name or in the name of the Depositor and the Trustee, is
hereby authorized and empowered by the Depositor and the Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect
to the Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Servicer to
service and administer the Mortgage Loans, including without limitation, any
powers of attorney. Upon receipt of such documents, the Depositor and/or the
Trustee shall execute such documents and deliver them to the Servicer.

         In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. Except with respect to any second lien Mortgage Loan,
to the extent that a Mortgage does not provide for escrow payments (i) the
Servicer shall determine whether any such payments are made by the Mortgagor in
a manner and at a time that is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien and (ii)
ensure that all insurance required to be maintained on the Mortgaged Property
pursuant to this Agreement is maintained. Except with respect to any second lien
Mortgage Loan, if any such payment has not been made and the Servicer receives
notice of a tax lien with respect to the Mortgage Loan being imposed, the
Servicer will, to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property. All costs incurred by the Servicer, if any, in effecting the
timely payments of taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purposes of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.

                                      -57-

<PAGE>

         The Servicer shall deliver a list of Servicing Officers to the Trustee
by the Closing Date.

         The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to Fannie Mae Guide Announcement 95-19 and that for each
Mortgage Loan, the Servicer agrees that it shall report one of the following
statuses each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed or charged-off.

         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 a sub-servicer, when the Servicer or such sub-servicer, as the case may be,
believes it is appropriate in its best judgment to register any Mortgage Loan on
the MERS System, or cause the removal from the registration of any Mortgage Loan
on the MERS 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 reasonable expenses incurred in connection with the
actions described in the preceding sentence or as a result of MERS discontinuing
or becoming unable to continue operations in connection with the MERS System,
shall be subject to withdrawal by the Servicer from the Collection Account.

         SECTION 3.02. Servicing and Subservicing; Enforcement of the
Obligations of Servicer.

         (a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a subservicer, which may be an affiliate (each, a "subservicer") pursuant to
a subservicing agreement (each, a "Subservicing Agreement"); provided, however,
that (i) such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder and (ii) that
such agreement would not result in a withdrawal or downgrading by any Rating
Agency of the ratings of any Certificates evidenced by a letter to that effect
delivered by each Rating Agency to the Depositor. Notwithstanding the provisions
of any subservicing agreement, any of the provisions of this Agreement relating
to agreements or arrangements between the Servicer and a subservicer or
reference to actions taken through a subservicer or otherwise, the Servicer
shall remain obligated and liable to the Depositor, the Trustee and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. Every subservicing
agreement entered into by the Servicer shall contain a provision giving any
successor servicer the option to terminate such agreement in the event a
successor servicer is appointed. All actions of the each subservicer performed
pursuant to the related subservicing agreement shall be performed as an agent of
the Servicer with the same force and effect as if performed directly by the
Servicer. The Servicer shall deliver to the Trustee copies of all subservicing
agreements. The Trustee shall have no obligations, duties or liabilities with
respect to a subservicer including no obligation, duty or liability to monitor
such subservicer or to pay a subservicer's fees and expenses.

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

         (c) Notwithstanding the foregoing, the Servicer shall be entitled to
outsource one or more separate servicing functions to a Person (each an
"Outsourcer") that does not meet the eligibility requirements for a subservicer,
so long as such outsourcing does not constitute the delegation of the Servicer's
obligation to perform all or substantially all of the servicing of the related
Mortgage Loans to

                                      -58-

<PAGE>
such Outsourcer. In any event, the use by the Servicer of any such Outsourcer
shall not release the Servicer from any of its obligations hereunder and the
Servicer shall remain responsible hereunder for all acts and omissions of such
Outsourcer as fully as if such acts and omissions were those of the Servicer,
and the Servicer shall pay all fees and expenses of the Outsourcer from the
Servicer's own funds. In the event an Outsourcer is not an Affiliate of the
Servicer, the Servicer shall notify the Trustee promptly in writing in the event
that the Servicer enters into an agreement with such Outsourcer whereby such
Outsourcer will be remitting and reporting to the Trustee. The Trustee shall
have no obligations, duties or liabilities with respect to any Outsourcer.

         SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.

         Neither the Trustee nor the Depositor shall have any responsibility or
liability for any action or failure to act by the Servicer, and none of them is
obligated to supervise the performance of the Servicer hereunder or otherwise.

         SECTION 3.04. Trustee to Act as Servicer.

         Subject to Sections 6.04 and 7.02, in the event that the Servicer shall
for any reason no longer be the Servicer hereunder (including by reason of an
Event of Default), the Trustee or its designee shall, within a period of time
not to exceed one hundred twenty (120) days from the date of notice of
termination or resignation, thereupon assume all of the rights and obligations
of the Servicer hereunder arising thereafter (except that the Trustee shall not
be (i) liable for losses of the Servicer pursuant to Section 3.10 hereof or any
acts or omissions of such predecessor Servicer hereunder, (ii) obligated to make
Advances or Servicing Advance if it is prohibited from doing so by applicable
law, (iii) obligated to effectuate repurchases or substitutions of Mortgage
Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof, (iv)
responsible for any expenses of the Servicer pursuant to Section 2.03 or (v)
deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.04 or the first paragraph of Section 6.02 hereof;
provided, however that the Trustee (subject to clause (ii) above) or its
designee, in its capacity as the successor servicer, shall immediately assume
the terminated or resigning Servicer's obligation to make Advances and Servicing
Advances). No such termination shall affect any obligation of the Servicer to
pay amounts owed under this Agreement and to perform its duties under this
Agreement until its successor assumes all of its rights and obligations
hereunder. If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; provided, however, that the Trustee (or any other successor servicer)
shall not incur any liability or have any obligations in its capacity as
servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession. To the extent any costs or expenses, including
without limitation Servicing Transfer Costs incurred by the Trustee in
connection with this Section 3.04, are not paid by the Servicer pursuant to this
Agreement within 30 days of the date of the Trustee's invoice thereof, such
amounts shall be payable out of the Certificate Account. In such event, the
terminated Servicer shall reimburse the Trust Fund for any such expense incurred
by the Trust Fund upon receipt of a reasonably detailed invoice evidencing such
expenses. If the Trustee is unwilling or unable to act as servicer, the Trustee
shall seek to appoint a successor servicer that is eligible in accordance with
the criteria specified this Agreement.

         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
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

                                      -59-

<PAGE>

         SECTION 3.05. Collection of Mortgage Loan Payments; Collection Account;
Certificate Account.

         (a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge or, if applicable, any penalty
interest, or (ii) subject to Section 3.01 hereof, extend the due dates for
payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, subject to Section 4.01, the Servicer
shall make any 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. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that in determining which course of action
permitted by this sentence it shall pursue, the Servicer shall adhere to the
standards of Section 3.01. The Servicer's analysis supporting any forbearance
and the conclusion that any forbearance meets the standards of Section 3.01
shall be reflected in writing in the Mortgage File or the Servicer's servicing
records.

         (b) The Servicer will not waive any Prepayment Penalty or portion
thereof unless, (i) the enforceability thereof shall have been limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally or is otherwise prohibited by law, or (ii) the
collectability thereof shall have been limited due to acceleration in connection
with a foreclosure or other involuntary payment, or (iii) the Servicer has not
been provided with information sufficient to enable it to collect the Prepayment
Penalty, or (iv) in the Servicer's reasonable judgment as described in Section
3.01 hereof, (x) such waiver relates to a default or a reasonably foreseeable
default, (y) such waiver would maximize recovery of total proceeds taking into
account the value of such Prepayment Penalty and related Mortgage Loan and (z)
doing so is standard and customary in servicing similar Mortgage Loans
(including any waiver of a Prepayment Penalty in connection with a refinancing
of a Mortgage Loan that is related to a default or a reasonably foreseeable
default). Except as provided in the preceding sentence, in no event will the
Servicer waive a Prepayment Penalty in connection with a refinancing of a
Mortgage Loan that is not related to a default or a reasonably foreseeable
default. If the Servicer waives or does not collect all or a portion of a
Prepayment Penalty relating to a Principal Prepayment in full due to any action
or omission of the Servicer, other than as provided above, the Servicer shall
deposit the amount of such Prepayment Penalty (or such portion thereof as had
been waived for deposit) into the Collection Account for distribution in
accordance with the terms of this Agreement. Notwithstanding any provision in
this Agreement to the contrary, in the event the Prepayment Penalty payable
under the terms of the Mortgage Note is less than the amount of the Prepayment
Penalty set forth in the Mortgage Loan Schedule or other information provided to
the Servicer, the Servicer shall not have any liability or obligation with
respect to such difference, and in addition shall not have any liability or
obligation to pay the amount of any uncollected Prepayment Penalty if the
failure to collect such amount is the direct result of inaccurate or incomplete
information on the Mortgage Loan Schedule.

                                      -60-

<PAGE>

         (c) 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.

         (d) The Servicer shall establish and initially maintain, on behalf of
the Certificateholders, the Collection Account. The Servicer shall deposit into
the Collection Account daily, within two Business Days of receipt thereof, in
immediately available funds, the following payments and collections received or
made by it on and after the Cut-Off Date with respect to the Mortgage Loans:

                  (i)      all payments on account of principal, including
         Principal Prepayments, on the Mortgage Loans, other than principal due
         on the Mortgage Loans on or prior to the Cut-off Date;

                  (ii)     all payments on account of interest on the Mortgage
         Loans net of the related Servicing Fee permitted under Section 3.15,
         other than interest due on the Mortgage Loans on or prior to the
         Cut-off Date;

                  (iii)    all Liquidation Proceeds, other than proceeds to be
         applied to the restoration or repair of the Mortgaged Property or
         released to the Mortgagor in accordance with the Servicer's normal
         servicing procedures;

                  (iv)     all Compensating Interest;

                  (v)      any amount required to be deposited by the Servicer
         pursuant to Section 3.05(f) in connection with any losses on Permitted
         Investments;

                  (vi)     any amounts required to be deposited by the Servicer
         pursuant to Section 3.10 hereof;

                  (vii)    all Advances made by the Servicer pursuant to Section
         4.01;

                  (viii)   all Prepayment Penalties; and

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

         The foregoing requirements for remittance by the Servicer into the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, late payment charges,
insufficient funds charges and payments in the nature of assumption fees (i.e.
fees related to the assumption of a Mortgage Loan upon the purchase of the
related Mortgaged Property and other similar ancillary fees (other than
Prepayment Penalties) if collected, need not be remitted by the Servicer. In the
event that the Servicer shall remit any amount not required to be remitted and
not otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at
any time withdraw or direct the Trustee, or such other institution maintaining
the Collection Account, to withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Collection Account at
the direction of the Servicer.

         The Servicer shall give notice to the Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. Not later than twenty days after each Distribution

                                      -61-

<PAGE>

Date, the Servicer shall forward to the Trustee and the Depositor the most
current available bank statement for the Collection Account. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Trustee.

         (e) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall, promptly upon
receipt, deposit or cause to be deposited in the Certificate Account and retain
therein the following:

                  (i)      the aggregate amount withdrawn by the Servicers from
         the Collection Accounts and required to be deposited in the Certificate
         Account;

                  (ii)     the Purchase Price and any Substitution Adjustment
         Amount;

                  (iii)    any amount required to be deposited by the Trustee
         pursuant to Section 3.05(g) in connection with any losses on Permitted
         Investments; and

                  (iv)     the Optional Termination Price paid by the Servicer
         pursuant to Section 9.01.

         Any amounts received by the Trustee prior to 1:00 p.m. New York City
time (or such earlier deadline for investment in the Permitted Investments
designated by the Trustee) which are required to be deposited in the Certificate
Account by the Servicer shall be invested in Permitted Investments on the
Business Day on which they were received. The foregoing requirements for
remittance by the Servicer and deposit by the Servicer into the Certificate
Account shall be exclusive. In the event that the Servicer shall remit any
amount not required to be remitted and not otherwise subject to withdrawal
pursuant to Section 3.08 hereof, it may at any time withdraw such amount from
the Certificate Account, any provision herein to the contrary notwithstanding.
All funds deposited in the Certificate Account shall be held by the Trustee in
trust for the Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.08. In no event shall the
Trustee incur liability for withdrawals from the Certificate Account at the
direction of the Servicers. The Trustee shall give notice to the Servicer of the
location of the Certificate Account maintained by it when established and prior
to any change thereof.

         (f) Each institution that maintains the Collection Account, or the
Certificate Account shall invest the funds in each such account, as directed by
the Servicer or the Trustee, as applicable, in writing, in Permitted
Investments, which shall mature not later than (i) in the case of the Collection
Account the Business Day preceding the related Servicer Remittance Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such Collection Account or is otherwise immediately available, then
such Permitted Investment shall mature not later than the Servicer Remittance
Date) and (ii) in the case of the Certificate Account, the Business Day
immediately preceding the first Distribution Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account or is otherwise immediately
available, then such Permitted Investment shall mature not later than such
Distribution Date) and, in each case, shall not be sold or disposed of prior to
its maturity. All such Permitted Investments shall be made in the name the
Trustee for the benefit of the Certificateholders. All income and gain net of
any losses realized from amounts on deposit in the Collection Account shall be
for the benefit of the Servicer as servicing compensation and shall be remitted
to it monthly as provided herein. The amount of any losses incurred in the
Collection Account in respect of any such investments shall be deposited by the
Servicer in the Collection Account out of the Servicer's own funds immediately
as realized. All income and gain net of any losses realized from amounts on
deposit in the Certificate Account shall be for the benefit of the Trustee and
shall be remitted to or withdrawn by it monthly as provided herein. The amount
of any losses

                                      -62-

<PAGE>

incurred in the Certificate Account in respect of any such investments shall be
deposited by the Trustee, in the Certificate Account out of the Trustee's own
funds immediately as realized.

         SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.

         To the extent required by the related Mortgage Note, the Servicer shall
establish and maintain one or more accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments, hazard insurance premiums
or comparable items for the account of the Mortgagors. Nothing herein shall
require the Servicer to compel a Mortgagor to establish an Escrow Account in
violation of applicable law.

         Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.

         SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans.

         Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided, that the Servicer shall be entitled to
be reimbursed by each such Certificateholder for actual expenses incurred by the
Servicer in providing such reports and access. Nothing in this Section 3.07
shall limit the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors, and the failure
of the Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section 3.07. Nothing in
this Section 3.07 shall require the Servicer to collect, create, collate or
otherwise generate any information that it does not generate in its usual course
of business. The Servicer shall not be required to make copies of or ship
documents to any party unless provisions have been made for reimbursement of the
costs thereof.

         SECTION 3.08. Permitted Withdrawals from the Collection Account and
Certificate Account.

         (a) The Servicer may from time to time, make withdrawals from the
Collection Account for the following purposes:

                  (i)      to pay to the Servicer (to the extent not previously
         paid to or withheld by the Servicer), as servicing compensation in
         accordance with Section 3.15, that portion of any payment of interest
         that equals the Servicing Fee for the period with respect to which such
         interest payment was made, and, as additional servicing compensation,
         those other amounts set forth in Section 3.15;

                  (ii)     to reimburse the Servicer or Advances made by it (or
         to reimburse the Advance Financing Person for Advances made by it) with
         respect to the Mortgage Loans, such right of reimbursement pursuant to
         this subclause (ii) being limited to amounts received on particular

                                      -63-

<PAGE>

         Mortgage Loan(s) (including, for this purpose, Liquidation Proceeds)
         that represent late recoveries of payments of principal and/or interest
         on such particular Mortgage Loan(s) in respect of which any such
         Advance was made;

                  (iii)    to reimburse the Servicer for (x) any Non-Recoverable
         Advance previously made and, (y) any Non-Recoverable Servicing Advances
         to the extent such Non-Recoverable Servicing Advances would constitute
         "unanticipated expenses" within the meaning of Treasury Regulation
         Section 1.860G-1(b)(3)(ii) if paid by one of the REMICs provided for
         herein;

                  (iv)     to pay to the Servicer earnings on or investment
         income with respect to funds in or credited to the Collection Account;

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

                  (vi)     to pay the Credit Risk Manager the Credit Risk
         Manager Fee;

                  (vii)    to pay the Servicer any unpaid Servicing Fees
         (including any unpaid Servicing Fees on second lien Mortgage Loans to
         the extent such fees are not recoverable from the Liquidation Proceeds
         received on such Mortgage Loan) and to reimburse it for any
         unreimbursed Servicing Advances, the Servicer's right to reimbursement
         of Servicing Advances pursuant to this subclause (vi) with respect to
         any Mortgage Loan being limited to amounts received on particular
         Mortgage Loan(s)(including, for this purpose, Liquidation Proceeds and
         purchase and repurchase proceeds) that represent late recoveries of the
         payments for which such advances were made pursuant to Section 3.01 or
         Section 3.06;

                  (viii)   to pay to the Depositor or the Servicer, as
         applicable, with respect to each Mortgage Loan or property acquired in
         respect thereof that has been purchased pursuant to Section 2.02, 2.03
         or 3.12, all amounts received thereon and not taken into account in
         determining the related Stated Principal Balance of such repurchased
         Mortgage Loan;

                  (ix)     to reimburse the Servicer, the Trustee or the
         Depositor for expenses incurred by any of them in connection with the
         Mortgage Loans or Certificates and reimbursable pursuant to Section
         3.25 or Section 6.03 hereof provided that reimbursement therefor would
         constitute "unanticipated" expenses within the meaning of Treasury
         Regulation Section 1.860G-1(b)(3)(ii);

                  (x)      to reimburse the Trustee for enforcement expenses
         reasonably incurred in respect of a breach of defect giving rise to the
         purchase obligation in Section 2.03 that were incurred in the Purchase
         Price of the Mortgage Loans including any expenses arising out of the
         enforcement of the purchase obligation; provided that any such expenses
         will be reimbursable under this subclause (ix) only to the that such
         expenses would constitute "unanticipated expenses" within the meaning
         of Treasury Regulation Section 1.860G-1(b)(3)(ii) if paid by one of the
         REMICs provided for herein;

                  (xi)     to make payments with respect to premiums for LPMI
         Policies;

                  (xii)    to withdraw pursuant to Section 3.05 any amount
         deposited in the Collection Account and not required to be deposited
         therein; and

                  (xiii)   to clear and terminate the Collection Account upon
         termination of this Agreement pursuant to Section 9.01 hereof.

                                      -64-

<PAGE>

         In addition, no later than 1:00 p.m. New York City Time on the Servicer
Remittance Date, the Servicer shall cause to be withdrawn from the Collection
Account the Interest Funds and the Principal Funds (other that amounts payable
to the Trustee), to the extent on deposit, and such amount shall be deposited in
the Certificate Account; provided, however, if the Trustee does not receive such
Interest Funds and Principal Funds by 1:00 p.m. New York City Time, such
Interest Funds and Principal Funds shall be deposited in the Certificate Account
by 1:00 p.m. New York City Time on the next Business Day. In the event such
funds are not deposited by 1:00 p.m. New York City Time on the Servicer
Remittance Date, the Servicer shall pay, out of its own funds, interest on such
amount at a rate equal to the Trustee's Prime Rate for each date or part
thereof.

         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 Collection Account.

         The Servicer shall provide written notification to the Trustee on or
prior to the next succeeding Servicer Remittance Date upon making any
withdrawals from the Collection Account pursuant to subclauses (iii) and (vii)
above.

         Unless otherwise specified, any amounts reimbursable to the Servicer or
the Trustee from amounts on deposit in the Collection Account or the Certificate
Accounts shall be deemed to come from first, Interest Funds, and thereafter,
Principal Funds for the related Distribution Date.

         (b) The Trustee shall withdraw funds from the Certificate Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to retain pursuant to this Agreement). In addition, the Trustee
may from time to time make withdrawals from the Certificate Account for the
following purposes:

                  (i)      to withdraw pursuant to Section 3.05 any amount
         deposited in the Certificate Account and not required to be deposited
         therein;

                  (ii)     to clear and terminate the Certificate Account upon
         termination of the Agreement pursuant to Section 9.01 hereof;

                  (iii)    to reimburse the Trustee for fees pursuant to Section
         8.05 hereof, and to reimburse the Trustee or the Custodian for expenses
         and indemnification reimbursable pursuant to Section 8.06 hereof; and

                  (iv)     to pay to the Trustee earnings on or investment
         income with respect to funds in or credited to the Certificate Account.

         The Trustee's right to pay and reimburse itself pursuant to this
Section 3.08(b) shall be prior to any payment or reimbursement to any other
Person and to any distributions to Certificateholders.

         SECTION 3.09. Servicing Transfer Dates.

         GreenPoint will service certain of the Mortgage Loans pursuant to the
terms of this Agreement prior to the related Servicing Transfer Date. With
respect to such Mortgage Loans, Ocwen shall not be obligated to perform any
duties or responsibilities under this Agreement with respect to any Mortgage
Loan until the servicing rights and related servicing files with respect to such
Mortgage Loan have been transferred to Ocwen on the related Servicing Transfer
Date. On the Servicing Transfer Date, Ocwen agrees to accept the servicing of
the Mortgage Loans previously serviced by GreenPoint. Ocwen agrees to cooperate
with GreenPoint to effectuate the timely transfer of servicing from GreenPoint
to Ocwen on

                                      -65-

<PAGE>

the related Servicing Transfer Date. Ocwen shall not be liable for any actions
or inactions of any prior servicer of a Mortgage Loan prior to the related
Servicing Transfer Date nor shall any action or inaction by a prior servicer be
deemed an Event of Default with respect to Ocwen. Ocwen shall confirm that the
Mortgage Loans on the Mortgage Loan Schedule have been transferred for servicing
to Ocwen and shall notify the Depositor and the Trustee promptly following the
completion of such transfer on the related Servicing Transfer Date.

         SECTION 3.10. Maintenance of Hazard Insurance.

         The Servicer shall cause to be maintained, for each Mortgage Loan,
hazard insurance with extended coverage in an amount that is at least equal to
the lesser of (i) the replacement value of the improvements that are part of
such Mortgaged Property and (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan and (b) an amount such that the proceeds of such
policy shall be sufficient to prevent the related Mortgagor and/or mortgagee
from becoming a co-insurer. Each such policy of standard hazard insurance shall
contain, or have an accompanying endorsement that contains, a standard mortgagee
clause. The Servicer shall also cause flood insurance to be maintained on
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan, to the extent required under the standards described below.
Pursuant to Section 3.05 hereof, any amounts collected by the Servicer under any
such policies (other than the amounts to be applied to the restoration or repair
of the related Mortgaged Property or property thus acquired or amounts released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account. Any cost incurred by the Servicer
in maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Servicer out of late payments by the related Mortgagor or
out of Liquidation Proceeds to the extent and as otherwise permitted by Section
3.08 hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Servicer shall cause flood insurance to be maintained with respect to such
Mortgage Loan. Such flood insurance shall be in an amount equal to the lesser of
(i) the original principal balance of the related Mortgage Loan, (ii) the
replacement value of the improvements that are part of such Mortgaged Property,
or (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973, as amended.

         In the event that the Servicer shall obtain and maintain a blanket
policy 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 3.10, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the 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 3.10, and there shall have
been a loss that would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor and the Trustee for the benefit of the Certificateholders, claims
under any such blanket policy.

                                      -66-

<PAGE>

         SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.

         When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has
knowledge of such conveyance or prospective conveyance, exercise its rights to
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"
clause contained in the related Mortgage or Mortgage Note; provided, however,
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable
law; provided, further, that the Servicer shall not take any action in relation
to the enforcement of any "due-on-sale" clause which would adversely affect or
jeopardize coverage under any Required Insurance Policy. An Opinion of Counsel
at the expense of the Servicer (which expense shall constitute a Servicing
Advance) delivered to the Trustee and the Depositor shall conclusively establish
the reasonableness of the Servicer's belief that any "due-on-sale" clause is not
enforceable under applicable law. In such event, the Servicer shall make
reasonable efforts to enter into an assumption and modification agreement 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 law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Note. In
addition to the foregoing, the Servicer shall not be required to enforce any
"due-on-sale" clause if in the reasonable judgment of the Servicer, entering
into an assumption and modification agreement with a Person to whom such
property shall be conveyed and releasing the original Mortgagor from liability
would be in the best interests of the Certificateholders. The Mortgage Loan, as
assumed, shall conform in all respects to the requirements, representations and
warranties of this Agreement. The Servicer shall notify the Trustee that any
such assumption or substitution agreement has been completed by forwarding to
the Trustee the original copy of such assumption or substitution agreement
(indicating the Mortgage File to which it relates) which copy shall be added by
the Trustee to the related Mortgage File and which shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. The Servicer shall be
responsible for recording any such assumption or substitution agreements, the
cost of which shall constitute a Servicing Advance. In connection with any such
assumption or substitution agreement, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the stated maturity or outstanding
principal amount of such Mortgage Loan shall not be changed nor shall any
required monthly payments of principal or interest be deferred or forgiven. Any
fee collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.

         SECTION 3.12. Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds.

         (a) The Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01 to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of Delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or

                                      -67-

<PAGE>

advisable and as shall be normal and usual in its general mortgage servicing
activities and the requirements of the insurer under any Required Insurance
Policy; provided, however, that the Servicer shall not be required to expend its
own funds in connection with the restoration of any property that shall have
suffered damage due to an uninsured cause unless it shall determine (i) that
such restoration increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the proceeds of liquidation of
the related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Servicer has knowledge that a Mortgaged Property that the Servicer is
contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Servicer, the Servicer will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance with
Accepted Servicing Practices.

         With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee or its nominee. Pursuant to its efforts to
sell such REO Property, the Servicer shall either itself or through an agent
selected by the Servicer protect and conserve such REO Property in the same
manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Servicer or an affiliate may receive usual and customary real estate referral
fees for real estate brokers in connection with the listing and disposition of
REO Property. The Servicer shall prepare a statement with respect to each REO
Property that has been rented showing the aggregate rental income received and
all expenses incurred in connection with the management and maintenance of such
REO Property at such times as is necessary to enable the Servicer to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Collection
Account no later than the close of business on each Determination Date. The
Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as specified
by Sections 1445, 6050J and 6050P of the Code by preparing and filing such tax
and information returns, as may be required.

         In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the expiration of three years from the end of the year of its acquisition by the
Trust Fund or, at the expense of the Trust Fund, request, in accordance with
applicable procedures for obtaining an automatic extension of the grace period,
more than 60 days prior to the day on which such three-year period would
otherwise expire, an extension of the three-year grace period, in which case
such property must be disposed of prior to the end of such extension, unless the
Trustee shall have been supplied with an Opinion of Counsel (such Opinion of
Counsel not to be an expense of the Trustee) to the effect that the holding by
the Trust Fund of such Mortgaged Property subsequent to such three-year period
or extension will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund or any of the REMICs provided for herein as
defined in section 860F of the Code or cause any of the REMICs provided for
herein to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust Fund
in such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or (ii) subject the Trust

                                      -68-

<PAGE>

Fund or any REMIC provided for herein to the imposition of any federal, state or
local income taxes on the income earned from such Mortgaged under section
860G(c) of the Code or otherwise, unless the Servicer or the Depositor has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.

         The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.

         The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Collection Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date.

         The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to
reimburse the Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, to any Prepayment Penalties and then to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate
to the Due Date occurring in the month in which such amounts are required to be
distributed; and fourth, as a recovery of principal of the Mortgage Loan.

         (b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Proceeds, if any, that occurred in the
related Prepayment Period.

         (c) The Servicer (or a special servicer appointed as set forth below)
or its designee, in its sole discretion, shall have the option (by written
notice sent to the Trustee ) to purchase for its own account from the Trust Fund
any Mortgage Loan that is 90 days or more Delinquent at a price equal to the
Purchase Price. The Purchase Price for any Mortgage Loan purchased hereunder
shall be delivered to the Trustee for deposit to the Certificate Account and the
Trustee, upon receipt of such confirmation of deposit and upon the Custodian's
receipt of a Request for Release from the Servicer in the form of Exhibit I
hereto, shall release or cause to be released to the Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the Servicer, in each case without recourse,
representation or warranty, as shall be necessary to vest in the Servicer any
Mortgage Loan released pursuant hereto and the Servicer shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan and all
security and documents related thereto. Such assignment shall be an assignment
outright and not for security. The Servicer shall thereupon own such Mortgage
Loan, and all security and documents, free of any further obligation to the
Trustee or the Certificateholders with respect thereto. In the alternative, with
respect to any Mortgage Loan that is 90 days or more Delinquent, the

                                      -69-

<PAGE>

Servicer, in its sole discretion, shall have the option to transfer the
servicing of any such Mortgage Loan to a special servicer; provided that such
special servicer must meet the successor servicer eligibility and other
requirements under Section 7.02. Upon the transfer of servicing to the special
servicer, the special servicer shall thereupon assume in writing all of the
rights and obligations of the Servicer hereunder arising thereafter with respect
to such Mortgage Loan, and the Servicer shall have no further rights or
obligations hereunder, with respect to such Mortgage Loan. The special servicer
shall be entitled to the Servicing Fee and other compensation accruing after the
servicing transfers to the special servicer with respect to such Mortgage Loans
pursuant to Section 3.15.

         SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files.

         Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will promptly notify the Trustee or
its designee by delivering a Request for Release substantially in the form of
Exhibit I. Upon receipt of a copy of such request, the Trustee or its designee
shall promptly release the related Mortgage File to the Servicer, and the
Servicer is authorized to cause the removal from the registration on the MERS
System of any such Mortgage if applicable, and the Trustee or its designee shall
at the Servicer's written direction execute and deliver to the Servicer the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage in each case
provided by the Servicer, together with the Mortgage Note with written evidence
of cancellation thereon. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account, the Certificate Account or the related subservicing account unless such
expenses are not recoverable from the Mortgagor. From time to time and as shall
be appropriate for the servicing or foreclosure of any Mortgage Loan, including
for such purpose, collection under any policy of flood insurance, any fidelity
bond or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or its designee shall, upon
delivery to the Trustee or its designee of a Request for Release in the form of
Exhibit I signed by a Servicing Officer, release the Mortgage File to the
Servicer. Subject to the further limitations set forth below, the Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
or its designee when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account.

         Each Request for Release may be delivered to the Trustee or its
designee (i) via mail or courier, (ii) via facsimile or (iii) by such other
means, including, without limitation, electronic or computer readable medium, as
the Servicer and the Trustee or its designee shall mutually agree. The Trustee
or its designee shall promptly release the related Mortgage File(s) within five
(5) Business Days of receipt of a properly completed Request for Release
pursuant to clauses (i), (ii) or (iii) above. Receipt of a properly completed
Request for Release shall be authorization to the Trustee or its designee to
release such Mortgage Files, provided the Trustee or its designee has determined
that such Request for Release has been executed, with respect to clauses (i) or
(ii) above, or approved, with respect to clause (iii) above, by an authorized
Servicing Officer of the Servicer, and so long as the Trustee or its designee
complies with its duties and obligations under the agreement. If the Trustee or
its designee is unable to release the Mortgage Files within the period
previously specified, the Trustee or its designee shall immediately notify the
Servicer indicating the reason for such delay. If the Servicer is required to
pay penalties or damages due to the Trustee or its designee's negligent failure
to release the related Mortgage File or the Trustee or its designee's negligent
failure to execute and release documents in a timely manner, the Trustee or its
designee, as applicable, shall be liable for such penalties or damages
respectively caused by it.

                                      -70-

<PAGE>

         If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property as authorized by this Agreement, the
Servicer shall deliver or cause to be delivered to the Trustee or its designee,
for signature, as appropriate, any court pleadings, requests for trustee's sale
or other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Trustee or its designee to be returned to the Trustee promptly
after possession thereof shall have been released by the Trustee or its designee
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account, and
the Servicer shall have delivered to the Trustee or its designee a Request for
Release in the form of Exhibit I or (ii) the Mortgage File or document shall
have been delivered to an attorney or to a public trustee or other public
official as required by law for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property and the
Servicer shall have delivered to the Trustee or its designee an Officer's
Certificate of a Servicing Officer certifying as to the name and address of the
Person to which the Mortgage File or the documents therein were delivered and
the purpose or purposes of such delivery.

         SECTION 3.14. Documents, Records and Funds in Possession of Servicer to
be Held for the Trustee.

         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 Collection Account, 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 Trust Fund, 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 Collection
Account or Certificate Account or in any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, 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 3.15. Servicing Compensation.

         As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund or as otherwise
provided in Section 3.08 an amount equal to interest at the Servicing Fee Rate
on the Stated Principal Balance of the related Mortgage Loan as of the
immediately preceding Distribution Date.

         Additional servicing compensation in the form of any Excess Proceeds,
late payment fees, assumption fees (i.e. fees related to the assumption of a
Mortgage Loan upon the purchase of the related Mortgaged Property) and similar
fees payable by the Mortgagor, and all income and gain net of any losses
realized from Permitted Investments in the Collection Account shall be retained
by the Servicer to the extent not required to be deposited in the Collection
Account pursuant to Sections 3.05, or 3.12(a) hereof. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of any premiums for hazard insurance, as
required by Section 3.10 hereof and maintenance of the other forms of insurance
coverage required by Section 3.10 hereof) and shall not

                                      -71-

<PAGE>

be entitled to reimbursement therefor except as specifically provided in
Sections 3.08 and 3.12 hereof. In no event shall the Trustee be liable for any
Servicing Fee or for any differential between the Servicing Fee and the amount
necessary to induce a successor servicer to act as a successor servicer under
this Agreement.

         SECTION 3.16. Access to Certain Documentation.

         The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Certificates and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Mortgage Loans required by applicable
regulations of the OTS and the FDIC. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices of the Servicer designated by it provided, that
the Servicer shall be entitled to be reimbursed by each such Certificateholder
for actual expenses incurred by the Servicer in providing such reports and
access. Nothing in this Section shall limit the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section. Nothing in this Section 3.16 shall require the Servicer to collect,
create, collate or otherwise generate any information that it does not generate
in its usual course of business. The Servicer shall not be required to make
copies of or ship documents to any party unless provisions have been made for
reimbursement of the costs thereof.

         SECTION 3.17. Annual Statement as to Compliance.

         Pursuant to this Agreement, the Servicer shall deliver to the Depositor
and the Trustee on or before March 15 of each year beginning in 2004 (or such
other date that the Depositor gives the Servicer at least 30 days prior notice
of) in order to remain in compliance with the Section 302 Requirements, an
Officer's Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Servicer during the preceding calendar year and of
performance under this Agreement or a similar agreement has been made under such
officer's supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The Trustee shall forward a copy of
each such statement received by it to each Rating Agency. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon written
request at the Certificateholder's expense, provided such statement has been
delivered by the Servicer to the Trustee.

         SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.

         On or before March 15 of each year, beginning in 2004 or such other
date in order to remain in compliance with the Section 302 Requirements, the
Servicer at its expense shall cause a nationally recognized firm of independent
public accountants (who may also render other services to the Servicer or any
Affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a USAP Report to the Trustee and the Depositor.
Copies of the USAP Report shall be provided by the Trustee to any
Certificateholder upon request at the Certificateholder's expense, provided such
report has been delivered by the Servicer to the Trustee.

         SECTION 3.19. Duties and Removal of the Credit Risk Manager.

         For and on behalf of the Seller, the Credit Risk Manager will provide
reports and recommendations concerning certain delinquent and defaulted Mortgage
Loans, and as to the collection of

                                      -72-

<PAGE>

any Prepayment Penalties with respect to the Mortgage Loans. Such reports and
recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the Credit Risk Management Agreement. Upon any termination
of the Credit Risk Manager or the appointment of a successor credit risk
manager, the Trustee, if it has been notified in writing of such termination or
appointment, shall give written notice thereof to Ocwen, the Trustee and the
Depositor.

         If Holders of the Certificates entitled to 66 2/3% or more of the
Voting Rights request in writing to the Trustee to terminate the Credit Risk
Manager under this Agreement, the Credit Risk Manager shall be removed pursuant
to this Section 3.19. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager.

         SECTION 3.20. Periodic Filings.

         (a) As part of the Form 10-K required to be filed pursuant to the terms
of this Agreement, the Trustee shall include, to the extent received by it, the
accountants report required pursuant to Section 3.18 as well as the Officer's
Certificate delivered by the Servicer pursuant to Section 3.17 relating to the
Servicer's performance of its obligations under this Agreement.

         (b) The Trustee shall prepare for filing (other than the initial Form
8-K which shall be the responsibility of the Depositor), and execute (other than
the Form 10-Ks and the Certification), on behalf of the Trust Fund, and file
with the Securities and Exchange Commission, (i) within 15 days after each
Distribution Date in each month, each Monthly Statement on Form 8-K under the
Exchange Act executed by the Trustee, (ii) on or before March 31 of each year
beginning in 2004 or such other date in order to remain in compliance with the
Section 302 Requirements, a Form 10-K under the Exchange Act executed by the
Depositor, including any certification (the "Certification") required by the
Section 302 Requirements, and (iii) any and all reports, statements and
information respecting the Trust Fund and/or the Certificates required to be
filed on behalf of the Trust Fund under the Exchange Act. The Certification and
Form 10-K shall be executed by a senior officer of the Depositor. Upon such
filing with the Securities and Exchange Commission, the Trustee shall promptly
deliver to the Depositor a copy of any such executed report, statement or
information. Prior to making any such filings and certifications, the Trustee
shall comply with the provisions set forth in this Section. If permitted by
applicable law and unless the Depositor otherwise directs, the Trustee shall
file a Form 15 under the Exchange Act on or before January 30, 2004 as soon as
it is able to do so pursuant to applicable law. The Depositor hereby grants to
the Trustee a limited power of attorney to execute (other than the Form 10-Ks
and the Certification) and file each such document on behalf of the Depositor.
Such power of attorney shall continue until either the earlier of (i) receipt by
the Trustee from the Depositor of written termination of such power of attorney
and (ii) the termination of the Trust Fund. The Depositor agrees to promptly
furnish to the Trustee, 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 reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Trustee shall have no responsibility to file any items other than those
specified in this section.

         (c) [Reserved].

         (d) The obligations set forth in paragraphs (a) through (c) of this
Section shall only apply with respect to periods for which the Trustee is
obligated to file Form 8-Ks and 10-Ks pursuant to paragraph (b) of this Section.
In the event a Form 15 is properly filed pursuant to paragraph (b) of this
Section, there shall be no further obligations under paragraphs (a) through (c)
of this Section commencing with the fiscal year in which the Form 15 is filed
(other than the obligations in paragraphs (a) and (b) of this Section to be
performed in such fiscal year that relate back to the prior fiscal year).

                                      -73-

<PAGE>

         SECTION 3.21. Annual Certificate by Trustee

         (a) Within 15 days prior to the date on which a Form 10-K is to be
filed with a Certification by the Depositor, an officer of the Trustee shall
execute and deliver an Officer's Certificate, signed by a Responsible Officer of
the Trustee or any officer to whom that officer reports, to the Depositor for
the benefit of such Depositor and its officers, directors and affiliates,
certifying as to the matters described in the Officer's Certificate attached
hereto as Exhibit K.

         (b) The Trustee shall indemnify and hold harmless the Depositor and its
respective officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Trustee or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.21 any material misstatement
or omission in the Officer's Certificate required under this Section or the
negligence, bad faith or willful misconduct of the Trustee in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, then the Trustee agrees that it
shall contribute to the amount paid or payable by the Depositor as a result of
the losses, claims, damages or liabilities of the Depositor in such proportion
as is appropriate to reflect the relative fault of the Trustee on the one had
and the Depositor on the other in connection with a breach of the Trustee's
obligations under this Section 3.21, any material misstatement or omission in
the Officer's Certificate required under this Section or the Trustee's
negligence, bad faith or willful misconduct in connection therewith.

         SECTION 3.22. Annual Certificate by Servicer

         (a) Within 15 days prior to the date on which a Form 10-K is required
to be filed with a Certification by the Depositor, the Servicer shall execute
and deliver an Officer's Certificate in the form of Exhibit L attached hereto,
signed by the senior officer in charge of servicing of the Servicer or any
officer to whom that officer reports, to the Trustee and Depositor for the
benefit of the Trustee and Depositor and their respective officers, directors
and affiliates, certifying as to the following matters:

                  (i)      I have reviewed the information required to be
         delivered by the Servicer to the Trustee pursuant to the Pooling and
         Servicing Agreement (the "Servicing Information").

                  (ii)     Based on my knowledge, the information in the Annual
         Statement of Compliance, and all servicing reports, officer's
         certificates and other information relating to the servicing of the
         Mortgage Loans submitted to the Trustee by the Servicer taken as a
         whole, does not contain any untrue statement of a material fact or omit
         to state a material fact necessary to make any such reports,
         certificates or other information, in light of the circumstances under
         which such statements were made, not misleading as of the last day of
         the period covered by the Annual Statement of Compliance;

                  (iii)    Based on my knowledge, the Servicing Information
         required to be provided to the Trustee by the Servicer under this
         Agreement has been provided to the Trustee; and

                  (iv)     I am responsible for reviewing the activities
         performed by the Servicer under this Agreement and based upon the
         review required hereunder, and except as disclosed in the Annual
         Statement of Compliance, the Annual Independent Certified Public
         Accountant's Servicing Report and all servicing reports, officer's
         certificates and other information relating to the servicing of the
         Mortgage Loans submitted to the Trustee by the Servicer, the Servicer
         has, as of the last day of the period covered by the Annual Statement
         of Compliance fulfilled its obligations under this Agreement.

                                      -74-

<PAGE>

         (b) The Servicer shall indemnify and hold harmless the Trustee and the
Depositor and their respective officers, directors, agents and affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 3.22, any material misstatement
or omission in the Officer's Certificate required under this Section or the
negligence, bad faith or willful misconduct of the Servicer in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Trustee and the Depositor, then the Servicer
agrees that it shall contribute to the amount paid or payable by the Trustee and
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Servicer on the other in connection with a
breach of the Servicer's obligations under this Section 3.22, any material
misstatement or omission in the Officer's Certificate required under this
Section or the Servicer's negligence, bad faith or willful misconduct in
connection therewith.

         SECTION 3.23. Prepayment Penalty Reporting Requirements

         (a) Promptly after each Distribution Date, the Servicer shall provide
to the Depositor, the Trustee the following information with regard to each
Mortgage Loan that has prepaid during the related Prepayment Period:

                  (i)      loan number;

                  (ii)     current Mortgage Rate;

                  (iii)    current principal balance;

                  (iv)     original principal balance;

                  (v)      Prepayment Penalty amount due;

                  (vi)     Prepayment Penalty amount collected; and

                  (vii)    reason why full Prepayment Penalty amount was not
                           collected, if applicable.

         SECTION 3.24. Statements to the Trustee.

         Not later than 5:00 p.m. New York City time on the second Business Day
following each Determination Date, the Servicer shall furnish to the Trustee an
electronic file providing loan level accounting data for the period ending on
the last Business Day of the preceding month in the format mutually agreed upon
between the Servicer and the Trustee. Each Servicer agrees to provide the
Trustee with such information that may reasonably be requested from such
Servicer by the Trustee pursuant to Section 8.12(a)(l) hereof.

         SECTION 3.25. Indemnification.

         (a) The Servicer shall indemnify the Seller, the Trust Fund, the
Trustee and the Depositor and their officers, directors, employees and agents
and hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgements, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the failure of the Servicer to perform
its duties and service the Mortgage Loans in compliance with the terms of this
Agreement. The Servicer immediately shall notify the Seller, the Trustee and the
Depositor or any other relevant party if a claim is made by a third party with
respect to this Agreement or

                                      -75-

<PAGE>

the Mortgage Loans, assume (with the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld or delayed) the defense
of any such claim and pay all expenses in connection therewith, including
counsel fees, and promptly pay, discharge and satisfy any judgement or decree
which may be entered against it or any of such parties in respect of such claim.
The Servicer shall follow any reasonable written instructions received from the
Trustee in connection with such claim it being understood that the Trustee shall
have no duty to monitor or give instructions with respect to such claims. The
Servicer shall provide the Depositor and the Trustee with a written report of
all expenses and advances incurred by the Servicer pursuant to this Section
3.25(a), and the Servicer shall promptly reimburse itself from the assets of the
Trust Fund in the Collection Account for all amounts advanced by it pursuant to
the preceding sentence except when the claim in any way relates to the failure
of the Servicer to service and administer the Mortgage Loans in material
compliance with the terms of this Agreement or the gross negligence, bad faith
or willful misconduct of the Servicer. The provisions of this paragraph shall
survive the termination of this Agreement and the payment of the outstanding
Certificates.

         (b) The Trustee shall indemnify the Seller, the Trust Fund, the
Servicer and the Depositor and their officers, directors, employees and agents
and hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgements, and any other costs, fees and expenses that any of such
parties may sustain in any way related to the failure of the Trustee to perform
its duties in compliance with the terms of this Agreement. The Trustee shall
provide the Servicer and the Depositor with a written report of all expenses and
advances incurred by the Trustee pursuant to this Section 3.25(b), and the
Trustee shall promptly reimburse itself from the assets of the Trust Fund in the
Collection Account for all amounts advanced by it pursuant to the preceding
sentence except when the claim in any way relates to the failure of the Trustee
to perform its duties in material compliance with the terms of this Agreement or
the negligence, bad faith or willful misconduct of the Trustee. The provisions
of this paragraph shall survive the termination of this Agreement and the
payment of the outstanding Certificates.

         SECTION 3.26. Nonsolicitation.

         For as long as the Servicer services the Mortgage Loans, the Servicer
covenants that it will not, and that it will ensure that its affiliates and
agents, will not, directly solicit or provide information for any other party to
solicit for prepayment or refinancing of any of the Mortgage Loans by the
related Mortgagors. It is understood that the promotions undertaken by the
Servicer, its agents or affiliates, which are directed to the general public at
large, or certain segments thereof, shall not constitute solicitation as that
term is used in this Section 3.26.

         SECTION 3.27. Maintenance of LPMI Policy.

         The Servicer shall take all such actions as are necessary to service,
maintain and administer the LPMI Loans in accordance with the LPMI Policy and to
perform and enforce the rights of the insured under such LPMI Policy. Except as
expressly set forth herein, the Servicer shall have full authority on behalf of
the Trust Fund to do anything it reasonably deems appropriate or desirable in
connection with the servicing, maintenance and administration of the LPMI
Policy. The Servicer shall not modify or assume a Mortgage Loan covered by the
LPMI Policy or take any other action with respect to such Mortgage Loan which
would result in non-coverage under the LPMI Policy of any loss which, but for
the actions of the Servicer, would have been covered thereunder. If the LPMI
insurer fails to pay a claim under the LPMI Policy as a result of breach by the
Servicer of its obligations hereunder or under the LPMI Policy, the Servicer
shall be required to deposit in the Collection Account on or prior to the net
succeeding Remittance Date an amount equal to such unpaid claim from its own
funds without any right to reimbursement from the Trust Fund. The Servicer shall
cooperate with the LPMI insurer and shall use

                                      -76-

<PAGE>

its best efforts to furnish all reasonable aid, evidence and information in the
possession of the Servicer to which the Servicer has access with respect to any
LPMI Loan.

         SECTION 3.28. Confidentiality.

         Notwithstanding anything to the contrary contained in this Agreement,
the Servicer agrees that, if and to the extent that the Servicer (the "Receiving
Party") should receive any Client Data hereunder: (1) the Receiving Party shall
not disclose or use such Client Data except to the extent necessary to carry out
such Receiving Party's obligations under this Agreement and for no other
purpose; (2) the Receiving Party shall not disclose Client Data to any third
party, including, without limitation, such Receiving Party's third party service
providers without the Depositor's prior written consent and an agreement in
writing from the third party to use or disclose such Client Data only to the
extent necessary to carry out such Receiving Party's obligations under this
Agreement and for no other purposes; (3) the Receiving Party shall maintain, and
shall require all third parties approved under subsection (2) to maintain,
effective information security measures to protect Client Data from unauthorized
disclosure or use; and (4) the Receiving Party shall provide the Depositor with
information regarding such security measures upon our reasonable request and
promptly provide the Depositor with information regarding any failure of such
security measures or any security breach related to Client Data. The obligations
set forth in this Section 3.28 shall survive termination of the Agreement.

                                   ARTICLE IV

                                  DISTRIBUTIONS

         SECTION 4.01. Advances.

         Subject to the conditions of this Article IV, the Servicer, as required
below, shall make an Advance with respect to the Mortgage Loans serviced by it
and deposit such Advance in the related Collection Account. Each such Advance
shall be remitted to the related Collection Account no later than 1:00 p.m. New
York City time on the related Servicer Advance Date in immediately available
funds. The Servicer shall be obligated to make any such Advance only to the
extent that such advance would not be a Non-Recoverable Advance. If the Servicer
shall have determined that it has made a Non-Recoverable Advance or that a
proposed Advance or a lesser portion of such Advance would constitute a
Non-Recoverable Advance, the Servicer shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Trustee an Officer's Certificate
setting forth the basis for such determination. The Servicer may, in its sole
discretion, make an Advance with respect to the principal portion of the final
Scheduled Payment on a Balloon Loan, but the Servicer is under no obligation to
do so; provided, however, that nothing in this sentence shall affect the
Servicer's obligation under this Section 4.01 to Advance the interest portion of
the final Scheduled Payment with respect to a Balloon Loan as if such Balloon
Loan were a fully amortizing Mortgage Loan. If a Mortgagor does not pay its
final Scheduled Payment on a Balloon Loan when due, the Servicer shall Advance
(unless it determines in its good faith judgment that such amounts would
constitute a Non-Recoverable Advance) a full month of interest (net of the
Servicing Fee) on the Stated Principal Balance thereof each month until its
Stated Principal Balance is reduced to zero.

         In lieu of making all or a portion of such Advance from its own funds,
a Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any amount held for future distribution has been
used by the Servicer in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the related Collection Account to the Certificate
Account. In addition, the Servicer shall have the right to reimburse itself for
any such Advance from amounts held from time to time in the related Collection
Account to the extent such amounts are not then required to be distributed. Any
funds so applied and transferred pursuant to the previous two sentences shall be
replaced by the

                                      -77-

<PAGE>

Servicer by deposit in the related Collection Account on or before any future
Servicer Advance Date to the extent that the funds that would otherwise be
available in the Certificate Account for the related Distribution Date shall be
less than the total amount that would be distributed to Certificateholders
pursuant to Section 4.04 if such amounts for future distribution had not been so
used to make Advances. The Servicer shall be entitled to be reimbursed from the
related Collection Account for all Advances of its own funds made pursuant to
this Section as provided in Section 3.08. The obligation to make Advances with
respect to any Mortgage Loan shall continue until such Mortgage Loan is paid in
full or the related Mortgaged Property or related REO Property has been
liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 4.01.

         SECTION 4.02. Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.

         In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, beginning on the related Servicing Transfer Date, a Servicer
shall, from amounts in respect of the applicable Servicing Fee for such
Distribution Date, deposit into the related Collection Account, as a reduction
of the applicable Servicing Fee for such Distribution Date, no later than the
related Servicer Advance Date immediately preceding such Distribution Date, an
amount up to the Prepayment Interest Shortfall. In case of such deposit, the
Servicer shall not be entitled to any recovery or reimbursement from the
Depositor, the Trustee, the Trust Fund or the Certificateholders. With respect
to any Distribution Date, to the extent that the Prepayment Interest Shortfall
exceeds Compensating Interest (such excess, a "Non-Supported Interest
Shortfall"), such Non-Supported Interest Shortfall shall reduce the Current
Interest with respect to each Class of Certificates, pro rata based upon the
amount of interest each such Class would otherwise be entitled to receive on
such Distribution Date.

         SECTION 4.03. Distributions on the REMIC Interests.

         On each Distribution Date, amounts on deposit in the Certificate
Account constituting Interest Funds and Principal Funds for such Distribution
Date shall be treated for federal income tax purposes as applied to
distributions on the interests in each of REMIC 1, REMIC 2 and Upper Tier REMIC
in an amount sufficient to make the distributions on the respective Certificates
on such Distribution Date in accordance with the provisions of Section 4.04.

         SECTION 4.04. Distributions.

         (a) [Reserved].

         (b) On each Distribution Date, the Trustee shall make the following
distributions, from funds then available in the Certificate Account, of an
amount equal to the Interest Funds in the following order of priority:

                  (i)      to pay to the Class C Certificates all Prepayment
         penalties received with respect to the Mortgage Loans, all amounts paid
         by the Servicer or the Seller in respect of prepayment charges pursuant
         to this Agreement and all amounts received in respect of any
         indemnification paid as a result of a prepayment charge being
         unenforceable in breach of the representations and warranties set forth
         in the Sale Agreement or the Transfer Agreement, in each case, for the
         related Prepayment Period;

                  (ii)     to each Class of Class R Certificate, Class A
         Certificates and Class S Certificates, the Current Interest and any
         Interest Carry Forward Amount with respect to such Class; provided,
         however, if such amount is not sufficient to make a full distribution
         of the Current Interest and any Interest Carry

                                      -78-

<PAGE>

         Forward Amount with respect to all of the Class R Certificate, Class
         A Certificates and Class S Certificates, such amount will be
         distributed pro rata among each Class of the Class R Certificate,
         Class A Certificates and Class S Certificates based on the
         ratio of (x) the Current Interest and Interest Carry Forward Amount for
         each Class of the Class R Certificate, Class A Certificates and Class
         S Certificates to (y) the total amount of Current Interest and any
         Interest Carry Forward Amount for the Class R Certificate, Class A
         Certificates and Class S Certificates;

                  (iii)    to the Class M-1 Certificates, the Current Interest
         and any Interest Carry Forward Amount for such Class;

                  (iv)     to the Class M-2 Certificates, the Current Interest
         and any Interest Carry Forward Amount for such Class;

                  (v)      to the Class M-3 Certificates, the Current Interest
         and any Interest Carry Forward Amount for such Class;

                  (vi)     to the Class B-1 Certificates, the Current Interest
         and any Interest Carry Forward Amount for such Class;

                  (vii)    to the Class B-2 Certificates, the Current Interest
         and any Interest Carry Forward Amount for such Class;

                  (viii)   to the Class B-3 Certificates, the Current Interest
         and any Interest Carry Forward Amount for such Class and

                  (ix)     any remainder pursuant to Section 4.04(e) hereof.

         (c) [Reserved]

         (d) On each Distribution Date, the Trustee shall make the following
distributions, from funds then available in the Certificate Account, of an
amount equal to the Principal Distribution Amount in the following order of
priority, and each such distribution shall be made only after all distributions
pursuant to Section 4.04(b) above shall have been made until such amount shall
have been fully distributed for such Distribution Date:

                  (i)      (A) to the Class R Certificate and the Class A
         Certificates, sequentially, the Class A Principal Distribution Amount,
         until the respective Certificate Principal Balances thereof have been
         reduced to zero;

                  (ii)     to the Class M-1 Certificates, the Class M-1
         Principal Distribution Amount;

                  (iii)    to the Class M-2 Certificates, the Class M-2
         Principal Distribution Amount;

                  (iv)     to the Class M-3 Certificates, the Class M-3
         Principal Distribution Amount;

                  (v)      to the Class B-1 Certificates, the Class B-1
         Principal Distribution Amount;

                  (vi)     to the Class B-2 Certificates, the Class B-2
         Principal Distribution Amount; and

                  (vii)    to the Class B-3 Certificates, the Class B-3
         Principal Distribution Amount; and

                  (viii)   any remainder pursuant to Section 4.04(e) hereof.

                                      -79-

<PAGE>

         (e) On each Distribution Date, the Trustee shall make the following
distributions, from funds available from the Certificate Account up to the
following amounts, of the remainders pursuant to Section 4.04(b)(ix) and
4.04(d)(viii) hereof and, to the extent required to make the distributions set
forth below in clauses (i) through (x) of this Section 4.04(e), and each such
distribution shall be made only after all distributions pursuant to Sections
4.04(b) and (d) above shall have been made until such remainders shall have been
fully distributed for such Distribution Date:

                  (i)      for distribution as part of the Principal
         Distribution Amount, the Extra Principal Distribution Amount;

                  (ii)     to the Class M-1 Certificates, the Class M-1 Unpaid
         Realized Loss Amount;

                  (iii)    to the Class M-2 Certificates, the Class M-2 Unpaid
         Realized Loss Amount;

                  (iv)     to the Class M-3 Certificates, the Class M-3 Unpaid
         Realized Loss Amount;

                  (v)      to the Class B-1 Certificates, the Class B-1 Unpaid
         Realized Loss Amount;

                  (vi)     to the Class B-2 Certificates, the Class B-2 Unpaid
         Realized Loss Amount;

                  (vii)    to the Class B-3 Certificates, the Class B-3 Unpaid
         Realized Loss Amount;

                  (viii)   to the Offered Certificates (other than the Class S
         Certificates), on a pro rata basis based upon outstanding Floating Rate
         Certificate Carryover, the Floating Rate Certificate Carryover for each
         such Class;

                  (ix)     [Reserved]; and

                  (x)      the remainder pursuant to Section 4.04(f) hereof.

         (f) on each Distribution Date, the Trustee shall allocate the
remainders pursuant to Section 4.04(e)(x) as follows:

                  (i)      to the Class C Certificates in the following order of
         priority, (I) the Class C Current Interest, (II) the Class C Interest
         Carry Forward Amount, (III) as principal on the Class C Certificate
         until the Certificate Principal Balance of the Class C Certificates has
         been reduced to zero and (IV) the Class C Unpaid Realized Loss Amount;
         and

                  (ii)     the remainder pursuant to Section 4.04(g) hereof.

         (g) On each Distribution Date, the Trustee shall allocate the remainder
to the Class R Certificate and such distributions shall be made only after all
preceding distributions shall have been made until such remainder shall have
been fully distributed.

         (h) On each Distribution Date, after giving effect to distributions on
such Distribution Date, the Trustee shall allocate the Applied Realized Loss
Amount for the Certificates to reduce the Certificate Principal Balances of the
Class C and Subordinated Certificates in the following order of priority:

                  (i)      to the Class C Certificates until the Class C
         Certificate Principal Balance is reduced to zero;

                  (ii)     to the Class B-3 Certificates until the Class B-3
         Certificate Principal Balance is reduced to zero;

                                      -80-

<PAGE>

                  (iii)    to the Class B-2 Certificates until the Class B-2
         Certificate Principal Balance is reduced to zero;

                  (iv)     to the Class B-1 Certificates until the Class B-1
         Certificate Principal Balance is reduced to zero;

                  (v)      to the Class M-3 Certificates until the Class M-3
         Certificate Principal Balance is reduced to zero

                  (vi)     to the Class M-2 Certificates until the Class M-2
         Certificate Principal Balance is reduced to zero; and

                  to the Class M-1 Certificates until the Class M-1 Certificate
         Principal Balance is reduced to zero.

         (i) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if such Holder has so notified
the Trustee at least five (5) Business Days prior to the related Record Date or,
if not, by check mailed by first Class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.

         In accordance with Section 3.24 of this Agreement, not later than the
time and date specified therein, each Servicer shall prepare and deliver a
report (the "Remittance Report") to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Servicer and the Trustee
may agree from time to time) containing such data and information such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and
make the required distributions for the related Distribution Date. The Trustee
will prepare the Monthly Report based solely upon the information received from
the Servicers.

         (j) The Trustee is hereby directed by the Depositor to execute both Cap
Contracts on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents, adequacy or
sufficiency of such Cap Contract, including, without limitation, the
representations and warranties contained therein. Any funds payable by the
Trustee under the Cap Contracts at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in the Cap
Contracts, the Trustee shall not be required to make any payments to the
counterparty under the Cap Contracts. Any payments received under the terms of
the Cap Contracts will be available to pay the holders of the Offered
Certificates up to the amount of any Floating Rate Certificate Carryover
remaining after the application of Section 4.04(e)(viii) on such Distribution
Date; provided, however, that payments received on the Cap Contracts will not be
used to pay any Floating Rate Certificate Carryover that results from a failure
to allocate to the Class A or Class R Certificates Realized Losses that do not
decrease the Overcollateralization Amount and are not allocated to the Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2 or Class B-3 Certificates. Any
amounts in the Cap Contract Account on any Distribution Date in excess of
amounts required, subject to the restrictions set forth in the preceding
sentence, to pay outstanding Floating Rate Certificate Carryovers on such
Distribution Date will be distributed to the holders of the Class C Certificates
in accordance with the provisions of Section 4.04(f) hereof (after all other
distributions have been made thereunder on such Distribution Date). Payments
from the Cap Contract Account in respect of the Floating Rate Certificate
Carryovers shall, subject to the limitations set

                                      -81-

<PAGE>

forth in the first sentence of this Section 4.04(j), be paid to the Offered
Certificates in accordance with the provisions of Section 4.04(e)(viii) hereof.

                  (i)      On or prior to the Cap Contract Termination Date,
         amounts, if any, received by the Trustee for the benefit of the Trust
         Fund in respect of the Cap Contracts shall be deposited by the Trustee
         into the Cap Contract Account. With respect to any Distribution Date on
         or prior to the Cap Contract Termination Date, the amount, if any,
         payable by the Cap Contract Counterparty under the Cap Contracts will
         equal the product of (i) the excess of (x) One-Month LIBOR (as
         determined by the Cap Contract Counterparty and subject to a cap equal
         to the rate with respect to such Distribution Date as shown under the
         heading "1ML Upper Collar" in the Cap Table), over (y) the rate with
         respect to such Distribution Date as shown under the heading "1ML Lower
         Collar" in the Cap Table, (ii) an amount equal to the Cap Contract
         Notional Balances and (iii) the number of days in such Accrual Period,
         divided by 360.

                  (ii)     Amounts on deposit in the Cap Contract Account will
         remain uninvested pending distribution to Certificateholders.

                  (iii)    The Cap Contracts are scheduled to remain in effect
         until the Cap Contract Termination Date and will be subject to early
         termination only in limited circumstances. Such circumstances include
         certain insolvency or bankruptcy events in relation to the Cap Contract
         Counterparty (after a grace period of three Local Business Days, as
         defined in the Cap Contract, after notice of such failure is received
         by the Cap Contract Counterparty) to make a payment due under the Cap
         Contract, the failure by the Cap Contract Counterparty or the Trustee
         (after a cure period of 20 days after notice of such failure is
         received) to perform any other agreement made by it under the Cap
         Contract, the termination of the Trust Fund and the Cap Contracts
         becoming illegal or subject to certain kinds of taxation.

         SECTION 4.05. Monthly Statements to Certificateholders.

         (a) Not later than each Distribution Date based solely on information
provided by the Servicers and the Cap Counterparty , the Trustee shall prepare
and make available on its website located at www.ctslink.com to each Holder of a
Class of Certificates of the Trust Fund, the Servicers, the Rating Agencies and
the Depositor a statement. Assistance in using the website can be obtained by
calling the Trustee's customer service desk at (301) 815-6600. All 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 such statements are
distributed in order to make such distributions more convenient and/or more
accessible to the above parties and the Trustee shall provide timely and
adequate notification to all above parties regarding such changes. Such
statement for each $1,000 principal amount of Certificates shall set forth the
following:

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

                  (ii)     the amount of such distribution to Holders of each
         Class allocable to interest, together with any Non-Supported Interest
         Shortfalls allocated to each Class;

                  (iii)    any Interest Carry Forward Amount for each Class of
         the Offered Certificates;

                                      -82-

<PAGE>

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

                  (v)      the Pool Stated Principal Balance for such
         Distribution Date;

                  (vi)     the related amount of the applicable Servicing Fee
         paid to or retained by each Servicer;

                  (vii)    the Pass-Through Rate for each Class of Certificates
         for such Distribution Date;

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

                  (ix)     the cumulative amount of (A) Realized Losses and (B)
         Applied Realized Loss Amounts to date;

                  (x)      the amount of (A) Realized Losses and (B) Applied
         Realized Loss Amounts with respect to such Distribution Date;

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

                  (xii)    [Reserved];

                  (xiii)   the related amount of the Credit Risk Manager Fee
         paid to the Credit Risk Manager;

                  (xiv)    with respect to any Mortgage Loan that became an REO
         Property during the preceding calendar month, the loan number and
         Stated Principal Balance of such Mortgage Loan as of the close of
         business on the last day of the calendar month preceding such
         Distribution Date and the date of acquisition thereof;

                  (xv)     the total number and principal balance of any REO
         Properties as of the close of business on the last day of the calendar
         month preceding such Distribution Date;

                  (xvi)    the aggregate Stated Principal Balance of all
         Liquidated Loans as of the preceding Distribution Date;

                  (xvii)   whether a Trigger Event has occurred;

                  (xviii)  with respect to each Class of Certificates, any
         Interest Carry Forward Amount with respect to such Distribution Date
         for each such Class, any Interest Carry Forward Amount paid for each
         such Class and any remaining Interest Carry Forward Amount for each
         such Class;

                  (xix)    with respect to each Class Certificates any Floating
         Rate Certificate Carryover with respect to such Distribution Date for
         each such Class, any Floating Rate Certificate Carryover paid for each
         such Class and any remaining Floating Rate Certificate Carryover for
         each such Class;

                                      -83-

<PAGE>

                  (xx)     the number and Stated Principal Balance (as of the
         preceding Distribution Date) of any Mortgage Loans which were purchased
         or repurchased during the preceding Due Period and since the Cut-off
         Date;

                  (xxi)    the number of Mortgage Loans for which prepayment
         penalties were received during the related Prepayment Period and, for
         each such Mortgage Loan, the amount of prepayment penalties received
         during the related Prepayment Period and in the aggregate of such
         amounts for all such Mortgage Loans since the Cut-off Date;

                  (xxii)   [Reserved];

                  (xxiii)  the amount and purpose of any withdrawal from the
         Collection Account pursuant to Section 3.08(a)(v);

                  (xxiv)   the amount of any payments to each Class of
         Certificates that are treated as payments received in respect of a
         REMIC Regular Interest and the amount of any payments to each Class of
         Certificates that are not treated as payments received in respect of a
         REMIC Regular Interest;

                  (xxv)    as of each Distribution Date, the amount, if any, to
         be deposited in the Cap Contract Account as described in Section
         4.04(j) and the amount thereof to be paid to the Offered Certificates
         as described in Section 4.04(j) hereof.

         (b) [Reserved]

         (c) If so requested in writing or as required by applicable law, within
a reasonable period of time after the end of each calendar year, the Trustee
shall make available on its website or cause to be furnished to each Person who
at any time during the calendar year was a Certificateholder of record, a
statement containing the information set forth in clauses (a)(i) and (a)(ii) of
this Section 4.05 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.

         (d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class R Certificate the Form 1066 and each Form
1066Q and shall respond promptly (subject to receipt of any information required
to be provided by the Depositor or the Servicer pursuant to this Agreement) to
written requests made not more frequently than quarterly by any Holder of Class
R Certificate with respect to the following matters: The original projected
principal and interest cash flows on the Closing Date on each Class of regular
and residual interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;

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

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

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

                                      -84-

<PAGE>

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

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

                  (vi)     The amount and timing of any non-interest expenses of
         the REMICs; and

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

         The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.

                                    ARTICLE V

                                THE CERTIFICATES

         SECTION 5.01. The Certificates.

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

<TABLE>
<CAPTION>
                                                                                 Original Certificate
                         Minimum               Integral Multiples in             Principal Balance or
     Class             Denomination              Excess of Minimum                 Notional Amount
     -----             ------------            ---------------------             --------------------
<S>                    <C>                     <C>                               <C>
A                      $    25,000.00                 $    1.00                     $228,938,000.00

S                      $ 1,000,000.00                 $    1.00                            (1)
M-1                    $    25,000.00                 $    1.00                     $ 16,500,000.00
M-2                    $    25,000.00                 $    1.00                     $ 12,375,000.00
M-3                    $    25,000.00                 $    1.00                     $  4,125,000.00
B-1                    $    25,000.00                 $    1.00                     $  3,300,000.00
B-2                    $    25,000.00                 $    1.00                     $  3,025,000.00
B-3                    $    25,000.00                 $    1.00                     $  3,025,000.00
C                      $   250,000.00                 $1,000.00                     $  3,629,434.01

R                      $       100.00                    N/A                        $        100.00
</TABLE>

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

(1)      The Class S Certificates are interest-only certificates; they will not
         be entitled to payments of principal; and they will accrue interest on
         the Class S Notional Amount.

                                      -85-

<PAGE>

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

         SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.

         (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.09 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.

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

         No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by a Trustee in accordance with such
Trustee's customary procedures.

         (b) No Transfer of a Class C Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall (except with
respect to the initial transfer of a Class C Certificate by Merrill Lynch & Co.)
each certify to the Trustee in writing the facts surrounding the Transfer in
substantially the forms set forth in Exhibit F (the "Transferor Certificate")
and (i) deliver a letter in substantially the form of either Exhibit G (the
"Investment Letter") or Exhibit H (the "Rule 144A Letter") or (ii) there shall
be delivered to the Trustee an Opinion of Counsel that such Transfer may be made
pursuant to an exemption from the Securities Act, which Opinion of Counsel shall
not be an expense of the Depositor or the Trustee. The Depositor shall provide
to any Holder of a Class C Certificate and any prospective transferee designated
by any such Holder,

                                      -86-
<PAGE>

information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for Transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee shall cooperate with the Depositor
in providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information in the possession of the
Trustee regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Depositor shall reasonably request to meet its
obligation under the preceding sentence. Each Holder of a Class C Certificate
desiring to effect such Transfer shall, and does hereby agree to, indemnify the
Depositor and the Trustee against any liability that may result if the Transfer
is not so exempt or is not made in accordance with such federal and state laws.

         No Transfer of an ERISA Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Title I of ERISA or a plan subject to Section 4975 of the Code or a
plan subject to any applicable Federal, state or local law materially similar to
the foregoing provisions of ERISA and the Code ("Similar Law"), or a Person
acting on behalf of any such plan or using the assets of any such plan, (ii)
except in the case of a Class R Certificate which may not be transferred to a
transferee that does not provide the representation described in clause (i), a
representation that the transferee is an insurance company that is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60, 60 Fed. Reg. 35925 (July 12, 1995) ("PTCE 95-60")) and that the
purchase and holding of such Certificates is covered under Sections I and III of
PTCE 95-60, or (iii) in the case of any such ERISA Restricted Certificate, other
than a Class R Certificate, presented for registration in the name of an
employee benefit plan subject to ERISA, a plan subject to Section 4975 of the
Code, or a plan subject to Similar Law (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person acting
on behalf of any such plan, an Opinion of Counsel satisfactory to the Trustee to
the effect that the purchase and holding of such ERISA Restricted Certificate
will not result in a prohibited transaction under ERISA or the Code or Similar
Law and will not subject the Trustee to any obligation in addition to those
expressly undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee. For purposes of clause (i) of the preceding sentence,
such representation shall be deemed to have been made to the Trustee by the
transferee's acceptance of an ERISA Restricted Certificate (or the acceptance by
a Certificate Owner of the beneficial interest in any Class of ERISA Restricted
Certificates) unless the Trustee shall have received from the transferee an
alternative representation acceptable in form and substance to the Trustee.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA Restricted Certificate to or on behalf of an employee benefit plan
subject to Title I of ERISA, a plan subject to Section 4975 of the Code, or a
plan subject to Similar Law without the delivery to the Trustee of an Opinion of
Counsel satisfactory to the Trustee as described above shall be void and of no
effect. The Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA Restricted Certificate that is in fact not
permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements. The
Trustee shall be entitled, but not obligated, to recover from any Holder of any
ERISA Restricted Certificate that was in fact an employee benefit plan subject
to Title I of ERISA, a plan subject to Section 4975 of the Code, or a plan
subject to Similar Law or a Person acting on behalf of any such plan at the time
it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a plan, all payments made on such ERISA
Restricted Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to the last
preceding Holder of such Certificate that is not such a plan or Person acting on
behalf of a plan.

                                      -87-

<PAGE>

         (c)      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
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:

                  (i)      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.

                  (ii)     No Ownership Interest in a Class R Certificate may be
         purchased, transferred or sold, directly or indirectly, except in
         accordance with the provisions hereof. No Ownership Interest in a Class
         R Certificate may be registered on the Closing Date or thereafter
         transferred, and the Trustee shall not register the Transfer of any
         Class R Certificate unless, in addition to the certificates required to
         be delivered to the Trustee under subparagraph (b) above, the Trustee
         shall have been furnished with an affidavit (a "Transfer Affidavit") of
         the initial owner or the proposed transferee in the form attached
         hereto as Exhibit E-1 and an affidavit of the proposed transferor in
         the form attached hereto as Exhibit E-2. In the absence of a contrary
         instruction from the transferor of a Class R Certificate, declaration
         (11) in Appendix A of the Transfer Affidavit may be left blank. If the
         transferor requests by written notice to the Trustee prior to the date
         of the proposed transfer that one of the two other forms of declaration
         (11) in Appendix A of the Transfer Affidavit be used, then the
         requirements of this Section 5.02(c)(ii) shall not have been satisfied
         unless the Transfer Affidavit includes such other form of declaration.

                  (iii)    Each Person holding or acquiring any Ownership
         Interest in a Class R Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Class R Certificate, (B) to obtain
         a Transfer Affidavit from any Person for whom such Person is acting as
         nominee, trustee or agent in connection with any Transfer of a Class R
         Certificate and (C) not to Transfer its Ownership Interest in a Class R
         Certificate or to cause the Transfer of an Ownership Interest in a
         Class R Certificate to any other Person if it has actual knowledge that
         such Person is not a Permitted Transferee. Further, no transfer, sale
         or other disposition of any Ownership Interest in a Class R Certificate
         may be made to a person who is not a U.S. Person (within the meaning of
         section 7701 of the Code) unless such person furnishes the transferor
         and the Trustee with a duly completed and effective Internal Revenue
         Service Form W-8ECI (or any successor thereto) and the Trustee consents
         to such transfer, sale or other disposition in writing.

                  (iv)     Any attempted or purported Transfer of any Ownership
         Interest in a Class R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class 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 Section 5.02(b) and this Section 5.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this Agreement so long as the Transfer was registered after receipt of
         the related Transfer Affidavit. The Trustee shall be entitled but not
         obligated to recover from any Holder of a Class R Certificate that was
         in fact not a Permitted Transferee at the time it became a Holder or,
         at such subsequent time as it became other than a Permitted Transferee,
         all payments made on such Class R Certificate at and after either such
         time. Any such payments so recovered by the Trustee shall

                                      -88-

<PAGE>

         be paid and delivered by the Trustee to the last preceding Permitted
         Transferee of such Certificate.

                  (v)      At the option of the Holder of the Class R
         Certificate, the Class LT1-R Interest, the Class LT2-R and the Residual
         Interest in the Upper Tier REMIC may be severed and represented by
         separate certificates (with the separate certificate that represents
         the Residual Interest also representing all rights of the Class R
         Certificate to distributions attributable to a Pass-Through Rate on the
         Class R Certificate in excess of the Net Rate); provided, however, that
         such separate certification may not occur until the Trustee receives an
         Opinion of Counsel to the effect that separate certification in the
         form and manner proposed would not result in the imposition of federal
         tax upon the Trust Fund or any of the REMICs provided for herein or
         cause any of the REMICs provided for herein to fail to qualify as a
         REMIC; and provided further, that the provisions of Sections 5.02(b)
         and (c) will apply to each such separate certificate as if the separate
         certificate were a Class R Certificate. If, as evidenced by an Opinion
         of Counsel, it is necessary to preserve the REMIC status of any of the
         REMICs provided for herein, the Class LT1-R Interest, Class LT2-R
         Interest and the Residual Interest in the Upper Tier REMIC shall be
         severed and represented by separate certificates (with the separate
         certificate that represents the Residual Interest also representing all
         rights of the Class R Certificate to distributions attributable to a
         Pass-Through Rate on the Class R Certificate in excess of the Net
         Rate).

         The restrictions on Transfers of a Class R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee, which Opinion of Counsel shall not be
an expense of the Trustee or the Depositor, to the effect that the elimination
of such restrictions will not cause any of the REMICs provided for herein to
fail to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, any REMIC provided for
herein, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Class R Certificate hereby consents to any amendment
of this Agreement that, based on an Opinion of Counsel furnished to the Trustee,
is reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.

         (d)      The transferor of the Class R Certificate shall notify the
Trustee in writing upon the transfer of the Class R Certificate.

         (e)      The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Depositor or the Trustee.

         SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.

         If (a) any mutilated Certificate is surrendered to the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and of the ownership thereof and (b) there is delivered to the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee and its counsel) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not

                                      -89-

<PAGE>

the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.

         SECTION 5.04. Persons Deemed Owners.

         The Trustee and any agent of the Trustee may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Trustee nor any agent of the Trustee
shall be affected by any notice to the contrary.

         SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.

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

         SECTION 5.06. Book-Entry Certificates.

         The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. The Class R Certificates shall be definitive certificates. The
Book-Entry Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of a Book-Entry Certificate will receive a definitive certificate representing
such Certificate Owner's interest in such Certificates, except as provided in
Section 5.08. Unless and until definitive, fully registered Certificates
("Definitive Certificates") have been issued to the Certificate Owners of the
Book-Entry Certificates pursuant to Section 5.08:

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

         (b) the Depositor and the Trustee may deal with the Depository and the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of the
Book-Entry Certificates;

         (c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;

         (d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;

                                      -90-

<PAGE>

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

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

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

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

         In the event that any ERISA-Restricted Certificate is a Book-Entry
Certificate, each transferor and transferee of an interest in such
ERISA-Restricted Certificate shall be deemed to have made the representations
and warranties with respect to such transfer as may be required by Section 5.02,
the Trustee shall have no obligation to monitor compliance with such transfer
restrictions and the Trustee shall have no liability with respect to transfers
of Book-Entry Certificates made in violation of such transfer restrictions.

         SECTION 5.07. Notices to Depository.

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

         SECTION 5.08. Definitive Certificates.

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

                                      -91-

<PAGE>

performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.

         SECTION 5.09. Maintenance of Office or Agency.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies where Certificates may be surrendered
for registration of transfer or exchange. The Trustee initially designates its
offices at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services - Terwin Mortgage Trust, Series TMTS
2003-8HE as offices for such purposes. The Trustee will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.

                                   ARTICLE VI

                         THE DEPOSITOR AND THE SERVICERS

         SECTION 6.01. Respective Liabilities of the Depositor and the
Servicers.

         The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.

         SECTION 6.02. Merger or Consolidation of the Depositor or the
Servicers.

         Except as provided in the next paragraph, the Depositor and each
Servicer will each keep in full effect its existence, rights and franchises as a
corporation or banking association under the laws of the United States or under
the laws of one of the States thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.

         Any Person into which the Depositor or a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer shall be a party, or any Person succeeding to the
business of the Depositor or a Servicer, shall be the successor of the
Depositor, or such 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 (except for the
execution of an assumption agreement where such succession is not effected by
operation of law); provided, however, that the successor or surviving Person to
a Servicer shall be qualified to sell mortgage loans to, and to service mortgage
loans on behalf of, Fannie Mae or Freddie Mac.

         SECTION 6.03. Limitation on Liability of the Depositor, the Servicers
and Others.

         None of the Depositor, either Servicer nor any of the directors,
officers, employees or agents of the Depositor or either 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 Depositor, either Servicer or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor, either Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, either Servicer and any director, officer,
employee or agent of the Depositor or either Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Depositor, either Servicer
and any director, officer, employee or agent of the

                                      -92-

<PAGE>

Depositor or either Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense, incurred in connection with the
performance of their duties under this agreement or incurred in connection with
any audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. None of the
Depositor nor either Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and that in its opinion may involve it in any expense or
liability; provided, however, that any of the Depositor or either Servicer, in
its discretion, may undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and interests of the Trustee and the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be, expenses, costs and liabilities of the Trust Fund,
and the Depositor and the Servicer shall be entitled to be reimbursed therefor
out of the Collection Account as provided by Section 3.08 hereof.

         SECTION 6.04. Limitation on Resignation of Servicer.

         No Servicer shall resign from the obligations and duties hereby imposed
on it except (i) upon determination that its duties hereunder are no longer
permissible under applicable law or (ii) upon at least 30 days prior written
notice to the Trustee, the servicing rights associated with the servicing rights
and obligations with respect to the Mortgage Loans (the "Servicing Rights") may
be transferred by the Servicer or the Servicing Rights Owner to a successor
servicer, provided, however, that the successor servicer meets the conditions
for a successor servicer set forth in Section 7.02. The Servicing Rights Owner
may at its option (a) retain ownership of the Servicing Rights, in which case
the Servicing Rights Owner may make such arrangements for the compensation
provided for by this Agreement or (b) sell the Servicing Rights to such
successor servicer, in which case all amounts paid by the successor servicer to
the Servicing Rights Owner shall be the property solely of the Servicing Rights
Owner. Any such determination under clause (i) permitting the resignation of a
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No such resignation shall become effective until the Trustee or a
successor servicer meeting the eligibility requirements under Section 7.02 has
assumed such Servicer's responsibilities, duties, liabilities and obligations
hereunder. Any such resignation shall not relieve a Servicer of any of the
obligations specified in Section 7.01 and 7.02 as obligations that survive the
resignation or termination of a Servicer.

         The Trustee and the Depositor hereby specifically (i) consent to the
pledge and assignment by a Servicer or the Servicing Rights Owner of all of its
right, title and interest in, to and under this Agreement to a Servicing Rights
Pledgee, for the benefit of certain lenders, and (ii) agree that upon delivery
to the Trustee by a Servicing Rights Pledgee of a letter signed by a Servicer
whereby such Servicer shall resign as a servicer under this Agreement, the
Trustee shall appoint such Servicing Rights Pledgee or its designee as successor
servicer, provided that at the time of such appointment, such Servicing Rights
Pledgee or such designee meets the requirements of a successor servicer as set
forth herein and agrees in writing to be subject to the terms of this Agreement.
If, pursuant to this paragraph, the duties of a Servicer are transferred to a
successor servicer, the entire amount of the applicable Servicing Fee and other
compensation payable to such Servicer pursuant hereto shall thereafter be
payable to such successor servicer.

         SECTION 6.05. Errors and Omissions Insurance; Fidelity Bonds.

         Each Servicer shall, for so long as it acts as a servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents.

                                      -93-

<PAGE>

Each such policy or policies and bond shall, together, comply with the
requirements from time to time of Fannie Mae or Freddie Mac for Persons
performing servicing for mortgage loans purchased by Fannie Mae or Freddie Mac.
Each Servicer shall provide the Trustee, upon request, with copies of such
policies and fidelity bond or a certification from the insurance provider
evidencing such policies and fidelity bond. In the event that any such policy or
bond ceases to be in effect, such Servicer shall use its reasonable best efforts
to obtain a comparable replacement policy or bond from an insurer or issuer
meeting the requirements set forth above as of the date of such replacement. Any
such policy or fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee.

         SECTION 6.06. [RESERVED].

         SECTION 6.07. [RESERVED].

         SECTION 6.08. Limitation Upon Liability of the Credit Risk Manager.

         Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trust Fund or the
Certificateholders, for any action taken or for refraining from the taking of
any action made in good faith pursuant to this Agreement or the Credit Risk
Management Agreement, in reliance upon information provided under the Credit
Risk Management Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Credit Risk Manager or any such person
against liability that would otherwise be imposed by reason of willful
malfeasance, gross negligence or bad faith in its performance of its duties or
by reason of reckless disregard for its obligations and duties under this
Agreement or the applicable Credit Risk Management Agreement. The Credit Risk
Manager and any director, officer, employee, or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by the Servicer
pursuant to the Credit Risk Management Agreement in the performance of its
duties thereunder and hereunder.

                                   ARTICLE VII

                        DEFAULT; TERMINATION OF SERVICER

         SECTION 7.01. Events of Default.

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

                  (i)      any failure by the Servicer to make any Advance to
         deposit in the related Collection Account or the Certificate Account or
         remit to the Trustee any payment (excluding a payment required to be
         made under Section 4.01 hereof) required to be made under the terms of
         this Agreement, which failure shall continue unremedied for three
         Business Days or, with respect to a payment required to be made under
         Section 4.01 hereof, for one Business Day, after the date on which
         written notice of such failure shall have been given to the Servicer by
         the Trustee or the Depositor, or to the Trustee and the Servicer by the
         Holders of Certificates evidencing not less than 25% of the Voting
         Rights evidenced by the Certificates; or

                  (ii)     any failure by the Servicer to observe or perform in
         any material respect any other of the covenants or agreements on the
         part of the Servicer contained in this Agreement or any representation
         or warranty shall prove to be untrue, which failure or breach shall
         continue unremedied for a period of 60 days after the date on which
         written notice of such failure shall have been given to the Servicer by
         the Trustee or the Depositor, or to the Trustee by the Holders

                                      -94-

<PAGE>

         of Certificates evidencing not less than 25% of the Voting Rights
         evidenced by the Certificates; or

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

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

                  (v)      admission by the Servicer in writing of 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.

         If an Event of Default shall occur with respect to the Servicer, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied within the applicable grace period, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights evidenced by the Certificates, shall, by notice in writing to the
Servicer (with a copy to each Rating Agency), 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. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee. To the
extent the Event of Default resulted from the failure of the Servicer to make a
required Advance, the Trustee shall thereupon make any Advance described in
Section 4.01 hereof subject to Section 3.04 hereof. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of a Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the related Collection Account, or thereafter be
received with respect to the Mortgage Loans. The Servicer and the Trustee shall
promptly notify the Rating Agencies of the occurrence of an Event of Default or
an event that, with notice, passage of time, other action or any combination of
the foregoing would be an Event of Default, such notice to be provided in any
event within two Business Days of such occurrence.

         Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan that was due prior to the notice
terminating the Servicer's rights and obligations as a servicer hereunder and
received after such notice, that portion thereof to which the Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder. Notwithstanding anything herein
to the contrary, upon termination of the Servicer hereunder, any liabilities of
the Servicer which accrued prior to such termination shall survive such
termination. The Servicer shall continue to be entitled to the benefits

                                      -95-

<PAGE>

of Section 6.03 notwithstanding any termination hereunder, with respect to
events occurring prior to such termination.

         SECTION 7.02. Trustee to Act; Appointment of Successor.

         On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, to the extent provided in
Section 3.04, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make advances pursuant to Section 4.01. As
compensation therefor, subject to the last paragraph of Section 7.01, the
Trustee shall be entitled to all fees, compensation and reimbursement for costs
and expenses that such Servicer would have been entitled to hereunder if the
Servicer had continued to act hereunder. Notwithstanding the foregoing, if the
Trustee has become the successor to the Servicer in accordance with Section 7.01
hereof, the Trustee may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making Advances pursuant to Section 4.01
hereof or if it is otherwise unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which successor shall not adversely affect the
then current rating of the Certificates by each Rating Agency 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. Any successor
servicer shall be an institution that is a Fannie Mae and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000,
and that is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer (other
than liabilities of the Servicer under Section 6.03 hereof incurred prior to
termination of the Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; and provided further that each
Rating Agency acknowledges that its rating of the Certificates in effect
immediately prior to such assignment and delegation will not be qualified or
reduced as a result of such assignment and delegation; provided however, that
(i) in no event shall Ocwen or any Affiliate thereof be a successor servicer and
(ii) in no event shall Ocwen or any Affiliate thereof act as a subservicer or
subcontractor to any successor servicer. No appointment of a successor to the
Servicer hereunder shall be effective until the Trustee shall have consented
thereto and written notice of such proposed appointment shall have been provided
by the Trustee to each Certificateholder. The Trustee shall not resign as
servicer until a successor servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.04 hereof, act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer hereunder. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.

         Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.

                                      -96-

<PAGE>
         In the event of an Event of Default, notwithstanding anything to the
contrary above, the Trustee and the Depositor hereby agree that upon delivery to
the Trustee by the Servicing Rights Pledgee of a letter signed by the Servicer
within ten Business Days of when notification of such event shall have been
provided by the Trustee, whereunder the Servicer shall resign as a servicer
under this Agreement, the Servicing Rights Pledgee or its designee shall be
appointed as successor servicer (provided that at the time of such appointment
the Servicing Rights Pledgee or such designee meets the requirements of a
successor servicer set forth above) and the Servicing Rights Pledgee or such
designee agrees to be subject to the terms of this Agreement. Furthermore, in
the absence of receiving a letter from the Servicing Rights Pledgee, for a
period of 20 days following the date on which the Servicer shall have received a
notice of termination pursuant to this Section 7.02, the terminated Servicer or
Servicing Rights Owner may appoint a successor servicer that satisfies the
eligibility criteria of a successor servicer set forth above; provided that such
successor servicer agrees to make all Advances that would otherwise be made by
the Trustee under Section 7.01 as of the date of such appointment, and to
reimburse the terminated Servicer and/or the Trustee for any unreimbursed
Advances they have made in connection this Section 7.02 or Section 7.01. Any
proceeds received in connection with the appointment of such successor servicer
shall be the property of the terminated Servicer or the Servicing Rights Owner.
Such 20-day period shall terminate immediately (i) at the close of business on
the second Business Day of such 20-day period if (A) the Servicer was terminated
because of an Event of Default described in Section 7.01(i) for failing to make
a required Advance, and (B) the Servicer shall have failed to make (or cause to
be made) such Advance, or shall fail to reimburse (or cause to be reimbursed)
the Trustee for an Advance made by the Trustee, by the close of business on such
second Business Day, or (ii) at the close of business on the second Business Day
following the date (if any) during such 20-day period on which an Advance is due
to be made, if the terminated Servicer shall have failed to make (or caused to
be made) such Advance,  or the terminated Servicer shall have failed to
reimburse (or cause to be reimbursed) the Trustee for such Advance, by the close
of business on such second Business Day.

         SECTION 7.03. Notification to Certificateholders.

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

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

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

         SECTION 8.01. Duties of Trustee.

         The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. In case an Event of Default or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee,
shall, at the written direction of the majority of the Certificateholders, or
may, proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform on their
face to the requirements of this Agreement. If any such instrument is found not
to conform on its face to the requirements of this Agreement in a material
manner, the Trustee shall notify the person providing such Agreement of such
non-conformance, and if the instrument is not corrected to the its satisfaction,
the Trustee will provide notice thereof to the Certificateholders and take such
further action as directed by the

                                      -97-

<PAGE>

Certificateholders. Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall have no obligation to reconcile, recompute or verify
any information provided to it in any monthly remittance report received by it
from the Servicer or to calculate, recompute or verify the amount of any payment
made to or by it pursuant to either Cap Contract.

         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 misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability that would be imposed by
reason of its willful misfeasance or bad faith; provided, however, that:

                  (i)      prior to the occurrence of an Event of Default, and
         after the curing of all such Events of Default that may have occurred,
         the duties and obligations of the Trustee shall be determined solely by
         the express provisions of this Agreement, the Trustee shall not be
         liable, except for the performance of such duties and obligations as
         are specifically set forth in this Agreement, no implied covenants or
         obligations shall be read into this Agreement against the Trustee and,
         the Trustee may conclusively rely, as to the truth of the statements
         and the correctness of the opinions expressed therein, upon any
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Agreement that it reasonably believed in good
         faith to be genuine and to have been duly executed by the proper
         authorities respecting any matters arising hereunder;

                  (ii)     the Trustee shall not be liable for an error of
         judgment made in good faith by a Responsible Officer or Responsible
         Officers of the Trustee, unless the Trustee was negligent or acted in
         bad faith or with willful misfeasance; and

                  (iii)    the Trustee shall not be liable, individually or as
         Trustee, with respect to any action taken, suffered or omitted to be
         taken by it in good faith in accordance with the direction of the
         Holders in accordance with this Agreement relating to the time, method
         and place of conducting any proceeding for any remedy available to the
         Trustee, or exercising any trust or power conferred upon the Trustee
         under this Agreement, nor shall it be liable for any acts or omissions
         of the Servicer or the Custodian.

         SECTION 8.02. Certain Matters Affecting the Trustee.

         (a) Except as otherwise provided in Section 8.01:

                  (i)      the Trustee may request and conclusively rely upon
         and shall be fully protected in acting or refraining from acting upon
         any resolution, Officer's Certificate, certificate of auditors or any
         other certificate, statement, instrument, opinion, report, notice,
         request, consent, order, appraisal, bond or other paper or document
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties;

                  (ii)     the Trustee may consult with counsel of its choice
         and any advice or Opinion of counsel shall be full and complete
         authorization and protection in respect of any action taken or suffered
         or omitted by it hereunder in good faith and in accordance with such
         Opinion of counsel;

                  (iii)    the Trustee shall not be liable for any action taken,
         suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (iv)     prior to the occurrence of an Event of Default
         hereunder and after the curing of all Events of Default that may have
         occurred, the Trustee shall not be bound to make any

                                      -98-

<PAGE>

         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 the Holders of each Class of
         Certificates evidencing not less than 25% of the Voting Rights of such
         Class;

                  (v)      the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents, custodians, accountants or attorneys or independent
         contractors and the Trustee will not be responsible for any misconduct
         or negligence on the part of any agent, custodian, accountant, attorney
         or independent contractor appointed with due care by it hereunder;

                  (vi)     with respect to expenses that would be treated as
         "unanticipated expenses" within the meaning of Treasury Regulations
         Section 1.860G-1(b)(3)(ii) if paid by the Trust Fund or any of the
         REMICs provided for herein, the Trustee shall not be required to expend
         its own funds or otherwise incur any financial liability in the
         performance of any of its duties hereunder if it shall have reasonable
         grounds for believing that repayment of such funds or adequate
         indemnity against such liability is not assured to it;

                  (vii)    the Trustee shall not be liable, individually or as
         Trustee, for any loss on any investment of funds pursuant to this
         Agreement (other than as issuer of the investment security);

                  (viii)   the Trustee shall not be deemed to have knowledge of
         an Event of Default until a Responsible Officer of the Trustee shall
         have received written notice thereof;

                  (ix)     the Trustee shall be under no obligation to exercise
         any of the trusts or powers vested in it by this Agreement or to make
         any investigation of matters arising hereunder or to institute, conduct
         or defend any litigation hereunder or in relation hereto at the
         request, order or direction of any of the Certificateholders, pursuant
         to the provisions of this Agreement, unless such Certificateholders
         shall have offered to the Trustee security or indemnity satisfactory to
         it against the costs, expenses and liabilities that may be incurred
         therein or thereby;

                  (x)      if requested by the Servicer, the Trustee may appoint
         the Servicer as the trustee's attorney-in-fact in order to carry out
         and perform certain activities that are necessary or appropriate for
         the servicing and administration of the Mortgage Loans pursuant to this
         Agreement. Such appointment shall be evidenced by a power of attorney
         in such form as may be agreed to by the Trustee and the Servicer. The
         Trustee shall have no liability for any action or inaction of the
         Servicer in connection with such power of attorney and the Trustee
         shall be indemnified by the Servicer for all liabilities, costs and
         expenses incurred by the Trustee in connection with the Servicer's use
         or misuse of such powers of attorney; and

                  (xi)     the Depositor and the Servicers hereby approve of the
         appointment of Deutsche Bank National Trust Company to act as custodian
         pursuant to the Custodial Agreement attached hereto as Exhibit M and
         each further agree that the Trustee appointed Deutsche Bank National
         Trust Company to act as custodian with due care.

         (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement. The Trustee shall have no duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such

                                      -99-

<PAGE>

rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owning with
respect to, assessed or levied against, any part of the Trust Fund.

         SECTION 8.03. Trustee Not Liable for Mortgage Loans.

         The recitals contained herein shall be taken as the statements of the
Depositor or the Servicers, 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, the Cap Contracts, the Custodial
Agreement, any Certificate or the Credit Risk Management Agreement, of any
Mortgage Loan, or any related document other than with respect to the execution
and authentication of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicers of any funds paid to
the Depositor or the Servicers in respect of the Mortgage Loans or deposited in
or withdrawn from the Collection Account or the Certificate Account by the
Depositor or the Servicers.

         SECTION 8.04. Trustee May Own Certificates.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.

         SECTION 8.05. Trustee's Fees.

         The Trustee shall be entitled to the Trustee Fee and earnings on or
investment income with respect to funds in or credited to the Certificate
Account.

         SECTION 8.06. Indemnification of Trustee.

         (a) The Trustee and its respective directors, officers, employees and
agents shall be entitled to indemnification from the Trust Fund for any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental authority or any legal proceeding
incurred without negligence or willful misconduct on their part, arising out of,
or in connection with, (x) the acceptance or administration of the trusts
created hereunder or (y) the performance of their duties hereunder and under the
Custodial Agreement and the Cap Contracts, and the costs and expenses of
defending themselves against any claim in connection with the exercise or
performance of any of their powers or duties hereunder, provided that:

                  (i)      with respect to any such claim, the Trustee shall
         have given the Depositor written notice thereof promptly after the
         Trustee shall have knowledge thereof; provided that failure to so
         notify shall not relieve the Trust Fund of the obligation to indemnify
         the Trustee;

                  (ii)     while maintaining control over its own defense, the
         Trustee shall reasonably cooperate and consult with the Depositor in
         preparing such defense; and

                  (iii)    notwithstanding anything to the contrary in this
         Section 8.06, the Trust Fund shall not be liable for settlement of any
         such claim by the Trustee entered into without the prior consent of the
         Depositor, which consent shall not be unreasonably withheld or delayed.

         The provisions of this Section 8.06 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense under
any environmental law.

                                     -100-

<PAGE>

         (b) The Trustee shall be entitled to all reasonable expenses,
disbursements and advancements incurred or made by the Trustee in accordance
with this Agreement (including fees and expenses of its counsel and all persons
not regularly in its employment), except any such expenses, disbursements and
advancements that either (i) arise from its negligence, bad faith or willful
misconduct or (ii) do not constitute "unanticipated expenses" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii).

         (c) Any amounts for indemnification and reimbursement under this
Agreement may be withdrawn by the Trustee from the Certificate Account at any
time.

         (d) In connection with its appointment as Custodian, to the same extent
and for the matters covered herein and subject to the limitations set forth in
this Section 8.06, the Custodian may seek indemnification out of the Trust Fund.

         SECTION 8.07. Eligibility Requirements for Trustee.

         The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust powers
having a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.07 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor and its Affiliates; provided, however,
that such corporation cannot be an Affiliate of either Servicer.

         SECTION 8.08. Resignation and Removal of Trustee.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor by
mailing notice of resignation by first class mail, postage prepaid, to the
Certificateholders at their addresses appearing on the Certificate Register and
each Rating Agency, not less than 60 days before the date specified in such
notice when, subject to Section 8.09, such resignation is to take effect, and
(2) acceptance of appointment by a successor trustee in accordance with Section
8.09 and meeting the qualifications set forth in Section 8.07. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice or resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.

         If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 hereof and shall fail to resign after
written request thereto by the Depositor or (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and shall promptly appoint a successor trustee
by written instrument, in triplicate, one copy of which instrument shall be
delivered to the Trustee, one copy of which shall be delivered to the successor
trustee.

                                     -101-

<PAGE>

         The Holders evidencing at least 51% of the Voting Rights of all Classes
of Certificates may at any time remove the Trustee and the Depositor shall
appoint a successor trustee by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered by the successor trustee to the
Servicer, one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
each Rating Agency by the successor Trustee.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.09 hereof.

         SECTION 8.09. Successor Trustee.

         Any successor trustee appointed as provided in Section 8.08 hereof
shall execute, acknowledge and deliver to the Depositor 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, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein.

         No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 8.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.

         SECTION 8.10. Merger or Consolidation of Trustee.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.07 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding (except for the execution of an assumption agreement where such
succession is not effected by operation of law).

         SECTION 8.11. Appointment of Co-Trustee or Separate Trustee.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Trustee shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.11, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be
compensated by the Trust Fund and subject to the written approval of the
Servicers. The Trustee shall not be liable for the actions of any co-trustee

                                     -102-

<PAGE>

appointed with due care; provided that the appointment of a co-trustee shall not
relieve the Trustee of its obligations hereunder. If the Servicers shall not
have joined in such appointment within 15 days after the receipt by the
Servicers of a request to do so, or in the case an Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.07 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.09.

         Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

                  (i)      All rights, powers, duties and obligations conferred
         or imposed upon the Trustee shall be conferred or imposed upon and
         exercised or performed by the Trustee and such separate trustee or
         co-trustee jointly (it being understood that such separate trustee or
         co-trustee is not authorized to act separately without the Trustee
         joining in such act), except to the extent that under any law of any
         jurisdiction in which any particular act or acts are to be performed
         (whether as Trustee hereunder or as successor to the Servicer
         hereunder), the Trustee shall be incompetent or unqualified to perform
         such act or acts, in which event such rights, powers, duties and
         obligations (including the holding of title to the Trust Fund or any
         portion thereof in any such jurisdiction) shall be exercised and
         performed singly by such separate trustee or co-trustee, but solely at
         the direction of the Trustee;

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

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

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

         SECTION 8.12. Tax Matters.

         (a) It is intended that each of the REMICs provided for herein REMIC
shall constitute, and that the affairs of the Trust Fund shall be conducted so
as to allow each such REMIC to qualify as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. It is also
intended that each of the grantor trusts provided for in Section 2.07 hereof
shall constitute, and that the affairs of the Trust Fund shall be conducted so
as to allow each such grantor trust to qualify as, a

                                     -103-

<PAGE>

grantor trust under the provisions of Subpart E, Part I of Subchapter J of the
Code. In furtherance of such intention, the Trustee covenants and agrees that it
shall act as agent (and the Trustee is hereby appointed to act as agent) on
behalf of each of the REMICs and grantor trusts provided for herein and that in
such capacity it shall: (a) prepare and file, or cause to be prepared and filed,
in a timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax
Return (Form 1066 or any successor form adopted by the Internal Revenue Service)
and prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each of the REMICs and grantor
trusts provided for herein, containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or SS-4 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the Certificates
may contact for tax information relating thereto, together with such additional
information as may be required by such Form, and update such information at the
time or times in the manner required by the Code for each of the REMICs provided
for herein; (c) make or cause to be made elections, on behalf of each of the
REMICs provided for herein to be treated as a REMIC on the federal tax return of
such REMICs for their first taxable years (and, if necessary, under applicable
state law); (d) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when required
to be provided to them in accordance with the REMIC Provisions or other
applicable tax law or with respect to the grantor trusts provided for herein,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) provide information necessary for the
computation of tax imposed on the transfer of a Class R Certificate to a Person
that is not a Permitted Transferee, or an agent (including a broker, nominee or
other middleman) of a Person that is not a Permitted Transferee, or a
pass-through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of each of the REMICs
and grantor trusts provided for herein at all times that any Certificates are
outstanding so as to maintain the status of each of the REMICs provided for
herein as a REMIC under the REMIC Provisions and the status of each of the
grantor trusts provided for herein as a grantor trust under Subpart E, Part I of
subchapter J of the Code; (g) not knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
any of the REMICs provided for herein or result in the imposition of tax upon
any such REMIC; (h) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the grantor trust status
under Subpart E, Part I of Subchapter J of the Code of any of the grantor trusts
provided to herein or result in the imposition of tax upon any such grantor
trusts; (i) pay, from the sources specified in the last paragraph of this
Section 8.12, the amount of any federal, state and local taxes, including
prohibited transaction taxes as described below, imposed on each of the REMICs
or grantor trusts provided for herein prior to the termination of the Trust Fund
when and as the same shall be due and payable (but such obligation shall not
prevent the Trustee or any other appropriate Person from contesting any such tax
in appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (j) sign or cause to be signed by the required person federal,
state or local income tax or information returns; (k) maintain records relating
to each of the REMICs and grantor trusts provided for herein, including but not
limited to the income, expenses, assets and liabilities of each of the REMICs
and grantor trusts provided for herein, and the fair market value and adjusted
basis of the Trust Fund property determined at such intervals as may be required
by the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information, in each instance, to the extent such information is
provided by a Servicer as required under this Agreement; (l) request from the
Servicers such information as may be reasonably available to the Servicers and
required to prepare the returns, schedules, statements or information referred
to in Section 8.12(k), and (m) as and when

                                     -104-

<PAGE>

necessary and appropriate, represent each of the REMICs and grantor trusts
provided for herein in any administrative or judicial proceedings relating to an
examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any of the REMICs provided
for herein, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of any of the
REMICs provided for herein, and otherwise act on behalf of each of the REMICs
and grantor trusts provided for herein in relation to any tax matter involving
any of such REMICs or any controversy involving the Trust Fund.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby agrees to indemnify the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.

         In the event that any tax is imposed on "prohibited transactions" of
any of the REMICs provided for herein as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of the any of such REMICs as
defined in Section 860G(c) of the Code, on any contribution to the Trust Fund
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed including any minimum tax imposed on any REMIC created hereunder
pursuant to sections 23153 and 24874 of the California Revenue and Taxation
Code, if not paid as otherwise provided for herein, such tax shall be paid by
(i) the Trustee, if any such other tax arises out of or results from a breach by
the Trustee of any of its obligations under this Agreement or as a result of the
location of the Trustee, (ii) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party here fails to honor its obligations
under the preceding clauses (i) or (ii), any such tax will be paid first with
amounts otherwise to be distributed to the Class R Certificateholders (pro rata)
pursuant to Section 4.04, and second with amounts (other than amounts derived by
the Trust Fund from a payment on the Cap Contract) otherwise to be distributed
to all other Certificateholders in the following order of priority: first, to
the Class C Certificates (pro rata), second to the Class B-3 Certificates (pro
rata), third, to the Class B-2 Certificates (pro rata), fourth to the Class B-1
Certificates (pro rata), fifth, to the Class M-3 Certificates (pro rata), sixth,
to the Class M-2 Certificates (pro rata), seventh, to the Class M-1 Certificates
(pro rata) and eighth, to the Class A Certificates (pro rata). Notwithstanding
anything to the contrary contained herein, to the extent that such tax is
payable by the Class R Certificate, the Trustee is hereby authorized pursuant to
such instruction to retain on any Distribution Date, from the Holders of the
Class R Certificate (and, if necessary, from the Holders of all other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.

         (b)      Each of the Depositor and the Trustee agrees not to knowingly
or intentionally take any action or omit to take any action that would (i) cause
the termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein or
(ii) cause the termination of the grantor trust status of any of the grantor
trusts provided for herein or result in the imposition of a tax upon any of the
grantor trusts provided for herein.

                                     -105-

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

         SECTION 9.01. Termination upon Liquidation or Repurchase of all
Mortgage Loans.

         Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicers and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the exercise by Ocwen of an
Optional Termination on or after the Optional Termination Date; and (b) the
later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement,
as applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late Ambassador of the United
States to the Court of St. James's, living on the date hereof and (ii) the
Latest Possible Maturity Date.

         Any termination pursuant to clause (a) above shall be effected by Ocwen
purchasing all Mortgage Loans and REO Properties at a price equal to the amount
described in the definition of Optional Termination Price. Notwithstanding
anything to the contrary herein, the Optional Termination Price paid by Ocwen
shall be deposited by the Trustee directly into the Certificate Account
immediately upon Optional Termination.

         The right of Ocwen to effect an Optional Termination pursuant to clause
(a) above shall be conditioned upon the aggregate Stated Principal Balance of
the Mortgage Loans, at the time of any such repurchase, aggregating ten (10)
percent or less of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.

         SECTION 9.02. Final Distribution on the Certificates.

         If on any Determination Date, (i) the Trustee determines that there are
no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Trustee shall send a final
distribution notice promptly to each Certificateholder or (ii) the Trustee
determines that a Class of Certificates shall be retired after a final
distribution on such Class, the Trustee shall notify the Certificateholders
within seven (7) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the Certificates at the office of the Trustee
specified in such notice. If Ocwen elects to terminate the Trust Fund pursuant
to clause (a) of Section 9.01, at least 10 days prior to the date notice is to
be mailed to the affected Certificateholders, the Trustee shall notify the
Depositor of the date such electing party intends to terminate the Trust Fund
and of the applicable repurchase price of the Mortgage Loans and REO Properties.

         Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 10th
day and no later than the 15th day of the month immediately preceding the month
of such final distribution. Any such notice shall specify (a) the Distribution
Date upon which final distribution on the Certificates will be made upon
presentation and surrender of Certificates at the office therein designated, (b)
the location of the office or agency at which such presentation and surrender
must be made, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Trustee will give such notice to each Rating Agency at the time such notice
is given to Certificateholders.

                                     -106-

<PAGE>

         In the event such notice is given, each Servicer shall cause all funds
in the related Collection Account to be deposited in the Certificate Account on
the Business Day prior to the applicable Distribution Date in an amount equal to
the final distribution in respect of the Certificates. Upon such final deposit
with respect to the Trust Fund, certification to the Trustee that such required
amount has been deposited in the Trust Fund and the receipt by the Trustee of a
Request for Release therefor, the Trustee shall promptly release to the Mortgage
Files for the Mortgage Loans.

         Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class the amounts
allocable to such Certificates held in the Certificate Account in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

         In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto. Upon payment to the Class R Certificateholders of such
funds and assets, the Trustee shall have no further duties or obligations with
respect thereto.

         SECTION 9.03. Additional Termination Requirements.

         (a) In the event Ocwen exercises its option to effect an Optional
Termination as provided in Section 9.01, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of Ocwen to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of any of the REMICs provided for herein as defined in section
860F of the Code, or (ii) cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                  (i)      The Depositor shall establish a 90-day liquidation
         period and notify the Trustee thereof, which shall in turn specify the
         first day of such period in a statement attached to the final tax
         returns of each of the REMICs provided for herein pursuant to Treasury
         Regulation Section 1.860F-1. The Depositor shall satisfy all the
         requirements of a qualified liquidation under Section 860F of the Code
         and any regulations thereunder, as evidenced by an Opinion of Counsel
         obtained at the expense of Ocwen;

                  (ii)     During such 90-day liquidation period, and at or
         prior to the time of making the final payment on the Certificates, the
         Depositor as agent of the Trustee shall sell all of the assets of the
         Trust Fund for cash; and

                  (iii)    At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Class R Certificateholders all cash on
         hand (other than cash retained to meet outstanding claims), and the
         Trust Fund shall terminate at that time, whereupon the Trustee shall
         have no further duties or obligations with respect to sums distributed
         or credited to the Class R Certificateholders.

                                     -107-

<PAGE>

         (b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to specify the 90-day liquidation period for the Trust
Fund, which authorization shall be binding upon all successor
Certificateholders.

         (c) The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation prepared and delivered to it by Depositor
upon the written request of the Depositor, and the receipt of the Opinion of
Counsel referred to in Section 9.03(a) and to take such other action in
connection therewith as may be reasonably requested by the Depositor.

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

         SECTION 10.01. Amendment.

         This Agreement may be amended from time to time by the Depositor, the
Servicers and the Trustee, without the consent of any of the Certificateholders
to,

                  (i)      to cure any ambiguity or correct any mistake,

                  (ii)     to correct, modify or supplement any provision
         therein which may be inconsistent with any other provision herein,

                  (iii)    to add any other provisions with respect to matters
         or questions arising under this Agreement, or

                  (iv)     to modify, alter, amend, add to or rescind any of the
         terms or provisions contained in this Agreement, provided, however,
         that, in the case of clauses (iii) and (iv), such amendment will not,
         as evidenced by an Opinion of Counsel to such effect, adversely effect
         in any material respect the interests of any Holder; provided, further,
         however, that such amendment will be deemed to not adversely affect in
         any material respect the interest of any Holder if the Person
         requesting such amendment obtains a letter from each Rating Agency
         stating that such amendment will not result in a reduction or
         withdrawal of its rating of any Class of the Certificates, it being
         understood and agreed that any such letter in and of itself will not
         represent a determination as to the materiality of any such amendment
         and will represent a determination only as to the credit issues
         affecting any such rating.

         Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Servicers and the Trustee may at any time
and from time to time amend this Agreement to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of any of the REMICs provided for herein as REMICs under the
Code or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund or any of the REMICs provided for herein pursuant to the Code that would be
a claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee shall have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.

         This Agreement may also be amended from time to time by the Depositor,
the Servicers, the Trustee and the Holders of the Certificates affected thereby
evidencing not less than 66 2/3% of the Voting Rights for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of

                                     -108-

<PAGE>

Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66
2/3% or more of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.

         The Trustee may, but shall not be obligated to, enter into any
supplement, modification or waiver which affects its rights, duties or
obligations hereunder.

         SECTION 10.02. Counterparts.

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

         SECTION 10.03. Governing Law.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

                                     -109-

<PAGE>

         SECTION 10.04. Intention of Parties.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement within the meaning
of the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.

         The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

         SECTION 10.05. Notices.

         (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:

                  (i)      Any material change or amendment to this Agreement;

                  (ii)     The occurrence of any Event of Default that has not
         been cured;

                  (iii)    The resignation or termination of the Trustee or the
         Servicer and the appointment of any successor;

                  (iv)     The repurchase or substitution of Mortgage Loans
         pursuant to Sections 2.02, 2.03 and 3.12;

                  (v)      The final payment to Certificateholders; and

                  (vi)     Any change in the location of the Certificate
         Account.

         The Trustee shall promptly furnish or make available to each Rating
Agency copies of the following:

                  (i)      Each report to Certificateholders described in
         Section 4.05;

                  (ii)     Each annual statement as to compliance described in
         Section 3.17; and

                  (iii)    Each annual independent public accountants' servicing
         report described in Section 3.18.

                                     -110-

<PAGE>

All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Merrill Lynch Mortgage Investors, Inc. 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance; (b) in the case of the Trustee, Wells Fargo Bank Minnesota, National
Association, 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention:
Corporate Trust Services - Terwin Mortgage Trust, Series TMTS 2003-8HE, with a
copy to its Corporate Trust Office in Minneapolis, Minnesota; (c) in the case of
the Rating Agencies, (i) Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041; and (ii)
Moody's Investors Service, Inc., 99 Church Street, 4th Floor, New York, New York
10007; (d) in the case of the Credit Risk Manager, The Murrayhill Company, 1700
Lincoln Street, Suite 1600, Denver, Colorado 80203; (e) in the case of Ocwen,
Ocwen Federal Bank FSB, 1675 Palm Beach Lakes Boulevard, West Palm Beach,
Florida 33401; and (f) in the case of GreenPoint, GreenPoint Mortgage Funding
Inc., 100 Wood Hollow Drive, Novato, California 94945, and in the case of any of
the foregoing persons, such other addresses as may hereafter be furnished by any
such persons to the other parties to this Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.

         SECTION 10.06. Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         SECTION 10.07. Assignment.

         Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, 6.04 and 7.02, this Agreement may not be
assigned by either Servicer without the prior written consent of the Depositor
and the Trustee.

         SECTION 10.08. Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such indemnity satisfactory to
it as it may require against

                                     -111-

<PAGE>

the costs, expenses, and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.

         SECTION 10.09. Inspection and Audit Rights.

         Each Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor or the Trustee during the Servicer's normal
business hours, to examine all the books of account, records, reports and other
papers of such Servicer relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees, agents, counsel and independent public accountants (and by this
provision, the Servicer hereby authorizes such accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Nothing in this Section 10.09
shall limit the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the Servicer to provide access as provided in this Section 10.09 as a result
of such obligation shall not constitute a breach of this Section 10.09. Nothing
in this Section 10.09 shall require the Servicer to collect, create, collate or
otherwise generate any information that it does not generate in its usual course
of business. Any out-of-pocket expense incident to the exercise by the Depositor
or the Trustee of any right under this Section 10.09 shall be borne by the party
requesting such inspection (except in the case of the Trustee in which case such
expenses shall be borne by the requesting Certificateholder(s)).

         SECTION 10.10. Certificates Nonassessable and Fully Paid.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

         SECTION 10.11. [Reserved]

         SECTION 10.12. [Reserved]

         SECTION 10.13. [Reserved]

         SECTION 10.14. Assignment; Sales; Advance Facilities.

         (a) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), under which (1)
the Servicer assigns or pledges its rights under this Agreement to be reimbursed
for any or all Advances and/or Servicing Advances to (i) a Person, which may be
a special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other

                                     -112-

<PAGE>

assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, the Certificateholders or any other party shall be required before
the Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to a Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.

         (b) The Advance Financing Person shall only have rights to previously
unreimbursed Advances and/or Servicing Advances ("Advance Reimbursement
Amounts"). Advance Reimbursement Amounts (i) shall consist solely of amounts in
respect of Advances and/or Servicing Advances for which the Servicer would be
permitted to reimburse itself in accordance with Section 3.08 hereof, assuming
the Servicer had made the related Advance(s) and/or Servicing Advance(s) and
(ii) shall not consist of amounts payable to a successor servicer in accordance
with Section 3.08 hereof to the extent permitted under Section 10.14(e) below.

         (c) Notwithstanding the existence of an Advance Facility, the Servicer,
on behalf of the Advance Financing Person and the Servicer's Assignee, shall be
entitled to receive reimbursements of Advances and/or Servicing Advances in
accordance with Section 3.08 hereof, which entitlement may be terminated by the
Advance Financing Person pursuant to a written notice to the Trustee in the
manner set forth in Section 10.05 hereof. Upon receipt of such written notice,
the Servicer shall no longer be entitled to receive reimbursement for any
Advance Reimbursement Amounts and the Servicer's Assignee shall immediately have
the right to receive from the related Collection Account all Advance
Reimbursement Amounts. Notwithstanding the foregoing, and for the avoidance of
doubt, (i) the Servicer and/or the Servicer's Assignee shall only be entitled to
reimbursement of Advance Reimbursement Amounts hereunder from withdrawals from
the related Collection Account pursuant to Section 3.08 of this Agreement and
shall not otherwise be entitled to make withdrawals or receive amounts that
shall be deposited in the Certificate Account pursuant to Section 3.05(f)
hereof, and (ii) neither the Trustee nor the Certificateholders shall have any
right to, or otherwise be entitled to, receive any Advance Reimbursement Amounts
to which the Servicer or Servicer's Assignee, as applicable, shall be entitled
pursuant to Section 3.08 hereof. An Advance Facility may be terminated by the
joint written direction of the Servicer and the related Advance Financing
Person. Written notice of such termination shall be delivered to the Trustee in
the manner set forth in Section 10.05 hereof. Neither the Depositor nor the
Trustee shall, as a result of the existence of any Advance Facility, have any
additional duty or liability with respect to the calculation or payment of any
Advance Reimbursement Amount, nor, as a result of the existence of any Advance
Facility, shall the Depositor or the Trustee have any additional responsibility
to track or monitor the administration of the Advance Facility or the payment of
Advance Reimbursement Amounts to the Servicer's Assignee. The Servicer shall
indemnify the Depositor, the Trustee, any successor servicer and the Trust Fund
for any claim, loss, liability or damage resulting from any claim by the related
Advancing Financing Person, except to the extent that such claim, loss,
liability or damage resulted from or arose out of negligence, recklessness or
willful misconduct on the part of the Depositor, the Trustee or any successor
servicer, as the case may be, or failure by the successor servicer or the
Trustee, as the case may be, to remit funds as required by this Agreement or the
commission of an act or

                                     -113-

<PAGE>

omission to act by the successor servicer or the Trustee, as the case may be,
and the passage of any applicable cure or grace period, such that an Event of
Default under this Agreement occurs or such entity is subject to termination for
cause under this Agreement. The Servicer shall maintain and provide to any
successor servicer and, upon request, the Trustee a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any Advancing Financing Person. The successor servicer shall be
entitled to rely on any such information provided by the predecessor servicer,
and the successor servicer shall not be liable for any errors in such
information.

         (d) [Reserved].

         (e) As between a predecessor servicer and its Advance Financing Person,
on the one hand, and a successor servicer and its Advance Financing Person, if
any, on the other hand, Advance Reimbursement Amounts on a loan-by-loan basis
with respect to each Mortgage Loan as to which an Advance and/or Servicing
Advance shall have been made and be outstanding shall be allocated on a
"first-in, first out" basis. In the event the Servicer's Assignee shall have
received some or all of an Advance Reimbursement Amount related to Advances
and/or Servicing Advances that were made by a Person other than such predecessor
servicer or its related Advance Financing Person in error, then such Servicer's
Assignee shall be required to remit any portion of such Advance Reimbursement
Amount to each Person entitled to such portion of such Advance Reimbursement
Amount. Without limiting the generality of the foregoing, the Servicer shall
remain entitled to be reimbursed by the Advance Financing Person for all
Advances and/or Servicing Advances funded by the Servicer to the extent the
related Advance Reimbursement Amounts have not been assigned or pledged to such
Advance Financing Person or Servicer's Assignee.

         (f) For purposes of any Officer's Certificate of the Servicer made
pursuant to Section 4.01, any Non-Recoverable Advance referred to therein may
have been made by such Servicer or any predecessor servicer. In making its
determination that any Advance or Servicing Advance theretofore made has become
a Non-Recoverable Advance, the Servicer shall apply the same criteria in making
such determination regardless of whether such Advance or Servicing Advance shall
have been made by the Servicer or any predecessor servicer.

                  Any amendment to this Section 10.14 or to any other provision
of this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.14, including
amendments to add provisions relating to a successor servicer, may be entered
into by the Trustee, the Depositor and the Servicers without the consent of any
Certificateholder, provided such amendment complies with Section 10.01 hereof.
All reasonable costs and expenses (including attorneys' fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. The parties
hereto hereby acknowledge and agree that: (a) the Advances and/or Servicing
Advances financed by and/or pledged to an Advance Financing Person under any
Advance Facility are obligations owed to the Servicer payable only from the cash
flows and proceeds received under this Agreement for reimbursement of Advances
and/or Servicing Advances only to the extent provided herein, and the Trustee
and the Trust Fund are not, as a result of the existence of any Advance
Facility, obligated or liable to repay any Advances and/or Servicing Advances
financed by the Advance Financing Person; (b) the Servicer will be responsible
for remitting to the Advance Financing Person the applicable amounts collected
by it as reimbursement for Advances and/or Servicing Advances funded by the
Advance Financing Person, subject to the provisions of this Agreement; and (c)
the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and any Advance
Financing Person.

                                     -114-

<PAGE>

         IN WITNESS WHEREOF, the Depositor, the Servicers 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.

                                        MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                                as Depositor

                                        By: ____________________________________
                                        Name:  Matthew Whalen
                                        Title: President

                                        WELLS FARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION,
                                           not in its individual capacity,
                                                but solely as Trustee

                                        By: ____________________________________
                                        Name:  Sandra Whalen
                                        Title: Vice President

                                        OCWEN FEDERAL BANK FSB,
                                                as Servicer

                                        By: ____________________________________
                                        Name:
                                        Title:

                                        GREENPOINT MORTGAGE FUNDING INC.,
                                                as Servicer

                                        By: ____________________________________
                                        Name:
                                        Title:

<PAGE>

                                        Acknowledged and Agreed for purposes of
                                        Article II

                                        TERWIN ADVISORS LLC,
                                                as Seller

                                        By: ____________________________________

                                        Name:
                                        Title:

                                        Acknowledged and Agreed for purposes of
                                        Section 3.19 and Section 6.08

                                        THE MURRAYHILL COMPANY,
                                                as Credit Risk Manager

                                        By: ____________________________________
                                        Name:
                                        Title:

<PAGE>

                                    EXHIBIT A

                          FORMS OF OFFERED CERTIFICATES

                             [INTENTIONALLY OMITTED]

                                       A-1

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                             [INTENTIONALLY OMITTED]

                                      B-1-1

<PAGE>

                                    EXHIBIT C

            SCHEDULE OF MORTGAGE LOANS WITH NO PREPAYMENT ENFORCEMENT

                             [INTENTIONALLY OMITTED]

                                       C-1

<PAGE>

                                    EXHIBIT D

                         FORM OF CUSTODIAN CERTIFICATION

                                     [DATE]

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

GreenPoint Mortgage Funding Inc.
100 Wood Hollow Drive
Novato, California 94945

Ocwen Federal Bank FSB
1675 Palm Beach Lakes Boulevard
West Palm Beach, Florida 33401

Re:      Pooling and Servicing Agreement dated as of December 1, 2003 among
         Merrill Lynch Mortgage Investors, Inc., as depositor, Ocwen Federal
         Bank FSB, as a servicer, GreenPoint Mortgage Funding Inc. as a servicer
         and Wells Fargo Bank Minnesota, National Association, as trustee,
         relating to Terwin Mortgage Trust, Asset-Backed Certificates, Series
         TMTS 2003-8HE

Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that [,except
as set forth in Schedule A hereto,] as to each Mortgage Loan listed in the
Mortgage Loan Schedule attached hereto (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
the Mortgage Loan Schedule and has determined that:

         (i)      All documents in the Mortgage File required to be delivered to
the Trustee pursuant to Section 2.01 of the Pooling and Servicing Agreement are
in its possession;

         (ii)     In connection with each Mortgage Loan or Assignment thereof as
to which documentary evidence of recording was not received on the Closing Date,
it has received evidence of such recording; and

         (iii)    Such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond confirming (i) that the Mortgage Loan
number and the name of the Mortgagor in each Mortgage File conform to the
respective Mortgage Loan number and name listed on the Mortgage Loan Schedule
and (ii) the existence in each Mortgage File of each of the documents listed in
subparagraphs (i)(A) through (G), inclusive, of Section 2.01 in the Agreement.
The Trustee makes no representations or warranties as to the validity, legality,
recordability, sufficiency, enforceability or genuineness of any of

                                      D-1

<PAGE>

the documents contained in each Mortgage Loan or the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.

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

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                        as Custodian

                                        By: ____________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                      D-2

<PAGE>

                                   EXHIBIT E-1

                           FORM OF TRANSFEREE'S LETTER
                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                 ASSET-BACKED CERTIFICATES, SERIES TMTS 2003-8HE

                                     [DATE]

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust Services - Terwin Mortgage Trust, Series TMTS
2003-8HE

Ladies and Gentlemen:

         We propose to purchase Terwin Mortgage Trust, Asset-Backed
Certificates, Series TMTS 2003-8HE, Class R, described in the Prospectus
Supplement, dated December 24, 2003, and Prospectus, dated July 3, 2003.

         1.       We certify that (a) we are not a disqualified organization and
(b) we are not purchasing such Class R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.

         2.       We certify that (a) we have historically paid our debts as
they became due, (b) we intend, and believe that we will be able, to continue to
pay our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class R Certificate, and (d) we intend
to pay any taxes associated with holding the Class R Certificate as they become
due and (e) we will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.

         3.       We acknowledge that we will be the beneficial owner of the
Class R Certificate and:*

                  _________         The Class R Certificate will be registered
                                    in our name.

________________________________

* Check appropriate box and if necessary fill in the name of the Transferee's
nominee.

                                      E-1-1

<PAGE>

                  _________         The Class R Certificate will be held in the
                                    name of our nominee, _________________,
                                    which is not a disqualified organization.

         4.       We certify that we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a plan within the meaning of Section 4975 of the Code or a plan
subject to federal, state or local law materially similar to the foregoing
provisions of ERISA and the Code (each, a "Plan"), and are not directly or
indirectly purchasing the Class R Certificate on behalf of, as investment
manager of, as named fiduciary of, as trustee of or with the assets of a Plan or
directly or indirectly purchasing the Class R Certificate with the assets of any
insurance company separate account or general account containing any "plan
assets" or of any Plan.

         5.       We certify that (i) we are a U.S. person or (ii) we will hold
the Class R Certificate in connection with the conduct of a trade or business
within the United States and have furnished the transferor, the Trustee and the
Trustee with a duly completed and effective Internal Revenue Service Form W-8ECI
or successor form at the time and in the manner required by the Code; for this
purpose the term "U.S. person" means a citizen or resident of the United States,
a corporation, or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal income
tax regardless of the source of its income, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such U.S. persons have the authority to control all
substantial decisions of the trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons. We agree that any breach by us
of this certification shall render the transfer of any interest in the Class R
Certificate to us absolutely null and void and shall cause no rights in the
Class R Certificate to vest in us.

         6.       We agree that in the event that at some future time we wish to
transfer any interest in the Class R Certificate, we will transfer such interest
in the Class R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us, the Trustee and the
Trustee with a duly completed and effective Internal Revenue Service Form W-8ECI
or successor form at the time and in the manner required by the Code and (iii)
has delivered to the Trustee and the Trustee a letter in the form of this letter
(including the affidavit appended hereto) and, we will provide the Trustee and
the Trustee a written statement substantially in the form of Exhibit E-2 to the
Agreement.

         7.       We hereby designate _______________________ as our fiduciary
to act as the tax matters person for each of the REMICs provided for in the
Agreement as to which the Class R Certificate represents the residual interest
for federal income tax purposes.

                                      E-1-2

<PAGE>

                                        Very truly yours,

                                        [PURCHASER]

                                        By: ____________________________________
                                            Name:
                                            Title:

Accepted as of __________ __, 200__

MERRILL LYNCH MORTGAGE INVESTORS, INC.

By: ________________________________
    Name:
    Title:

                                      E-1-3
<PAGE>

                                   APPENDIX A

                                    Affidavit pursuant to (i) Section 860E(e)(4)
                                    of the Internal Revenue Code of 1986, as
                                    amended, and (ii) certain provisions of the
                                    Pooling and Servicing Agreement

Under penalties of perjury, the undersigned declares that the following is true:

(1)      He or she is an officer of _________________________ (the
         "Transferee"),

(2)      the Transferee's Employer Identification number is __________,

(3)      the Transferee is not a "disqualified organization" (as defined below),
         has no plan or intention of becoming a disqualified organization, and
         is not acquiring any of its interest in the Terwin Mortgage Trust,
         Asset-Backed Certificates, Series TMTS 2003-8HE, Class R on behalf of a
         disqualified organization or any other entity,

(4)      unless Merrill Lynch Mortgage Investors, Inc.("MLMI") has consented to
         the transfer to the Transferee by executing the form of Consent affixed
         as Appendix B to the Transferee's Letter to which this Certificate is
         affixed as Appendix A, the Transferee is a "U.S. person" (as defined
         below),

(5)      that no purpose of the transfer is to avoid or impede the assessment or
         collection of tax,

(6)      the Transferee has historically paid its debts as they became due,

(7)      the Transferee intends, and believes that it will be able, to continue
         to pay its debts as they become due in the future,

(8)      the Transferee understands that, as beneficial owner of the Class R
         Certificate, it may incur tax liabilities in excess of any cash flows
         generated by the Class R Certificate,

(9)      the Transferee intends to pay any taxes associated with holding the
         Class R Certificate as they become due,

(10)     the Transferee consents to any amendment of the Pooling and Servicing
         Agreement that shall be deemed necessary by MLMI (upon advice of
         counsel) to constitute a reasonable arrangement to ensure that the
         Class R Certificate will not be owned directly or indirectly by a
         disqualified organization, and

(11)     IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
         transfer is not a direct or indirect transfer of the Class R
         Certificate to a foreign permanent establishment or fixed base (within
         the meaning of an applicable income tax treaty) of the Transferee, and
         as to each of the residual interests represented by the Class R
         Certificate, the present value of the anticipated tax liabilities
         associated with holding such residual interest does not exceed the sum
         of:

                                     E-1-4
<PAGE>

         (A)      the present value of any consideration given to the Transferee
                  to acquire such residual interest;

         (B)      the present value of the expected future distributions on such
                  residual interest; and

         (C)      the present value of the anticipated tax savings associated
                  with holding such residual interest as the related REMIC
                  generates losses.

         For purposes of this declaration, (i) the Transferee is assumed to pay
         tax at a rate equal to the highest rate of tax specified in Section
         11(b)(1) of the Code, but the tax rate specified in Section 55(b)(1)(B)
         of the Code may be used in lieu of the highest rate specified in
         Section 11(b)(1) of the Code if the Transferee has been subject to the
         alternative minimum tax under Section 55 of the Code in the preceding
         two years and will compute its taxable income in the current taxable
         year using the alternative minimum tax rate, and (ii) present values
         are computed using a discount rate equal to the Federal short-term rate
         prescribed by Section 1274(d) of the Code for the month of the transfer
         and the compounding period used by the Transferee;]

[(11)    (A)      at the time of the transfer, and at the close of each of the
                  Transferee's two fiscal years preceding the Transferee's
                  fiscal year of transfer, the Transferee's gross assets for
                  financial reporting purposes exceed $100 million and its net
                  assets for financial reporting purposes exceed $10 million;
                  and

         (B)      the Transferee is an eligible corporation as defined in
                  Treasury regulations Section 1.860E-1(c)(6)(i) and has agreed
                  in writing that any subsequent transfer of the Class R
                  Certificate will be to another eligible corporation in a
                  transaction that satisfies Treasury regulation Sections
                  1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and
                  1.860E-1(c)(5) and such transfer will not be a direct or
                  indirect transfer to a foreign permanent establishment (within
                  the meaning of an applicable income tax treaty) of a domestic
                  corporation.

For purposes of this declaration, the gross and net assets of the Transferee do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]

(12)     The Transferee will not cause income from the Class R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.

                                     E-1-5
<PAGE>

For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).

_________________________________

By: _____________________________

_________________________________

         Address of Investor for receipt of distribution:

         Address of Investor for receipt of tax information:

         (Corporate Seal)

         Attest:

_________________________________
_________________________________, Secretary

                                     E-1-6
<PAGE>

         Personally appeared before me the above-named ______________, known or
         proved to me to be the same person who executed the foregoing
         instrument and to be the _______ of the Investor, and acknowledged to
         me that he executed the same as his free act and deed and the free act
         and deed of the Investor.

         Subscribed and sworn before me this         day of

                 , 200_ .

_________________________________
         Notary Public

         County of ____________________
         State of _____________________
         My commission expires the ________ day of ______________

                                              By: ____________________________
                                                  Name:   ____________________
                                                  Title:  ____________________

Dated: _____________

                                     E-1-7
<PAGE>

                                   EXHIBIT E-2

                         FORM OF TRANSFEROR'S AFFIDAVIT
                     MERRILL LYNCH MORTGAGE INVESTORS, INC.
                 ASSET-BACKED CERTIFICATES, SERIES TMTS 2003-8HE

                                     [DATE]

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention:Corporate Trust Services - Terwin Mortgage Trust, Series TMTS 2003-8HE

Re:      Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS 2003-8HE

                  _______________________ (the "Transferor") has reviewed the
attached affidavit of _____________________________ (the "Transferee"), and has
no actual knowledge that such affidavit is not true, and has no reason to
believe that the Transferee has the intention to impede the assessment or
collection of any federal, state or local taxes legally required to be paid with
respect to the Class R Certificate referred to in the attached affidavit. In
addition, the Transferor has conducted a reasonable investigation at the time of
the transfer and found that the Transferee had historically paid its debts as
they came due and found no significant evidence to indicate that the Transferee
will not continue to pay its debts as they become due.

                                             Very truly yours,

                                             _________________________________

                                             Name:
                                             Title:

                                     E-2-1
<PAGE>

                                    EXHIBIT F

                       FORM OF TRANSFEROR CERTIFICATE FOR
                              CLASS C CERTIFICATES

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention:  Corporate Trust Services - TMTS 2003-8HE

RE:      Terwin Mortgage Trust, Asset-Backed Certificates, Series 2003-8HE

Ladies and Gentlemen:

         In connection with our disposition of the Class C Certificate, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of December 1,
2003, among Merrill Lynch Mortgage Investors, Inc., as depositor, Ocwen Federal
Bank FSB, as a servicer, GreenPoint Mortgage Funding Inc., as a servicer and
Wells Fargo Bank Minnesota, National Association, as trustee.

                                             Very truly yours,

                                             _________________________________
                                             Name of Transferor

                                             By: _____________________________
                                             Name:
                                             Title

                                      F-1
<PAGE>

                                    EXHIBIT G

                            FORM OF INVESTMENT LETTER
                              (ACCREDITED INVESTOR)

                                     [DATE]

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention:  Corporate Trust Services - TMTS 2003-8HE

Re:    Terwin Mortgage Trust, Asset-Backed Certificates, Series 2003-8HE Class C

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of Terwin Mortgage Trust, Asset-Backed Certificates,
Series 2003-8HE, Class C (the "Certificates"), issued pursuant to a Pooling and
Servicing Agreement, dated as of December 1, 2003 (the "Pooling and Servicing
Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor (the
"Depositor"), Ocwen Federal Bank FSB, as a servicer ( "Ocwen" or a "Servicer"),
GreenPoint Mortgage Funding Inc., as a servicer ("GreenPoint" or a
"Servicer")and Wells Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN
THE NAME OF ____________________, AS NOMINEE FOR _________________.] All terms
used and not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

         1.       The Purchaser understands that (a) the Certificates have not
been registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.

         2.       The Certificates will bear a legend to the following effect:

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "ACT"), THE INVESTMENT COMPANY ACT OF 1940, AS
         AMENDED (THE "1940 ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS,
         AND MAY NOT, DIRECTLY OR INDIRECTLY, BE SOLD OR OTHERWISE TRANSFERRED,
         OR OFFERED FOR SALE, UNLESS SUCH TRANSFER IS NOT SUBJECT TO
         REGISTRATION UNDER THE ACT, THE 1940 ACT AND ANY APPLICABLE STATE
         SECURITIES LAWS AND SUCH TRANSFER ALSO COMPLIES WITH THE OTHER

                                      G-1
<PAGE>

         PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT. NO
         TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL
         HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO THE SERVICER (A)
         AN INVESTMENT LETTER FROM THE PROSPECTIVE INVESTOR; AND (B)
         REPRESENTATIONS FROM THE TRANSFEROR REGARDING THE OFFERING AND SALE OF
         THE CERTIFICATES.

         NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE TRUSTEE SHALL
         HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF
         THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE EITHER (A) IS NOT
         AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF
         THE CODE OR ANY APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW")
         (EACH, A "PLAN") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF
         ERISA AND THE CODE, AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING ANY
         CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY
         OF, AS TRUSTEE OF OR WITH ASSETS OF A PLAN OR, IN THE CASE OF AN
         INSURANCE COMPANY, THE ASSETS OF ANY SEPARATE ACCOUNTS CONTAINING ANY
         "PLAN ASSETS" PURSUANT TO THE DEPARTMENT OF LABOR REGULATIONS SET FORTH
         IN 29 CFR Section 2510.3-101 TO EFFECT SUCH ACQUISITION OR (B) A
         REPRESENTATION LETTER THAT THE TRANSFEREE IS AN INSURANCE COMPANY THAT
         IS PURCHASING THE CERTIFICATE WITH FUNDS CONTAINED IN AN "INSURANCE
         COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(E) OF
         PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, 60 FED. REG. 35925 (JULY
         12, 1995) ("PTCE 95-60"), AND THE PURCHASE AND HOLDING OF THE
         CERTIFICATE IS COVERED UNDER SECTIONS I AND III OF PTCE 95-60, OR (II)
         AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE AND HOLDING OF
         THE CERTIFICATE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER
         ERISA, THE CODE OR SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE OR THE
         TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN
         THE POOLING AND SERVICING AGREEMENT, WHICH REPRESENTATION LETTER OR
         OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE.

         3.       The Purchaser is acquiring the Transferred Certificates for
its own account [FOR INVESTMENT ONLY]* and not with a view to or for sale or
other transfer in connection with any distribution of the Transferred
Certificates in any manner that would violate the Securities Act or any
applicable state securities laws, subject, nevertheless, to the understanding
that disposition of the Purchaser's property shall at all times be and remain
within its control.

         4.       The Purchaser (a) is a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters, and in particular in such matters related to securities
similar to the Certificates, such that it is capable of evaluating the merits
and risks of investment in the Certificates, (b) is able to bear the economic
risks of such an investment and (c) is an "accredited investor" within the
meaning of Rule 501(a) promulgated pursuant to the Securities Act.

         5.       The Purchaser will not nor has it authorized nor will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other

--------

* Not required of a broker/dealer purchaser.

                                      G-2

<PAGE>

similar security to any person in any manner, (b) solicit any offer to buy or to
accept a pledge, disposition or other transfer of any Certificate, any interest
in any Certificate or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any Certificate, any
interest in any Certificate or any other similar security with any person in any
manner, (d) make any general solicitation by means of general advertising or in
any other manner, or (e) take any other action, that would constitute a
distribution of any Certificate under the Securities Act or the Investment
Company Act of 1940, as amended (the "1940 Act"), that would render the
disposition of any Certificate a violation of Section 5 of the Securities Act or
any state securities law, or that would require registration or qualification
pursuant thereto. Neither the Purchaser nor anyone acting on its behalf has
offered the Certificates for sale or made any general solicitation by means of
general advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.

         6.       The Purchaser either (A) is not an employee benefit plan
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or a plan within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") or a plan subject to federal state
or local law materially similar to the foregoing provisions of ERISA and the
Code ("Similar Law") (each, a "Plan"), and is not directly or indirectly
purchasing any Certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of or with assets of a Plan or directly or indirectly
purchasing any certificates with the assets of any insurance company separate
account containing any "plan assets" or of any Plan, (B) is an insurance company
that is purchasing the Certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60, 60 Fed. Reg. 35925 (July 12, 1995) ("PTCE
95-60"), and the purchase and holding of the Certificate is covered under
Sections I and III of PTCE 95-60, or (C) herewith delivers to the Trustee an
Opinion of Counsel satisfactory to the Trustee, and upon which the Trustee shall
be entitled to rely, to the effect that the purchase and holding of the
Certificate by the Purchaser will not result in a prohibited transaction under
ERISA, the Code or Similar Law and will not subject the Trustee to any
obligation in addition to those expressly undertaken in the Pooling and
Servicing Agreement, which Opinion of Counsel shall not be an expense of the
Trustee.

         7.       Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit [H] to the Pooling and Servicing Agreement.

         8.       The Purchaser agrees to indemnify the Trustee, the Servicers
and the Depositor against any liability that may result from any
misrepresentation made herein.

                                             Very truly yours,

                                             [PURCHASER]

                                             By:_______________________________
                                                Name:
                                                Title:

                                      G-3
<PAGE>

                                    EXHIBIT H

                       FORM OF RULE 144A INVESTMENT LETTER
                         (QUALIFIED INSTITUTIONAL BUYER)

                                     [DATE]

Wells Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention:  Corporate Trust Services - TMTS 2003-8HE

Re:    Terwin Mortgage Trust, Asset-Backed Certificates, Series 2003-8HE Class C

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
________________ (the "Transferor") $_______ by original principal balance (the
"Transferred Certificates") of the Terwin Mortgage Trust, Asset-Backed
Certificates, Series 2003-8HE, Class C (the "Certificates"), issued pursuant to
a Pooling and Servicing Agreement, dated as of December 1, 2003 (the "Pooling
and Servicing Agreement"), among Merrill Lynch Mortgage Investors, Inc., as
depositor (the "Depositor"), Ocwen Federal Bank FSB, as a servicer ( "Ocwen" or
a "Servicer"), GreenPoint Mortgage Funding Inc., as a servicer ("GreenPoint" or
a "Servicer")and Wells Fargo Bank Minnesota, National Association, as trustee
(the "Trustee"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE
IN THE NAME OF ____________________, AS NOMINEE FOR __________________.] All
terms used and not otherwise defined herein shall have the meanings set forth in
the Pooling and Servicing Agreement.

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:

         In connection with our acquisition of the above Transferred
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferred Certificates, (d)
we either (i) are not an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan
within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") or a plan subject to federal, state or local law materially
similar to the foregoing provisions of ERISA and the Code ("Similar Law") (each,
a "Plan"), nor are we directly or

                                      H-1
<PAGE>

indirectly purchasing any Certificate on behalf of, as investment manager of, as
named fiduciary of, as trustee of or with assets of a Plan or directly or
indirectly purchasing any certificates with the assets of any insurance company
separate account containing any "plan assets" or of any Plan, (ii) are an
insurance company that is purchasing the Transferred Certificates with funds
contained in an "insurance company general account" (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg. 35925
(July 12, 1995) ("PTCE 95-60"), and the purchase and holding of the Certificates
is covered under Sections I and III of PTCE 95-60, or (iii) herewith have
delivered to the Trustee an Opinion of Counsel satisfactory to the Trustee, and
upon which the Trustee shall be entitled to rely, to the effect that the
purchase and holding of the Transferred Certificates by the Purchaser will not
result in a prohibited transaction under ERISA, the Code or Similar Law and will
not subject the Trustee to any obligation in addition to those expressly
undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, (e) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
one of the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. We are aware that the sale of the Transferred Certificates to us is
being made in reliance on Rule 144A. We are acquiring the Transferred
Certificates for our own account or for resale pursuant to Rule 144A and further
understand that such Certificates may be resold, pledged or transferred only (i)
to a person reasonably believed by us, based upon certifications of such
purchaser or information we have in our possession, to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.

         We agree to indemnify the Trustee, the Servicers and the Depositor
against any liability that may result from any misrepresentation made herein.

                                             Very truly yours,

                                             [PURCHASER]

                                             By:______________________________
                                                Name:
                                                Title:

                                      H-2
<PAGE>

                                                                         ANNEX 1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]

         The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

         1.       As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

         2.       In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________* in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.

                  ____     Corporation, etc. The Buyer is a corporation (other
                           than a bank, savings and loan association or similar
                           institution), Massachusetts or similar business
                           trust, partnership, or charitable organization
                           described in Section 501(c)(3) of the Internal
                           Revenue Code of 1986, as amended.

                  ____     Bank. The Buyer (a) is a national bank or banking
                           institution organized under the laws of any State,
                           territory or the District of Columbia, the business
                           of which is substantially confined to banking and is
                           supervised by Federal, State or territorial banking
                           commission or similar official or is a foreign bank
                           or equivalent institution, and (b) has an audited net
                           worth of at least $25,000,000 as demonstrated in its
                           latest annual financial statements, a copy of which
                           is attached hereto.

                  ____     Savings and Loan. The Buyer (a) is a savings and loan
                           association, building and loan association,
                           cooperative bank, homestead association or similar
                           institution, which is supervised and examined by a
                           State or Federal authority having supervision over
                           such institution or is a foreign savings and loan
                           association or equivalent institution and (b) has an
                           audited net worth of at least $25,000,000 as
                           demonstrated in its latest annual financial
                           statements, a copy of which is attached hereto.

                  ____     Broker-dealer. The Buyer is a dealer registered
                           pursuant to Section 15 of the Securities Exchange Act
                           of 1934, as amended.

                  ____     Insurance Company. The Buyer is an insurance company
                           whose primary and predominant business activity is
                           the writing of insurance or the reinsuring of risks
                           underwritten by insurance companies and which is
                           subject to supervision by the

---------

* Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.

                                      H-3
<PAGE>

                           insurance commissioner or a similar official or
                           agency of the State, territory or the District of
                           Columbia.

                  ____     State or Local Plan. The Buyer is a plan established
                           and maintained by a State, its political
                           subdivisions, or any agency or instrumentality of the
                           State or its political subdivisions, for the benefit
                           of its employees.

                  ____     ERISA Plan. The Buyer is an employee benefit plan
                           subject to Title I of the Employee Retirement Income
                           Security Act of 1974, as amended.

                  ____     Investment Advisor. The Buyer is an investment
                           advisor registered under the Investment Advisors Act
                           of 1940, as amended.

                  ____     Small Business Investment Company. Buyer is a small
                           business investment company licensed by the U.S.
                           Small Business Administration under Section 301(c) or
                           (d) of the Small Business Investment Act of 1958, as
                           amended.

                  ____     Business Development Company. Buyer is a business
                           development company as defined in Section 202(a)(22)
                           of the Investment Advisors Act of 1940, as amended.

         3.       The term "securities" as used for purposes of the calculation
of the dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.

         4.       For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

         5.       The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

         6.       Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this

                                      H-4
<PAGE>

certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                             By:______________________________
                                                Name:
                                                Title:

                                             Date:____________________________

                                      H-5
<PAGE>

                                                                         ANNEX 2

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]

         The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

         1.       As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

         2.       In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in Rule 144A because (i) the Buyer is
an investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

                  ____     The Buyer owned $___________ in securities (other
                           than the excluded securities referred to below) as of
                           the end of the Buyer's most recent fiscal year (such
                           amount being calculated in accordance with Rule
                           144A).

                  ____     The Buyer is part of a Family of Investment Companies
                           which owned in the aggregate $__________ in
                           securities (other than the excluded securities
                           referred to below) as of the end of the Buyer's most
                           recent fiscal year (such amount being calculated in
                           accordance with Rule 144A).

         3.       The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

         4.       The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

         5.       The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.

                                      H-6
<PAGE>

         6.       Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.

                                             By:_______________________________
                                                Name:
                                                Title:

                                             IF AN ADVISER:

                                             __________________________________
                                             Print Name of Buyer

                                             Date:_____________________________

                                      H-7
<PAGE>

                                    EXHIBIT I

                  REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT

                                                            ________________

                                                                  [Date]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California  92705
Attention:  Mortgage Custody - TW038C

In connection with the administration of the mortgages held by you as Custodian
under a certain Custodial Agreement dated as of [ ] between [ ], as Trustee, and
you, as Custodian (the "Custodial Agreement"), the undersigned Servicer hereby
requests a release of the Mortgage File held by you as Custodian with respect to
the following described Mortgage Loan for the reason indicated below.

         Mortgagor's Name:

         Address:

         Loan No.:

         Reason for requesting file:

         1.       Mortgage Loan paid in full. The Servicer hereby certifies that
all amounts received in connection with the loan have been credited, or paid to
the Trustee for credit, to the Collection Account or the Certificate Account
(whichever is applicable) pursuant to the Pooling Agreement.)

         2.       The Mortgage Loan is being foreclosed.

         3.       Mortgage Loan substituted. The Servicer hereby certifies that
a Qualifying Substitute Mortgage Loan has been assigned and delivered to you
along with the related Mortgage File pursuant to the Pooling Agreement.)

         4.       Mortgage Loan repurchased. The Servicer hereby certifies that
the Purchase Price has been credited to the Collection Account or the
Certificate Account (whichever is applicable) pursuant to the Pooling
Agreement.)

         5.       Other. (Describe)

The undersigned acknowledges that the above Mortgage File will be held by the
undersigned in accordance with the provisions of the Pooling Agreement and will
be returned to you within ten (10) days of our receipt of the Mortgage File,
except if the Mortgage Loan has been paid in full, or repurchased or substituted
for a Qualifying Substitute Mortgage Loan (in which case the Mortgage File will
be retained by us permanently) and except if the Mortgage Loan is being
foreclosed (in which case the Mortgage File will be returned when no longer
required by us for such purpose).

                                       I-1
<PAGE>

Capitalized terms used herein shall have the meanings ascribed to them in the
Custodial Agreement.

                                             __________________________________

                                             [Name of Servicer]

                                             By: ______________________________

                                                 Name:

                                                 Title:  Servicing Officer

                                      I-2

<PAGE>

                                    EXHIBIT J

                                   [RESERVED]

                                       J-1
<PAGE>

                                    EXHIBIT K

                        OFFICER'S CERTIFICATE OF TRUSTEE

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Re:      Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS 2003-8HE

         Reference is made to the Pooling and Servicing Agreement, dated as of
December 1, 2003 (the "Agreement"), by and among Merrill Lynch Mortgage
Investors, Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as a
servicer, GreenPoint Mortgage Funding Inc., as a servicer and Wells Fargo Bank
Minnesota, National Association, as trustee (the "Trustee").

I, [identify the certifying individual], a [title] of the Trustee hereby certify
to the Depositor, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

1.       I have reviewed the Monthly Statements delivered pursuant to the
         Agreement since the last Officer's Certificate executed pursuant to
         Section 3.21 of the Agreement [or in the case of the first
         certification, since the Cut-off Date] (the "Trustee Information").

2.       Based on my knowledge, the information in the Monthly Statement, taken
         as a whole, does not contain any untrue statement of a material fact or
         omit to state a material fact necessary to make the statements made, in
         light of the circumstances under which such statements were made, not
         misleading as of the date hereof;

3.       Based on my knowledge, the Monthly Statements required to be prepared
         by the Trustee under the Agreement has been prepared and provided in
         accordance with the Agreement; and

4.       I am responsible for reviewing the activities performed by the Trustee
         under the Agreement and the Trustee has, as of the date hereof
         fulfilled its obligations under the Agreement and there are no
         significant deficiencies relating to the Trustee's compliance with the
         Agreement.

Date:

                            Wells Fargo Bank Minnesota, National Association, as
                            Trustee

                            By:      ____________________________

                            Name:    ____________________________

                            Title:   ____________________________

                                      K-1

<PAGE>

                                    EXHIBIT L

                        OFFICER'S CERTIFICATE OF SERVICER

Merrill Lynch Mortgage Investors, Inc.
250 Vesey Street
4 World Financial Center, 10th Floor
New York, New York 10080

Wells Fargo Bank Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention:Corporate Trust Services - Terwin Mortgage Trust, Series TMTS 2003-8HE

Re:      Terwin Mortgage Trust, Asset-Backed Certificates, Series TMTS 2003-8HE

         Reference is made to the Pooling and Servicing Agreement, dated as of
December 1, 2003 (the "Agreement"), by and among Merrill Lynch Mortgage
Investors, Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as a
servicer ("Ocwen" or a "Servicer"), GreenPoint Mortgage Funding Inc., as a
servicer ("GreenPoint" or a "Servicer") and Wells Fargo Bank Minnesota, National
Association, as trustee (the "Trustee").

         I, [identify the certifying individual], an authorized representative
of the Servicer hereby certify to the Trustee and the Depositor, and each of
their respective officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, that:

1.       I have reviewed the information required to be delivered by the
         Servicer to the Trustee pursuant to the Agreement (the "Servicing
         Information").

2.       Based on my knowledge, the information in the Annual Statement of
         Compliance, and all servicing reports, officer's certificates and other
         information relating to the servicing of the Mortgage Loans submitted
         to the Trustee by the Servicer taken as a whole, does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading as of the last
         day of the period covered by the Annual Statement of Compliance;

3.       Based on my knowledge, the Servicing Information required to be
         provided to the Trustee by the Servicer under the Agreement has been
         provided to the Trustee; and

                                       L-1

<PAGE>

4.       I am responsible for reviewing the activities performed by the Servicer
         under the Agreement and based upon the review required hereunder, and
         except as disclosed in the Annual Statement of Compliance, the Annual
         Independent Certified Public Accountant's Servicing Report and all
         servicing reports, officer's certificates and other information
         relating to the servicing of the Mortgage Loans submitted to the
         Trustee by the Servicer, the Servicer has, as of the last day of the
         period covered by the Annual Statement of Compliance fulfilled its
         obligations under this Agreement.

Date:

                                              _____________________, as Servicer

                                              By:    __________________________

                                              Name:  __________________________

                                              Title: __________________________

                                       L-2

<PAGE>

                                    EXHIBIT M

                               CUSTODIAL AGREEMENT

                             [INTENTIONALLY OMITTED]

                                      M-1

<PAGE>

                                    EXHIBIT N

                              FORM OF CAP CONTRACT

                             [INTENTIONALLY OMITTED]

                                      N-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]