Document:

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                                                                   EXHIBIT 10.22

                             C O N F I D E N T I A L

                              AMENDED AND RESTATED

                          RAIL TRANSPORTATION AGREEMENT

                                     between

                         UNION PACIFIC RAILROAD COMPANY

                                       and

                PACER INTERNATIONAL, INC., d/b/a PACER STACKTRAIN

                    (f/k/a APL LAND TRANSPORT SERVICES, INC.)

                                       and

                         AMERICAN PRESIDENT LINES, LTD.

                                       and

                                APL CO. PTE LTD.

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                                TABLE OF CONTENTS
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<TABLE>
<S>                                                                                                               <C>
Section 1.    EFFECTIVE DATE, TERM AND RENEWAL ............................................................       2
Section 2.    DEFINITIONS .................................................................................       3
Section 3.    AUTHORIZED AGENT ............................................................................       3
Section 4.    RAIL TRANSPORTATION SERVICES TO BE PROVIDED BY UP ...........................................       4
                  Linehaul Services .......................................................................       4
Section 5.    TERMINAL SERVICES TO BE PROVIDED BY UP ......................................................       4
                  A.  General Services ....................................................................       4
                  B.  Loading Containers ..................................................................       5
                  C.  Other Terminal Services .............................................................       5
                  D.  Facilities ..........................................................................       6
                  E.  Additional Terminal Services Provided by UP Chicago, IL ,
                      for Stack Car Trains for Which UP Does Not Receive a Linehaul .......................       7
Section 6.    UP EQUIPMENT OBLIGATIONS ....................................................................       8
                  A.  Intermodal Cars Furnished by UP .....................................................       8
                  B.  Stack Car Supply ....................................................................       9
                  C.  UP Relief From Obligation ...........................................................      10
                  D.  Equipment Use .......................................................................      10
                  E.  Maintenance of Equipment ............................................................      10
                      1.   Responsibility .................................................................      10
                      2.   Cost of Repairs for APL Stack Cars .............................................      10
                      3.   Cost of Repairs for Containers and Chassis .....................................      11
                      4.   Repairs by Non-Responsible  Party ..............................................      11
                      5.   Permission to Enter ............................................................      12
Section 7.    SERVICE COMMITMENTS BY UP ...................................................................      12
Section 8.    APL'S VOLUME COMMITMENT .....................................................................      12
Section 9.    CAR COST COMPONENT AND USE OF APL OWNED
                  STACK CARS ..............................................................................      12
                  A.  APL's Payment for Stack Cars ........................................................      12
                  B.  UP Use of and Payment for APL Owned or Leased Stack Cars ............................      12
Section 10.   OTHER APL OBLIGATIONS .......................................................................      13
                  A.  Collection of Charges ...............................................................      13
                  B.  Shipping Orders .....................................................................      13
                  C.  UP Domestic Container Space .........................................................      14
Section 11.   EQUIPMENT STORAGE ...........................................................................      14
                  A.  Parking Spaces at Terminals .........................................................      14
                  B.  Equipment Storage Charges ...........................................................      14
                  C.  Storage of Stack Cars ...............................................................      14
Section 12.  PARTICIPANT AND TPI SHIPMENTS ................................................................      15
                  A.  UP and Participants To Negotiate All Terms Other Than
                      Rates and Train Schedules ...........................................................      15
                  B.  Participants' Volume Commitment .....................................................      16
                  C.  International Shipments for TPI Customers ...........................................      16
Section 13.   RATES/ADJUSTMENT TO RATES ...................................................................      16
Section 14.   COMPETITIVE PROPOSALS .......................................................................      16
Section 15.   FORCE MAJEURE ...............................................................................      17
</TABLE>

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<TABLE>
<S>                                                                                                       <C>
Section 16.   ARBITRATION .............................................................................   18
                  A.  Panel ...........................................................................   18
                  B.  Arbitrators' Findings and Rules of Evidence .....................................   18
                  C.  Arbitrators' Duties .............................................................   18
                  D.  Expenses ........................................................................   19
                  E.  Confidentiality .................................................................   19
Section 17.   RENEGOTIATION ...........................................................................   19
Section 18.   MUTUAL INDEMNITY ........................................................................   20
Section 19.   CLAIMS FOR CARGO LOSS AND DAMAGE ........................................................   21
                  A.  Domestic Shipments and Third Party Equipment ....................................   21
                  B.  International Shipments .........................................................   21
                      1.   Duties of Parties ..........................................................   21
                  C.  Processing of Cargo Claims ......................................................   22
                  D.  Notification of Damage ..........................................................   23
                  E.  Agreement Only for Benefit of Party .............................................   23
                  F.  Condition Precedent .............................................................   23
Section 20.   HAZARDOUS MATERIALS AND RESTRICTED COMMODITIES ..........................................   24
                  A.  Hazardous Materials .............................................................   24
                  B.  Indemnity .......................................................................   24
                  C.  Duty of Cooperation .............................................................   25
Section 21.   FEDERAL CONTRACTOR REQUIREMENTS .........................................................   25
                  A.  Applicable Laws .................................................................   25
                  B.  Certification ...................................................................   26
Section 22.   OTHER AGREEMENTS ........................................................................   26
Section 23.   WHEN TERMS AND PROVISIONS OF UP'S INTERMODAL
              RULES APPLY .............................................................................   27
Section 24.   ASSIGNMENT ..............................................................................   27
Section 25.   YEAR 2000 COMPLIANCE ....................................................................   29
Section 26.   NOTICES .................................................................................   30
Section 27.   CONFIDENTIALITY .........................................................................   31
Section 28.   VENUE ...................................................................................   31
Section 29.   APPLICABLE LAW ..........................................................................   31
</TABLE>

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                               List of Appendices

Appendix 6.B      --       Stack Car Supply

Appendix 7        --       UP's Service Performance Standards

Appendix 8        --       APL's Volume Commitment

Appendix 9.A      --       Car Cost Component

Appendix 9.B      --       Rates for Use of APL Stack Cars, Etc.

Appendix 11.A     --       Parking Spaces at Terminals

Appendix 12.C     --       International Shipments for TPI Customers

Appendix 13       --       Rates/Adjustments to Rates

Appendix 14.      --       Competitive Proposals

Appendix 17.B     --       Renegotiation of Rates

Appendix 23       --       When Terms and Provisions of UP's Intermodal Rules
                           Apply

                                List of Exhibits

Exhibit A     --  Definitions

Exhibit B     --  Rates per Container and Empty Repositioning Rates

Exhibit C     --  Kearny Trains

Exhibit D         APL Volume Commitment in the Lanes Identified in Section A.1
                  of Appendix 7

Exhibit E     --  [Intentionally Left Blank]

Exhibit F     --  TPI Accounts

Exhibit G     --  Free Time and Storage Provisions at UP Terminals

Exhibit X     --  Southern Corridor International Rates

Exhibit Y     --  Average Daily Tender

Exhibit Z     --  UP Intermodal Rules Not Applicable to AP

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                             C O N F I D E N T I A L

                              AMENDED AND RESTATED

                          RAIL TRANSPORTATION AGREEMENT

                  THIS AGREEMENT is made and entered into as of the 15/th/ day
of May, 2002, between UNION PACIFIC RAILROAD COMPANY, a Delaware Corporation
("UP"), and PACER INTERNATIONAL, INC., d/b/a PACER STACKTRAIN (f/k/a APL LAND
TRANSPORT SERVICES, INC.), a Tennessee corporation (hereafter "LTS" or "Pacer"),
and AMERICAN PRESIDENT LINES, LTD., a Delaware corporation (hereafter "APL
International") and APL CO. PTE LTD., a Singapore company (hereafter "APL Co.").
LTS, APL International and APL Co. are sometimes jointly referred to as "APL".

                                    RECITALS

                  APL International and APL Co. provide ocean common carrier
freight transportation. LTS provides intermodal management services and acts as
agent for APL International, APL Co., Participants and TPI Customers. UP
provides rail transportation services as a common and exempt intermodal carrier.

                  APL International, APL Co., LTS and UP are parties to that
certain Rail Transportation Agreement dated October 11, 1996 (the "Original
Agreement"), pursuant to which UP provides rail transportation services to APL
for the movement of foreign and domestic cargo in Containers under the terms and
conditions contained therein. The Original Agreement also covers transportation
via the former Southern Pacific Transportation Company and its affiliated
railroads (collectively referred to as "SP") which have been acquired by and are
under common control with UP.

                  The Original Agreement further provides for (i) carriage of
International Shipments in Containers owned or leased by third party ocean
carriers (hereafter "TPI

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Shipments") as arranged by APL; (ii) carriage of Domestic Shipments in
Containers owned or leased by third party ocean carriers as arranged by APL; and
(iii) carriage of auto parts shipments for foreign automobile companies in APL
or other ocean carrier Containers as arranged by APL (hereafter "CKD
Shipments"). The term "International Shipments" as used in the Original
Agreement (and in this Agreement) includes shipments moving for the benefit of
APL International, APL Co., TPI Shipments and CKD Shipments.

                  The Original Agreement also formalized and consolidated
agreements and understandings, which have been reached over the years between
the parties, in anticipation of the transaction involving the recapitalization
of LTS which occurred in May 1999 and resulted in a substantial change in
ownership of LTS.

                  The parties desire to amend and restate the Original Agreement
to read as set forth in this Agreement in order to give effect to certain
agreements and understandings among them regarding car supply and to make
certain other technical changes and corrections as they have deemed necessary.

                                    AGREEMENT

                  NOW THEREFORE, the parties agree as follows:

Section 1.        EFFECTIVE DATE, TERM AND RENEWAL

                  The Original Agreement took effect on October 11, 1996, thirty
days after the Control Date, and as amended and restated herein shall continue
to be in effect until October 10, 2011.

                                      -2-

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Section 2.        DEFINITIONS

                  Capitalized terms used in this Agreement which are not defined
in the Agreement itself will have the meanings set forth in Exhibit A to this
Agreement.

Section 3.        AUTHORIZED AGENT

                  APL International and APL Co. designate LTS as their
authorized representative for the following purposes under this Agreement,
including but not limited to:

         1.       Paying transportation charges, as required by this Agreement;
         2.       Arranging all operational matters connected with APL
                  International's and APL Co.'s Containers;
         3.       Giving and receiving all notices under this Agreement; and
         4.       Performing all other actions and performance required of or
                  permitted to APL International and APL Co. under this
                  Agreement.

                  APL International and APL Co. reserve the right, at their sole
discretion and upon prior notice to UP, to take such direct actions and directly
perform such obligations under this Agreement as they deem necessary or
convenient. It is contemplated by the parties that such direct action and
performance by APL International and APL Co. generally will be limited to cargo
claims, federal contractor compliance, and other administrative matters.

                  Notwithstanding the foregoing the parties agree that in the
event LTS fails to perform any of the duties and responsibilities for APL
International and APL Co. with respect to this Agreement with UP, APL
International and APL Co. shall perform those duties and responsibilities,
particularly payment of transportation charges as required by this Agreement.

                                      -3-

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Section 4.        RAIL TRANSPORTATION SERVICES TO BE PROVIDED BY UP

                  Linehaul Services

                  UP shall transport loaded Containers carrying International
and Domestic Shipments, empty Containers or empty APL Stack Cars between the
points and at the divisions, charges and rates (hereafter "Rates") set forth in
Exhibit B, as adjusted from time to time under the terms of this Agreement.

Section 5.        TERMINAL SERVICES TO BE PROVIDED BY UP

         A.       General Services

                  The Rates set forth in Exhibit B, as adjusted from time to
time under the provisions of this Agreement, include the following additional
services to be performed by UP or its authorized agents or independent
contractors:

                  (a)    Lifting Equipment onto Intermodal Cars and securing
                         Equipment onto Intermodal Cars and unsecuring Equipment
                         and lifting or driving Equipment from Intermodal Cars
                         except at On-Dock facilities.

                  (b)    Preparing Equipment receipt and interchange inspection
                         reports evidencing the apparent condition of the
                         Equipment at times of interchange providing copies of
                         those reports to APL;

                  (c)    Providing timely notification of Arrival and
                         Availability of Shipments to APL or Participant as
                         identified on the bill of lading;

                  (d)    Assessing and collecting any Equipment storage charges
                         against Participants for Domestic Service shipments
                         held at any UP terminal beyond the free time as may be
                         provided in UP's Intermodal Rules except as otherwise
                         provided herein. The Parties

                                      -4-

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                         agree that APL shall not be responsible for payment of
                         storage charges on Participants' shipments; however,
                         APL shall cooperate with UP to enable UP to collect
                         storage charges on Participants' shipments.

                  (e)    Providing APL with a daily inventory report of all APL
                         owned or leased Stack Cars, Containers and chassis on
                         hand at UP's Global One facilities. Such report will be
                         by unit number and will be furnished once daily by
                         10:00 AM Chicago time for each calendar day.

                  (f)    Such other transferring, marshaling and repositioning
                         of Equipment within rail terminals as may be necessary
                         or convenient to carry the purposes of this Agreement
                         into effect.

         B.       Loading Containers

                  Except at On-Dock Facilities, UP shall load the Containers
tendered under this Agreement on to Intermodal Cars in a timely manner. UP shall
load Intermodal Cars properly in accordance with any safe operating parameters
given by connecting rail carriers to UP and/or established by UP, the AAR or the
FRA.

                  When Stack Cars are received from connecting rail carriers at
interchange points, UP shall accept the connecting rail carrier's loading of top
and bottom Containers on each platform as being in accordance with the loading
capabilities of the Stack Cars and normal railroad operating parameters.

         C.       Other Terminal Services

                  APL will pay the Rates set forth in Exhibit B for the
following additional terminal services:

                                      -5-

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                  (a)    Transferring Containers at Global One between Railcars,
                         including Stack Cars and Standard Railroad Flatcars.
                         Such service includes the attachment or detachment of a
                         chassis.

                  (b)    Unloading or loading empty Containers, when directed by
                         APL, from or to Stack Cars or Flatcars when such empty
                         Containers are received or delivered in interchange
                         from or to connecting rail carriers at Chicago,
                         Illinois and on which UP does not receive a linehaul
                         movement.

                  (c)    Lifting Containers when directed by APL, between
                         chassis; or from the ground to chassis or from chassis
                         to ground, when directed by APL or required due to
                         APL's shortage of chassis, and the charge for such
                         lifting is not covered in the linehaul rates shown in
                         Exhibit B to this Agreement or in (a) or (b) above.

         D.       Facilities

                  (a)    UP agrees to maintain its Chicago, IL area Stack Car
                         Train terminal facility at a size and capacity such as
                         will accommodate APL's requirements for Stack Car Train
                         traffic and terminal services.

                  (b)    UP agrees to provide APL with use of no less than one
                         set of three ramp tracks and two cranes or lifting
                         devices during the scheduled loading or unloading of
                         any APL Stack Car Train of ten (10) or more cars.

                  (c)    UP shall lease to APL for the term of this Agreement
                         and any extensions thereof 1,800 square feet of office
                         space at its Global One facility to APL for APL's use
                         in the administration of its Stack

                                      -6-

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                         Car Train operations. The lease shall contain normal
                         and customary terms and conditions concerning tenant
                         and landlord obligations and responsibilities, and the
                         rent required shall not exceed the fair rental value of
                         the leased premises.

         E.       Additional Terminal Services Provided by UP in Chicago, IL for
                  Stack Car Trains for Which UP Does Not Receive a Linehaul.

                  In addition to providing terminal service in connection with
APL Stack Car Trains for which UP receives a linehaul movement, UP shall also
provide additional terminal services as defined in this Section 5 for APL Stack
Car Trains which UP does not handle in linehaul service.

                  (1)    Such additional terminal services will not be provided
                         for Stack Car Trains originating or terminating in the
                         States of Washington, Oregon or California for which UP
                         does not receive a linehaul.

                  (2)    Such additional terminal services shall be limited to
                         apply to a reasonable number of weekly Stack Car Trains
                         but in no case less than two such Stack Car Trains per
                         week.

                  (3)    UP shall have no obligations hereunder to provide
                         Intermodal Cars used in transferring Containers from
                         such Stack Car Trains for movement beyond the Chicago,
                         IL area. However, upon notice from APL, UP will use
                         reasonable efforts to furnish any excess Intermodal
                         Cars that may be in UP's possession at Chicago, IL.

                  (4)    Such terminal services shall not include payment by UP
                         of any other rail carrier's switching charges.

                                      -7-

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                  (5)    APL shall reimburse UP for any transportation expense
                         incurred by UP for the movement of traffic which UP did
                         not handle in linehaul service.

                  (6)    At UP's option, such terminal service will be provided
                         at either UP's Global One or Global Two facilities.

                  (7)    UP shall assess and APL shall pay a per Container fee
                         as set forth in Exhibit B for such additional terminal
                         services, provided however, such per Container fee
                         shall only be assessed when UP does not receive a
                         linehaul movement. Also UP shall assess and APL shall
                         pay an additional fee for each Container transferred
                         between Stack Cars and Flatcars as set forth in Exhibit
                         B. This charge includes attachment to or detachment
                         from a chassis. When UP does not receive a linehaul,
                         such additional terminal services shall be performed
                         under operating Schedules as mutually agreed upon by
                         UP, APL and, where necessary, the connecting rail
                         carrier providing linehaul transportation service.

Section 6.        UP EQUIPMENT OBLIGATIONS

         A.       Intermodal Cars Furnished by UP

                  1. At each intermodal terminal where APL tenders volumes to
UP, UP shall furnish APL with a sufficient number of Stack Cars to transport
loaded and empty Containers tendered by APL on any given day for movement under
the applicable Train Schedule, provided that APL shall provide verbal advance
notice of its estimated Stack Car needs to UP as provided in Section 6.A.2.
below.

                                      -8-

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                  2. Other than for shipments originating at On-Dock rail
terminals at San Pedro, CA, Tacoma, WA and Seattle, WA ("On Dock Terminals"),
APL will provide UP with twelve (12) hours verbal advance notice of its
estimated Stack Car needs. For shipments originating at the On Dock Terminals,
APL will provide UP with five (5) days advance verbal notice of its anticipated
Stack Car needs based upon inbound ocean vessel loadings. Further, APL will
provide UP with twenty-four (24) hours advance verbal notice of its actual Stack
Car needs so as to allow sufficient time for UP to position the required empty
Stack Cars to the On Dock Terminal.

                  3. The parties recognize that the day-to-day volume of
domestic and international export loaded containers cannot be predicted with
certainty. Further, the parties recognize that the available supply of Stack
Cars for outbound loading at any given rail intermodal terminal and at On Dock
Terminals is also dependent upon timely arrival and unloading of inbound trains.
Considering these factors, the parties also recognize that APL cannot provide UP
with precise advance notice of its daily Stack Car needs. However, APL will use
its best efforts to provide the most accurate advance notice as possible. So
long as APL provides the advance notice as required in sub-paragraph A.2. of
this Section 6, APL's failure to provide the exact number of Stack Cars required
will not relieve UP of its obligation as stated in sub-paragraph A.1. of this
Section 6. To the extent APL's actual daily volume exceeds the estimated volume
provided by APL in its 12 hour advance notice by a factor of 125%, UP will not
be obligated to provide Stack Cars for the volume in excess of 125%.

         B.       Stack Car Supply

                  The conditions under which UP will provide Stack Cars to APL
are set forth in Appendix 6.B.

                                      -9-

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         C.       UP Relief From Obligation

                  In the event APL incurs a shortage of chassis at any given UP
intermodal terminal, and such shortage results in a situation where inbound APL
Containers are held on Stack Cars, then UP will be relieved of certain of its
Stack Car supply obligations as described in Appendix 6.B until such time as all
inbound APL Containers are placed on chassis.

         D.       Equipment Use

                  The rules covering the use of a Container while the Container
is in UP's possession or while UP may otherwise be responsible for the Container
shall be governed by the AAR Rules.

         E.       Maintenance of Equipment

                  1.       Responsibility

                  Except as otherwise stated in this Agreement, responsibility
for loss, damage, maintenance, and repair of Equipment and Intermodal Cars will
be governed as follows:

                           (a) Intermodal Cars shall be governed by the then
current Field Manual of the A.A.R. Interchange Rules, sometimes referred to as
the Car Interchange Rules of the Association of American Railroads ("Car Rules")
in effect on the effective date of this Agreement and as may be amended from
time to time, and

                           (b) Containers and Chassis shall be governed by the
Container Rules.

                  2.       Cost of Repairs for APL Stack Cars

                  The cost of repairs to APL Stack Cars shall be allocated as
follows:

                                      -10-

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                           (a)     APL shall pay for or perform owner's
                                   responsibility repairs under the Car Rules.
                           (b)     UP shall pay for or perform those handling
                                   carrier responsibility repairs under the Car
                                   Rules that become necessary while an APL
                                   Stack Car is in the possession of UP.
                           (c)     APL shall be responsible for all repairs
                                   while an APL Stack Car is in the possession
                                   of a third party, including but not limited
                                   to another rail carrier.

                  3.       Cost of Repairs for Containers and Chassis

                  The cost of repairs to Containers and Chassis will be
allocated as follows:

                           (a)     APL shall pay for or perform owner's
                                   responsibility repairs under the Container
                                   Rules.
                           (b)     UP shall pay for or perform those handling
                                   carrier responsibility repairs under the
                                   Container Rules that become necessary while a
                                   Container or Chassis is in the possession of
                                   UP. If after joint investigation by APL and
                                   UP, the responsible party cannot be
                                   determined, the cost of handling carrier
                                   responsibility repairs shall be shared
                                   equally by APL and UP.
                           (c)     As between APL and UP, APL shall be
                                   responsible for all repairs while a Container
                                   or Chassis is in the possession of a third
                                   party, including but not limited to a motor
                                   carrier and other rail carriers.

                  4.       Repairs By Non-Responsible Party

                  If either party performs repairs to Containers or Chassis for
which the other party is responsible under this Section, the responsible party
shall pay the performing party as set forth in the Container Rules.

                                      -11-

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                  5.       Permission To Enter.

                  Only upon written request by APL, and after execution of a
signed Right of Entry Agreement, UP may permit APL or its contractor to enter
onto UP property at UP origins and UP destinations to bring personnel, material
and equipment onto that property, and to perform repairs to Containers, Chassis,
and Stack Cars on that property. This permission, if granted, shall be in
writing and shall not be unreasonably withheld.

Section 7.        SERVICE COMMITMENTS BY UP

                  Appendix 7 sets out the standards for UP's service performance
and the remedies if UP fails to meet those standards.

Section 8.        APL'S VOLUME COMMITMENT

                  Appendix 8 sets forth APL's volume commitment to UP and
remedies if APL fails to meet those commitments.

Section 9.        CAR COST COMPONENT AND USE OF APL OWNED STACK CARS

         A.       APL's Payment for Stack Cars.

                  Other than the domestic 20' and 40' rates applying from
Chicago, IL, Kansas City, MO and St. Louis, MO on the one hand, to Seattle, WA,
Portland, OR, Oakland, CA and Los Angeles, CA, on the other hand, the domestic
rates shown in Exhibit B include a car cost component equal to the average per
diem and mileage paid by UP to TTX and other rail carriers. The car cost
component is derived by the process described in Appendix 9.A.

B.       UP Use of and Payment for APL Owned or Leased Stack Cars.

                  1. For purposes of this Agreement, the terms "APL owned Stack
Cars" and "APL Stack Car" shall mean those cars owned by APL and/or Pacer as
well

                                      -12-

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as those cars leased by APL and/or Pacer bearing marks of "APLX" or "BRAN" or
any other mark Pacer arranges to be placed on Stack Cars for movement on UP
under this Agreement.

                  2. UP may use APL owned Stack Cars for the movement of APL
volumes, Pacer volumes or the volumes of other UP customers.

                  3. Appendix 9.B sets forth the parties' agreement regarding
per diem and mileage rates payable by UP for the use of, and other matters
regarding, the Stack Cars identified in Appendix 9.B.

Section 10.       OTHER APL OBLIGATIONS

         A.       Collection of Charges

                  APL shall pay UP the Rates set forth in Exhibit B, adjusted in
accordance with Section 13, as compensation for the transportation services
described in this Agreement. Payment shall be made within thirty (30) days of
receipt of an invoice from UP. However, if APL demonstrates that it received any
UP invoice more than six calendar days after the date of the invoice, the
payment period shall be extended, day for day, by the number of days beyond six
days. If APL does not pay UP within the specified time period at UP's request,
APL shall pay a late charge of 1.5% per month or the maximum rate then
permissible by law, whichever is less.

         B.       Shipping Orders

                  APL shall prepare shipping orders which will specify the rail
route of movement for the Containers listed on each shipping order.

                                      -13-

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         C.       UP Domestic Container Space

                  APL agrees to make available to UP's retail subsidiary, Union
Pacific Distribution Services ("UPDS") or its successors, a minimum of 25% of
the available domestic Container space on any given APL Train (hereinafter "25%
Allocation").

                  In the event UPDS does not fully utilize its 25% Allocation
during any calendar month for a particular traffic corridor, the total number of
Containers tendered by UPDS for Stack Car Train service in that corridor and
direction of movement in the following calendar month shall not exceed 200% of
the average per train tender for the month in which UPDS did not utilize its 25%
Allocation, not to exceed a 10-unit increase per Stack Car Train. For example,
if UPDS's current 25% Allocation for the Stack Car Train moving eastbound from
Oakland, California, is 50 Containers per train, and during a given calendar
month, UPDS tenders an average of 20 Containers per train, then UPDS's maximum
25% Allocation for the next month for that train will be 20 x 200% or a total of
10 additional Containers per train, whichever is less. In this example, UPDS's
new 25% Allocation on the eastbound Stack Car Train from Oakland, California,
would be 30 Containers per train.

Section 11.       EQUIPMENT STORAGE

         A.       Parking Spaces at Terminals

UP will provide parking spaces and spaces for empty chassis to APL at UP's
Global One facility pursuant to the terms and conditions specified in Appendix
11.

         B.       Equipment Storage Charges

                  UP will allow APL Equipment to be stored at points set forth
in Exhibit G, subject to the free time and charges set forth in that Exhibit.

                                      -14-

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         C.       Storage of Stack Cars

                  1. At UP's Global One facility, UP shall provide temporary
track space to store Stack Cars as specified in Appendix 11. UP will make
reasonable efforts to accommodate the storage of additional Stack Cars, that is,
Stack Cars above and beyond those Stack Cars specified in Appendix 11. Such
storage may be at Global One or elsewhere on UP controlled property. If UP is
unable to store additional Stack Cars, it will verbally notify APL. Within
twenty-four (24) hours of such notification, APL will verbally notify UP of
APL's desired disposition of these Stack Cars. All APL controlled Stack Cars
will remain in the APL account until delivered off-line.

                  2. UP shall provide temporary storage of APL Stack Cars
without charge when cargo volumes or other factors do not allow for continued
use of APL Stack Cars. When APL Stack Cars are stored by UP, UP shall be
relieved of paying the per diem charges as set forth in Section 4 of Appendix
9.B from the time the APL Stack Car is placed in storage until it is removed
from storage.

Section 12.     PARTICIPANT AND TPI SHIPMENTS

         A.       UP and Participants To Negotiate All Terms Other Than Rates
                  and Train Schedules

                  UP and APL agree that APL arranges for the transportation of
Participants' Containers with UP, as well as with other rail carriers. UP and
APL acknowledge that the terms and conditions of the transportation by rail
shall be agreed upon by UP and the Participants other than the Rates and Train
Schedules applicable to Participants for movement of their Containers.

                  Unless otherwise specifically advised in writing by APL, UP
acknowledges that APL has no authority as agent for the Participants to enter
into any agreement with

                                      -15-

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UP exculpating or in any way limiting UP's liability for cargo loss, damage,
delay or misdelivery, if any. UP shall issue bills of lading either directly or
through APL as agent of UP which advises Participants of the terms and
conditions of the rail transportation.

         B.       Participants' Volume Commitment

                  UP shall allow any Domestic Shipments tendered by a
Participant under this Agreement to count toward any annual volume commitment
which that Participant has with UP.

         C.       International Shipments for TPI Customers

                  Provisions for TPI Customer shipments are set forth in
Appendix 12.C.

Section 13.       RATES/ADJUSTMENT TO RATES

                  Appendix 13 sets forth UP's rates and charges to APL and the
adjustment mechanisms applicable to those rates and charges.

Section 14.       COMPETITIVE PROPOSALS

                  Appendix 14 sets forth provisions for the adjustment of UP's
rates and charges to APL as a result of specified market conditions and
competitive circumstances.

                                      -16-

<PAGE>

Section 15.       FORCE MAJEURE

                  In the event that either party is unable to meet its
obligations under this Agreement as a result of Acts of God, war, insurrection,
strikes, high winds, derailments which result in the normal route being
impassable, heat and cold weather speed restrictions, or any like causes beyond
its control, the performance obligations of the party or parties affected by the
force majeure condition shall be suspended to that extent for the duration of
such event; PROVIDED, HOWEVER, that the parties shall make all best faith
efforts to continue to meet their obligations during the duration of the force
majeure condition; and PROVIDED, FURTHER, that the party declaring force majeure
shall notify the other parties in writing when (a) the force majeure commences,
(b) the nature of the force majeure, and (c) when the force majeure condition is
terminated.

                  The suspension of any obligation owing to force majeure shall
neither cause the term of this Agreement to be extended nor affect any rights
accrued under this Agreement prior to the force majeure condition.

                  If the parties are unable to agree on whether an operating
condition constitutes a force majeure condition, the matter shall be brought to
the attention of the APL Vice President-Transportation Purchasing and the UP
Vice President-Intermodal within ten (10) days of the occurrence of the disputed
event for resolution by them.

                                      -17-

<PAGE>

Section 16.       ARBITRATION

       A.         Panel

                  If during the term of this Agreement any dispute between the
parties, except concerning loss and damage, should arise regarding the
interpretation, application or enforcement of any of the terms of this
Agreement, and such dispute cannot be resolved by the parties within sixty (60)
days after either of the parties notified the other of its desire to arbitrate
the dispute, then the dispute shall be settled by arbitration in accordance with
the rules then in effect of the American Arbitration Association. For
arbitration, a panel of three arbitrators shall be named, one to be selected by
UP, one to be selected by APL, and one to be selected by the other two
arbitrators. If the two arbitrators previously appointed by UP and APL cannot
agree upon the third arbitrator within fifteen (15) days, then either party may
apply to the presiding judge of any court of competent jurisdiction for
appointment of a neutral third arbitrator. In the alternative, the parties may
agree on a sole arbitrator.

         B.       Arbitrators' Findings and Rules of Evidence

                  The finding of the arbitrator shall be binding on the parties,
subject to provisions of the Federal Arbitration Act. No change in the rules of
arbitration which would deprive a party of the right to be represented by
counsel, to present evidence or to cross-examine witnesses presented by the
other party shall be effective in any arbitration proceeding arising out of this
Agreement.

         C.       Arbitrators' Duties

                  The arbitrators shall have no power to modify any of the
contract provisions without the parties' consent, and their jurisdiction is
limited accordingly. The

                                      -18-

<PAGE>

decision of the arbitrators shall be rendered within ninety (90) days after the
matter has been submitted.

         D.       Expenses

                  Each of the parties shall be responsible for the expenses
incurred by the arbitrator appointed by said party, and the expenses, fees and
cost of the third arbitrator, or sole arbitrator shall be borne equally between
the parties.

         E.       Confidentiality

                  Any terms and conditions of this Agreement as well as any
confidential cost information which must be disclosed by any party during the
course of arbitration shall only be disclosed pursuant to the arbitrators'
execution of a non-disclosure agreement acceptable to all parties.

Section 17.       RENEGOTIATION

         A.       If performance of the terms of this Agreement, as currently
written or as subsequently modified by the parties or by order, law, rule,
regulation of a competent governmental or regulatory authority would have a
material adverse effect on any party due to causes beyond the control of the
materially adversely affected party, then that party may request in writing that
any or all terms of this Agreement be renegotiated; PROVIDED, HOWEVER, that
competitive transportation proposals or offerings shall not be grounds for such
renegotiation. New terms so renegotiated shall become effective at the time a
renegotiated agreement is executed. If, after renegotiation in good faith, the
parties are unable to agree upon new terms within 90 days of the written request
for renegotiation, any party may terminate this Agreement by giving written
notice of termination to all other parties.

                                      -19-

<PAGE>

         B.       The mechanism for any party to this Agreement to request
renegotiation of Rates is set forth in Appendix 17.B.

Section 18.       MUTUAL INDEMNITY

                  Each party to this Agreement shall indemnify and hold the
other party harmless against all liability, loss, damage, and expense, including
attorneys' fees, reasonably incurred by the other party to the extent that such
liability, loss or damage is caused by the negligent or intentional act or by
any default under this Agreement by any employee, agent or subcontractor of the
indemnifying party. More specifically, UP shall be liable to APL for any loss or
damage to APL owned, leased or controlled Equipment or for any injury to any
employee, agent or subcontractor of APL caused by the negligent or intentional
act or failure to act by UP, its agents and subcontractors to the extent
provided by applicable law. If UP is found liable for such loss, damage or
injury, UP shall also be liable for any expenses, including attorneys' fees,
reasonably incurred by APL in resolving such claims.

                  APL shall be liable to UP for any loss or damage to UP owned,
leased or controlled Equipment or for any injury to any employee, agent or
subcontractor of UP caused by the negligent or intentional act or failure to act
by APL, its agents and subcontractors to the extent provided by applicable law.
If APL is found liable for such loss, damage or injury, APL shall also be liable
for any expenses, including attorneys' fees, incurred by UP in resolving such
claims.

                                      -20-

<PAGE>

Section 19.       CLAIMS FOR CARGO LOSS AND DAMAGE

       A.         Domestic Shipments and Third Party Equipment

                  Liability for loss or damage to any Equipment owned by persons
other than the parties to this Agreement shall be governed by the terms and
provisions of UP's Intermodal Rules and the AAR Container Rules.

                  Claims for loss or damage to Domestic Shipments shall be
handled by UP with the individual Participant, and UP's liability to the
Participant shall be as set forth in UP's Intermodal Rules. APL agrees to
cooperate with UP in settling any claims for loss or damage to Domestic
Shipments or to Equipment owned by persons other than the parties to this
Agreement.

       B.         International Shipments

                  This section shall govern claims arising out of International
Shipments only.

                  1.       Duties of Parties

                  UP and APL each undertake, with respect to the other,

                           (a) to cooperate with each other to settle
International cargo and Equipment damage claims, and to do nothing to increase
the liability or exposure of the other party to increased cargo or equipment
damage claims.

                           (b) to accept liability for actual cargo shortage
when a seal is breached while the cargo is in its possession, unless that party
can produce an executed interchange receipt or other documentation showing that
the seal was broken when the cargo was first received by the party;

                           (c) to accept liability for cargo and Equipment
damage when carrying Equipment is damaged while in its custody or that of its
agents, unless such

                                      -21-

<PAGE>

party can produce duly executed interchange receipt documentation or other
documentation evidencing that the Equipment was damaged when first received by
such party or that cargo damage was caused by other than such party's handling.
APL will provide all pertinent documentation including any communications from
the individual cargo interest relating to the shipment and all APL
correspondence with the individual cargo interest relating to the shipment as
well as any reports or communications made or ordered by APL while the shipment
was in the possession of APL, including, but not limited to, bills of lading,
dock receipts, trailer interchange records, and surveys made of the cargo or
equipment.

                           (d) Nothing in this Agreement shall be defined or
construed to make the package or liability limitations of C.O.G.S.A. unavailable
to UP.

         C.       Processing of Cargo Claims

                  When APL refers a cargo claim either for Domestic or
International Shipments, to UP, UP shall:

                  (a) acknowledge receipt of the referred claim to APL within 30
days of such receipt; and,

                  (b) within 120 days after receipt of the completed referred
claim,

                      (1) pay the claim;

                      (2) decline to pay the claim and furnish an explanation of
denial together with any supporting documentation for the denial; or

                      (3) advise APL as to the status of the claim as required
by Part 1005 of Title 49, Code of Federal Regulations.

                                      -22-

<PAGE>

         D.       Notification of Damage

                  Whenever substantial cargo or Equipment damage is brought to
the attention of UP's Damage Prevention Services while the cargo or Equipment is
in the possession of UP, UP shall promptly notify APL concerning the extent of
damage as well as the location and availability of the cargo and Equipment for
inspection, APL shall thereafter notify the cargo interest of any damaged cargo
and obtain the instructions of the cargo interests, if any, and furnish advice
of disposition to UP. UP shall not dispose of any cargo and/or Equipment without
APL's written authorization to do so. Whenever substantial damage is brought to
the attention of APL while the cargo is in the possession of APL, APL shall
promptly notify UP's Damage Prevention Services as to the nature of the damage
and location of the Equipment.

         E.       Agreement Only for Benefit of Party

                  Except as otherwise provided herein, this Agreement shall not
be interpreted as intended for the benefit of, or as providing any legal remedy
for, any person not a party hereto.

         F.       Condition Precedent

                  As a condition precedent to recovery on claims for loss or
damage, the liability of UP shall be limited to those cargo claims which are
filed with UP by cargo interests, or by APL when the claim rights of cargo
interests have been subrogated to APL, in writing within nine months (9) from
the date that UP has completed performance under the through bill of lading for
such shipment; PROVIDED, HOWEVER, that for shipments moving via UP direct or
where UP is solely responsible for said loss or damage, said filing period shall
be extended to twelve (12) months from the date UP has completed performance
under the through bill of lading when said claim is filed with

                                      -23-

<PAGE>

UP by cargo interests directly, and said filing period shall be extended to
fourteen (14) months from the date UP has completed performance under the
through bill of lading when said claim is filed with UP by APL on behalf of
cargo.

Section 20.       HAZARDOUS MATERIALS AND RESTRICTED COMMODITIES

         A.       Hazardous Materials

                  In the event that any International or Domestic Shipment
contains hazardous material, APL International or APL shall obtain certification
on the shipping documents received from the consignor that the consignor has
complied with all appropriate federal regulations governing the transportation
of such hazardous materials, including, but not limited to, regulations
concerning loading, blocking, bracing, documentation, placarding, commodity mix,
and packaging. APL shall furnish UP (or the origin carrier) with the hazardous
materials information prior to acceptance for transportation by UP. UP reserves
the right to refuse to accept or restrict hazardous materials. UP shall supply
APL with a list of prohibited hazardous materials not later than 30 days prior
to UP's refusal to accept such hazardous materials under this Agreement.

         B.       Indemnity

                  APL shall indemnify UP for all losses, damages, liabilities,
fines, civil penalties and expenses (including attorney's fees) suffered by UP
to the extent caused by the omission of full disclosure required by this Section
or by applicable law or regulation.

                  Containers discovered leaking hazardous materials at any UP
destination terminal shall not be allowed to leave the premises until (a)
responsibility therefor is

                                      -24-

<PAGE>

determined and/or the leak is repaired, or (b) UP obtains permission from the
involved Government authorities to move the shipment.

         C. Duty of Cooperation
            -------------------

            The parties recognize that, as to Domestic Shipments, the primary
responsibility for any spill, discharge, or accident resulting from a failure by
the consignor to comply with applicable federal regulations shall be the
responsibility of the Participants; and that, in the event of a spill,
discharge, or accident resulting from the failure of a consignor or one or more
Participants to properly package, block, brace, or load hazardous materials, or
in the event of a claim, lawsuit, judgment, settlement, citation, fine or
penalty arising out of such failure, UP shall assist APL by furnishing all
relevant communications, data, information and reports to APL.

Section 21. FEDERAL CONTRACTOR REQUIREMENTS
            -------------------------------

         A. Applicable Laws
            ---------------

            The parties, each for its own part, shall comply with and give all
representations and further assurances required by any law or regulation
applicable to federal contracts and subcontracts including, without limitation,
the following:

            (1) the extent applicable, the Renegotiation Act of 1951, as
amended, (50 U.S.C. App.ss.ss.1211 et seq.,), the Walsh-Healy Public Contracts
Act, as amended (41 U.S.C.(S)(S) 35, 45), and the Contract Work Hours and Safety
Standards Act, as amended (40 U.S.C.(S)(S) 327,333);

            (2) to the extent applicable, Executive Order No. 11246 dated
September 24, 1965, as amended, relating to equal employment opportunity and
affirmative action in employment of persons without regard to race, color,
religion, sex or national origin; Executive Order No. 11701 dated January 24,
1973, relating to

                                      -25-

<PAGE>

affirmative action in the employment of certain veterans; Executive Order No.
11758 dated January 15, 1974, relating to affirmative action in employment of
handicapped individuals; Executive Order No. 11 625 dated October 13, 1971,
relating to the assistance of minority business enterprises; Executive Order No.
12138 dated May 18, 1979, relating to the assistance of women's business
enterprises; the Age Discrimination Act of 1975; all applicable Regulations of
the Secretary of Labor, including, but not limited to, 41 C.F.R.(S)(S)60-1.4 et
seq.; 41 C.F.R.(S)(S)60-250 et seq.; and 41 C.F.R. (S)(S) 60-741 et seq.; and
all applicable Federal Procurement Regulations including, but not limited to, 41
C.F.R.(S)(S)1-1.13 et seq.; and,

            (3) to the extent applicable, Defense Acquisition
Regulations-104.14, relating to the utilization of small business and minority
business concerns; and 7-104.20, relating to the utilization of labor surplus
area concerns.

         B. Certification
            -------------

            Each party hereby certifies to the other that it does not and shall
not maintain any facilities provided for employees which are unlawfully
segregated, that it does not and shall not permit employees to perform services
at any location under its control or that of its subcontractors where unlawfully
segregated facilities are maintained, and that it shall require its non-exempt
subcontractors to furnish a similar certification to the award of any non-exempt
contract.

Section 22. OTHER AGREEMENTS
            ----------------

            This Agreement and the Original Agreement, as amended and
supplemented and in effect through the date of this Agreement (including,
without limitation, the Letter of Understanding dated April 4, 2002, between the
parties), together comprise the entire agreement and understanding between the
parties

                                      -26-

<PAGE>

regarding the subject matter hereof and thereof and supersede all other existing
and prior agreements between the parties with respect to such subject matter;
provided, however, that the termination of any and all existing and prior
agreements shall not release any party from any obligation that may have accrued
under those agreements prior to such termination.

Section 23. WHEN TERMS AND PROVISIONS OF UP'S INTERMODAL RULES APPLY
            --------------------------------------------------------

            The provisions relating to the applicability of UP's
Intermodal Rules are set forth in Appendix 23 and Exhibit Z.

Section 24. ASSIGNMENT
            ----------

            Except as expressly allowed by this Section, no party to this
Agreement may assign this Agreement, in whole or in part, or assign any rights
granted by or under this Agreement, or delegate to any person not a party to
this Agreement any of its obligations under this Agreement without the prior
written consent of the other party. In the event of an acquisition or merger of
UP by another Class I railroad or by UP of another Class I railroad, APL
International, APL Co. and/or LTS have the right (1) to refuse its agreement to
allow UP to assign this Agreement to the acquiring or merging party(ies) and (2)
if UP attempts to assign this Agreement, to terminate this Agreement upon thirty
(30) days written notice at any time subsequent to the consummation of the
transaction between UP and the other party(ies). Similarly, in the event of a
major restructuring of APL International, APL Co. and/or LTS which (a) would
result in a significant change in the volume of Containers tendered by APL
International, APL Co. and/or LTS to UP or (b) would significantly increase the
cost of doing business for UP or (c) would significantly change UP's operational
or administrative efficiency of doing

                                      -27-

<PAGE>

business with APL International, APL Co. and/or LTS, or (d) would significantly
impact UP's position negatively in the intermodal market; UP has the right to
refuse its agreement to allow APL International, APL Co. and/or LTS to assign
this Agreement. However, if the major restructuring of APL International, APL
Co. and/or LTS does not result in any of the changes described in (a) through
(d) of the immediately preceding sentence, APL International, APL Co. and/or LTS
may assign this Agreement without UP's consent. In the event that UP's consent
is required because a major restructuring of APL International, APL Co. and/or
LTS would result in (a), (b), (c) , or (d) above, and UP does not grant its
consent to the assignment on that basis, the parties shall engage in
renegotiation of the Agreement in an effort to obtain UP's consent. In the event
the parties cannot successfully renegotiate this Agreement, LTS shall have the
right to terminate this Agreement in its entirety as to all parties. In the
event that LTS terminates this Agreement pursuant to the above sentence, APL
International, APL Co. and LTS will transition their business to a new carrier
as soon as possible, but no longer than six (6) months after termination of this
Agreement. Subject to this Section, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their permitted successors and
assigns.

          For purposes of this Section, a major restructuring is defined as a
merger, sale of substantially all assets or other change of control. An initial
public offering of shares of APL International, APL Co. and/or LTS shall not be
considered to result in any of the changes described in (a) through (d) above;
and, therefore, shall not be considered to require UP's consent to assignment of
this Agreement.

                                      -28-

<PAGE>

Section 25. YEAR 2000 COMPLIANCE
            --------------------

            UP and APL each represent and warrant (i) it has audited its
computer hardware and software systems which will be utilized in connection with
this Agreement and (ii) that accurate and current information regarding the Year
2000 Compliance status of such hardware and software systems and the party's
plans to address Year 2000 Compliance problems have been supplied or made
available to the other party. UP and APL each further represent and warrant that
they will cooperate with each other in providing or making available updated
information regarding their Year Compliance program upon reasonable request.

            Any costs associated with effectuating Year 2000 Compliance shall be
borne by each party and shall not result in any additional charges to the other
under this Agreement.

            When data is exchanged between UP and APL as part of this Agreement,
UP and APL each agree to provide to the other, at no additional cost, reasonable
testing assistance and cooperation in order to verify Year 2000 Compliance. Each
party shall designate a Year 2000 Technical Contact person with sufficient
knowledge, experience, and expertise in areas of the Year 2000 problem and the
party's systems environment, who will be available to facilitate answering
questions, coordinate deliverables for testing Year 2000 compliance and provide
other assistance as needed.

            For purposes of this Section, "Year 2000 Compliance" means that each
computer hardware and software system or component thereof (including without
limitation hardware, firmware, middleware, custom or commercial software,
internal components or subroutines therein, or databases which perform any
date/time data recognition function, calculation, comparing or sequencing) will
(a) accurately record,

                                      -29-

<PAGE>

process, store and display date and time data (including but not limited to
calculating, comparing and sequencing) on dates from, into and between different
centuries, including the years 1999 and 2000 and including leap year
calculations, (b) will respond to two-digit date input in a way that resolves
any ambiguity as to century in a disclosed and defined manner, (c) will store
and provide output of date information in ways that are unambiguous as to
century, and (d) will conform to the foregoing requirements when interfacing
with operating systems and other software, hardware and systems with which it
will interact in performing any obligations under this Agreement.

Section 26. NOTICES
            -------

            Except as provided otherwise in this Agreement, any and all notices
given by any party under this Agreement shall be in writing and shall be
delivered (postage or other delivery charges prepaid) to the other parties by
USPS Express Mail, UPS, DHL, Federal Express or other established expedited
courier service, telecopy, facsimile or like wire delivery or any other
commercially reasonable and accepted form of delivery, excluding regular U.S.
Postal Service, to the following addressees:

            To LTS:             Pacer International, Inc.
                                2300 Clayton Road, Suite 1200
                                Concord, California 94520
                                ATTN: Vice President-Transportation Purchasing

            To APL Co./         American President Lines, Ltd.
             APL International: APL Co. PTE, Ltd.
                                1111 Broadway
                                Oakland, California 94607
                                ATTN: Vice President-Transportation Purchasing

            To UP:              Union Pacific Railroad Company
                                1416 Dodge Street
                                Omaha, NE 68179
                                ATTN: Vice President -Intermodal

Any written notice given under this Agreement shall be deemed effective on the
date the notice is received.

                                      -30-

<PAGE>

Section 27. CONFIDENTIALITY
            ---------------

            The parties agree that the commercial terms of this Agreement and
its appendices are confidential and proprietary, and that unauthorized
disclosure could be damaging from a commercial or competitive standpoint under
many circumstances. Therefore, except as otherwise provided in this Agreement
and except to the extent required by law, the contents of this Agreement shall
not be disclosed or released by any party to anyone other than that party's
employees on a "need to know" basis without the written consent of the other
party during the term of this Agreement and for one (1) year thereafter. Any
employee having access to any part of this Agreement or to any information
contained within the Agreement must agree to abide by the terms of this
provision. This includes, without limitation, rate information of any kind,
customer identities, traffic volumes and commodities moving via APL, train
schedules and/or performances, and any other information learned by one party
about the other's business during the course of their dealings thereunder.

Section 28. VENUE
            -----

            Any lawsuits filed by either party against the other arising from
any dispute between the parties during the term of this Agreement shall be
brought in the San Francisco, California judicial district, either state or
federal.

Section 29. APPLICABLE LAW
            --------------

            This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California, without reference to the
laws of any other jurisdiction except to the extent governed by the laws, rules
and regulations of the United States.

                                      -31-

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first written above.

UNION PACIFIC RAILROAD COMPANY              Attest:

By:  /s/ Ivan Evans
    ---------------------------------
Title: President and C.O.O.
       ------------------------------                           Secretary

PACER INTERNATIONAL, INC.                   Attest:
  d/b/a Pacer Stacktrain

By:  /s/ Larry Yarberry
    ---------------------------------
Title: Executive Vice President
       ------------------------------                           Secretary

AMERICAN PRESIDENT LINES, LTD.              Attest:

By:  /s/ Timothy J. Windell
    ---------------------------------
Title: Vice President
       ------------------------------                           Secretary

APL CO. PTE LTD.                            Attest:

By:  /s/ Timothy J. Windell
    ---------------------------------
Title: Authorized Signatory
       ------------------------------                           Secretary

<PAGE>

                               List of Appendices
                               ------------------

Appendix 6.B      --       Stack Car Supply

Appendix 7        --       UP's Service Performance Standards

Appendix 8        --       APL's Volume Commitment

Appendix 9.A      --       Car Cost Component

Appendix 9.B      --       Rates for Use of APL Stack Cars, Etc.

Appendix 11.A     --       Parking Spaces at Terminals

Appendix 12.C     --       International Shipments for TPI Customers

Appendix 13       --       Rates/Adjustments to Rates

Appendix 14.      --       Competitive Proposals

Appendix 17.B     --       Renegotiation of Rates

Appendix 23       --       When Terms and Provisions of UP's Intermodal Rules
                           Apply

                                List of Exhibits
                                ----------------

Exhibit A     --  Definitions

Exhibit B     --  Rates per Container and Empty Repositioning Rates

Exhibit C     --  Kearny Trains

Exhibit D     --  Geographic Areas for APL Volume Commitment

Exhibit E     --  [Intentionally Left Blank]

Exhibit F     --  TPI Accounts

Exhibit G     --  Free Time and Storage Provisions at UP Terminals

Exhibit X     --  Southern Corridor International Rates

Exhibit Y     --  Average Daily Tender

Exhibit Z     --  UP Intermodal Rules Not Applicable to AP

<PAGE>

                                                                   APPENDIX 6.B.

                                Stack Car Supply

                  The parties recognize that occasional regional or national
shortages of Stack Cars can occur. In such situations, UP agrees to provide APL
with priority and preference over other UP customers and over any domestic
container products which UP offers. APL shall have preference and priority as
to:

                  1.    the supply of empty Stack Cars on hand at any given UP
facility;
                  2.    the repositioning of empty Stack Cars from surplus to
deficit locations;
                  3.    the loading of APL containers in available Stack Car
slots at all intermodal terminals where APL volumes are tendered to UP.

                                  Appendix 6.B

<PAGE>

                                                                      APPENDIX 7

                       UP's Service Performance Standards

         A.   Service Performance Standards for Loaded Containers on Stack Cars

              1.       Service Lanes

              For loaded Containers moving on Stack Cars, UP shall transport
such Containers in compliance with the Service Performance Standards set forth
below. The Service Performance Standards shall apply to all APL Containers
whether moving on a Dedicated APL Train or on other UP intermodal trains.
Fourteen Service Lanes will be measured separately on UP. Those Service Lanes
are:

              Service Lane 1: Traffic moving from the Pacific Northwest to
Chicago.
              Service Lane 2: Traffic moving from Chicago to the Pacific
Northwest.
              Service Lane 3: Traffic moving from Southern California to
Chicago.
              Service Lane 4: Traffic moving to Southern California from
Chicago.
              Service Lane 5: Traffic moving from Northern California to
Chicago.
              Service Lane 6: Traffic moving from Chicago to Northern
California.
              Service Lane 7: Traffic moving from Chicago to Laredo.
              Service Lane 8: Traffic moving from Laredo to Chicago.
              Service Lane 9: Traffic moving from southern California to the
southeast, including New Orleans and the Norfolk Southern ("NS") interchange at
New Orleans.
              Service Lane 10: Traffic moving to southern California from the
southeast, including New Orleans and the NS interchange at New Orleans.
              Service Lane 11: Traffic moving from southern California to
Memphis.

                                App. 7 - Page 1

<PAGE>

              Service Lane 12: Traffic moving to southern California from
Memphis.
              Service Lane 13: Traffic moving from southern California to Texas.
              Service Lane 14: Traffic moving to southern California from Texas.

              2.       Service Performance Standards

              Each Service Lane shall be measured separately in each Calendar
Month. UP's performance will be measured on the trains whose scheduled Arrival
time is during that Calendar Month. The Service Performance Standard for each
Service Lane is eighty percent (80%) except that for 3rd AM trains from Chicago
to Los Angeles and to Northern California ("3rd AM Trains") and for selected
Eastbound trains destined to Kearny, New Jersey ("Kearny Trains"), the Service
Performance Standard shall be ninety percent (90%). The Kearny Trains are
identified in Exhibit C.

              In order to meet these Service Performance Standards, for each
Calendar Month UP must make Available or Interchange not less than the
applicable percentage of all loaded Containers for each Service Lane at or in
advance of the applicable scheduled Availability or interchange times set forth
in the Train Schedules.

              Any APL Train Schedules shall not be changed without the consent
of APL which shall not be withheld unreasonably. "APL Train Schedules" refer to
the schedules for those trains on which APL containers regularly comprise
twenty-five percent (25%) of the total number of containers transported on the
train. In the event APL Containers regularly comprise 25% or more of the total
number of Containers transported on a train moving in a lane for which APL has
no Volume Commitment, but another UP customer has a contractual commitment to
that train, UP will have the right to alter the train schedule as required by
UP's commitment in the other contract without

                                App. 7 - Page 2

<PAGE>

the consent of APL, provided UP notifies APL of the intended changes to the
Train Schedule.

              3.       Specific Measures for Service Performance

              If UP is required to set out a bad order Stack Car en route, no
additional hour will be added to the schedule of the train that sets out the bad
order Car and one hour will be added to the schedule of the train that picks up
the bad order Car.

                       a.       UP Terminals

                       In the Eastbound or Southbound direction, performance
will be measured against the scheduled Availability and interchange time for UP
at destination terminals or at designated interchange points in the Service
Lanes specified in Section A.1 of this Appendix 7. In the Westbound or
Northbound direction, UP's performance will be measured against the scheduled
Availability time at each destination terminal in the Service Lanes specified in
Section A.1 of this Appendix 7. Seattle and Portland volumes will be aggregated
to determine UP's performance in any given Monitoring Period.

                       b.       UP On-Dock

              In the event that APL initiates service to an "on-dock" terminal
at any West Coast location for International, or International and Domestic,
Containers, UP's performance will be measured against the scheduled interchange
time to the rail carrier servicing the on-dock facility or against the scheduled
time of placement of loaded Stack Cars at the on-dock terminal when UP makes
such placements.

                       c.       Other

              In the event that a Container is excluded from the performance
measure, UP will still make its best effort to transport the Container on a
timely basis and at the

                                App. 7 - Page 3

<PAGE>

hourly transit time reflected in the applicable Train Schedules.

              The Service Performance Standards shall not apply to any loaded
Container where the actions of APL, a Participant or their agents, or a Force
Majeure condition prevent UP from meeting a Train Schedule. This includes the
following: lack of Chassis, a late ship, a lack of proper and/or complete
documentation, a failure to tender a Container in advance of the scheduled
"cut-off " time as set forth in the Train Schedule or adjusted gate cutoff times
made at APL's request with UP's consent. If UP believes that an event has
happened which was within APL's control and that event prevented UP from meeting
a Train Schedule, the parties will confer in good faith to determine if the
Service Performance Standards should apply to the affected Containers.

              4.       Force Majeure Conditions

              If a Container incurs a force majeure condition but UP still makes
the scheduled Availability or interchange, that Container will be included in
the Service Performance measure. Force majeure conditions are set forth in
Section 15.

              5.       Service Standard Adjustments Due to Maintenance

              Each year UP will evaluate its maintenance of way programs and
discuss with APL the potential implications of maintenance on the Service
Performance Standards. Included in the evaluation may be a proposal to change a
specific Service Performance Standard for a period of time during certain
maintenance periods. APL will review these proposals and will not unreasonably
withhold its consent to potential changes. APL will make its best efforts to
work with UP to accommodate repair programs. However, in no event will the
proposed change from the Service Performance Standard be greater than 5%.

                                App. 7 - Page 4

<PAGE>

          6. Cross-Town Standards

          Service performance standards for crosstown movements by truck of
Containers for the ZLAAP Trains or their successor trains are as follows:

          10 containers by 1700

          10 containers by 1800

          15 containers by 1900

          20 containers by 2000

In the event that the volumes being excluded from the above crosstown measure
become excessive, UP and APL agree to negotiate in good faith to establish new
standards to increase the volume included in the measurement process.

          7. Service Performance Compliance Reports

          APL and UP shall each monitor compliance with the Service Performance
Standards. APL and UP shall use their best efforts to develop a joint report
measuring each Monitoring Period ("UP Service Performance Report"). The UP
Service Performance Report shall include each Container number, the Train
identification number for each Container, the scheduled Availability or
interchange of each Container, the actual Availability or interchange of each
Container, and the time each Container was removed from the terminal.

      B.  Penalties for Failure to Meet Service Performance Standards

          1.   Default Condition

          If UP fails to meet its Service Performance Standards in any period of
three consecutive Calendar Months or five Calendar Months in any twelve
consecutive Calendar Months, UP will be in default of its Service Performance
Standards ("Default Condition"). APL is not required to notify UP of this
Default Condition.

                                App. 7 - Page 5

<PAGE>

          2.   Related Service Lanes

          The following traffic is defined as being in Related Service Lanes:

               (a) Service Lanes 1 and 2;

               (b) Service Lanes 3 and 4;

               (c) Service Lanes 5 and 6;

               (d) Service Lanes 7 and 8;

               (e) Service Lanes 9 and 10;

               (f) Service Lanes 11 and 12;

               (g) Service Lanes 13 and 14.

          3.   Correction of Default Condition

          UP may correct the Default Condition if its average performance in the
next three Calendar Months ("Correction Period") meets the Service Performance
Standards. For example, if UP fails in Calendar Months One, Two and Three, and
the current Service Performance Standard is 80% , if UP's performance in
Calendar Months Four, Five and Six (the "Correction Period") averages 80%, then
UP will have corrected the Default Condition. UP will have one such Correction
Period during each period of twelve (12) consecutive Calendar Months commencing
with the effective date of the Agreement. The Correction Period is included in
the eighteen consecutive Calendar Months.

          4.   Elimination of APL Volume Commitment

          If UP fails to remedy the Default Condition or has exhausted its
available Correction Periods as to the 80% Service Standard, then APL's Volume
Commitment as defined in Section A of Appendix 8 shall be eliminated for the
affected Service Lane(s) and Related Lane(s), including any 3rd AM Trains or
Kearny Trains which are moving in

                                App. 7 - Page 6

<PAGE>

the affected Service Lane(s) or Related Service Lane(s). If UP fails to remedy
the Default Condition or has exhausted its available Correction Periods as to
the 90% Service Standard, then APL's Volume Commitment as defined in Section
8.A. shall be eliminated for that percentage of APL's Volume Commitment
represented by the affected Train(s). If APL does not divert its business during
the six Calendar Months following UP's Service Performance Failure, and provided
that UP meets the Service Performance Standard in each of the six Calendar
Months, then APL's Volume Commitment for the involved Service Lane and Related
Service Lanes is reinstated. If UP fails to meet the Service Performance
Standards in any of the six Calendar Months, then APL's Volume Commitment for
the involved Service Lane and Related Service Lanes is eliminated for the
remainder of the Agreement.

          APL will provide UP with sixty days advance written notice of its
intended diversion of traffic ("Notice of Diversion"). If APL diverts a portion
of its traffic in the affected Service Lanes, and UP meets the Service
Performance Standard in each of the six Calendar Months, then APL's Volume
Commitment will be reinstated for the traffic which APL did not divert from
these Service Lanes. Regardless of APL's diversion of traffic, all other
provisions of the Agreement will continue to apply to traffic which APL
continues to offer to UP under this Agreement.

          5.   APL's Sole Remedy

          If UP fails to remedy a Default Condition as set forth in Section B.3
of this Appendix 7, APL shall have the right, in its sole discretion, to divert
its traffic, in whole or in part, temporarily or permanently, to other carriers.
Except as provided in Section B.6 of this of this Appendix 7, the foregoing
right to divert shall be APL's sole right against UP for UP's failure to correct
a Default Condition within the Correction Period.

                                App. 7 - Page 7

<PAGE>

          6.   UP's Sole Remedy

          If APL notifies UP that it plans to divert some or all of its traffic
under Section B.4 of this Appendix 7, UP shall have the right to request
expedited, single issue arbitration as set forth in Section C of this Appendix
7. It shall not be a defense available to UP in an arbitration proceeding
brought under this subsection that APL (i) will not be able to improve its
service by diverting to another carrier; (ii) will have to pay higher (or lower)
Rates to the carrier to which APL's traffic is to be diverted, or (iii) has some
other motive unrelated to UP's performance under this Agreement for desiring to
divert its traffic to another carrier.

     C.   Expedited Arbitration

          If UP desires to invoke single-issue arbitration under this
subsection, it shall serve its written demand on APL within ten working days
after its receipt of APL's Notice of Diversion. It shall simultaneously identify
the arbitrator of its choice. APL shall have ten working days from receipt of
UP's written demand for arbitration to select its arbitrator and to notify UP.
The two arbitrators shall have twenty working days to select a third neutral
arbitrator. In the event that the two arbitrators are unable to agree on a third
arbitrator, they shall submit the issue to the Chief Judge of the United States
District Court for the Northern District of California to select the third
arbitrator from a list of six candidates nominated by the parties. UP and APL
shall each nominate three persons. Each candidate shall have substantial
expertise in some phase of rail freight transportation.

          Following the selection of the third arbitrator, the issue of whether
UP has failed to meet its Service Performance Standards shall be expeditiously
arbitrated. It is

                                App. 7 - Page 8

<PAGE>
<PAGE>

the goal of UP and APL to have the issue decided within sixty days after the
three arbitrators are impaneled.

          The arbitration proceeding shall be conducted in accordance with the
rules and procedures set forth in Section 16 of this Agreement, but in the event
of inconsistencies between the terms of this Appendix 7 and Section 16, this
Appendix 7 shall govern. The decision of the arbitrators shall be final, and
neither party shall have the right to appeal the decision or to seek a trial de
novo in any court of law.

          If UP invokes arbitration under this subsection, APL shall not divert
any traffic identified in its Notice of Diversion until the arbitration
proceedings have been completed and a decision is issued.

     D.   Continued Duty of Cooperation

          In the event of APL's diversion of its traffic under this Section,
both parties shall be obligated to cooperate with one another to the maximum
extent possible to wind down their business relationship related to the diverted
traffic in a reasonable and business-like manner so as to avoid imposing
unnecessary hardships on each other, or on their joint customers, joint
suppliers/vendors, or employees. In that regard and at the time of APL's
diversion, UP shall be required to deliver to APL's new railroad operators at
UP's expense a sufficient number of Stack Cars, both APL owned or leased from
TTX or other parties, to efficiently accommodate APL's volume of business and to
allow APL unconstrained access to UP's terminals for the purpose of removing all
APL Containers, chassis, office fixtures, supplies, and related articles, owned,
leased or otherwise under the control of APL. The number of Stack Cars to be
delivered will be determined by comparing APL's then current volume of traffic
in the diverted Service lanes to the then current turn time of Stack Cars in
those Service Lanes. UP agrees to maintain a

                                App. 7 - Page 9

<PAGE>

sufficient number of Stack Cars owned by TTX Company in UP's possession or
control so as to facilitate any needed diversion by APL, until the transition to
the new carrier is complete.

          E.   Completion of Performance

          In the event of APL's diversion of traffic under this Section, both
parties shall be required to complete any contractually required performances
begun prior to the announcement by APL of its Notice of Diversion, including,
but not limited to, UP's delivery of Containers tendered prior to the date of
termination and APL's payment for such transportation services.

                                App. 7 - Page 10

<PAGE>

                                                                      APPENDIX 8

                             APL's Volume Commitment

         A.       Minimum Traffic Volume Commitment

                  Effective as of January 1, 1999, APL's Volume Commitment is
comprised of the following elements: During each twelve month period of this
Agreement, APL shall tender to UP for movement under the terms of this Agreement
95% of its high cube domestic business, 95% of its international business
originating or terminating at California ports; and 85% of its international
business to and from the Pacific Northwest. APL shall also tender 95% of its
westbound domestic 20' and 40' Containers to California for movement under this
Agreement and 85% of its domestic 20' and 40' containers to the Pacific
Northwest for movement under this Agreement. This Volume Commitment shall apply
only to Service Lanes 1 through 14 as further specified in Exhibit D.

                  This Volume Commitment does not apply to shipments tendered
through APL Intermodal Management Services, a division of American Consolidation
Services of North America, Ltd., when those shipments are not tendered to LTS.

                  B.       APL Written Statement

                  Within thirty (30) days following the end of each twelve (12)
month period of this Agreement, at UP's request, APL shall submit a written
statement to UP indicating whether it is in compliance with the Volume
Commitment applicable under this Section. UP shall have the right to audit, at
its expense, appropriate APL records to verify APL's compliance with the Volume
Commitment. If the audit determines that the APL Statement is materially
inaccurate, APL shall reimburse UP for the expense of the audit.

                                App. 8 - Page 1

<PAGE>

     C.   Compensation for Failure to Meet Volume Commitment

          In the event that APL fails to meet the Volume Commitment in any
twelve (12) month period under this Agreement, APL shall pay to UP a payment
equal to $76.00 times the number of loaded Containers by which APL fell short of
meeting the Volume Commitment. Such payment shall not be deemed a penalty, but
compensation for UP's lost contribution on these Shipments. APL shall make any
payment to UP within thirty (30) days after receipt of an invoice from UP for
that twelve (12) month period.

                                 App. 8 - Page 2

<PAGE>

                                                                    APPENDIX 9.A

                               Car Cost Component

The car cost component is derived by the following process:

          1.   The system average per diem and mileage rates are determined for
Stack Cars moving over the UP system. This will be a weighted average of all
articulated TTX and foreign line railroad owned Stack Cars moving over the UP
rail system. As example, if the TTX per diem rate is $65 per day and the foreign
line railroad owned per diem rate is $80 per day, and if 90% of the Stack Cars
used by UP are TTX cars and 10% are foreign line cars, then the weighted average
per diem rate would be $66.50 per day. If the TTX mileage rate is 6.5 cents per
mile and the foreign line railroad mileage rate is 4.5 cents per mile, then the
UP system average would be 6.10 cents per mile. UP will calculate and provide
the system average per diem and mileage rates to APL. In the event that APL
disputes any of the numbers provided by UP, then APL can audit UP's calculations
through use of an independent auditor. In the event that UP's numbers are proven
to be substantially correct, then APL will pay all costs of the audit. If UP's
numbers are found to be incorrect, then UP will pay all costs of the audit.

          2.   The average transit time is calculated for APL volumes moving by
direction for each origin and destination pair shown for APL Train Schedules.
The transit time will be stated in whole days and will be calculated using the
scheduled transit time as provided in train schedules used to move APL volumes.
To the extent that multiple train schedules are used from one origin to one
destination, the transit time will be calculated using a weighted average based
on APL's volumes moved on the different train schedules. One-half day of origin
and one-half day of destination dwell

                                App. 9A - Page 1

<PAGE>

time will be included in the transit time. Dwell time is the time that Stack
Cars sit idle at a terminal waiting to be loaded or unloaded. The transit time
and dwell time together will be considered as the one way "turn time" for each
origin/destination pair. The turn times will be agreed upon by the Parties for
each origin/destination pair.

          3.   The UP rail mileage will be determined for each
origin/destination pair shown in Exhibit B, Part III.

          4.   The average per diem rate determined in Sub-paragraph 9.A.1. will
be multiplied by the turn time derived under Sub-paragraph 9.A.2. The average
mileage rate determined under Sub-paragraph 9.A.1. will be multiplied by the
mileage determined under Sub-paragraph 9.A.3. The resulting per diem and mileage
charges will be added together and rounded to the nearest whole dollar to form
the average Stack Car cost. This total will then be divided by ten (10) to
derive the car cost component for 40', 45', 48' and 53' domestic container
rates. The total will be divided by twenty (20) to derive the car cost component
for 20' domestic container rates.

          5.   Effective as of February 1, 2000, the car cost component will be
adjusted every two years utilizing the weighted system average of TTX and
foreign line railroad Stack Cars moving on UP and the transit times for APL
volumes moving from and to each specific origin/destination pair shown in
Exhibit B during the calendar year prior to the adjustment. As example, the
February 1, 2000 adjustment will be based on data from calendar year 1999.

                                App. 9A - Page 2

<PAGE>

                                                                    APPENDIX 9.B

                     Rates for Use of APL Stack Cars, Etc.

     Effective as of August 20, 2001, for the balance of the term of this
Agreement (unless otherwise modified by the parties), UP shall pay to Pacer the
per diem and mileage rates set forth below for the Stack Cars identified in
below:

Car Type                Number of Cars      Rate
--------                --------------      ----

40' well 5-unit         140 cars            $2.77/hour and 5.5 cents per mile

45' well 5-unit         70 cars             $2.94/hour and 5.5 cents per mile

48' well 5-unit         346 cars            $2.10/hour and 6.8 cents per mile

53' well 3-unit         1300 cars           $1.88/hour and 6.0 cents per mile

     The above rates on the 40' and 45' well cars have been in place since the
cars were converted to BRAN markings and these rates will continue to apply for
the duration of this Agreement. The above rates applicable to the 48' and 53'
well cars became effective as of August 20, 2001. For periods prior to that
date, UP is obligated to pay the AAR default rate as defined in the AAR rules
for BRAN marked cars and the rates previously set out in Section 9.B of the
Original Agreement for the APLX Cars.

     APL and Pacer agree that neither of them shall acquire additional Stack
Cars to be used on UP, unless and until the entity acquiring the additional
Stack Cars by purchase, lease or otherwise has reached a bilateral car hire
agreement with UP.

     Nothing contained in this Agreement shall prevent APL or Pacer from
acquiring cars of a particular car type listed above to replace cars of the same
car type that are removed from service on UP for whatever reason; provided;
however, that the number of cars in a particular car type category of cars
listed above cannot be increased. Furthermore, nothing herein shall prevent APL
or Pacer from acquiring additional Stack Cars to be used on any other railroad.

                                     App. 9B

<PAGE>

                                                                   APPENDIX 11.A

                          Parking Spaces at Terminals.

     UP will provide 250 parking spaces to APL at UP's Global One facility
without charge for the term of this Agreement. If, due to the continued use of
Global One by other stack train operators or due to UP's failure to expand the
facility, UP cannot provide APL with 250 parking spaces at Global One, then UP
shall have the option of providing parking spaces at another location on
property owned or controlled by it. In that case, UP will pay for any drayage
services required to move Containers between Global One and the UP location. If
it cannot or does not want to offer such parking spaces on its own property or
on property controlled by it, then UP will compensate APL for its expenses in
draying Containers and storing Containers on third party property. In the event
empty Containers are placed on the ground and stacked one on top of the other,
any lifting of such Containers from the ground or stacked position for placement
on chassis shall be without charge to APL.

     At its Global One facility, UP will provide APL with sufficient space to
accommodate up to 1,000 empty chassis for use in the day to day operation of APL
Container movements. Such space will be provided to APL without charge. Further,
the parties recognize that as APL's volume of business increases or decreases,
other than day to day fluctuations or normal business cycle fluctuations, the
allowable number of empty chassis held at UP's Global One facility may need to
be increased or decreased. In the event of such volume changes, the parties
agree to negotiate in good faith to establish a new maximum number of empty
chassis that may be held at the Global One facility without charge to APL.

                                  Appendix 11A

<PAGE>

                                                                   APPENDIX 12.C

                    International Shipments for TPI Customers

     In addition to its own International traffic, APL may also ship
International traffic under this Agreement for those TPI customers listed on
Exhibit F. When mutually agreed in writing between the parties, other TPI
customers may be added to Exhibit F.

                                  Appendix 12C

<PAGE>

                                                                     APPENDIX 13

                           Rates/Adjustments to Rates

          A.   Rates and Charges; Adjustment Processes

               All Rates are on a per Container basis and apply to the movement
of Containers under this Agreement.

               The rates, divisions and charges ("Rates") which are applicable
to the shipments moving under this Agreement are shown in Exhibit B. Part I
shows International Rates per loaded Container. Part II shows Rates on all empty
Containers. Part Ill shows rates on Domestic loaded Containers. Part IV shows
all other miscellaneous Rates. Part V shows the TPI Rates. Part VI shows
terminal and switch charges.

               The Rates in Exhibit B are based on those agreed to by the
parties in a Memorandum of Understanding dated December 15, 1995, as adjusted
pursuant to the provisions of this Agreement after 1995 to and including
February 1, 1997.

               Adjustments to Rates will be calculated using three processes:

               (1)  Cost Adjustments;

               (2)  International Market Rate Adjustments;

               (3)  Domestic Adjustments including Market, Daily Domestic
                    Tender, and Utilization Adjustments.

          B.   Cost Adjustments

               Except as otherwise provided, all Rates are Cost Adjusted. Cost
Adjustments apply only to that portion of a Rate which is adjustable ("Adjusted
Portion"). For domestic Rates, other than westbound 40' domestic Rates applying
from Chicago, IL, Kansas City, MO and St. Louis, MO, on the one hand, to
Seattle, WA,

                                App. 13 - Page 1

<PAGE>

Portland, OR, Oakland, CA and Los Angeles, CA, on the other hand, the car cost
component will be deducted from the Rate prior to the application of any Cost
Adjustments. Further, and where such charges and components are part of the
total Rate, the following charges and components will also be deducted prior to
the application of any Cost Adjustments: stop charge, container size arbitrary,
utilization component, domestic market adjustment component, average daily
tender component and the fixed portion of the Rate. The Adjusted Portion of each
Rate consists of the following components and respective weights for each
component:

                  Component                             Weight
                  ---------                             ------
                  Overhead                              22.70%
                  Fuel                                   9.90%
                  Wages                                 33.60%
                  Supplements                           13.80%
                  Materials and Supplies                 8.30%
                  Other Expenses                        11.70%

                  Beginning February 1, 1999, and consistent with the
methodology shown in Exhibit B.1., the weights shall be rebased every three
years using UP's most recent R-1 reports. Cost Adjustments for empty Container
rates shall be effective August 1, 1999.

                  Exhibit B, Part I shows the base Adjusted and Fixed Portion of
International Rates per loaded Container. Exhibit B, Part II shows the base
Adjusted and Fixed Portions of empty Container Rates. Exhibit B, Part III shows
the base Adjusted and Fixed Portion of loaded Domestic Containers. Exhibit B,
Part V shows the Adjusted and Fixed Portions for loaded TPI Rates.

                                App. 13 - Page 2

<PAGE>

          For each of the Rates set forth in Parts I, II, III and V, the
Adjusted Portion shall be divided into its component parts. Each component part
will be Cost Adjusted as described below. Then all the Cost Adjusted Components
will be added together to obtain the new Adjusted Portion. That new Adjusted
Portion shall then be added to the Fixed Portion for the new Rates.

          1. Fuel Component

             (1) The fuel component shall be increased or decreased each
February 1, May 1, August 1, and November 1 by an amount equal to the percentage
change, if any, in the United States Fuel component of the Series RCR, Railroad
Cost Recovery Index, published by the Association of American Railroads, for the
first preceding calendar quarter over the second preceding calendar quarter. For
example, the February 1, 1996, Adjustment shall be based on the change in the
index between the fourth quarter of 1995 and the third quarter of 1995.

             (2) The parties recognize that the cost of fuel can be highly
dynamic; that is, fuel costs can rise and fall dramatically over relatively
short periods of time. The parties further recognize that, in such situations,
it is to their mutual benefit to initiate a process whereby the Adjustment of
the Rates contained in Exhibit B is accomplished on a more timely basis than is
provided for in the preceding paragraph. In the event there is a dramatic and
immediate rise in the cost of fuel to UP, as jointly determined by the parties,
the parties agree to implement the following process:

                 (a.) UP and APL jointly develop the dollar or percent amount
which is required to recover the increased fuel cost on a per shipment basis;

                                App. 13 - Page 3

<PAGE>

                    (b.)    APL  analyzes  the market  situation  and
determines  the dollar  amount on a per shipment basis for Domestic, TPI and
International shipments that can be successfully recovered.

                    (c.)    The Domestic,  TPI and  International  Rates to APL
shall be increased by the amount of the dollar surcharge identified in section
(b.) above effective with the date of APL's implementation of that surcharge on
its rates to its customers. However, in no event shall the dollar amount of the
surcharge be greater than the dollar amount developed in section (1) above.

                    (d.)    The parties will follow this process as the price of
fuel or as market conditions change which affect the amount which APL can
recover. UP will change its rates to reflect any market change in APL's rates.

                    (e.)    Where this process is in place for part of any
quarter, the normal fuel adjustment process will not be utilized for that
quarter.
                    (f.)    When the  parties  agree that the price of fuel has
stabilized and returned to a normal condition, the fuel surcharge will be
cancelled and the APL Rates will again be subject to the standard fuel
adjustment in the next quarter in which the fuel surcharge is not applicable.
The calculation of that fuel cost will be based on a comparison of the quarter
which immediately preceded the last quarter in which the normal fuel adjustment
was applied to the quarter in which the APL Rates again become subject to the
standard fuel cost adjustment.

        For example, the Second Quarter 1997 adjustment effective May 1, 1997
was:

                  AAR RCR Table C Fuel Index 1Q97 = 211.5
                                             4Q96 = 224.1
                                Percent change    =(5.622)%

                                App. 13 - Page 4

<PAGE>

                  On June 1, 1997, UP approaches APL to seek relief from rising
fuel costs; the fuel surcharge process is implemented and lasts until December
15, 1997, when the fuel surcharge is cancelled. The normal fuel adjustments for
the third, fourth and first quarters effective August 1, November 1 and February
1 are set aside. (Since February uses 4th quarter 1997 in the adjustment process
and since the surcharge was in effect for a portion of the 4th quarter, the
first quarter adjustment is not performed.)

                  The next adjustment, effective May 1, 1998, will compare the
first quarter 1998 to the first quarter 1997, as the first quarter 1997 was the
last quarter used to calculate a fuel cost adjustment:

                          AAR RCR Table C Fuel Index 1Q97 = 211.5
                                                     1Q98 = 215.7
                                        Percent change    = 1.98%

                  2.   Non-Fuel Component

                  The non-fuel components shall be increased or decreased
annually each May 1 by an amount equal to the percentage change, if any, in the
weighted average in the cost components listed below for the fourth quarter of
the preceding year over the fourth quarter for the second preceding year. The
non-fuel component shall be defined and weighted as detailed below:

                             Non-Fuel Sub-Components

Component                 Weight           Escalation Series
---------                 ------           -----------------
Wages                     33.60%           AAR RCR US Wage Index
Supplements               13.80%           AAR RCR US Wage Supplements Index
Materials and Supplies     8.30%           Producer Price Index - Industrial
                                                Commodities Excluding Fuel
                                                (preliminary)
Other Expenses            11.70%           AAR RCR US All Other Expenses Index
Overhead                  22.70%           Producer Price Index - Industrial
                                                Commodities Excluding Fuel
                                                (preliminary)

                                App. 13 - Page 5

<PAGE>

                  The overhead component for each rate shall be increased or
decreased annually each May 1 by an amount equal to the percentage change, if
any, in the Producer Price Index -- Industrial Commodities Excluding Fuel
(preliminary) published by the Bureau of Labor Statistics for the fourth quarter
of the preceding year over the fourth quarter of the year before the preceding
year. The fourth quarter PPI for any year is obtained by calculating the simple
average PPI for the months October, November and December of that year. For
example, the May 1, 1996, Adjustment shall be based on any change in the
calculated average index for October, November and December 1995 and the
calculated average index for October, November, and December 1994.

                   3.  Percentage Change

                  In computing the amount of Adjustment each quarterly or annual
period, the percentage change in the indices shall be computed to three decimal
places. When the percentage change is applied as provided in subsection 1.
through 3. of this subsection B., the aggregate results shall be added together
to reach the Adjusted Portion which shall be stated in dollars and cents. The
Adjusted and Fixed Portions shall be added together and rounded to the nearest
whole dollar to establish the current Rate. In the event any of the necessary
index series is rebased between any two measurement periods, the earlier index
shall be restated to the new base for purposes of computing the percentage
change. In the event the AAR modifies the construction of the Series RCR, the
parties hereto agree to accept such modifications for use in this Section.

                  In the event the AAR publishes a retroactive adjustment to an
RCR component used for an Adjustment under this Section, the Adjusted Portion of
the Rates shall be revised accordingly, effective on the first day of the month
following such

                                App. 13 - Page 6

<PAGE>

publication and retroactive to the date of the Adjustment for which the original
index was used.

         C.  International Market Adjustment

             It is the intention of the parties that each of them be
treated fairly in relation to the competitive marketplace in which both do
business. The parties recognize that their mutual interests may suffer if
"International Market Rates" (as defined below) are substantially less than the
Rates provided under this Agreement. Therefore, the parties have devised a
process, called the International Market Adjustment process, to adjust the Base
Rates by taking into account International Market Rates as defined below. APL's
Rates with UP will go down, but not up, based on the International Market
Adjustment.

             For purposes of this Agreement, the relevant International Market
Rates are defined as those Rates assessed by UP and Burlington Northern Santa
Fe ("BNSF") to APL's International steamship competitors ("APL Competitors") on
Comparable Units as that term is defined below in subsection C.3. The
International Market Rates do not include APL's Rates or volume moving under
this Agreement.

             1.  APL Request to Negotiate

             In the event that APL believes that any or all of the
International Rates set forth in Exhibit B, as adjusted under the provisions of
this Section B.1, are higher than the then current market levels, at APL's
request APL and UP shall make a comparison of APL's Rates to the then current
market rates. International Market Rates will be determined by using the process
set forth in subsections 2 and 3 of this Section C. In the event that any of
APL's then current Rates are found to be higher than the corresponding
International Market Rates, APL and UP shall enter into good faith

                                App. 13 - Page 7

<PAGE>

negotiations with the intent of establishing a new level of APL Rates such that
APL retains a competitive cost position.

                  2.   Determination of International Market Rates

                  International Market Rates will be determined on a one-way
basis. First, for each container size, each type of movement (International
load, empty, westbound Domestic), in each direction and each origin/destination
pair, an average UP rate will be developed from the rates which UP offers to APL
Competitors ("Average UP Rate"). Second, average BNSF rates will be developed
for each container size, each type of movement (International load, empty,
westbound Domestic), each direction and each origin/destination pair. Rates for
both UP and BNSF will be equated to a Comparable Unit Basis as set forth in this
Section C.3.

                  The average BNSF and average UP rates will then be weighted by
their respective market shares to develop a weighted average market rate and the
weighted average market rate will then be compared with APL's Rate. APL's Rate
will be equated to a Comparable Unit Basis as set forth in this Section C.3. If
the weighted average International Market Rate is higher than the comparable APL
Rate, then no adjustment will be made to the APL Rate. If the weighted average
International Market Rate is lower than the comparable APL Rate, then APL and UP
shall negotiate in good faith as provided in this Section C.1.

                  3.   Determination of Comparable Unit Basis

                  Weighted average International Market Rates will be determined
on the basis of through rates between the West Coast port cities, on the one
hand, and inland points shown in Exhibit B, on the other hand. Any specific
interchange rates applicable

                                App. 13 - Page 8

<PAGE>

to or from Chicago, Kansas City, St. Louis, Memphis or New Orleans will be
compared separately from the local rates which apply from/to those points.

                  In making the determination of weighted average International
Market Rates and comparing those rates to APL's Rates, APL and UP shall consider
all associated costs and economic factors necessary to arrive at a valid
comparison. The parties shall consider costs which would be involved in any
agreement between a rail carrier and a steamship line.

                  First, a separate assessment will be made for each container
size, each type of movement (International load, empty, westbound Domestic) in
each direction, and each origin/destination pair. Second, costs over which UP
has some control or influence and which are incurred by APL and the APL
Competitor for the Comparable Unit will be compared. This analysis will result
in the "Comparable Unit Basis."

                  Cost factors to be considered in determining the Comparable
Unit Basis include, but are not limited to, rail car ownership/lease costs,
mileage and maintenance costs, free repositioning of empty Containers, empty
repositioning rates between inland points, the difference in drayage cost,
drayage allowances, volume incentive payments, terminal storage provisions,
arbitraries, on dock rail facilities and any other relevant cost-influencing
factors. Drayage between rail ramps and container yards or drayage between rail
ramps and customers' facilities at inland points will not be considered. All
costs shall be equated to a per container basis by specific container size.

                  4.       Arbitration

                  If APL and UP cannot agree on the prevailing International
Market Rates within ninety (90) days of APL's notification to UP of its desire
to negotiate, then the

                                App. 13 - Page 9

<PAGE>

parties agree to arbitrate the prevailing International Market Rates pursuant to
Section 16 of this Agreement.

                  5.       Effective Date for Adjusted Rates

                  If any  adjustments  are made to the Base Rates as the result
of the agreement of the parties under this Section C.1, such new Rates will be
made effective no later than thirty (30) days following completion of the
negotiations. Any adjusted Rates will also be subject to the next scheduled Cost
Adjustment following the effective date of the Adjusted Rates.

         D.       Domestic Market Adjustment

                  It is the intent of the parties that the Domestic Market
Adjustment should reflect changes in the Domestic Rates which APL charges to its
customers.

                  1.       Amount of Adjustment

                  The amount of the Adjustment to the Base Rates shall be:

                           a. Except as provided in subparagraphs b. and d. of
this Section D.1., 50% of the dollar change in APL's average Domestic Container
Rates (i) between West Coast points and Chicago, (ii) between Northern
California points, Seattle, and Portland on the one hand and Memphis Local
(Eastbound only) and Memphis Interchange (Westbound only) on the other hand,
(iii) from Chicago to Salt Lake City, and (iv) between Southern California
points, on the one hand, and points in Texas, Memphis Local and New Orleans
Local, on the other hand.

                           b. 38.5% of the dollar change in APL's average
Domestic Container Rates between points in Southern California, on the one hand,
and Memphis and New Orleans Interchange, on the other hand.

                                App. 13 - Page 10

<PAGE>

                           c. There will be no adjustments made to the 40'
Domestic Container Rates applying from Chicago, Kansas City or St. Louis to
Seattle, Portland, Oakland or Los Angeles since those rates are adjusted
pursuant to the International Rate Adjustment process.

                           d. The following provisions only apply in the event
that APL Land Transport Services, Inc., a subsidiary of APL Limited, is sold to
another entity. Effective January 1, 2001, the parties agree that, in the event
APL is able to secure the agreement of either CSX Intermodal ("CSXI") or the
Norfolk Southern Railway ("NS") to participate in the Domestic Market Adjustment
process on the Northeast business which APL tenders under its current contract
with Consolidated Rail Corporation ("Conrail"), then UP's portion of future
Domestic Market Adjustments for Northeast business interchanged from or to that
carrier will be reduced by a comparable percentage. As an example, if NS agrees
to assume 15% of any Domestic Market Adjustment on Northeast business, then UP's
percentage of the Domestic Market Adjustment on Northeast business will be
reduced from its current 50% to 35%. If NS fails to agree to participate in the
Domestic Market Adjustment process, then UP's portion would remain at 50% for
volumes interchanged to or from NS.

                  2.       Determining the Adjustment Factor

                  APL's average Domestic Container Rates assessed against its
customers in one calendar quarter shall be compared with its average Domestic
Container Rates in the preceding calendar quarter. Rate adjustments will be made
effective every February 1, May 1, August 1, and November 1. Thus, the February
1 adjustment would be based on the comparison of the prior fourth calendar
quarter to the prior third calendar quarter. The May 1 adjustment would be based
on the comparison of the prior

                                App. 13 - Page 11

<PAGE>

first calendar quarter to the fourth quarter of the preceding year. The August 1
and November 1 adjustments would be accomplished in a similar fashion using the
appropriate comparison of calendar quarters.

                  Adjustments will be made separately for each direction by
origin-destination. Adjustments will be made based on the following container
sizes: 20', 40'/45' grouped together, 48' and 53'. For example, an Adjustment
will be made for all 20' Containers moving from Chicago to Southern California
while a separate Adjustment will be made for all 48' Containers moving from
Southern California to Chicago.

                  The following deductions will be made to create the applicable
APL Container Rates that are used for comparisons:

                           (1) Any charges included in APL's Domestic Container
Rates for drayage or motor carrier service will be deducted, except that
sub-service drayage charges for Modesto and Sacramento will not be deducted.

                           (2) For any APL Domestic Container Rates applying
from or to points beyond Chicago, the connecting rail carrier rates in effect on
July 1, 1992 will be deducted.

                           (3) For any APL Domestic Container Rates applying
from or to points in the Southeast beyond Memphis or New Orleans, the connecting
carrier rates in effect on January 1, 1997 will be deducted.

                  The purpose of these deductions is to prevent any effect on
the Domestic Market Adjustment which would be caused by changes in APL's drayage
or motor carrier rates, or by changes in the rates of connecting rail carriers.
As example, Conrail could assess APL an increase in the rates that Conrail
charges APL for Domestic shipments. If APL raises the Domestic Container Rates
to its customers to pass on the

                               App. 13 - Page 12

<PAGE>

Conrail increase, UP should not be able to take advantage of that increased
Domestic Container Rate. Likewise, if Conrail reduces its rates to APL, but APL
makes not change in the Domestic Container Rates that APL assesses against its
customers, the use of the lower Conrail Rates in this adjustment process would
have the impact of increasing the Western portion of the APL Domestic Container
Rate when compared to the prior calendar quarter. This would then result in an
increase in the Rates that UP assesses against APL.

                  The parties have developed a methodology to assist in
eliminating the impact of any regional mixes for the Rates applying to and from
the Southeast region. Beginning with the January 1, 1997 adjustment and
thereafter for each annual twelve (12) month period, Eastbound and Westbound
volumes from and to Atlanta, Charleston, Jacksonville and Charlotte (the
"Points") will be analyzed separately both by direction and by Container size.
The calculations shall be done as follows:

                           (1) for each annual twelve (12) month period, the
percentage mix of traffic for each of the four Points will be determined. Thus,
in one twelve month period, Eastbound Atlanta volumes may represent 75% of the
total Eastbound volumes to the four Points named above. Charleston may be 8%,
Charlotte 7% and Jacksonville 10%.

                           (2) the average APL Domestic Container Rates that APL
assesses against its Domestic customers for each of the four points will be
determined for the appropriate calendar quarters as set forth foregoing
provisions, deductions for any connecting rail or motor carrier rates will be
made and a comparison made, one calendar quarter to the next. Any resulting
difference in the average APL rate will then be multiplied by the percentage
that the volume for that point represents as a

                               App. 13 - Page 13

<PAGE>

percentage of the total volume for the four named Points. As example, if the APL
Domestic Container Rate to Atlanta was $800 in one quarter and $750 in the next
quarter, then the difference of $50 would be multiplied by 0.75 (75%) when using
the example in subparagraph (1) above. Similar calculations would be made for
Charleston, Charlotte and Jacksonville.

                           (3) the sum of the resulting factors would then be
multiplied by 38.5% to determine the dollar amount of adjustment to the rates
assessed by UP against APL for each adjustment period during that annual twelve
(12) month period.

                  UP shall have the right to audit the calculations made under
subsections (1) through (3) above so long as (a) APL approves the auditor, which
approval shall not be unreasonably withheld; (b) the auditor signs a
confidentiality agreement which specifically restricts the auditor from sharing
with UP or any other party any of the APL information to which the auditor is
given access to perform the calculations except that the auditor may give to UP
a certification of the dollar amount of the adjustment which should be made to
the rates assessed by UP.

         E.       Utilization Adjustment

                  Domestic Rates shall also be adjusted based on the change in
APL's utilization of Stack Car or Spine Cars ("Utilization Adjustment"). The
Utilization Adjustment shall be made in May 1996 for trains moving between April
1, 1995 and March 29, 1996. Another Utilization Adjustment shall be made in
November 1996 for trains that moved between March 30, 1996 and October 4, 1996.
Subsequently, Utilization Adjustments shall be made quarterly beginning on
February 1, 1997 based on the utilization for trains for the preceding calendar
quarter.

                                App. 13 - Page 14

<PAGE>

                  The Utilization Adjustment shall be made separately in each of
the following lanes:

FROM                       TO                        NOTES
----                       --                        -----

Los Angeles                Chicago
Chicago                    Los Angeles               Does not apply to Westbound
                                                     Third AM Service
Oakland/Lathrop            Chicago
Chicago                    Oakland/Lathrop           Does not apply to Westbound
                                                     Third AM Service
Memphis Interchange        Oakland/Lathrop
Portland/Seattle           Chicago
Chicago                    Portland/Seattle
Memphis Interchange        Portland/Seattle
Chicago                    Salt Lake City

Los Angeles                Texas Points
Texas Points               Los Angeles

Los Angeles                Memphis/New Orleans
Memphis/New Orleans        Los Angeles

Texas points will include Dallas, El Paso, Houston and San Antonio. Los Angeles
will include the following intermodal terminals: the APL On-Dock facility at San
Pedro, ICTF and UP's terminal at East Los Angeles. Texas Points shall be
measured and adjusted as a single location. Memphis local, Memphis interchange,
New Orleans local and New Orleans interchange shall be measured and adjusted as
a single location. The Los Angeles area terminals shown in the foregoing shall
be measured and adjusted as a single location. Portland/Seattle and
Oakland/Lathrop shall be measured and adjusted as single locations. Calculation
of the Utilization Adjustment shall exclude Containers offered by APL to UP for
movement on Flatcars.

                  The Utilization Adjustment shall be calculated in the
following way:

                  (a) The utilization percentage shall be determined by dividing
the total number of loaded and empty FEUs moved during the time periods
specified above by

                               App. 13 - Page 15

<PAGE>

the total number of Stack/Spine Car FEU slots used in that lane during that same
time period. All Containers moved are counted without regard to the line of
business (i.e., International, Domestic, TPI, CKD). Any EMP or similar
Containers used by UP to fill empty slots on Stack Cars or Spine Cars loaded
with APL Containers shall be included in the calculation of the Utilization
Adjustment.

          (b)  The sum of the fixed Portion, the Adjusted Portion, the Stop
Charge components as set forth in Exhibit B and the Car Cost component as set
forth in Exhibit B shall be developed.

          (c)  The utilization percentage is divided into the figure developed
in (b).

          (d)  The difference between (b) and (c) is the new utilization dollar
component.

          As an example:

          Fixed Portion of Rate              =        $ 381.44
          Adjusted Portion of Rate           =        $ 370.02
          Stop Charge                        =        $   0.00
          Car Cost                           =        $  47.41
          ----------------------------------------------------
          Total (100% Utilization)           =        $ 798.87

If the new utilization percentage is 98.61%, $798.87 is divided by 98.61% to
reach $810.13. The difference between $810.13 and $798.87 is $11.26, the new
utilization component. This adjustment is added onto the Rate. Each Rate will be
adjusted by the new utilization percentage.

     F.   Growth Incentive

          As an incentive to APL to increase traffic tendered under the
Agreement, a ten percent (10%) Growth Incentive Payment program shall apply for
both International and Domestic Shipments moving under this Agreement in Service
Lanes 9-14. A six

                               App. 13 - Page 16

<PAGE>

percent (6%) annual incremental gross revenue cap shall be used in calculating
the Growth Incentive Payment. The Growth Incentive Payment shall be calculated
as follows:

               For the year ending December 31, 1996

                              1996 Gross Revenue in Service Lanes 9-14
                            - 1995 Gross Revenue in Service Lanes 9-14

                    Difference (if positive) x 10% = Growth Incentive Payment

               For the year ending December 31, 1997

               1997 Gross Revenue in Service Lanes 9-14 minus the lesser of
                        (a)  the 1996 Gross Revenue in Service Lanes 9-14 or
                        (b)  the 1995 Gross Revenue in Service Lanes 9-14 x 1.06

                             (which becomes the 1996 Base Revenue)

                    Difference (if positive) x 10% = Growth Incentive Payment

               For the year ending December 31, 1998

                    1998 Gross Revenue in Service Lanes 9-14 minus the lesser of

                        (a)  the 1997 Gross Revenue in Service Lanes 9-14 or
                        (b)  the 1996 Gross Revenue in Service Lanes 9-14 x 1.06

                             (which becomes the 1997 Base Revenue)

                    Difference (if positive) x 10% = Growth Incentive Payment

The Growth Incentive Payment for subsequent years will be calculated using the
same methodology.

          "Gross Revenue" is defined as the sum of the amounts APL pays to UP
for (1) the movement of loaded or empty Containers and (2) the movement of empty
Stack Cars from or to points shown in Exhibit D for which APL has made a volume
commitment.

                               App. 13 - Page 17

<PAGE>

          In order to eliminate the effect of future UP Cost Adjustments and
Market Level Adjustments on APL's Rates during the course of the Agreement, the
parties agree that, for the purpose of determining the linehaul portion of APL's
Gross Revenue, APL shall make the following adjustment each year: the volume of
traffic for the year in question shall be multiplied by the APL Per Container
Rates in effect on February 1,1997 as shown in Exhibit B.

          If APL diverts some of its volume to an alternate carrier and
subsequently returns that volume to UP, the returned volume will be excluded in
determining that year's growth incentive. However, the Gross Revenue for that
year will include the returned volume to calculate the next year's Growth
Incentive.

          If APL secures the business of any TPI customer that was previously
utilizing UP in the Southern Corridor immediately prior to APL, that TPI volume
will be excluded from determining APL's Growth Incentive for that year. However,
the Gross Revenue for that year will be restated to include the TPI volume to
accurately calculate the next year's Grown Incentive.

          G.   Average Daily Tender

          Domestic Rates will also be adjusted based on the change in APL's
Average Daily Domestic Tender ("Average DDT") baseline shown in Part A of
Exhibit Y. Changes based on the Average DDT will be calculated at the end of
each quarter for inclusion in the quarterly cost adjustment set forth in Section
B.1 of this Appendix 13. Domestic Container volume will be counted for
containers moving between Southern California, on the one hand, and Chicago,
Kansas City, St. Louis and Omaha, on the other, as well as between Northern
California and Pacific Northwest, on the one hand, and Chicago, Kansas City, St.
Louis, Omaha and Memphis, on the other. Westbound

                               App. 13 - Page 18

<PAGE>

Containers destined to Salt Lake City will be added to Southern California
volumes. APL's International, CKD and TPI volumes will not be included in the
calculation of APL's Average DDT.

          Changes to the Average DDT will be based on a rolling annualized total
comparing the four most recent Calendar quarters to the preceding four Calendar
quarters.

          APL's average DDT will be derived by dividing the total of APL's
Domestic Container volume for the four most recent calendar quarters by 52 weeks
and then dividing that amount by the number of published service days of the
week in which APL tendered the Container volumes. Westbound and Eastbound volume
shall be separately calculated. Adjustment to the domestic rates will be made
based upon increases or decreases in the Average DDT based upon the Scale shown
in part B of Exhibit Y.

                 Example:

                                 Southern California to Chicago

                             Current                        Prior
                 ----------------------------   --------------------------------
                  Adj.               Domestic    Adj.                  Domestic
                 Period   (weeks)     Volume    Period     (weeks)       Volume
                 ------   -------    --------   ------     -------     ---------
                  4Q96    140-152      9755      3Q96      127-139        9343
                  3Q96    127-139      9343      2Q96      114-126        9303
                  2Q96    114-126      9303      1Q96      101-113        9296
                  1Q96    101-113      9296      4Q95      940-952        9290

         TTL Domestic Volume          37697                              37232
         Div by 52 weeks                725                                716
         Div by 6 service days          121                                119
         Current less Prior               2
         Rounded/unit of 10               0
         Increase or Decrease          0.00%
         Prior DDT Adj.             - 1.964%
         Cumulative Adj.            - 1.964%

                               App. 13 - Page 19

<PAGE>

          The DDT Adjustment will be cumulative. That is, the net dollar change
resulting from the current Adjustment will be added to the net dollar change
resulting from the previous adjustment.

          For adjustment purposes, the average daily tender will be rounded to
the nearest unit of ten (less than five will be rounded down and five or more
will be rounded up).

          The percentage change resulting from the DDT Adjustment will be
applied to the fully Adjusted Rate. This change will not apply to 40' Westbound
Domestic movements to Seattle, Portland, Oakland and Los Angeles.

          The parties have established threshold Rates (displayed by Container
size) below which and above which the Base Rate cannot decrease or exceed as set
forth in part C of Exhibit Y.

          Exception to the Adjustment. If during a current quarter a new service
day is added which causes the DDT to drop, UP and APL will share equally in any
increase that may result from this additional service day. This 50% sharing
arrangement will remain in effect until the average DDT reaches the level that
was in effect prior to the commencement of the additional service day.

          Example:

     In the Seattle/Portland to Chicago lane, service days are increased from
     four to five days per week in Quarter 2. The DDT drops from 150 in Quarter
     1 to 100 in Quarter 2 and then increases to 120 in Quarter 3 and 150 in
     Quarter 4.

        -   The Quarter 3 domestic rates will be increased by 50% of the % shown
            for a 50-unit drop in the DDT (6.25% x 50% = 3.125%).

                               App. 13 - Page 20

<PAGE>

        -   The Quarter 4 domestic rates will be reduced by 50% of the
            percentage shown for a 20-unit increase in the DDT (2.5% x 50% =
            1.25%).

        -   The next year's Quarter 1 domestic rates will be reduced by 50% of
            the % shown on a 30-unit increase in the DDT (3.75% x 50% = 1.875%).

        -   The next year's Quarter 2 adjustment (up or down) will be based on
            the normal scale since the original DDT level of 150 has been
            reached.

     H.     End-Well Credit

            Effective January 1, 1996, APL may claim a credit of $200 per
Container from UP for movement of loaded 40 foot eastbound Containers with
Domestic traffic only in the bottom slot end well of Stack Cars having 40 foot
end wells. This credit shall apply only to traffic originating on the West Coast
and destined for Chicago or interchange at Chicago for interline movement beyond
Chicago. Furthermore, APL may claim a refund on empty Containers moving
eastbound from the West Coast to Chicago for each 20 foot and/or 40 foot
Container moving in the bottom slot of Stack Cars having 40 foot end wells when
a loaded 45 foot or larger container is moving in the top slot of the end well.
APL may also claim a refund for the subsequent empty westbound Container move.
The westbound empty refund amount per container will be equal to the then
current empty rate applying from Chicago to Seattle. The End-Well Credit will be
calculated by APL and presented to UP quarterly.

     I.     Southern Corridor International Rates

            Based on UP's representation that the International Rates between
the ICTF and Dallas, Houston, Memphis and New Orleans ("the Southern Corridor")
are marginal or non-compensatory, APL agrees that during calendar year 1999 it
will evaluate UP's proposed increases as shown in Exhibit X for the Southern
Corridor.

                               App. 13 - Page 21

<PAGE>

                                                                     APPENDIX 14

                              Competitive Proposals

     A.   Automotive Business

          1. Incentive Packages

          It is the intent of APL and UP that each will provide the other a
level playing field as it relates to automotive business moving to and from
Mexico. Consistent with that mutual intent, Union Pacific agrees that in
connection with bid packages on projects offered to APL and UP by the various
automotive manufacturers, if UP elects to offer a reduction in its boxcar or
multi-level rates or an incentive of any kind ("Incentive Package") as an
inducement to award the intermodal business to the UP, UP will provide the same
Incentive Package offering to the automotive manufacturer in conjunction with
APL's response to that bid package or project. In exchange for UP's commitment
to make all Incentive Packages available to APL, APL agrees that it will only
use UP's linehaul service and rates agreed to in connection with such bid
packages or projects. In the event APL is awarded the business, UP will not
offer lower rates to any other entity during the term of that award.

          Similarly in connection with bid packages on projects offered to APL
and UP by various automotive manufacturers, APL agrees that it will provide UP's
wholly-owned retail marketing affiliate the same rates and/or Incentive Package
as APL offers to any other intermodal marketing company affiliated with APL.

          2. Equipment and Management Services

          UP agrees to give APL the right of first refusal to provide Equipment
and management services for current and future automotive business moving in
containers to and from Mexico. Consequently, even if APL is not able to secure
the business

                                App. 14- Page 1

<PAGE>

utilizing the rates quoted by UP to APL on an automotive bid package, UP will
not offer lower rates to any other entity (including an automotive manufacturer)
in an attempt to secure that business.

                  In the event that APL is unable to secure the automotive bid
package at the rates offered by UP, APL has the right to solicit offers from
other rail carriers. If APL chooses to elect to utilize that option, APL shall
first inform UP of that decision in a timely manner to allow UP to also assess
its options in conjunction with that bid. At that time either APL or UP may
submit a bid on that automotive bid or package alone or in conjunction with any
other party without any restrictions on either party.

         B.       CSXI Business   (Chicago and Northeast Lanes Only)

                  UP and APL agree that, if the agreement between SP and CSX
Intermodal ("CSXI") as of the Effective Date contains Domestic Rates that are
lower in the California-Chicago and California-Northeast Service Lanes than
those UP provides to APL, and if APL believes CSXI is using the cost advantage
to make APL non-competitive, APL shall notify UP. UP shall then make its best
effort to provide APL with rates that allow APL to remain competitive with CSXI.

                  The provisions of this Appendix 14 do not apply to the rates
offered by UP to CSXI or SeaLand unless CSX or SeaLand has lower International
or Domestic rates than APL, and if UP provides CSXI or SeaLand with a higher
level of service reliability in any three month period as compared to the
service reliability which UP provides APL during that same three month period.
In that case, UP agrees to reduce APL's Rates to the rates which CSXI has for
comparable traffic types, traffic lanes and directions and container sizes in
all lanes in which APL tenders volume under this Agreement.

                                App. 14- Page 2

<PAGE>

                  Once the SP-CSXI agreement expires, this Competitive Proposals
provision will apply to CSXI traffic in these lanes. If, however, UP negotiates
new rate levels within the current CSXI agreement that decrease the overall rate
package for CSXI in the LA/Chicago-Northeast lane without creating a new
agreement, then at that time the CSXI agreement will be covered by the
provisions of this Appendix 14. If the new rate levels are negotiated within the
current agreement, the test to determine the effect of the change will be as
follows: The old rates in the CSXI agreement (LA/Chicago and Northeast) will be
applied to the CSXI volumes for the most recent twelve month period in that
lane. The new rates will also be applied to the same CSXI volumes over the
twelve month period. If the new rates produce a lower overall net revenue
figure, the provisions of this Appendix 14 will then apply from that point
forward.

         C.       UP's Agreements with APL Competitors

                  The following provisions apply only in Service Lanes 1 through
6 and 9 through 14 specified in Section A.1 of Appendix 7.

                  It is the intent of UP and APL that APL shall be treated
fairly by UP in relation to an APL Competitor. The parties recognize that their
mutual interests will suffer if APL Competitors are accorded more favorable
Rates, contract provisions or transportation service by UP than UP accords APL,
if the result is that APL's per Comparable Unit cost of transportation is higher
than that of APL Competitors.

                  If at any time during the term of this Agreement, an agreement
is reached between UP and an APL Competitor, and the Rates and/or provisions
offered generate lower costs on a Comparable Unit Basis as defined below than
are available to APL under this Agreement, UP shall make an offer to adjust the
then current Rates charged

                                App. 14- Page 3

<PAGE>

to APL to a level that generates costs for APL that are equal to or lower than
those generated for APL Competitors, subject to the same hourly transit time and
adjustment provisions that apply to the Competitor's Rates. However, if UP
utilizes the same or greater horsepower per trailing ton for the APL Competitor
as for APL , APL shall not be obligated to accept a slower transit time for the
lower rates unless there are other identifiable cost savings associated with
that slower transit time. Such other identifiable cost savings will be
considered only when UP demonstrates their validity and APL agrees with their
application in the comparison process. To the extent that UP offers a lower rate
and faster transit time than APL currently has, UP will offer APL the same or
lower rates and transit time equal to or better than that provided to the APL
Competitor.

                  The adjusted Rates, if accepted by APL, will be effective on
the same date that such Rates were made available to APL's Competitor, provided,
however, that no adjusted Rates shall be retroactive to a date one calendar year
prior to (1) APL's request for an audit under Section C.4 of this Appendix 14 or
(2) notification by UP that it failed to meet its obligation under this Section.
Once an offer is made to APL under this Appendix 14, APL may either accept the
offer or continue with its current Rates, service levels, and Rate adjustment
provisions. All other provisions of this Agreement will continue to apply.

                  If it is determined that UP has in effect rates for an APL
Competitor in a particular lane which do not conform with the requirements of
this Appendix 14, UP will adjust the Rates in that lane to the new lowest
applicable Rate effective immediately. However, since the purpose of this
Appendix 14 is to ensure that APL is not disadvantaged in the market place, both
parties agree that an analysis may be performed to review other lanes where APL
may have Rates that are below the

                                App. 14- Page 4

<PAGE>

competitive market place. If this analysis indicates that there are such lanes,
UP and APL agree to enter into good faith negotiations to allow UP to increase
Rates in those lanes to achieve a neutral pricing result to APL. If APL and UP
are unable to reach an agreement, UP will not be granted the offsetting
increase. This decision will not be subject to arbitration including any issue
regarding "good faith" negotiations.

                  For example, should the new Rate in the PNW/Chicago lane be
$700 per 40 foot container, while the APL Rate is $750 and APL moves 5,000 units
per year in this lane, the effective disadvantage to APL is $250,000 ($50 x
5,000 units). The new APL Rate will become $700. UP will then have the right to
look at other corridors where the APL Rate may be lower than the competitive
market. If it is determined that an APL 40 foot Rate in the Chicago/LA lane of
$725 is lower than the next lowest Rate of $775, and the APL volume in this lane
is 10,000 units, then UP will have the option to request increasing these Rates
in this lane by $25 per unit (the $250,000 outline in the PNW lane, divided by
the 10,000 units moving in this lane) to create a net "no change" to the total
revenues APL pays to UP.

                  1.      Aggregate Volume of Business A Material Consideration

                  The parties agree that the aggregate volume of business
(International and Domestic combined) which APL tenders to UP is a material
consideration in determining whether UP has provided any APL Competitor with
lower Rates. Therefore, this Section applies only to those traffic lanes for
which APL provides UP with a Volume Commitment, even though UP may have lost
that Volume Commitment under Appendix 7 to this Agreement. Further, UP shall
have no obligation to adjust APL's Rates in a particular lane where an APL
Competitor's volume of business under a given rate and in the same lane is less
than 1000 Containers annually.

                                App. 14- Page 5

<PAGE>

                  2.       $15 Average Advantage

                  The parties recognize that a higher volume of business should
result in lower Rates. UP guarantees that APL will have a $15 average advantage
per Container on the through Rates to and from Chicago. The $15 average
advantage is based on a comparison of UP's through Rates to APL with UP's
through Rates to APL's Competitors.

                  APL's average Rate on a Comparable Unit Basis as defined below
and the APL Competitor's average Rate on a Comparable Unit Basis will be derived
by applying the APL Competitor's volume of business against the APL Competitor's
rates applicable to such volumes and then applying that same volume against
APL's Rates in the same lanes and on the same type of traffic.

                  As an example, if ABC ocean carrier has 2,000 units moving
from Los Angeles to Chicago at $750, 2,000 units moving from Chicago to Los
Angeles at $700, 1000 units moving from Oakland to Chicago at $800 and 1000
units moving from Chicago to Oakland at $750, ABC's overall average rate would
be $742. Further assuming APL's rates to be $750, $700, $775, and $725
respectively, and applying ABC's volume against these rates, APL's average rate
is $733, or $9 lower than ABC's average rate. In such a case, UP would be
obligated to adjust any or all APL rates such that the average is $727, or $15
lower, than ABC's rates. This further assumes that APL's overall actual volume
is greater than ABC's.

                  3.       Determination of The Comparable Unit Basis and
                           Adjustment of Rates

                  In making a determination as to whether a Rate is lower to an
APL Competitor than to APL, UP must compare that Rate to APL's Rate on a
Comparable

                                App. 14- Page 6

<PAGE>

Unit Basis. To do this, UP must compare APL's cost of movement compared to an
APL Competitor's cost of movement. This cost includes, but is not limited to,
UP's linehaul Rate or division of a through Rate, railcar cost, terminal charges
(using UP's cost as the basis), terminal credits as a deduction from cost, and
any other like cost components which creates an "apples to apples" comparison.
An example of determining a Comparable Unit Basis is this:

                  If UP offers an APL Competitor a rate which includes drayage,
the dollar amount UP spends to provide the dray will be deducted from APL
Competitor's Rate and the resulting amount will be used in comparison to the
rate UP charges APL. For example, assume UP charges the APL Competitor $500 from
Seattle to Chicago and provides drayage from the pier to UP's terminal, at a
cost to UP of $50, and UP charges APL $500 from the UP ramp in Seattle to
Chicago. In this case, all other factors being equal, UP would be obligated to
reduce APL's rate by a minimum of $50 as the comparison would be based upon the
competitor's $450 rate ($500-50) vs. APL's $500 rate.

                  In determining a Comparable Unit Basis, the following
guidelines will apply:

                        a.    International and Westbound Domestic Containers

                  For International 20', 40', and 45' Containers and Westbound
Domestic 20', 40' and 45' Containers:

         (a)      Each Container size will be compared separately and
                  independently.

         (b)      Each origin and destination pair will be compared separately
                  and independently as follows:

                                App. 14- Page 7

<PAGE>

         On a round-trip basis:

         (1)      For International on an Eastbound load and a Westbound load;

         (2)      For International on an Eastbound load and Westbound empty;

         (3)      For International on an Eastbound load and Domestic on a
    Westbound load for 20', 40' and 45' Containers; and,

         (4)      On a one-way basis, where an APL Competitor has 50% or more of
    its total volume on UP moving in one direction, either Eastbound or
    Westbound. As an example, assume that ABC ocean carrier tenders 20,000
    Eastbound International Containers to UP for movement from the Port of Los
    Angeles, Oakland and/or Seattle. In turn, ABC tenders 5,000 westbound
    International loads and 3,000 Westbound empties to UP. In this case, ABC has
    8,000 units that move on a round-trip basis and 12,000 Containers (60%) that
    move Eastbound only. In such a case, the comparison with APL's costs is on a
    one-way basis for both Eastbound and Westbound traffic. If ABC had 10,001
    Westbound loads and empties combined, the comparison would be made on a
    roundtrip basis.

                  b.       Domestic 48' and 53' Containers

         For Domestic 48' and 53' Containers, the following comparison will be
made:

     (a) Each Container size will be compared separately and independently;

     (b) Each origin and destination pair will be compared separately and
     independently as follows:

         (1)      On a round-trip load to load basis;

                                App. 14- Page 8

<PAGE>

                  (2)    On a Westbound load and Eastbound empty;

                  (3)    When 50% or more of an APL Competitor's total volume of
         traffic in a single Service Lane on UP moves in one direction, the
         comparison will be made on a one-way basis in that Service Lane. For
         example, in the Chicago to Los Angeles Service Lane, the APL Competitor
         moves 10,000 48' and 53' containers Eastbound and only 4,500 containers
         in the Westbound direction. In this case, the lane will be analyzed on
         a one-way basis in both the Eastbound and Westbound direction. If
         movement in the Westbound direction is 5,001 or more containers, the
         analysis would be on a round-trip basis.

                  If APL believes that it suffers a market disadvantage by the
application of a round-trip comparison methodology for 48' and 53' Containers,
APL will notify UP in writing. The parties agree to negotiate in good faith to
eliminate the disadvantage and to establish a new method of comparison to be
used in the future. If, after ninety days following APL's written notice to
negotiate this matter, the parties are unable to reach agreement, the matter can
be submitted to arbitration pursuant to Section 16 of this Agreement.

                         c.    The Rates to Be Used

                  In applying these provisions, the parties agree that the basis
of comparison for Comparable Units will be the UP's linehaul Rate or division of
its through Rate between one UP intermodal terminal to another UP intermodal
terminal or interchange point. These Rates will be compared to similar Rates
that UP provides to an APL Competitor. For Rates applying between West Coast
points on the one hand and the Chicago, IL (local or interchange) on the other
hand, UP's actual division of revenue will be used for comparison as provided in
subsection f. below.

                                App. 14- Page 9

<PAGE>

                           d.   Excluded Costs

                  Drayage between inland rail ramps and inland container yards
(CY) locations, or drayage between rail ramps and customer locations at inland
points will not be a cost component considered in the Comparable Unit Basis.

                           e.   Additional Cost Components

                  Volume refunds, drayage allowances, signing bonuses or other
similar incentives will be considered as a reduction of cost in adjusting Rates
to determine a Comparable Unit Basis, where such allowances or incentives can
logically be applied to similar volumes or service lanes.

                  For example, if UP provides ABC Ocean Carrier with a Rate of
$700 per 40' Container from Seattle to Chicago, and that Rate applies on
shipments destined to the Chicago area as well as to shipments moving to points
in Eastern Canada, and if UP's offer to ABC Ocean Carrier also includes an end
of year refund to ABC Ocean Carrier of $40 for each shipment destined to Canada
as an incentive to ABC to route its Canadian traffic on UP, then the comparison
to APL's rates would be as follows:

                           For Shipments to                   For Shipments Over
                           Chicago Proper                     Chicago to Canada
                           --------------                     -----------------

         APL Rate         $700                                   $700
         ABC Rate         $700                                   $660 ($700-$40)

                  In this example, UP would be obligated to reduce APL's Rate by
$40 for Canadian shipments only. The current $700 Rate would continue to apply
to Chicago proper shipments since APL is not disadvantaged on that business
segment.

                  APL will not be required to agree to incentives that are
conditioned upon a specific volume count or percentage volume growth of traffic.
If UP offers such

                                App. 14- Page 10

<PAGE>

incentives to an APL Competitor, UP will offer APL a Rate which is at a cost
level equal to or lower than such APL Competitor without requiring specific
volume counts or percentage growth factors.

                       f.  Adjustment of Rates

                  In comparing round-trip Rates, either load-load or load-empty,
if UP has established a lower round-trip Rate for an APL Competitor, the
individual Eastbound or Westbound Rates will be adjusted as follows:

                  (1)  In the event the APL Competitor's Rate is lower in only
one direction, Eastbound or Westbound, and equal in the other direction, APL's
Rate will be reduced in the direction for which APL is disadvantaged so that
APL's round trip Rate is equal to or lower than the APL Competitor's round trip
Rate;

                  (2)  In the event both the competitive Eastbound and Westbound
Rates are lower than APL's Rates, each APL rate will be reduced by the dollar
amount that it is higher than the corresponding competitive rate. As an example,
if the competitive Eastbound rate is $20 lower than APL's Eastbound rate and the
competitive Westbound rate is $10 lower than APL's Westbound rate, APL's
Eastbound and Westbound Rate would be reduced by a minimum of $20 and $10
respectively.

                  (3)  In the event the competitive Rate is higher than APL's
Rate in one direction, but lower in the other direction such that the overall
roundtrip Rate is lower, APL's Rate will be reduced in the direction for which
it is disadvantaged so that APL's round trip Rate is equal to or lower than the
APL Competitor's round trip Rate.

                  4.   Independent Auditor Review

                  If APL believes UP has failed to meet its obligation under
this Section, APL may request in writing an audit of all contracts which UP has
with APL Competitors

                                App. 14- Page 11

<PAGE>

("Audit"), giving UP thirty days' advance notice. Upon such request, UP will
arrange for its regular independent certified public accounting firm ("the
Auditor") to perform an independent review of UP's other comparable
transportation contracts to determine whether, and to what extent, UP has failed
to meet its obligations. The Auditor will use the Benchmark Date process set
forth in this sub-section when performing the Audit. APL shall reimburse UP for
the cost of the Audit. APL shall not request an Audit more than once in any
calendar year. The Auditor shall also be allowed to review UP's volume records
to determine whether the comparison should be on a round-trip or one-way basis.

                  Prior to the Audit, UP will conduct a comparative analysis
using the methodology set forth in this Section. UP will identify any problems
and propose appropriate remedies, if needed, to APL and to the Auditor. The
Auditor will review the agreements between UP and the APL Competitors, perform a
comparative analysis using the methodology described in this Section, review the
remedies proposed by UP and make a determination if the proposed remedies meet
the requirements of this Section. The Auditor will determine if there are other
areas of non-compliance with this Section. If the Auditor discovers such areas
of non-compliance, the Auditor will work with UP to design and propose proper
corrective action to APL.

                  In order to perform an accurate and equitable comparison of
APL's Rates with the Rates of APL Competitors, a date or point in time for such
a comparison must be established. The parties recognize that rates vary and are
adjusted periodically at different times as a result of the unique provisions in
each transportation agreement. Consequently, for purposes of comparability of
Rates, UP, upon notification by APL of its request for an audit, shall conduct
the comparative analysis by first determining the

                                App. 14- Page 12

<PAGE>

effective date or most recent anniversary date of UP's doublestack contract with
each of APL Competitors closest in time but prior to APL's request for an audit
(Benchmark Date). Each APL Competitor's Rates will be compared with APL's Rates
as of that Benchmark Date. The parties recognize that there may be a different
Benchmark Date for each APL competitor. If as a result of this comparison, APL's
Rates need to be adjusted pursuant to sub-section 3.f., UP will offer APL such
adjusted rates to the extent applicable to be effective not more than a date one
calendar year before (1) APL's request for an audit or (2) the date UP notified
APL that UP failed to meet its obligation under this Section for those lanes
where APL is disadvantaged.

                  If APL receives a retroactive Rate adjustment, UP will pay to
APL the difference between what APL was paying under the APL Rates and what it
should have paid under the adjusted Rates times the volume of traffic which APL
moved during that one year calendar period prior to APL's request for an audit
or notification by UP that UP failed to meet its obligation. The amount to be
paid APL will be determined by comparing APL Rates to APL Competitor Rates for
the period noted above, and applying the rate differential to the volume of
traffic that APL moved during the time period.

                  Prior to the Audit, UP may take all reasonable steps to
conceal the identities of the entities whose Rates, costs and service are being
reviewed by the Auditor. This may be done by blocking out a shipper's name and
assigning a code to that shipper. The burden of developing such a system is on
UP. UP also has the burden of assuring that the Auditor has access to all
challenged transportation agreements and Rates. In order to assure UP that the
Rates being examined will be held in confidence, the individual accountant(s)
employed by the Auditor who is/are

                                App. 14- Page 13

<PAGE>

assigned to the Audit shall be required to execute a reasonable confidentiality
and non-disclosure agreement prior to undertaking the Audit. Unless otherwise
agreed by the parties, the Audit shall be conducted at UP's headquarters in
Omaha, Nebraska. No materials shall be removed by the Auditor unless the removal
is approved by UP's vice president of law and vice president of marketing and
sales.

                  Prior to beginning the Audit, the Auditor shall have at least
one meeting with UP and APL representatives to define the scope of the Audit, to
agree upon generic categories of documents to be inspected in the course of the
Audit and to develop a process for the Auditor to determine the facts. Although
APL shall reimburse UP for the customary fees and expenses of the Auditor, the
role of the Auditor shall be that of an independent, nonpartisan, expert
arbiter. As necessary during the Audit, the Auditor may, but is not required to,
hold periodic meetings with UP and APL to discuss issues or problems that have
arisen in the course of the Audit. The Auditor shall not have substantive
discussions with either party unless both parties are present. The Auditor shall
prepare a brief written summary of each meeting held with UP and/or APL and
shall furnish a copy of that summary to each party.

                  Once the Audit has been completed, the Auditor shall provide
UP and APL with a report setting forth findings and conclusions. The report may
be oral or in writing but shall at all times preserve the confidentiality of the
Rates and other contract terms of the APL Competitors.

                  APL shall not have access to, nor receive a copy of, any of
the Auditor's workpapers or UP's workpapers, or any document that includes
information on UP's costs, APL Competitors' Rates or other contract terms.

                                App. 14- Page 14

<PAGE>

                  The report shall be final. Neither party will seek review of
the report or the audit process via arbitration or in any other forum.

                  Nothing in this Agreement shall be construed to require UP to

                  (1)  breach any obligation,  including but not limited to
confidentiality  provisions, in any agreements to which UP is, or may become, a
party.
                  (2)  inform APL of any pending negotiations that UP may
have with its customers.

                  (3)  inform APL of the identity of the customer with whom UP
has the transportation agreement at issue.

                  5.   Future Adjustments

                  If the costs of an APL Competitor  increase due to the
expiration of its linehaul Rates and subsequent  renegotiation of new Rates, or
through some other means, UP can increase the level of APL's Rates to the lesser
of (1) a level such that APL's cost is equal to or lower than the cost of the
APL Competitor, except that, to or from Chicago (the Chicago Lanes), the new
Rate must also meet the requirements of Section C.2 of this Appendix 14 (i.e.,
                                                                         ---
$15 advantage) or (2) the level of APL's cost prior to the reductions taken as a
result of the process set forth in this Agreement plus any quarterly or annual
adjustments as provided for in this Agreement.

         D.       Most Favored Nations Provision for EMP Rates.

                  If APL believes that UP has established EMP rates which have
adversely impacted APL's margins or contribution levels and that those rates are
not the result of competitive forces external to UP and APL ("Challenged EMP
Rates"), APL will notify UP. Upon such notification, UP agrees that it will
automatically reduce APL's rates

                                App. 14- Page 15

<PAGE>

according to the methodology set forth below. The comparison to determine APL's
rate will be made as follows:

         .  The starting point is the average round trip EMP rate in a given
lane after incentive refunds, pickup credits or other credits or drop-off
charges are added or deducted as appropriate. The rates to be compared are those
that are in effect at the time of APL's notification to UP.

         .  The following deductions will then be made:

            (1) UP's costs for containers and chassis for the line haul portion
                of their use

            (2) UP's average cost for empty repositioning in that lane

            (3) $40 round trip terminal expense

            (4) $70 round trip administrative expense

            (5) $50 cross-town expense (applicable only to Northeast rates)

         .  The resulting rate will be compared to the 48' and/or 53' Domestic
Rates shown in Exhibit B as adjusted under Appendix 13.

         .  If the round-trip EMP rate is lower than the round-trip APL rate,
then UP will reduce APL's rate an equivalent dollar amount in the direction in
which EMP has a lower rate. If the EMP rate is lower in both directions, then
the APL rate will be reduced in both directions.

         .  No comparison of EMP and APL Rates will be made for any traffic lane
where the annual volume of EMP containers in both the E/B and W/B direction
totals less than 1,000 loaded units. If the volume in either the E/B or W/B
direction is 1,000 units or more, then a comparison can be made. Also, the
parties have agreed to exclude from comparison EMP

                                App. 14- Page 16

<PAGE>

            rates and APL rates in connection with NUMMI volume moving from/to
            Lathrop, CA.

         .  UP will evaluate and adjust annually its cost components. This
            includes cost for containers and chassis, cost for empty
            repositioning, and crosstown expense. Similarly, APL will evaluate
            and adjust annually the terminal expense component which, however,
            shall never exceed $40 per round trip. APL agrees that if APL's cost
            is less than $40 round trip, that number will be used. APL further
            agrees that the number for terminal expense shall never be more than
            $40 round trip.

         .  The traffic lanes which will be used for Most Favored Nations
            comparisons are as follows:

                 Southern California - Chicago
                 Southern California - Northeast
                 Northern California - Chicago
                 Northern California - Northeast
                 Pacific Northwest - Chicago
                 Pacific Northwest - Northeast
                 Los Angeles - Texas
                 Los Angeles - Memphis/New Orleans
                 Los Angeles - Southeast
                 Chicago - Mexico City

            Where rate comparisons are required, the relevant UP linehaul rate
will be UP's division of revenue to/from the UP gateway.

                                App. 14- Page 17

<PAGE>

            If UP disagrees with APL regarding the circumstances surrounding the
Challenged EMP Rates, the parties will submit for arbitration the single
question as to whether the Challenged EMP Rates were the result of competitive
forces external to UP and APL pursuant to the Arbitration provisions in the
Current Agreements. If the Arbitration Panel rules in favor of UP, APL's rates
will be restored to the level which they were before being reduced, and APL
shall refund the difference between the restored rates and the rates APL had
been paying since its rates were reduced.

                                App. 14- Page 18

<PAGE>

                                                                   APPENDIX 17.B

                             Renegotiation of Rates

            If during the term of this Agreement, any party to this Agreement
believes that adjustments to Rates as calculated in accordance with the
provisions of Appendix 13 are, or the level of Rates set forth in this Agreement
is, causing that party to operate in any Traffic Corridor at a revenue/variable
cost ratio of 1.05 or less, that party may request, in writing, renegotiation of
the Rates contained herein; PROVIDED, HOWEVER, that once a party invokes its
right to renegotiate the charges under this Appendix 17.B for a particular
Traffic Corridor, that party may not invoke this right again for the same
Traffic Corridor before another 12 months has passed.

            If at the end of the 120-day period following the party's invoking
its right to renegotiate under this Subsection, the invoking party's
revenue/variable cost ratio has gone back above 1.05, the renegotiation period
will terminate and the Rates will be maintained at their existing level under
this Agreement.

            If at the end of such 120-day period, the invoking party's revenue/
variable cost ratio remains at 1.05 or less and the parties have failed to reach
agreement on what Rates to apply to the affected Traffic Corridor, the party
requesting renegotiation may select an independent auditor, and, subject to the
other party's concurrence as to the selection of the independent auditor, such
auditor shall review the internal management revenue/variable cost information
of the requesting party to verify that party's stated marginal profit level. Any
terms and conditions of this Agreement as well as any confidential cost
information which must be disclosed by any party for purposes of the auditor's
review under this Subsection shall only be disclosed pursuant to the auditor's
execution of a nondisclosure agreement acceptable to all parties.

                               App. 17B - Page 1

<PAGE>

                  The independent auditor will provide its findings as to the
revenue/variable cost ratio of the Traffic Corridor in question in writing to
the parties within 30 days from its receipt of the requesting party's cost
information. If, based on the independent auditor's findings, the parties are
unable to reach agreement within 90 days of the independent auditor's report as
to whether the existing Rates should be maintained or the Rates should be
restated at a particular level, the requesting party may terminate this
Agreement as to the Traffic Corridor in question by giving written notice to all
other parties. If the parties reach agreement on new terms to govern the Traffic
Corridor in question, new terms so negotiated (including possible deletion of
the Traffic Corridor in question from this Agreement) shall become effective on
the date designated by the parties in a written addendum.

                               App. 17B - Page 2

<PAGE>

                                                                     APPENDIX 23

            When Terms and Provisions of UP's Intermodal Rules Apply

         To the extent that this Agreement is silent on any matter, the
Intermodal Rules or AAR Rules shall govern the rights and obligations of the
parties to this Agreement. Where there is a conflict between the Intermodal
Rules and the AAR Rules, the Intermodal Rules shall apply, provided, however,
that UP shall not modify the Intermodal Rules without giving notice to APL and
obtaining APL's consent to the modification which consent will not be
unreasonably withheld. UP shall supply APL with any amendments, updates,
changes, or revisions to UP's Intermodal Rules immediately upon such amendments,
updates, changes, or revisions being made or issued. If UP does not supply such
amendments, updates, changes or revisions to APL within five (5) days of the
effective date, the terms of the amendments, updates, changes or revisions shall
not take effect as to APL until five (5) days after such time as UP delivers any
amendments, updates, changes or revisions to APL. In the event that APL
determines that the proposed modification will have a substantially negative
effect on APL, upon written notification the designated modification shall not
apply to APL until such time as UP and APL are able to negotiate to resolve any
differences. Those provisions of UP Intermodal Rules that are not applicable to
APL for shipments made under provisions of this Agreement are set forth in
Exhibit Z.

                                  Appendix 23

<PAGE>

                                                                       EXHIBIT A

                                   DEFINITIONS

         In this Agreement and the Exhibits attached hereto, the following terms
shall have the following meanings, except as otherwise stated:

Agreement: The Original Agreement dated October 11, 1996, between UP and APL, as
amended and restated herein, and all Appendices and Exhibits to it.

APL Competitor: Ocean carrier or other entity providing Domestic and/or
International service which UP sells to on a wholesale basis in either railroad
supplied or privately owned or controlled containers. Motor carriers are
considered entities to which UP sells on a wholesale basis.

APL Stack Car: As defined in Section 9.B.1, including a Stack Car (a) owned by
APL or (b) under lease to APL; includes all APLX marked Stack Cars.

APL Train: A train consisting of not less than 75 Platforms on Stack Cars
containing only APL or TPI Containers and which is moving under Train Schedules
agreed to by UP and APL.

Auditor: Mutually acceptable independent auditor/consultant who shall have
substantial experience in rail rate matters.

Available or Availability: When UP has placed the loaded Container on a Chassis
and placed the Container and Chassis in the terminal at a location accessible to
APL, draymen, Participants or their agents.

Base Rates: The linehaul divisions, rates and charges set forth in Exhibit B, as
adjusted from time to time pursuant to the terms of this Agreement.

Car Cost: Average per diem and mileage expense per Stack Car or Spine Car

Car Rules: Car Interchange Rules of the Association of American Railroads.

                                 Ex. A - Page 1

<PAGE>

Chassis: Underframe (excluding floor, sides, and roof) equipped with wheels,
landing gear, king pin assembly, and locking safety devices for securing a
Container, used for transporting a Container as a wheeled vehicle.

Comparable Unit: A container of specific size moving between the same geographic
points carrying the same type of freight (international, domestic or empty)
under the terms of this Agreement.

CKD Shipment: Auto parts shipments arranged by APL for foreign automobile
companies in APL or other ocean carrier Containers.

Container: Any container, dry or refrigerated, with or without Chassis, that is
moving under the terms of this Agreement. Each Container (loaded or empty) must
conform to the Container Rules, the applicable regulations of the Federal
Railroad Administration, as amended and in effect at the time of tender to UP,
and all other applicable laws.

Container Rules: Container and Trailer (TOFC/COFC) Interchange Rules of the
Association of American Railroads, as amended and in effect at the time of
transportation under this Agreement.

Control Date: The date upon which UP acquired control of SP, i.e., September 11,
1996.

Decision Date: The date on which the Surface Transportation Board rendered its
decision on the UP-SP merger.

Domestic Shipments: Shipments arranged for by APL on behalf of Participants
moving in rail service between the points covered by this Agreement.

EDI:  APL's Electronic Data Interchange system.

Effective Date:  October 11, 1996

Equipment:  Containers, including attached skeletal Chassis.

                                 Ex. A - Page 2

<PAGE>

Exhibit: Additional terms and conditions applicable to and governing
Transportation, attached hereto and made a part hereof as if set forth fully in
this Agreement.

Failed Service Lane: Service Lane in which UP fails to meet Service Performance
Standards in any Monitoring Period.

FEU: A forty, forty-five, forty-eight or fifty-three foot Container or two
twenty-foot Containers.

Flatcar: Standard intermodal car with or without pedestals capable of handling
Containers in various configurations.

Forty-Eight Hour Period: Time from first 23:59 following actual Availability in
which APL must remove Container from UP's terminal.

FRA: Federal Railroad Administration

Holiday: New Year's Day, Thanksgiving Day, Friday after Thanksgiving, Christmas
Eve, Christmas Day, New Year's Eve.

Intermodal Car: A Flatcar or Stack Car or Spine Car.

Intermodal Rules: Union Pacific Railroad Company Exempt Circular 20-B effective
as of January 1, 1999 and any modifications thereto or successor document made
applicable to this Agreement, as provided in Section 23.

International Market Rates: Rates charged by UP and BNSF to APL's international
steamship competitors on a Comparable Unit as adjusted by Section C.1 of
Appendix 13.

International Shipments: Containers loaded with freight in international
commerce and tendered on behalf of American President Lines, Ltd. or APL Co. PTE
Ltd., or on behalf of a TPI. International Shipments also include CKD Shipments
moving between points in the U.S. on the one hand and points in foreign
countries on the other.

                                 Ex. A - Page 3

<PAGE>

Joint Service: Joint water/rail transportation services provided by American
President Lines, Ltd., and UP under joint through bills of lading.

Notice of Diversion: Notice that APL is diverting traffic and specifying that
traffic.

On-Dock: A facility not operated by UP for loading and unloading containers
directly from or to ocean-going vessels to or from Intermodal Cars. Participant:
Participants shall include domestic shippers, shippers' agents, property
brokers, freight forwarders, others having a beneficial interest in
containerized shipments, or other rail or motor carriers who desire to use APL
or other ocean carrier Containers for transportation of their Domestic
Shipments.

Rates: Divisions, charges and rates.

Scheduled Trains: Trains regularly operated by UP.

Service Default: When UP fails to meet the Service Performance Standards in any
Service Lane for a period of three consecutive Calendar Months or in any five
Calendar Months during any twelve consecutive Calendar Months.

Service Lane: Corridors of traffic as set forth in Appendix 7 to this Agreement.

Service Performance Standard: UP must make Available or Interchange the
applicable percentage of all loaded Containers for each Service Lane at or in
advance of the applicable scheduled Availability or Interchange times set forth
in Train Schedules.

Slot: Space on Stack Car platform capable of handling one (1) FEU.

Spine Car: Articulated or non-articulated flatcar containing from one (1) to
five (5) platforms, each platform capable of handling not more than one FEU per
platform.

Stack Car: Articulated flatcar containing from one (1) to five (5) platforms,
each platform capable of handling two FEUs per platform.

Stack Car Train: See APL Train, above.

                                 Ex. A - Page 4

<PAGE>

Stop Charge: The component cost reflecting set out or pick up at Lathrop or
Portland.

TPI: Person, other than American President Lines, Ltd., offering ocean common
carrier freight transportation for which APL provides intermodal management
services and acts as agent, sometimes known as a third party international.

TPI Shipments: International Shipments in Containers owned or leased by TPIs.

TTX Stack Car: A Stack Car owned by TTX Company.

Train Schedules: The train schedules, including the specific route of movement,
displayed in the Union Pacific's Transportation Plan which have been agreed to
by APL.

UP Stack Car: A Stack Car which is not an APL Stack Car.

UP Service Performance Compliance Report: Report to be published twenty days
after the end of each Monitoring Period.

Utilization Factor: The sum of loaded and empty Containers moving on Stack Cars
divided by the total number of Stack Car Slots.

100% Utilization Rate: Equivalent of a Rate in which there is 100%
utilization of the slots on every Stack Car.

Volume Commitment: Ninety-five percent of APL's high cube domestic business; 95%
of APL's international business originating or terminating at California ports,
including westbound domestic 20' and 40' containers; 85% of APL's international
business to and from the Pacific Northwest; including 20' and 40' westbound
domestic volume.

                                 Ex. A - Page 5

<PAGE>

                                                               Exhibit B Part II

                         THIRD PARTY INTERNATIONAL RATES

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    FIXED AND ADJUSTED RATE
                                                                                                            COMPONENTS
                                                                                          ------------------------------------------
                                         Contract Reference                                                 Sec. 15.B
------------------------------------------------------------------------------------------------------------------------------------
         Origin                Destination                 Size            Total Rate         Fixed Portion      Adjusted Portion
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>             <C>                 <C>                  <C>
   Chicago (Canal St.)             Lathrop                  20              483.51              242.07               241.44
       (See Note)                                         40/45             663.16              332.02               331.14
------------------------------------------------------------------------------------------------------------------------------------
                                 Los Angeles                20              409.60              205.07               204.53
                                                          40/45             537.92              269.31               268.61
------------------------------------------------------------------------------------------------------------------------------------
                                   Oakland                  20              483.51              242.07               241.44
                                                          40/45             663.16              332.02               331.14
------------------------------------------------------------------------------------------------------------------------------------
                                   Portland                 20              500.95              250.81               250.14
                                                            40              630.32              315.57               314.75
                                                            45              630.32              315.57               314.75
------------------------------------------------------------------------------------------------------------------------------------
                                   Seattle                  20              500.95              250.81               250.14
                                                            40              500.32              315.57               314.75
                                                            45              500.32              315.57               314.75
------------------------------------------------------------------------------------------------------------------------------------
   Chicago (Global 1)              Lathrop                  20              483.90              242.27               241.63
                                                          40/45             662.76              331.32               330.94
                                                          48/53             682.29              341.59               340.70
------------------------------------------------------------------------------------------------------------------------------------
                                 Los Angeles                20              406.34              203.43               202.91
                                                          40/45             547.54              274.13               273.41
                                                          48/53             567.05              283.90               283.15
------------------------------------------------------------------------------------------------------------------------------------
                                   Oakland                  20              483.80              242.27               241.53
                                                          40/45             662.76              331.32               330.94
                                                          48/53             682.29              341.59               340.70
------------------------------------------------------------------------------------------------------------------------------------
                                   Portland                 20              496.75              248.70               248.05
                                                            40              675.62              338.59               337.03
                                                            45              683.73              342.31               341.42
------------------------------------------------------------------------------------------------------------------------------------
                                Salt Lake City              20              427.42              248.70               213.42
                                                          40/45             565.24              283.00               282.24
------------------------------------------------------------------------------------------------------------------------------------
                                   Seattle                  20              496.75              248.70               248.05
                                                            40              676.52              338.69               337.83
                                                            45              683.73              342.31               341.42
                                                          48/53             703.22              352.08               351.14
------------------------------------------------------------------------------------------------------------------------------------
         Dallas                  Los Angeles                20              358.75              177.50               181.25
                                                          20 TNK            793.29              392.50               400.79
                                                          40/45             679.10              336.00               343.10
                                                          48/53             679.10              336.00               343.10
------------------------------------------------------------------------------------------------------------------------------------
         El Paso                 Los Angeles                20              331.48              164.00               167.48
                                                          20 TNK            766.00              379.00               387.00
                                                          40/45             547.72              271.00               276.72
                                                          48/53             547.72              271.00               276.72
------------------------------------------------------------------------------------------------------------------------------------
         Houston                 Los Angeles                20              357.74              177.00               180.74
                                                          20 TNK            792.28              392.00               400.28
                                                          40/45             677.07              335.00               342.07
                                                          48/53             677.07              335.00               342.07
------------------------------------------------------------------------------------------------------------------------------------
       Kansas City                 Lathrop                  20              452.73              226.66               226.07
                                                          40/45             609.77              305.29               304.48
------------------------------------------------------------------------------------------------------------------------------------
                                 Los Angeles                20              420.91              210.72               210.19
                                                          40/45             552.28              276.51               275.77
------------------------------------------------------------------------------------------------------------------------------------
                                   Oakland                  20              452.73              226.66               226.07
                                                          40/45             609.77              305.29               304.48
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    FIXED AND ADJUSTED RATE
                                                                                                            COMPONENTS
                                                                                          ------------------------------------------
                                            Contract Reference                                              Sec. 15.B
------------------------------------------------------------------------------------------------------------------------------------
         Origin                Destination                 Size            Total Rate         Fixed Portion      Adjusted Portion
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                 <C>                 <C>                  <C>                  <C>
                                   Portland                 20              399.33              199.93               199.40
                                                          40/45             614.90              307.86               307.04
------------------------------------------------------------------------------------------------------------------------------------

                                   Seattle                  20              399.33              199.93               199.40
                                                          40/45             614.90              307.86               307.04
------------------------------------------------------------------------------------------------------------------------------------
         Lathrop             Chicago (Canal St.)            20              606.00              300.16               305.85
                                  (See Note)              40/45             841.77              421.44               420.33
------------------------------------------------------------------------------------------------------------------------------------
                              Chicago (Global 1)            20              581.16              290.97               290.19
                                                          40/45             834.79              417.95               416.84
                                                            48              854.32              427.72               426.60
------------------------------------------------------------------------------------------------------------------------------------
         Lathrop                 Kansas City                20              516.34              258.52               257.82
                                                            40              730.89              365.93               364.96
                                                            45              784.30              392.66               391.64
------------------------------------------------------------------------------------------------------------------------------------
                                   Memphis                  20              531.76              266.23               265.53
                                                          40/45             817.14              409.11               408.03
------------------------------------------------------------------------------------------------------------------------------------
         Lathrop                 Memphis (X)                20              506.10              253.38               252.72
                                                          40/45             789.43              395.23               394.20
------------------------------------------------------------------------------------------------------------------------------------
                                    Omaha                   20              575.00              575.00                 NS
                                                          40/45             795.00              795.00                 NA
------------------------------------------------------------------------------------------------------------------------------------
                                  St. Louis                 20              572.82              288.79               288.03
                                                            40              789.43              395.23               394.20
                                                            45              841.77              421.44               420.33
------------------------------------------------------------------------------------------------------------------------------------
       Los Angeles           Chicago (Canal St.)            20              537.92              269.31               268.61
                                  (See Note)              40/45             743.43              372.21               371.22
------------------------------------------------------------------------------------------------------------------------------------
                              Chicago (Global 1)            20              518.32              259.50               258.82
                                                          40/45             743.25              372.12               371.13
                                                            48              762.77              381.88               380.89
------------------------------------------------------------------------------------------------------------------------------------
                                    Dallas                  20              322.37              159.50               162.87
                                                          20 TNK            756.91              374.50               382.41
                                                          40/45             613.41              303.50               309.91
                                                          48/53             613.41              303.50               309.91
------------------------------------------------------------------------------------------------------------------------------------
                                   El Paso                  20              221.31              109.50               111.81
                                                          20 TNK            655.85              324.50               331.35
                                                          40/45             416.35              206.00               210.35
                                                          48/53             416.35              206.00               210.35
------------------------------------------------------------------------------------------------------------------------------------
                                   Houston                  20              322.37              159.50               162.87
                                                          20 TNK            756.91              374.50               382.41
                                                          40/45             612.40              303.00               309.40
                                                          48/53             612.40              303.00               309.40
------------------------------------------------------------------------------------------------------------------------------------
                                 Kansas City                20              473.24              236.93               236.31
                                                            40              693.94              347.43               346.51
                                                            45              720.63              360.80               359.83
------------------------------------------------------------------------------------------------------------------------------------
                                   Memphis                  20              326.41              161.50               154.91
                                                          20 TNK            760.95              376.50               384.45
                                                          40/45             620.48              307.00               313.48
                                                          48/53             620.48              307.00               313.48
------------------------------------------------------------------------------------------------------------------------------------
                                 New Orleans                20              324.39              160.50               163.89
                                                          20 TNK            758.90              375.50               383.40
                                                          40/45             616.44              305.00               311.44
                                                          48/53             616.44              305.00               311.44
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    FIXED AND ADJUSTED RATE
                                                                                                            COMPONENTS
                                                                                          ------------------------------------------
                                      Contract Reference                                                      Sec. 15.B
------------------------------------------------------------------------------------------------------------------------------------
         Origin                Destination                 Size            Total Rate         Fixed Portion      Adjusted Portion
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                        <C>               <C>                 <C>                  <C>
                               New Orleans (X)              20              321.36              159.00               162.36
                                                          20 TNK            755.90              374.00               381.90
                                                          40/45             612.40              303.00               309.40
                                                          48/53             612.40              303.00               309.40
------------------------------------------------------------------------------------------------------------------------------------
                                   Oakland                  20              270.63              134.00               136.63
                                                          40/45             332.47              164.50               167.97
------------------------------------------------------------------------------------------------------------------------------------
                                    Omaha                   20              550.00              550.00                 NS
                                                          40/45             725.00              725.00                 NS
------------------------------------------------------------------------------------------------------------------------------------
                                   Portland                 20              474.96              235.00               239.96
                                                          40/45             556.82              275.50               281.32
------------------------------------------------------------------------------------------------------------------------------------
                                Salt Lake City              20              525.00              525.00                 NS
                                                          40/45             550.00              550.00                 NS
------------------------------------------------------------------------------------------------------------------------------------
                                 San Antonio                20              285.99              141.50               144.49
                                                          20 TNK            720.33              384.33               336.00
                                                          40/45             542.57              258.50               274.17
                                                          48/53             542.67              268.50               274.17
------------------------------------------------------------------------------------------------------------------------------------
                                  St. Louis                 20              542.03              271.37               270.66
                                                            40              752.46              376.73               375.73
                                                            45              789.43              395.23               394.20
                                                            48              772.19              386.60               385.59
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                                                EXHIBIT B PART V

                         THIRD PARTY INTERNATIONAL RATES

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    FIXED AND ADJUSTED RATE
                                                                                                    COMPONENTS
                                                                                          ------------------------------------------
                                                                      Contract Reference                    Sec. 1.B
------------------------------------------------------------------------------------------------------------------------------------
         Origin                Destination                 Size            Total Rate         Fixed Portion      Adjusted Portion
------------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                             <C>               <C>                   <C>                 <C>
Memphis                     Lathrop                         20               571.78              286.27                285.51
                                                           40/45             698.07              349.49                348.58
------------------------------------------------------------------------------------------------------------------------------------
                            Los Angeles                     20               361.78              179.00                182.78
                                                          20 TNK             796.32              394.00                402.32
                                                           40/45             684.15              338.50                345.65
                                                           48/53             684.15              338.50                345.65
------------------------------------------------------------------------------------------------------------------------------------
                            Oakland                         20               571.78              255.27                255.51
                                                           40/45             698.07              349.49                348.58
------------------------------------------------------------------------------------------------------------------------------------
                            Portland                        20               683.69              342.29                341.40
                                                           40/45             789.43              395.23                394.20
------------------------------------------------------------------------------------------------------------------------------------
                            Seattle                         20               683.69              342.29                341.40
                                                           40/45             789.43              395.23                394.20
------------------------------------------------------------------------------------------------------------------------------------
Memphis (X)                 Lathrop                         20               571.78              286.27                285.51
                                                           40/45             698.07              349.49                348.58
------------------------------------------------------------------------------------------------------------------------------------
                            Oakland                         20               571.78              286.27                285.51
                                                           40/45             698.07              349.49                348.58
------------------------------------------------------------------------------------------------------------------------------------
                            Portland                        20               683.69              342.29                341.40
                                                           40/45             789.43              395.23                394.20
------------------------------------------------------------------------------------------------------------------------------------
                            Seattle                         20               683.69              342.29                341.40
                                                           40/45             789.43              395.23                394.20
------------------------------------------------------------------------------------------------------------------------------------
New Orleans                 Los Angeles                     20               360.77              178.50                182.27
                                                          20 TNK             795.31              393.50                401.81
                                                           40/45             682.13              337.50                344.53
                                                           48/53             682.13              337.50                344.53
------------------------------------------------------------------------------------------------------------------------------------
New Orleans (X)             Los Angeles                     20               358.75              177.50                181.25
                                                          20 TNK             793.29              392.50                400.79
                                                           40/45             677.07              335.00                342.07
                                                           48/53             677.07              335.00                342.07
------------------------------------------------------------------------------------------------------------------------------------
Oakland                     Chicago (Canal St.)             20               599.50              300.15                299.35
                            (See Note)                     40/45             841.77              421.14                420.63
------------------------------------------------------------------------------------------------------------------------------------
                            Chicago (Global)                20               581.16              290.97                250.19
                                                           40/45             834.79              417.95                416.84
                                                            48               854.32              427.72                426.60
------------------------------------------------------------------------------------------------------------------------------------
                            Kansas City                     20               515.84              258.52                257.32
                                                            40               730.89              385.93                364.96
                                                            45               784.30              392.66                391.64
------------------------------------------------------------------------------------------------------------------------------------
                            Los Angeles                     20               270.83              134.00                136.83
                                                           40/45             332.47              164.50                167.97
------------------------------------------------------------------------------------------------------------------------------------
                            Memphis                         20               531.78              288.23                265.53
                                                           40/45             817.14              409.11                408.03
------------------------------------------------------------------------------------------------------------------------------------
                            Memphis (X)                     20               506.10              253.38                252.72
                                                           40/45             789.43              395.23                394.20
------------------------------------------------------------------------------------------------------------------------------------
                            Omaha                           20               575.00              575.00                  NS
                                                           40/45             795.00              795.00                  NS
------------------------------------------------------------------------------------------------------------------------------------
                            Portland                        20               328.41              163.50                164.91
                                                           40/45             393.11              194.50                198.61
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    FIXED AND ADJUSTED RATE
                                                                                                            COMPONENTS
                                                                                          ------------------------------------------
                                                                        Contract Reference                Sec. 1.B
------------------------------------------------------------------------------------------------------------------------------------
         Origin                Destination                 Size            Total Rate         Fixed Portion      Adjusted Portion
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>              <C>                 <C>                   <C>
                            St. Louis                       20               572.82              356.79                206.03
                                                            40               789.43              395.23                394.20
                                                            45               841.77              421.44                420.33
------------------------------------------------------------------------------------------------------------------------------------
Omaha                       Los Angeles                     20               435.27              217.92                217.35
                                                          40 RFR            1275.00             1275.00                  NS
                                                           40/45             595.44              298.61                297.83
------------------------------------------------------------------------------------------------------------------------------------
                            Oakland                         20               435.27              217.92                217.35
                                                          40 RFR            1275.00             1275.00                  NS
                                                           40/45             591.33              296.04                295.29
------------------------------------------------------------------------------------------------------------------------------------
                            Portland                      40 RFR            1275.00             1275.00                  NS
------------------------------------------------------------------------------------------------------------------------------------
                            Seattle                         20               435.27              217.92                217.35
                                                          40 RFR            1275.00             1275.00                  NS
                                                           40/45             596.44              298.61                297.83
------------------------------------------------------------------------------------------------------------------------------------
Portland                    Chicago (Canal St.)             20               591.49              296.12                295.37
                            (See Note)                     40/45             789.43              395.23                394.20
------------------------------------------------------------------------------------------------------------------------------------
                            Chicago (Global 1)              20               591.38              296.07                295.31
                                                            40               784.34              392.68                391.66
                                                            45               783.29              392.17                391.12
                                                            48               802.32              401.33                400.89
------------------------------------------------------------------------------------------------------------------------------------
                            Kansas City                     20               472.23              236.42                235.81
                                                            40               697.05              348.98                348.07
                                                            45               723.70              362.34                361.36
------------------------------------------------------------------------------------------------------------------------------------
                            Los Angeles                     20               474.95              235.0                 239.96
                                                           40/45             556.82              275.50                281.32
------------------------------------------------------------------------------------------------------------------------------------
                            Memphis                         20               504.05              252.35                251.70
                                                           40/45             814.07              407.57                406.50
------------------------------------------------------------------------------------------------------------------------------------
                            Memphis (X)                     20               504.05              252.35                251.70
                                                           40/45             814.07              407.57                406.50
------------------------------------------------------------------------------------------------------------------------------------
                            Oakland                         20               325.41              161.50                164.91
                                                           40/45             393.11              194.50                194.61
------------------------------------------------------------------------------------------------------------------------------------
                            Omaha                           20               550.00              550.00                  NS
                                                           40/45             725.00              725.00                  NS
------------------------------------------------------------------------------------------------------------------------------------
                            Salt Lake City                  20               553.00              553.00                  NS
                                                           40/45             757.00              757.00                  NS
------------------------------------------------------------------------------------------------------------------------------------
                            St. Louis                       20               545.11              272.91                272.20
                                                            40               736.05              368.51                367.54
                                                            45               787.38              394.21                393.17
------------------------------------------------------------------------------------------------------------------------------------
Salt Lake City              Los Angeles                     20               103.67              51.91                 51.76
                                                           40/45             172.45              88.34                 86.11
------------------------------------------------------------------------------------------------------------------------------------
                            Oakland                         20               103.67              51.91                 51.76
                                                           40/45             172.45              86.34                 56.11
------------------------------------------------------------------------------------------------------------------------------------
                            Portland                        20               184.78              92.51                 92.27
                                                           40/45             338.76              169.61                169.15
------------------------------------------------------------------------------------------------------------------------------------
                            Seattle                         20               212.48              106.39                106.09
                                                           40/45             393.17              196.84                196.33
------------------------------------------------------------------------------------------------------------------------------------
San Antonio                 Los Angeles                     20               318.31              158.50                159.81
                                                          20 TNK             750.85              371.50                379.25
                                                           40/45             600.27              297.00                303.27
                                                           48/53             600.27              297.00                303.27
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    FIXED AND ADJUSTED RATE
                                                                                                            COMPONENTS
                                                                                          ------------------------------------------
                                                                        Contract Reference                Sec. 1.B
------------------------------------------------------------------------------------------------------------------------------------
         Origin                Destination                 Size            Total Rate         Fixed Portion      Adjusted Portion
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>              <C>                 <C>                   <C>
Seattle                     Chicago (Canal St.)             20               591.49              296.12                295.37
                            (See Note)                     40/45             789.43              395.23                394.20
------------------------------------------------------------------------------------------------------------------------------------
                            Chicago (Global 1)              20               591.38              296.07                295.31
                                                            40               784.34              392.58                391.55
                                                            45               783.29              392.17                391.12
                                                            48               802.82              401.93                400.89
------------------------------------------------------------------------------------------------------------------------------------
                            Kansas City                     20               472.23              236.42                235.81
                                                            40               697.05              348.98                348.07
                                                            45               723.70              362.34                361.36
------------------------------------------------------------------------------------------------------------------------------------
                            Memphis                         20               504.05              252.35                251.70
                                                           40/45             814.07              407.57                406.50
------------------------------------------------------------------------------------------------------------------------------------
                            Memphis (X)                     20               504.05              252.35                251.70
                                                           40/45             814.07              407.57                406.50
------------------------------------------------------------------------------------------------------------------------------------
                            Omaha                           20               550.00              550.00                  NS
                                                           40/45             725.00              725.00                  NS
------------------------------------------------------------------------------------------------------------------------------------
                            Salt Lake City                  20               553.00              553.00                  NS
                                                           40/45             757.00              757.00                  NS
------------------------------------------------------------------------------------------------------------------------------------
                            St. Louis                       20               545.11              272.91                272.20
                                                            40               736.05              358.51                387.54
                                                            45               787.38              394.21                393.17
------------------------------------------------------------------------------------------------------------------------------------
St. Louis                   Lathrop                         20               482.48              241.56                240.92
                                                           40/45             661.09              330.98                330.11
------------------------------------------------------------------------------------------------------------------------------------
                            Los Angeles                     20               451.68              226.14                225.54
                                                           40/45             588.20              294.49                293.71
------------------------------------------------------------------------------------------------------------------------------------
                            Oakland                         20               482.48              241.56                240.92
                                                           40/45             661.09              330.98                330.11
------------------------------------------------------------------------------------------------------------------------------------
                            Portland                        20               431.16              215.86                215.30
                                                           40/45             655.96              328.41                327.55
------------------------------------------------------------------------------------------------------------------------------------
                            Seattle                         20               431.16              215.86                215.30
                                                           40/45             655.96              328.41                327.55
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NS  - Where reference is made hereto the cost or rate component is not subject
      to adjustment.

(X) - Denotes proportional rate. Rate applies only on traffic interchanged to
      or from a connecting rail corner.

Note: Chicago (Canal St.) - At no time will Canal St. rates be less than the
      current effective Global 1 rate. Should cost adjustments produce a lower
      Canal St. rate, APL will pay the current Global 1 rate.

<PAGE>

                                                           EXHIBIT B PART III
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                             DOMESTIC RATES
------------------------------------------------------------------------------------------------------------------------------------
                    Contract Reference:                             Sec. 16.B     Sec.      Sec. 15E        Sec. 16.D      Sec.16.F
                                                                                  10.A
------------------------------------------------------------------------------------------------------------------------------------
                                                        FIXED       ADJUSTED                               DOMESTIC       AVERAGE
                                          TOTAL      PORTION BASE   PORTION       CAR      UTILIZATION      MARKET         DAILY
 ORIGIN         DESTINATION      SIZE     RATE          RATE       BASE RATE      COST     ADJUSTMENT     ADJUSTMENT       TENDER
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>             <C>       <C>        <C>            <C>           <C>      <C>            <C>             <C>
Chicago         Lathrop           20'     440.04        235.91       235.27       NS           NS          -31.14            NS
             -----------------------------------------------------------------------------------------------------------------------
(Canal St)                        40'     859.28        436.38       435.70       NS           NS          -13.28            NS
             -----------------------------------------------------------------------------------------------------------------------
(See Note)                        45'     899.32        456.90       455.70       NS           NS          -13.28            NS
             -----------------------------------------------------------------------------------------------------------------------
                                48'/53'   802.06        473.35       462.35       NS           NS         -133.64            NS
------------------------------------------------------------------------------------------------------------------------------------
                Los Angeles       20'     318.08        220.49       219.89       NS           NS         -122.30            NS
             -----------------------------------------------------------------------------------------------------------------------
                                  40'     726.84        407.56       406.50       NS           NS          -87.12            NS
             -----------------------------------------------------------------------------------------------------------------------
                                  45'     759.79        242.01       422.90       NS           NS          -87.12            NS
             -----------------------------------------------------------------------------------------------------------------------
                                48'/53'   757.38        439.94       429.71       NS           NS         -112.29            NS
             -----------------------------------------------------------------------------------------------------------------------
                Modesto           20'     440.04        235.91       235.27       NS           NS          -31.14            NS
             -----------------------------------------------------------------------------------------------------------------------
                                  40'     359.28        436.36       435.70       NS           NS          -13.28            NS
             -----------------------------------------------------------------------------------------------------------------------
                                  45'     899.32        456.90       455.70       NS           NS          -13.28            NS
             -----------------------------------------------------------------------------------------------------------------------
                                48'/53'   802.06        473.35       462.35       NS           NS         -133.64            NS
             -----------------------------------------------------------------------------------------------------------------------
                Oakland           20'     326.96        230.76       230.16       NS           NS         -133.98            NS
             -----------------------------------------------------------------------------------------------------------------------
                                  40'     307.08        424.01       422.30       NS           NS          -39.33            NS
             -----------------------------------------------------------------------------------------------------------------------
                                  45'     524.08        443.54       442.37       NS           NS          -61.33            NS
             -----------------------------------------------------------------------------------------------------------------------
                                48'/53'   815.09        459.47       448.79       NS           NS          -92.36            NS
            ------------------------------------------------------------------------------------------------------------------------
                 Portland         20'     424.38        241.56       240.93       NS           NS          -57.53            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     853.24        434.81       433.56       NS           NS          -15.23            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     815.75        464.10       462.38       NS           NS         -111.23            NS
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   871.23        478.49       467.38       NS           NS          -74.64            NS
            ------------------------------------------------------------------------------------------------------------------------
                 Sacramento       20'     440.04        235.91       235.27       NS           NS          -31.14            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     859.28        436.36       435.70       NS           NS          -13.28            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     899.32        456.90       456.70       NS           NS          -13.28            NS
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   802.06        473.35       462.35       NS           NS         -133.84            NS
            ------------------------------------------------------------------------------------------------------------------------
                 Salt Lake City   20'     557.23        217.40       216.83       NS           NS          123.00            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     370.72        400.37       399.31       NS           NS           30.04            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     911.56        415.30       415.22       NS           NS           80.04            NS
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   811.73        432.23       431.09       NS           NS          -51.59            NS
            ------------------------------------------------------------------------------------------------------------------------
                 Seattle          20'     408.00        225.14       225.55       NS           NS          -43.89            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     849.62        434.81       433.66       NS           NS          -18.85            NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     744.21        485.85       464.41       NS           NS         -185.35            NS
            ------------------------------------------------------------------------------------------------------------------------
                                 48'60'   873.32        473.49       467.28       NS           NS          -57.65            NS
------------------------------------------------------------------------------------------------------------------------------------
Chicago         Lathrop           20'     421.34        238.11       234.87      26.70        1.07         -69.53           -6.86
            ------------------------------------------------------------------------------------------------------------------------
(Global 1)                        40'     858.16        424.85       423.02      47.41        2.06         -25.44          -14.02
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     884.47        438.21       436.61      47.41        2.13         -25.44          -14.45
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   862.75        464.47       453.19      47.41        0.55         -88.77          -14.10
            ------------------------------------------------------------------------------------------------------------------------
                Los Angeles       20'     336.83        215.06       214.98      25.70        0.34        -119.69            9.44
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     879.42        339.45       340.27       NS           NS            NS              NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     741.58        377.81       385.81      47.41        0.65         -90.28           20.18
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   819.65        424.89       414.71      47.41        1.17        -100.42           31.39
            ------------------------------------------------------------------------------------------------------------------------
                Modesto           20'     421.24        238.11       234.77      25.70        1.07         -69.53           -8.88
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     858.18        424.85       423.32      47.41        2.06         -25.44          -14.02
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     384.47        438.21       438.81      47.41        2.13         -25.44          -14.45
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   862.75        464.47       453.19      47.41        0.55         -88.77          -14.10
            ------------------------------------------------------------------------------------------------------------------------
                Oakland           20'     349.43        229.94       228.81      25.70        1.04        -130.35           -5.71
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     765.98        383.50       382.48       NS           NS            NS              NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     815.74        425.36       424.22      47.41        2.07         -69.99          -13.33
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   836.30        451.52       440.80      47.41        0.53         -90.09          -13.87
            ------------------------------------------------------------------------------------------------------------------------
                Portland          20'     470.99        259.24       257.57      25.70        0.41         -61.22          -10.91
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     782.47        391.75       390.72       NS           NS            NS              NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     593.38        484.99       482.76      47.41        0.81        -101.39          -20.70
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   963.01        511.25       498.71      47.41        1.71         -73.77          -22.30
            ------------------------------------------------------------------------------------------------------------------------
                Sacramento        20'     421.24        236.11       234.77      25.70        1.07         -69.53          -6.88
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     858.18        424.85       423.32      47.41        2.06         -25.44          -14.02
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     884.47        438.21       436.61      47.41        2.13         -25.44          -14.45
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   882.75        464.47       453.19      47.41        0.55         -38.77          -14.10
            ------------------------------------------------------------------------------------------------------------------------
                Salt Lake City    20'     546.97        214.00       212.92      17.70        5.85          80.51          14.59
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     882.85        381.58       380.68      32.41       13.47          50.88          24.03
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     908.59        394.01       392.98      32.41       13.58          50.88          24.73
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   842.81        420.27       418.32      32.41      13.58                         -22.94
            ------------------------------------------------------------------------------------------------------------------------
               Seattle           20'     460.10        244.33       243.18      25.70        0.39          -53.08         -10.42
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     778.37        389.69       388.68       NS           NS             NS             NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     782.21        455.17       463.98      47.41        0.77         -157.01         -18.11
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   922.93        481.43       469.93      47.41        1.61          -58.08         -21.37
            ------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                             DOMESTIC RATES
------------------------------------------------------------------------------------------------------------------------------------
                    Contract Reference:                             Sec. 16.B     Sec.      Sec. 15E         Sec. 16.D      Sec.16.F
                                                                                  10.A
------------------------------------------------------------------------------------------------------------------------------------
                                                        FIXED       ADJUSTED                             DOMESTIC       AVERAGE
                                          TOTAL      PORTION BASE   PORTION       CAR      UTILIZATION    MARKET         DAILY
 ORIGIN         DESTINATION      SIZE     RATE          RATE       BASE RATE      COST     ADJUSTMENT   ADJUSTMENT       TENDER
------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>              <C>       <C>        <C>            <C>          <C>       <C>          <C>             <C>
                                  40'     882.85        381.58       380.68      32.41       13.17        50.38           24.03
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     908.59        394.01       392.98      32.41       13.58        50.38           24.73
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   842.81        420.27       418.32      32.41       13.59       -34.72           22.94
            ------------------------------------------------------------------------------------------------------------------------
                Seattle           20'     450.10        244.33       243.18      25.70        0.39       -53.08          -10.42
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     778.37        389.59       388.58       NS           NS          NS              NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     782.21        455.17       453.98      47.41        0.77      -157.01          -18.11
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   922.93        481.43       469.93      47.41        1.37       -58.08          -21.37
------------------------------------------------------------------------------------------------------------------------------------
Dallas          Los Angeles       20'     361.72        151.50       154.70      20.00       35.32         0.00            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     543.19        210.30       214.35      41.00       50.79        25.96            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     516.03        243.00       248.13      41.00       57.96        25.95            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  48'     543.16        246.00       251.20      41.00       58.61       -53.55            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  53'     575.35        250.50       266.00      41.00       51.30       -53.55            NS
------------------------------------------------------------------------------------------------------------------------------------
El Paso         Los Angeles       40'     506.12        209.50       213.92      33.00       49.70         0.00            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     506.12        209.50       213.32      33.00       49.70         0.00            NS
------------------------------------------------------------------------------------------------------------------------------------
Houston         Los Angeles       20'     360.51        151.50       154.70      19.00       35.41         0.00            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     518.01        226.00       230.77      39.00       53.99         1.75            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     598.89        262.00       267.53      39.00       61.91       -31.75            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  48'     620.99        257.00       252.43      39.00       60.81         1.75            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  53'     628.83        260.50       266.00      39.00       61.58         1.75            NS
------------------------------------------------------------------------------------------------------------------------------------
Kansas City     Lathrop           20'     479.00        479.00         NS         NS           NS           NS             NS
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     725.00        725.00         NS         NS           NS           NS             NS
            ------------------------------------------------------------------------------------------------------------------------
                                  45'     765.00        765.00         NS         NS           NS           NS             NS
            ------------------------------------------------------------------------------------------------------------------------
                                48'/53'   300.00        300.00         NS         NS           NS           NS             NS
            ------------------------------------------------------------------------------------------------------------------------
                Los Angeles       20'     448.00        448.00         NS         NS           NS           NS             NS
            ------------------------------------------------------------------------------------------------------------------------
                                  40'     500.00        500.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     875.00        875.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   700.00        700.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                Modesto           20'     479.00        479.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     725.00        725.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     765.00        765.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   300.00        300.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                Oakland           20'     465.00        465.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     700.00        700.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     733.00        733.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   750.00        750.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                Portland          20'     425.00        425.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                40'/45'   950.00        950.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   998.00        998.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                Sacramento        20'     479.00        479.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     725.00        725.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     765.00        765.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   800.00        800.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                Seattle           20'     425.00        425.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     960.00        960.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     970.00        970.00         NS         NS           NS           NS             NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'  1020.00       1020.00         NS         NS           NS           NS             NS
------------------------------------------------------------------------------------------------------------------------------------
Lathrop         Chicago         40'/45'   900.42        469.24       488.00       NS           NS        -36.82            NS
                (Canal St)
                (See Note)
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   882.40        469.24          458.32       NS           NS     -45.16            NS
           -------------------------------------------------------------------------------------------------------------------------
                Chicago         40'/45'   885.33        444.14          442.56      47.41       12.21      -.74          -17.75
                (Global 1)
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   875.46        444.14          433.66      47.41       14.95    -47.15          -17.54
           -------------------------------------------------------------------------------------------------------------------------
                Kansas City       20'     403.00        403.00            NS         NS           NS         NS            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     725.00        725.00            NS         NS           NS         NS            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     750.00        750.00            NS         NS           NS         NS            NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   775.00        775.00            NS         NS           NS         NS            NS
           -------------------------------------------------------------------------------------------------------------------------
                Memphis         40'/45'   797.32        388.04          386.59      45.00         NS     -11.71          -10.10
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   799.54        388.04          386.59      45.00         NS      -9.37          -10.12
           -------------------------------------------------------------------------------------------------------------------------
                Memphis (X)     40'/45'   783.01        374.57          373.25      45.00         NS         NS          -2.91
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   775.84        374.57          365.79      45.00         NS         NS          -2.32
           -------------------------------------------------------------------------------------------------------------------------
                St. Louis         20'     442.00        442.00            NS         NS           NS         NS            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     800.00        800.00            NS         NS           NS         NS            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     825.00        825.00            NS         NS           NS         NS            NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   850.00        850.00            NS         NS           NS         NS            NS
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       2

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                             DOMESTIC RATES
------------------------------------------------------------------------------------------------------------------------------------
                    Contract Reference:                             Sec. 16.B     Sec.      Sec. 15E         Sec. 16.D      Sec.16.F
                                                                                  10.A
------------------------------------------------------------------------------------------------------------------------------------
                                                        FIXED       ADJUSTED                             DOMESTIC       AVERAGE
                                          TOTAL      PORTION BASE   PORTION       CAR      UTILIZATION    MARKET         DAILY
 ORIGIN         DESTINATION      SIZE     RATE          RATE       BASE RATE      COST     ADJUSTMENT   ADJUSTMENT       TENDER
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>             <C>       <C>        <C>           <C>            <C>      <C>          <C>             <C>
Los Angeles      Chicago          20'    570.32         282.16          281.41       NS           NS        6.75             NS
           -------------------------------------------------------------------------------------------------------------------------
                (Canal St)
                (See Note)
           -------------------------------------------------------------------------------------------------------------------------
                                40'/45'   756.52        397.29          396.23       NS           NS      -35.00            NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   733.04        397.29          388.04       NS           NS      -52.29            NS
           -------------------------------------------------------------------------------------------------------------------------
                Chicago           20'     571.79        281.10          279.85      25.70        3.24      -6.65          -11.45
                (Global 1)
           -------------------------------------------------------------------------------------------------------------------------
                                40'/45'   756.96        381.44          380.45      47.41        4.72     -41.92          -15.16
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   736.63        381.44          372.59      47.41        5.24     -55.29          -14.76
           -------------------------------------------------------------------------------------------------------------------------
                Dallas            20'     204.04        90.00           91.90       20.00        2.14       0.00            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     556.19        257.50          242.52      40.00        5.52      10.65            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     529.25        239.00          244.05      40.00        5.65       0.55            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     516.07        231.50          236.39      40.00        5.39       2.79            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     502.79        225.00          229.75      40.00        5.25       2.79            NS
           -------------------------------------------------------------------------------------------------------------------------
                Houston           20'     291.87        133.00          135.81      20.00        3.06       0.00            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     607.07        273.00          278.77      39.00        6.27      10.63            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     539.24        239.50          244.36      39.00        5.15      10.83            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     517.06        234.50          239.45      39.00        6.44      -2.33            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     553.33        252.50          257.13      39.00        6.33      -1.63            NS
           -------------------------------------------------------------------------------------------------------------------------
                Kansas City       20'     453.00        453.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     625.00        625.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     650.00        650.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   675.00        675.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                Memphis           20'     260.99        108.00          110.28      24.00        3.71      15.00            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     493.10        233.50          238.43      47.00        7.96     -33.79            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     527.98        250.50          255.79      47.00        8.48     -33.79            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     595.60        268.50          274.17      47.00        9.04      -3.11            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     609.97        275.50          281.32      47.00        9.26      -3.11            NS
------------------------------------------------------------------------------------------------------------------------------------
Los Angeles     New Orleans       20'     314.75        142.50          145.51      22.00        4.75       0.00            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     612.56        271.50          277.23      43.00        9.07      11.36            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     573.21        301.00          307.36      43.00        9.99      11.98            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     658.24        305.00          312.46      43.00       10.14     -15.36            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     585.44        271.50          277.23      43.00        9.07     -15.36            NS
           -------------------------------------------------------------------------------------------------------------------------
                New Orleans (X)   20'     353.78        163.00          166.44      19.00        5.34       0.00            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     563.57        254.50          259.87      39.00        8.48       1.72            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     542.03        244.00          249.15      39.00        8.16       1.72            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     514.66        232.00          236.90      39.00        7.79      -1.03            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     508.50        229.00          233.64      39.00        7.89      -1.03            NS
           -------------------------------------------------------------------------------------------------------------------------
                Oakland         40'/45'   329.44        163.00          166.44       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                Portland        40'/45'   549.74        272.00          277.74       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     679.10        338.00          345.10       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                San Antonio       20'     276.58        127.00          129.68      17.00        2.90       0.00            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     524.21        240.00          245.07      35.00        5.52      -1.38            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     506.85        237.50          236.39      35.00        5.34      -1.38            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     583.76        263.50          265.04      39.00        6.02      10.20            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     535.79        240.00          245.07      35.00        5.52      10.20            NS
           -------------------------------------------------------------------------------------------------------------------------
                St. Louis         20'     516.00        516.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     700.00        700.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     725.00        725.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   750.00        750.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
Memphis         Lathrop           20'     537.25        261.09          259.46      23.00         NS        NS            -6.30
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     946.48        457.55          455.91      45.00         NS        NS           -11.98
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     984.74        478.95          473.26      45.00         NS        NS            -12.47
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   989.17        484.15          472.54      45.00         NS        NS            -12.52
           -------------------------------------------------------------------------------------------------------------------------
                Los Angeles       20'     316.21        138.50          141.42      23.00       19.06      -5.77            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     703.18        310.00          316.55      46.00       42.32     -11.59            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     744.00        329.00          335.85      46.00       44.74     -11.59            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     747.37        326.00          332.38      46.00       44.25      -1.26            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     717.90        312.00          318.59      46.00       42.57      -1.26            NS
           -------------------------------------------------------------------------------------------------------------------------
                Modesto           20'     537.25        261.09          258.66      23.00         NS        NS            -5.50
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     946.88        457.57          456.31      45.00         NS        NS            -11.98
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                        3

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                             DOMESTIC RATES
------------------------------------------------------------------------------------------------------------------------------------
                    Contract Reference:                             Sec. 16.B     Sec.      Sec. 15E         Sec. 16.D      Sec.16.F
                                                                                  10.A
------------------------------------------------------------------------------------------------------------------------------------
                                                        FIXED       ADJUSTED                             DOMESTIC       AVERAGE
                                          TOTAL      PORTION BASE   PORTION       CAR      UTILIZATION    MARKET         DAILY
 ORIGIN         DESTINATION      SIZE     RATE          RATE        BASE RATE     COST     ADJUSTMENT   ADJUSTMENT       TENDER
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>             <C>       <C>        <C>           <C>            <C>      <C>          <C>             <C>
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     984.74        476.95          475.26     45.00         NS        NS            -12.47
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   989.17        484.15          472.54      45.00         NS        NS            -12.52
           -------------------------------------------------------------------------------------------------------------------------
                Oakland           20'     630.70        308.37          307.31      23.00         NS        NS            -7.98
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     945.53        456.80          455.70      45.00         NS        NS            -11.97
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     989.22        479.00          477.74      45.00         NS        NS            -12.52
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   984.31        481.58          470.19      45.00         NS        NS            -12.46
           -------------------------------------------------------------------------------------------------------------------------
                Portland          20'     550.00        550.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     950.00        950.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'    1080.88        532.99          530.61      45.00         NS        NS            -27.72
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'  1070.60        532.99          520.06      45.00         NS        NS            -27.45
           -------------------------------------------------------------------------------------------------------------------------
                Sacramento        20'     537.25        261.09          259.96      23.00         NS        NS            -6.80
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     946.48        457.55          455.91      45.00         NS        NS            -11.98
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     984.76        476.95          475.28      45.00         NS        NS            -12.47
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   989.17        484.15          472.54      45.00         NS        NS            -12.52
           -------------------------------------------------------------------------------------------------------------------------
                Seattle           20'     650.00        650.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     850.00        850.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'    1081.80        532.97          531.57      45.00         NS        NS            -27.74
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'  1070.91        532.98          520.39      45.00         NS        NS            -27.46
------------------------------------------------------------------------------------------------------------------------------------
 Memphis (X)    Lathrop           20'     538.88        243.52          242.53      22.00       12.98      23.67          -6.82
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     860.43        451.89          450.29      45.00       24.88     -100.74         -10.89
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     900.73        471.81          470.13      45.00       25.93     -100.74         -11.40
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   968.33        487.78          476.04      45.00       38.56     -67.76          -12.25
           -------------------------------------------------------------------------------------------------------------------------
                Modesto           20'     538.88        243.52          242.53      23.00       11.98      23.67          -6.82
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     860.43        451.89          450.29      45.00       24.88     -100.74         -10.89
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     900.73        471.31          470.13      45.00       25.93     -100.74         -11.40
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   968.33        457.75          476.04      45.00       38.56     -67.76          -12.26
           -------------------------------------------------------------------------------------------------------------------------
                Oakland           20'     506.61        237.46          236.57      23.00       11.56      3.34           -6.41
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     869.35        438.85          433.70      45.00       24.11     -61.32          -11.00
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     914.08        458.96          457.74      45.00       25.27     -61.32          -11.57
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   924.05        474.90          463.55      45.00       38.54     -86.24          -11.70
           -------------------------------------------------------------------------------------------------------------------------
                Portland          20'     566.81        266.75          265.33      23.00       19.76       6.50          -14.53
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     990.00        990.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     970.70        518.58          516.25      45.00       39.51     -123.75         -24.89
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'  1109.59        534.53          521.55      45.00       87.24      -50.73         -28.45
           -------------------------------------------------------------------------------------------------------------------------
                Sacramento        20'     535.88        243.82          242.53      23.00       12.98       20.37          -6.82
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     869.93        461.89          450.29      45.00       24.38     -100.74         -10.89
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     900.73        471.81          470.13      45.00       25.93     -100.74         -11.40
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   968.33        487.75          476.04      45.00       39.56      -67.75         -12.26
           -------------------------------------------------------------------------------------------------------------------------
                Seattle           20'     512.01        251.34          250.94      23.00       18.58      -18.71         -13.14
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     973.00        973.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     952.26        488.77          487.47      45.00       37.37      -81.93         -24.42
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'  1116.22        504.71          492.77      45.00       82.93       19.43         -28.62
------------------------------------------------------------------------------------------------------------------------------------
   Modesto      Chicago         40'/45'   821.39        429.66          428.55       NS           NS       -36.82            NS
                (Canal St)
                (See Note)
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   804.19        329.66          419.69       NS           NS      -45.16            NS
           -------------------------------------------------------------------------------------------------------------------------
                Chicago         40'/45'   812.41        407.14          405.54      47.41       11.24     -42.74          -16.28
                (Global 1)
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   802.59        407.14          397.51      47.41       13.77     -47.16          -16.08
           -------------------------------------------------------------------------------------------------------------------------
                Kansas City       20'     403.00        403.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     725.00        725.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     750.00        750.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   775.00        775.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
               Memphis          40'/45'   797.82        388.04          388.59      45.00         NS      -11.71          -10.10
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   791.53        388.04          378.85      46.00         NS      -10.24          -10.32
            ------------------------------------------------------------------------------------------------------------------------
                Memphis (X)     40'/45'   783.01        374.67          373.25      45.00         NS        NS             -9.91
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   775.64        374.67          365.79      45.00         NS        NS             -9.82
           -------------------------------------------------------------------------------------------------------------------------
                St. Louis         20'     442.00        442.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     800.00        800.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     825.00        825.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   850.00        850.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
 New Orleans     Los Angeles      20'     438.01        193.00          197.08      22.00       25.93      0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       4

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                             DOMESTIC RATES
------------------------------------------------------------------------------------------------------------------------------------
                    Contract Reference:                             Sec. 16.B     Sec.      Sec. 15E         Sec. 16.D      Sec.16.F
                                                                                  10.A
------------------------------------------------------------------------------------------------------------------------------------
                                                        FIXED       ADJUSTED                             DOMESTIC       AVERAGE
                                          TOTAL      PORTION BASE   PORTION       CAR      UTILIZATION    MARKET         DAILY
 ORIGIN         DESTINATION      SIZE     RATE          RATE        BASE RATE     COST     ADJUSTMENT   ADJUSTMENT       TENDER
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>              <C>      <C>        <C>           <C>            <C>      <C>          <C>             <C>
                                  40'     640.73        307.50          313.99      44.00       41.88     -66.64            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     867.37        413.00          421.72      44.00       55.29     -66.64            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     859.65        384.50          392.52      44.00       51.57     -12.94            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     733.10        325.50          332.37      44.00       44.17     -12.94            NS
------------------------------------------------------------------------------------------------------------------------------------
New Orleans     Los Angeles       20'     437.87        192.00          196.05      20.00       25.68      4.14             NS
(X)
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     756.28        340.00          347.18      35.00       45.70      -5.50            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     726.58        322.50          329.31      39.00       43.47      -5.50            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     703.17        313.50          320.12      39.00       42.32     -11.77            NS
           -------------------------------------------------------------------------------------------------------------------------
                                  53'     652.69        290.00          296.12      39.00       39.34     -11.77            NS
------------------------------------------------------------------------------------------------------------------------------------
Oakland         Chicago           20'     457.73        227.17          226.56       NS           NS       4.00             NS
                (Canal St)
                See Note
           -------------------------------------------------------------------------------------------------------------------------
                                40'/45'   857.22        427.51          426.48       NS           NS       3.23             NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   795.40        428.12          418.16       NS           NS      -50.88            NS
           -------------------------------------------------------------------------------------------------------------------------
                Chicago           20'     448.10        224.05          222.96      25.70        5.77     -21.40          -8.98
                (Global 1)
           -------------------------------------------------------------------------------------------------------------------------
                                40'/45'   837.16        404.05          402.99      47.41       11.17     -11.69          -16.77
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   786.16        404.05          394.66      47.41       13.67     -57.88          -15.75
           -------------------------------------------------------------------------------------------------------------------------
                Kansas City       20'     447.00        447.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     675.00        675.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     700.00        700.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   700.00        700.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                Los Angeles     40'/45'   329.44        163.00          166.44       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                Memphis         40'45'    806.85        387.52          386.48      45.00         NS       -1.94          -10.21
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   787.76        387.52          378.49      45.00         NS      -13.28          -9.97
           -------------------------------------------------------------------------------------------------------------------------
                Memphis (X)     40'45'    783.44        374.67          373.69      45.00         NS        NS            -9.92
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   775.81        374.67          365.96      45.00         NS        NS            -9.82
           -------------------------------------------------------------------------------------------------------------------------
                Portland        40'/45'   388.05        192.00          196.05       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     529.53        262.00          267.53       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                St. Louis         20'     496.00        496.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     750.00        750.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     775.00        775.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   800.00        800.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
Portland        Chicago           20'     461.95        231.28          230.67       NS           NS       0.00             NS
                (Canal St)
                (See Note)
           -------------------------------------------------------------------------------------------------------------------------
                                40'/45'   783.37        436.36          435.72       NS           NS      -88.71            NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   765.30        436.36          425.71       NS           NS      -96.77            NS
           -------------------------------------------------------------------------------------------------------------------------
                Chicago           20'     446.96        222.51          221.41      25.70        7.67     -24.40          -5.93
                (Global 1)
           -------------------------------------------------------------------------------------------------------------------------
                                40'/45'   778.55        405.09          404.02      47.41       14.99     -82.63          -10.33
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   758.11        405.09          395.68      47.41        9.78     -89.77          -10.08
           -------------------------------------------------------------------------------------------------------------------------
                Kansas City       20'     505.00        505.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     577.00        577.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     305.00        305.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   961.00        961.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                Los Angeles     40'/45'   549.74        272.00          277.74       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     734.10        386.00          348.10       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                Memphis         40'/45'   908.71        441.49          440.34      45.00         NS      -29.34          11.22
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   928.31        467.19          456.33      45.00         NS      -51.67          11.46
           -------------------------------------------------------------------------------------------------------------------------
                Memphis (X)     407.45    938.42        441.49          440.34      45.00         NS        NS            11.59
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   980.63        467.19          456.33      45.00         NS        NS            12.11
           -------------------------------------------------------------------------------------------------------------------------
                Oakland         40'/45'   388.05        192.00          196.05       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  48'     529.53        262.00          267.53       NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                St. Louis         20'     544.00        544.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     386.00        386.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'    1012.00       1012.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/50'   350.00        350.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
Sacramento      Chicago         40'45'    821.39        429.66          428.55       NS           NS      -36.82            NS
                (Canal St)
                (See Note)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       5

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                             DOMESTIC RATES
------------------------------------------------------------------------------------------------------------------------------------
                    Contract Reference:                             Sec. 16.B     Sec.      Sec. 15E         Sec. 16.D      Sec.16.F
                                                                                  10.A
------------------------------------------------------------------------------------------------------------------------------------
                                                        FIXED       ADJUSTED                             DOMESTIC       AVERAGE
                                          TOTAL      PORTION BASE   PORTION       CAR      UTILIZATION    MARKET         DAILY
 ORIGIN         DESTINATION      SIZE     RATE          RATE        BASE RATE     COST     ADJUSTMENT   ADJUSTMENT       TENDER
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>              <C>      <C>        <C>           <C>            <C>      <C>          <C>             <C>
                                48'/53'   804.19        429.66          419.69       NS           NS      -45.16            NS
------------------------------------------------------------------------------------------------------------------------------------
                Chicago         40'/45'   812.41        407.14          405.64      47.41       11.24     -42.74         -16.28
                (Global 1)
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   802.59        407.14          397.51      47.41       13.77     -47.16         -16.08
------------------------------------------------------------------------------------------------------------------------------------
                Kansas City       20'     403.00        403.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     725.00        725.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     750.00        750.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   775.00        775.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Memphis         40'/45'   797.82        388.04          386.59      45.00         NS      -11.71          -10.10
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   791.63        388.04          378.85      45.00         NS      -10.24          -10.02
------------------------------------------------------------------------------------------------------------------------------------
                Memphis (X)     40'/45'   783.01        374.67          373.25      46.00         NS        NS            -9.91
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   775.64        374.67          366.79      45.00         NS        NS            -9.82
------------------------------------------------------------------------------------------------------------------------------------
                St. Louis         20'     442.00        442.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     800.00        800.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     825.00        825.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   850.00        850.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
Salt Lake City  Chicago         40'/45'   500.00        500.00            NS         NS           NS        NS              NS
                (Canal St)
                (See Note)
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   500.00        500.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Chicago         40'/45'   500.00        500.00            NS         NS           NS        NS              NS
                (Global 1)
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   500.00        500.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Lathrop           20'     317.53        154.19          153.34      10.00         NS       0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     400.00        180.25          179.53      17.00         NS       23.22            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     409.35        185.02          184.11      17.00         NS       23.22            NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   429.46        203.02          201.53      17.00         NS       7.91             NS
------------------------------------------------------------------------------------------------------------------------------------
                Los Angeles       20'     317.72        154.19          153.53      10.00         NS       0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     379.45        179.94          179.44      17.00         NS       3.07             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     391.69        186.05          185.57      17.00         NS       3.07             NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   448.51        201.99          200.95      17.00         NS       28.57            NS
------------------------------------------------------------------------------------------------------------------------------------
                Oakland           20'     317.72        154.19          153.53      10.00         NS       0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     383.44        179.94          179.44      17.00         NS       7.06             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     393.62        185.02          184.54      17.00         NS       7.06             NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   431.30        202.50          201.44      17.00         NS       10.36            NS
------------------------------------------------------------------------------------------------------------------------------------
                Portland          20'     210.63        94.57           94.06       22.00         NS       0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     334.22        146.48          146.09      41.00         NS       0.65             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     389.35        174.23          173.77      41.00         NS       0.35             NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   420.32        190.17          189.15      41.00         NS       0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                Seattle           20'     240.36        108.96          108.40      23.00         NS       0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     371.74        195.82          195.31      43.00         NS       62.39            NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     363.03        201.47          200.95      43.00         NS      -82.39            NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   476.74        217.41          216.33      43.00         NS       0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
San Antonio     Los Angeles       20'     331.49        139.00          141.94      18.00       32.55      0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     552.04        228.50          233.33      36.00       54.21      0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     456.79        186.00          189.93      36.00       44.86      0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  48'     453.43        184.50          188.40      36.00       44.53      0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
                                  53'     568.84        236.00          240.98      36.00       55.86      0.00             NS
------------------------------------------------------------------------------------------------------------------------------------
Seattle         Chicago           20'     347.67        225.63          225.04       NS           NS      -103.00           NS
                (Canal St)
                (See Note)
------------------------------------------------------------------------------------------------------------------------------------
                                40'/45'   767.32        431.72          430.59       NS           NS      -94.99            NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   809.13        431.72          421.68       NS           NS      -44.27            NS
------------------------------------------------------------------------------------------------------------------------------------
                Chicago           20'     336.02        217.89          216.78      25.70        7.51     -127.40         -4.46
                (Global 1)
------------------------------------------------------------------------------------------------------------------------------------
                                40'/45'   751.10        440.45          399.40      47.41       14.83     -20.91          -10.09
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   793.89        400.46          391.14      47.41        9.68     -44.27          -10.53
------------------------------------------------------------------------------------------------------------------------------------
                Kansas City       20'     505.00        505.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     868.00        868.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     894.00        894.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       6

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                             DOMESTIC RATES
------------------------------------------------------------------------------------------------------------------------------------
                    Contract Reference:                             Sec. 16.B     Sec.      Sec. 15E         Sec. 16.D      Sec.16.F
                                                                                  10.A
------------------------------------------------------------------------------------------------------------------------------------
                                                        FIXED       ADJUSTED                             DOMESTIC       AVERAGE
                                          TOTAL      PORTION BASE   PORTION       CAR      UTILIZATION    MARKET         DAILY
 ORIGIN         DESTINATION      SIZE     RATE          RATE        BASE RATE     COST     ADJUSTMENT   ADJUSTMENT       TENDER
------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>              <C>      <C>        <C>           <C>            <C>      <C>          <C>             <C>
                                48'/53'   938.00        938.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Memphis         40'/45' 1,136.19        467.19          465.97      45.00         NS      144.00          14.03
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   980.62        487.19          456.33      45.00         NS      -19.76          11.86
------------------------------------------------------------------------------------------------------------------------------------
                Memphis (X)     40'/45'   972.71        458.45          457.25      45.00         NS        NS            12.01
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   963.13        458.45          447.79      45.00         NS        NS            11.89
------------------------------------------------------------------------------------------------------------------------------------
                St. Louis         20'     544.00        544.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     948.00        948.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     974.00        974.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53' 1,036.00      1,036.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
  St. Louis     Lathrop           20'     510.00        510.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     760.00        760.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  45'     800.00        800.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                48'/53'   950.00        950.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                Los Angeles       20'     403.00        403.00            NS         NS           NS        NS              NS
           -------------------------------------------------------------------------------------------------------------------------
                                  40'     700.00        700.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     733.00        733.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   300.00        300.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Modesto           20'     510.00        510.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     760.00        760.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     800.00        800.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   950.00        950.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Oakland           20'     497.00        497.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     780.00        780.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     500.00        500.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   900.00        900.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Portland          40'   1,000.00      1,000.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     998.00        998.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53' 1,005.00      1,005.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Sacramento        20'     510.00        510.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  40'     780.00        780.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'     800.00        800.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'   950.00        950.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                Seattle           40'    1010.00       1010.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                  45'    1020.00       1020.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
                                48'/53'  1070.00       1070.00            NS         NS           NS        NS              NS
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NS    When reference is made here, the cost or rate component is not subject
      to adjustment.
(X)-  Denotes proportionate rate. Rate applies only on traffic interchanged to
      or from a connecting rail carrier.
Note: Chicago (Canal St) - Rates are exempt from Car Cost, Utilization and
      Average Daily Tender adjustment. At no time will Canal St rates be less
      than the current effective Global 1 rate. Should cost adjustments produce
      a lower Canal St rate APL will pay the current Global 1 rate.

                                       7

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                        Sec. 16.B                  Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN      DESTINATION             SIZE          TOTAL          FIXED         ADJUSTED       CAR COST
                                                         RATE         PORTION         PORTION
-------------------------------------------------------------------------------------------------------------
<S>              <C>                    <C>          <C>            <C>             <C>            <C>
Chicago (Canal      Denver                    20'       280.00          140.00         140.00
St.)
(See Note)
-------------------------------------------------------------------------------------------------------------
                    Lathrop                   20'   =   341.84          171.14         170.70
-------------------------------------------------------------------------------------------------------------
                                           40/45'       473.24          236.95         236.31
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'       341.84          171.14         170.70
-------------------------------------------------------------------------------------------------------------
                                           40/45'       473.24          236.95         236.31
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =   316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           40/46'   =   367.50          184.00         183.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Salt Lake City            20'       300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'       300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           40/45'       367.50          184.00         183.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'       300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
Chicago (Doiton)    Houston                   20'       130.13           53.50          64.63          22.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       260.26          107.00         109.26          44.00
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'   =    96.00           48.00          48.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   162.00           81.00          81.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   162.00           81.00          81.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'   =   114.00           57.00          57.00
---------------------------------------------------- --------------------------------------------------------
                                           40/45'   =   198.00           99.00          99.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   198.00           99.00          99.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'   =    90.00           45.00          45.00
-------------------------------------------------------------------------------------------------------------
                                           45/50'   =   151.00           75.50          75.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   151.00           75.50          75.50
-------------------------------------------------------------------------------------------------------------
Chicago (Global 1)  Denver                    20'   =   240.00          120.00         120.00
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   235.00          117.50         117.50
-------------------------------------------------------------------------------------------------------------
                    Lathrop                   20'       341.71          171.08         170.63
-------------------------------------------------------------------------------------------------------------
                                           40/45'       472.20          236.40         235.30
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       315.92          158.17         157.75
-------------------------------------------------------------------------------------------------------------
                                           40/45'       420.87          210.81         210.06
-------------------------------------------------------------------------------------------------------------
                                           48/53'  =    302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'       341.71          171.08         170.63
-------------------------------------------------------------------------------------------------------------
                                           40/45'       472.20          236.40         235.80
-------------------------------------------------------------------------------------------------------------
                                           48/53'  =    302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'       315.92          158.17         157.75
-------------------------------------------------------------------------------------------------------------
                                           40/45'       368.08          184.29         183.79
-------------------------------------------------------------------------------------------------------------
                                           48/53'  =    302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Salt Lake City            20'       316.02          158.22         157.80
-------------------------------------------------------------------------------------------------------------
                                           40/45'       424.97          212.76         212.21
-------------------------------------------------------------------------------------------------------------
                                           48/53'  =    302.29          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'       315.92          158.17         157.75
-------------------------------------------------------------------------------------------------------------
                                           40/45'       368.08          184.29         183.79
-------------------------------------------------------------------------------------------------------------
                                           48/53'  =    302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
Dallas              Portland                  20'  =    600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'  =    825.00          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'  =    600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'  =    825.00          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    Chicago  (Dolton)      48/53'       243.54          120.50         123.04
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'        34.27           13.00          13.27           8.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'        57.55           25.00          26.55          15.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       208.82           38.00          87.82          35.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       417.63          172.00         175.63          70.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'        56.50           23.50          24.00           9.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       112.99           47.00          47.99          18.00
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                      1

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
                                                        Sec. 16.B                  Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN        DESTINATION             SIZE       TOTAL            FIXED        ADJUSTED        CAR COST
                                                        RATE           PORTION       PORTION
-------------------------------------------------------------------------------------------------------------
<S>               <C>                  <C>             <C>            <C>            <C>             <C>
Dallas              New Orleans               20'        74.64           30.60          31.14          13.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       149.29           61.00          52.29          26.00
-------------------------------------------------------------------------------------------------------------
                    Phoenix                   20'       161.40           66.50          67.90          27.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       322.31          133.00         135.31          54.00
-------------------------------------------------------------------------------------------------------------
                    San Antonio               20'        40.34           16.00          16.34           3.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'        81.68           32.00          32.68          17.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'        88.77           36.50          37.27          15.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       177.54           73.00          74.54          30.00
-------------------------------------------------------------------------------------------------------------
Denver              Los Angeles               20'   =   229.00          114.50         114.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   229.00          114.50         114.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   229.00          114.50         114.50
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'   =   260.00          130.00         130.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   260.00          130.00         130.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   260.00          130.00         130.00
-------------------------------------------------------------------------------------------------------------
                    Salt Lake City            20'   =   106.00           53.00          53.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   181.00           90.50          90.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   181.30           90.50          90.50
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   229.00          114.50         114.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   229.00          114.50         114.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   229.00          114.50         114.50
-------------------------------------------------------------------------------------------------------------
El Paso             Houston                   20'        93.83           39.50          40.33          14.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       186.57           79.00          80.57          27.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'        97.88           40.50          41.38          16.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'        94.71           31.00          32.71          31.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'       135.20           57.00          58.20          20.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       274.41          114.00         116.41          41.00
-------------------------------------------------------------------------------------------------------------
Houston             Chicago, Dolton        48/53'       260.72          129.00         131.72
-------------------------------------------------------------------------------------------------------------
                    Dallas                    20'        34.27           18.00          13.27           3.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'        68.55           26.00          26.55          16.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       194.89           87.00          81.89          33.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       289.38          180.00         183.38          26.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'        65.37           27.00          27.57          11.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       131.14           54.00          55.14          22.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'        43.37           17.50          17.87           8.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'        87.74           35.00          35.74          17.00
-------------------------------------------------------------------------------------------------------------
                    Phoenix                   20'       147.28           50.50          61.78          25.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       294.56          121.00         123.56          50.00
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =   600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   825.10          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    San Antonio               20'        28.21           10.00          10.21           8.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'        56.42           20.00          20.42          16.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   825.00          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    St Louis               96.84'        40.00           40.84          16.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       193.69           80.00          81.69          32.00
-------------------------------------------------------------------------------------------------------------
Kansas City         Chicago (Dolton)          20'   =    96.00           48.00          48.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   162.00           81.00          81.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   162.00           81.00          81.00
-------------------------------------------------------------------------------------------------------------
                    Chicago, (Global 1)       20'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   235.00          117.50         117.50
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'   =    65.00           32.50          32.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =    65.00           32.50          32.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    65.00           32.50          32.50
-------------------------------------------------------------------------------------------------------------
                    Lathrop                   20'       341.34          171.14         170.20
-------------------------------------------------------------------------------------------------------------
                                           40/45'       473.24          236.93         236.31
-------------------------------------------------------------------------------------------------------------
                                           48/53'       300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       308.04          154.23         153.81
-------------------------------------------------------------------------------------------------------------
                                           40/45'       410.73          205.64         205.09
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                      2

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                        Sec. 16.B                   Sec. 10.A
-------------------------------------------------------------------------------------------------------------
    ORIGIN         DESTINATION             SIZE       TOTAL            FIXED          ADJUSTED       CAR COST
                                                       RATE           PORTION         PORTION
-------------------------------------------------------------------------------------------------------------
<S>              <C>                    <C>          <C>            <C>             <C>            <C>
Kansas City         Memphis                   20'   =    78.00           39.00          39.00
-------------------------------------------------------------------------------------------------------------
                                          4/0/45'   =   126.00           63.00          63.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   126.00           63.00          63.00
-------------------------------------------------------------------------------------------------------------
                    Memphis (X)               20'   =    73.00           36.50          36.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   116.00           58.00          58.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   116.00           58.00          58.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'   =   143.00           71.50          71.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   256.00          128.00         128.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   256.00          128.00         128.00
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'       341.84          171.14         170.70
-------------------------------------------------------------------------------------------------------------
                                           40/45'       473.24          236.93         236.31
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Phoenix                   20'       161.40           66.50          67.90          27.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       322.81          133.00         135.81          54.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'       292.57          146.48         146.09
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'   =    68.00           34.00          34.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   107.00           53.50          53.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   107.00           53.50          53.50
-------------------------------------------------------------------------------------------------------------
                    St. Louis (X)          48/53'   =   177.00           88.50          88.50
-------------------------------------------------------------------------------------------------------------
Lathrop             Chicago (Canal St)        20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                    (See Note)             40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Chicago (Global 1)        20'       280.95          140.67         140.28
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.60          158.51         158.09
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'       277.16          138.77         138.39
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Lathrop (X)               20'   =    57.00           28.50          28.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =    52.00           26.00          26.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    52.00           26.00          26.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles            48/53'   =   310.00          155.00         155.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Memphis (X)               20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'   =    62.00           31.00          31.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =    62.00           31.00          31.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    62.00           31.00          31.00
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =   185.00           92.50          92.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   190.00           95.00          95.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'       311.05          155.73         155.32
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
Lewiston, ID        Portland                  20'   =   150.00           75.00          75.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'       200.00          100.00         100.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   170.00           85.00          85.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   225.00          112.50         112.50
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                      3

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                        Sec. 16.B                  Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN           DESTINATION        SIZE        TOTAL             FIXED         ADJUSTED       CAR COST
                                                      RATE             PORTION        PORTION
-------------------------------------------------------------------------------------------------------------
<S>               <C>                    <C>         <C>            <C>              <C>            <C>
Los Angeles         Chicago (Canal St)        20'       317.21          158.81         158.40
-------------------------------------------------------------------------------------------------------------
                    (See Note)             40/45'       317.21          158.81         158.40
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   299.00          149.50         149.50
-------------------------------------------------------------------------------------------------------------
                    Chicago (Global 1)        20'       273.78          137.07         136.71
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.60          158.51         158.09
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Dallas                    20'       208.82           88.00          37.82          35.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       417.63          172.00         175.63          70.00
-------------------------------------------------------------------------------------------------------------
                    El Paso                   20'        98.86           40.50          41.36          17.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       197.71           81.00          82.71          34.00
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'       194.59           80.00          81.59          33.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       389.38          160.00         163.38          66.00
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles (X)           20'   =    65.00           32.50          32.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =    60.00           30.00          30.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    60.00           30.00          30.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'       280.26          107.00         109.26          44.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       520.52          214.00         218.52          88.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'       237.06           97.50          99.56          40.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       474.12          195.00         199.12          80.00
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'   =   178.00           89.00          89.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Omaha                  40/45'   =   425.00          212.50         212.50
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Salt Lake City         40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    San Antonio               20'       170.48           70.00          71.48          29.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       340.96          140.00         142.96          58.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
  Memphis           Dallas                    20'        58.50           23.50          24.00           9.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       112.99           47.00          47.99          18.00
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'        66.57           27.00          27.57          12.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       133.14           54.00          55.14          24.00
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'   =   160.00           80.00          80.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   180.00           90.00          90.00
-------------------------------------------------------------------------------------------------------------
                    Lathrop                   20'   =   325.00          162.50         162.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   450.00          225.00         225.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       260.25          107.00         109.25          44.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       520.52          214.00         215.52          88.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'        97.34           40.00          40.34          17.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       196.69           80.00          81.69          35.00
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'   =   325.00          162.00         162.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   450.00          225.00         225.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Phoenix                   20'       212.85           87.50          89.35          36.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       425.70          175.00         178.70          72.00
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   350.00          175.00         175.00
-------------------------------------------------------------------------------------------------------------
                                           48/53    =   300.00          150.00         150.00
</TABLE>

                                                                      4

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                        Sec. 16.B                  Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN            DESTINATION        SIZE       TOTAL     FIXED PORTION     ADJUSTED       CAR COST
                                                      RATE                         PORTION
-------------------------------------------------------------------------------------------------------------
<S>               <C>                    <C>         <C>            <C>              <C>            <C>
Memphis             Seattle                   20'   =   300.00          175.00         175.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   350.00          175.00         175.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    30.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'        47.41           19.50          19.91           8.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'        94.82           39.00          39.82          16.00
-------------------------------------------------------------------------------------------------------------
Memphis (X)         Kansas City            40/45'   =   115.00           58.00          58.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   125.00           62.50          62.50
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'   =    36.00           17.50          17.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =    36.00           17.50          17.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    36.00           17.50          17.50
-------------------------------------------------------------------------------------------------------------
New Orleans         Dallas                    20'        77.64           30.50          31.14          16.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       155.29            61.0          62.29          32.00
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'        43.37           17.50          17.87           8.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'        87.74           35.00          35.74          17.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       237.06           97.50          99.56          40.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       474.12          196.00         198.12          80.00
-------------------------------------------------------------------------------------------------------------
                    Phoenix                   20'       189.85           78.00          79.85          32.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       379.29          156.00         159.29          64.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'       129.12           53.00          54.12          22.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       258.24          106.00         108.24          44.00
-------------------------------------------------------------------------------------------------------------
Oakland             Chicago (Canal St.)       20'       317.21          158.81         158.40
-------------------------------------------------------------------------------------------------------------
                    (See Note)             40/45'       316.60          158.51         158.09
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Chicago (Global 1)        20'       280.95          140.67         140.28
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.60          158.51         158.09
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'       277.16          138.77         138.39
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.15          158.30         157.85
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Lathrop                   20'   =     0.00            0.00           0.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =     0.00            0.00           0.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =     0.00            0.00           0.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       188.87           94.57          94.30
-------------------------------------------------------------------------------------------------------------
                                           40/45'       311.05          155.73         155.32
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Memphis (X)               20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Oakland (X)               20'   =    75.00           37.50          37.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =    75.00           37.50          37.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    75.00           37.50          37.50
-------------------------------------------------------------------------------------------------------------
                    Omaha                  40/45'   =   425.00          212.50         212.50
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =   185.00           92.50          92.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   190.00           95.00          95.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                   St. Louis                  20'       311.05          155.73         155.32
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                      5

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                        Sec. 16.B                  Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN            DESTINATION        SIZE       TOTAL     FIXED PORTION     ADJUSTED       CAR COST
                                                      RATE                         PORTION
-------------------------------------------------------------------------------------------------------------
<S>                 <C>                   <C>         <C>       <C>               <C>            <C>
Omaha               Kansas City               20'   =   157.00           78.50          78.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   157.00           78.50          78.50
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'   =   275.00          137.50         137.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   350.00          175.00         175.00
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'   =   275.00          137.50         137.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   350.00          175.00         175.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   275.00          137.50         137.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   350.00          175.00         175.00
-------------------------------------------------------------------------------------------------------------
Phoenix             Dallas                    20'       161.40           66.50          67.90          27.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       322.81          133.00         135.81          54.00
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'       147.28           60.50          61.78          25.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       294.56          121.00         123.56          50.00
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'       161.40           66.50          67.90          27.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       322.81          133.00         135.81          54.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'       212.85           87.50          89.35          36.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       425.70          175.00         178.70          72.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'       189.85           78.00          79.85          32.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       379.29          156.00         159.29          64.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'       195.70           80.50          82.20          33.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       391.40          161.00         164.40          66.00
-------------------------------------------------------------------------------------------------------------
Portland            Chicago (Canal St.)       20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                    (See Note)             40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Chicago (Global 1)        20'       290.21          145.29         144.92
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.60          158.51         157.09
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Dallas                    20'   =   600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   825.00          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'   =   600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   825.00          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Lathrop                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Lewiston, ID              20'   =   150.00           75.00          75.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   200.00          100.00         100.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Memphis (X)               20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Oakland (X)               20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Omaha                  40/45'   =   425.00          212.50         212.50
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   101.00           50.50          50.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   150.00           75.00          75.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   150.00           75.00          75.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           40/45'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                      6

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                        Sec. 16.B                  Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN            DESTINATION        SIZE       TOTAL     FIXED PORTION     ADJUSTED       CAR COST
                                                      RATE                         PORTION
--------------------------------------------------------------------------------------------------------------
<S>                 <C>                   <C>         <C>       <C>               <C>            <C>
Portland            Portland               40/45'   =    35.00           17.50          17.50
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =    95.00           47.50          47.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   138.00           69.00          69.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   138.00           69.00          69.00
-------------------------------------------------------------------------------------------------------------
Roseville           Portland                  20'       269.82          133.50         136.32
-------------------------------------------------------------------------------------------------------------
                                           40/53'       331.46          164.00         167.46
-------------------------------------------------------------------------------------------------------------
                                           48/53'       430.50          213.00         217.50
-------------------------------------------------------------------------------------------------------------
Salt Lake City      Chicago (Canal St)        20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    (See Note)             40/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Chicago (Global 1)        20'   =   296.62          148.31         148.31
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   302.33          151.17         151.16
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Denver                    20'   =      106           53.00          53.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   181.00           90.50          90.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   181.00           90.50          90.50
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'   =   154.00           77.00          77.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   278.00          139.00         139.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   278.00          139.00         139.00
-------------------------------------------------------------------------------------------------------------
                    Lathrop                   20'   =    98.00           49.00          49.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'   =    98.00           49.00          49.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'   =    98.00           49.00          49.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   165.00           82.50          82.50
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =   133.00           66.50          66.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   237.00          118.50         118.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   237.00          118.50         118.50
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'   =   146.00           73.00          73.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   266.00          133.00         133.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   266.00          133.00         133.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'   =   189.00           94.50          94.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
San Antonio         Dallas                    20'        41.34           16.00          16.34           9.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'        81.68           32.00          32.68          17.00
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'        28.21           10.00          10.21           8.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'        56.42           20.00          20.42          16.00
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'       170.48           70.00          71.48          29.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       340.96          140.00         142.96          68.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'        70.58           27.50          28.08          15.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'       141.16           55.00          56.16          30.00
-------------------------------------------------------------------------------------------------------------
Seattle             Chicago (Canal St)        20'       316.16          158.30         157.86
-------------------------------------------------------------------------------------------------------------
                    (See Note)             40/45'       316.16          158.00         157.36
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                   Chicago (Global 1)         20'       309.72          155.86         154.86
-------------------------------------------------------------------------------------------------------------
                                           40/45'       315.56          157.99         157.57
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   302.39          151.20         151.19
-------------------------------------------------------------------------------------------------------------
                    Dallas                    20'   =   600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   825.00          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'   =   600.00          300.00         300.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   825.00          412.50         412.50
-------------------------------------------------------------------------------------------------------------
                    Kansas City               20'       315.14          157.78         157.36
-------------------------------------------------------------------------------------------------------------
                                           40/45'       315.14          157.78         157.36
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                      7

<PAGE>

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                       Sec. 16.B                  Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN            DESTINATION        SIZE       TOTAL     FIXED PORTION     ADJUSTED       CAR COST
                                                      RATE                         PORTION
-------------------------------------------------------------------------------------------------------------
<S>                 <C>                   <C>         <C>       <C>               <C>            <C>
Seattle             Lathrop                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Lewiston, ID              20'   =   170.00           85.00          85.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   225.00          112.50         112.50
-------------------------------------------------------------------------------------------------------------
                    Los Angeles               20'   =   238.00          119.00         119.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Memphis (X)               20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Oakland                   20'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Omaha                  40/45'   =   425.00          212.50         212.50
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'   =    89.00           44.50          44.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   142.00           71.00          71.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   142.00           71.00          71.00
-------------------------------------------------------------------------------------------------------------
                    Portland (X)              20'   =    95.00           47.50          47.50
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   138.00           69.00          69.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   138.00           69.00          69.00
-------------------------------------------------------------------------------------------------------------
                    St. Louis                 20'       315.14          157.78         157.36
-------------------------------------------------------------------------------------------------------------
                                           40/45'       315.14          157.78         157.36
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
St. Louis           Chicago (Canal St)        20'   =    98.00           49.00          49.00
-------------------------------------------------------------------------------------------------------------
                    (See Note)             40/45'   =   166.00           83.00          83.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   166.00           83.00          83.00
-------------------------------------------------------------------------------------------------------------
                    Dallas                    20'        88.77           36.50          37.27          16.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'       177.54           73.00          74.54          30.00
-------------------------------------------------------------------------------------------------------------
                    Houston                   20'        96.84           40.00          40.84          16.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       193.69           80.00          81.69          32.00
-------------------------------------------------------------------------------------------------------------
                   Kansas City                20'   =    68.00           34.00          34.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   107.00           53.50          53.50
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   107.00           53.50          53.50
-------------------------------------------------------------------------------------------------------------
                   Lathrop                    20'       340.82          170.63         170.19
-------------------------------------------------------------------------------------------------------------
                                           40/45'       472.23          236.42         235.81
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                   Los Angeles                20'       308.04          154.23         153.81
-------------------------------------------------------------------------------------------------------------
                                           40/45'       410.73          205.64         205.09
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   400.00          200.00         200.00
-------------------------------------------------------------------------------------------------------------
                    Memphis                   20'   =    80.00           40.00          40.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'        94.82           39.00          39.82          16.00
-------------------------------------------------------------------------------------------------------------
                    Memphis (X)               20'   =    70.00           35.00          35.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =   108.00           54.00          54.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   108.00           54.00          54.00
-------------------------------------------------------------------------------------------------------------
                    New Orleans               20'       129.12           53.00          54.12          22.00
-------------------------------------------------------------------------------------------------------------
                                           40/53'       258.24          106.00         108.24          44.00
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                      8

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                EMPTY RATES
-------------------------------------------------------------------------------------------------------------
                                    Contract Reference  FIXED AND ADJUSTED RATE COMPONENTS
-------------------------------------------------------------------------------------------------------------
                                                        Sec. 16. B                 Sec. 10.A
-------------------------------------------------------------------------------------------------------------
      ORIGIN            DESTINATION        SIZE       TOTAL     FIXED PORTION     ADJUSTED       CAR COST
                                                      RATE                         PORTION
-------------------------------------------------------------------------------------------------------------
<S>                 <C>                   <C>         <C>       <C>               <C>            <C>
St. Louis           Oakland                   20'       340.82          170.63         170.19
-------------------------------------------------------------------------------------------------------------
                                          40/45''       472.23          236.42         235.81
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Phoenix                   20'       195.70           80.50          82.20          33.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'       391.40          161.00         164.40          66.00
-------------------------------------------------------------------------------------------------------------
                    Portland                  20'       315.14          157.78         157.36
-------------------------------------------------------------------------------------------------------------
                                           40/45'       366.47          183.48         182.99
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
                    Seattle                   20'       315.14          157.78         157.36
-------------------------------------------------------------------------------------------------------------
                                           40/45'       366.47          183.48         182.99
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =   300.00          150.00         150.00
-------------------------------------------------------------------------------------------------------------
St. Louis (X)       St. Louis                 20'   =    38.00           19.00          19.00
-------------------------------------------------------------------------------------------------------------
                                           40/45'   =    38.00           19.00          19.00
-------------------------------------------------------------------------------------------------------------
                                           48/53'   =    38.00           19.00          19.00
-------------------------------------------------------------------------------------------------------------

</TABLE>
=     Where reference is made hereto rates are not subject to the provisions of
      Section 15, Cost adjustment until August 1, 1999.

x     Denotes proportionate rate. Rate applies only on traffic interchanged to
      or from a connecting rail carrier.

Note: Chicago (Canal St.) - At no time will Canal St. rates be less than the
      current effective Global 1 rate. Should cost adjustments produce a lower
      Canal St. rate APL will pay the current Global 1 rate.

                                       9

<PAGE>

                                                                       EXHIBIT D

                          APL Volume Commitment in the
                 Lanes Identified in Section A.1 of Appendix 7.

          Section A.1 of Appendix 7 identifies lanes where UP has a service
commitment and APL has a volume commitment as specified in Section A of Appendix
8. Listed below are the specific origin and destination states covered by each
lane in this Agreement. APL may not use another gateway as a means to avoid the
commitment between the points listed below. Also, if by mutual agreement, the
interchange point for the contracted business outlined below changes, then the
commitment will apply to the new service lane.

1.   Lanes 1 through 6

          Between the states of California, Washington and Oregon and:

                           Connecticut               New Hampshire
                           Delaware                  New Jersey
                           District of Columbia      New York
                           Illinois                  Ohio
                           Indiana                   Pennsylvania
                           Iowa                      Rhode Island
                           Kentucky                  Vermont
                           Maine                     Virginia
                           Maryland                  West Virginia
                           Massachusetts             Wisconsin
                           Michigan

2.   Lanes 7 and 8

          Between Mexico and all states north and east of a line consisting and
including of the following states:

                           Iowa
                           Kentucky
                           Minnesota
                           Missouri
                           Virginia

                                 Ex. D - Page 1

<PAGE>

3.   Lanes 9 through 14

          Between Southern California and the following states:

                           Alabama                   North Carolina
                           Arkansas                  South Carolina
                           Florida                   Tennessee
                           Georgia                   Texas
                           Louisiana                 Virginia
                           Mississippi

                                 Ex. D - Page 2

<PAGE>

                                                                       EXHIBIT F
                                                                       ---------

                                  TPI ACCOUNTS

1.   Authorized TPI Customers which APL may ship on the Union Pacific under the
terms outlined in Appendix 12.C. of this Agreement:

     A.   ANZDL
     B.   Atlantic Container Line
     C.   Canada Maritime
     D.   Cho Yang (PNW Only)
     E.   Columbus Lines
     F.   Hapag Lloyd
     G.   Farrell Lines
     H.   Matson
     I.   P&O
     J.   TMM
     K.   Westwood

          All others will be handled on a shorter term SCQ basis.

2.   TPI Customers where Union Pacific has granted APL the temporary right to
ship as TPI accounts on specific short term SCQ Rates. These may change or be
deleted from the list as the SCQ's expire.

     A.   Med Shipping
     B.   Yang Ming
     C.   Bermuda
     D.   Chilean Line
     E.   HLX
     F.   Ivaran
     G.   Fleet Shipping
     H.   Zim

                                    Exhibit F

<PAGE>

                                                                       EXHIBIT G

                FREE TIME AND STORAGE PROVISIONS AT UP TERMINALS

1.       GLOBAL 1

         A.   Except for Equipment stored on the land described in Section 12.A.
of this Agreement, APL shall remove loaded or empty Equipment from UP's terminal
within the free time described in paragraph B. below. If APL fails to do so, APL
shall pay to UP an Equipment storage charge of $14.00 per day for each loaded or
empty container. When at the request of APL, empty containers are stored on
Flatcars, APL shall pay a daily charge of $21.00 per day after expiration of
free time.

         B.   Free time shall commence at 0001 hours on the day following UP's
notification to APL of the Equipment's availability and shall expire 48 hours
later, at 2400 hours on the second day, Saturdays, Sundays, and holidays
excluded.

         C.   Storage charges shall not apply after Equipment is loaded to
railcars for transportation by UP and shall not apply to any outbound Equipment
after APL has given a notice of disposition to load the Equipment to a railcar.

2.       TERMINALS NAMED IN SECTION 1 OF ATTACHMENT TO THIS EXHIBIT

         A.   For terminals named in Section 1 of Attachment to this Exhibit APL
shall remove Equipment from the destination terminal of UP by 11:59 p.m. local
time on the day following notice of Arrival and Availability given to APL,
Saturdays, Sundays, and holidays excluded. If APL fails to remove Equipment, it
shall pay UP an equipment storage charge of $20.00 per unit of Equipment per
calendar day or fraction thereof for each of the first 5 days, and $39.00 per
unit of Equipment per day or fraction thereof thereafter. No equipment storage
charge will be assessed on the number of empty chassis UP and APL deems
necessary for day to day operations. APL shall make such payment to UP within
the payment period set forth in this agreement

3.       TERMINALS NAMED IN SECTION 2 OF ATTACHMENT TO THIS EXHIBIT

         A.   For terminals named in Section 2 of Attachment to this Exhibit
during years of 1998, 1999 and 2000, three (3) calendar days free time will be
allowed for loaded international containers held on UP premises. Effective Jan.
1, 2001, two (2) days free time will be allowed. Saturdays, Sundays, and
holidays as defined in UP's intermodal rules circular will be also be considered
as free days. Railroad holidays cannot be added to the end of the free time
period.

         B.   Empty containers held on UP premises at terminals named in
Attachment 2 of this Exhibit will be allowed two (2) calendar days free time,
plus Saturdays, Sundays, plus any railroad holidays defined above. Railroad
holidays can not be added to the end of the free time period.

                                 Ex. G - Page 1

<PAGE>

         C.   Free time will begin at the first 12:01 am following notification
of availability given to APL. After expiration of free time, charges will be
assessed for each unit of Equipment at the applicable rates below for each day
or fraction of a day including Saturdays, Sundays, and holidays:

              For each of the first ten (10) days:    $13.00
              For each day thereafter:                $28.00

                                 Ex. G - Page 2

<PAGE>

                                    EXHIBIT G

                                   ATTACHMENT

Section 1.

         Provisions of Section 2 of EXHIBIT G apply at the following terminals:

              North Little Rock, AR              Council Bluffs, IA (Omaha, NE)
              Lathrop, CA                        Las Vegas, NV
              Los Angeles, CA                    Reno, NV
              Oakland West, CA                   Portland, OR
              Denver, CO                         Dallas, TX
              Nampa, ID                          Houston, TX
              ChicanUP, IL(Canal Street)         Laredo, TX
              Dupo, IL                           San Antonio, TX
              Global 2, IL                       Salt Lake City, UT
              Yard Center, IL                    Seattle, WA
              Armordale, KS                      Green River, WY
              Kansas City, MO

Section 2.

         Provisions of Section 3 of EXHIBIT G apply at the following terminals:

              Marion, AR
              Phoenix, AZ
              City of Industry, CA
              Fresno, CA
              ICTF, CA
              LATC, CA
              Oakland, CA
              Chicago, IMX, IL
              New Orleans, LA
              Sparks, NV
              Brooklyn, OR
              Barbours Cut, TX
              El Paso, TX
              Englewood, TX
              Miller, TX
              San Antonio, TOFC, TX

                                 Ex. G - Page 3

<PAGE>

                                                                       EXHIBIT C

                                  KEARNY TRAINS

            The following or their successors are the Kearny Trains:

                                     ZGNAP5

                                     IGNAPB

                                     IGNAP

                                   Exhibit C

<PAGE>

                                                                       EXHIBIT Y

                              AVERAGE DAILY TENDER

A.       Average DDT Baseline:

                  The following Average DDT adjustments are in place as of
February 1, 1997 and will be considered the Baseline for all cumulative
adjustments to Average DDT:

         Eastbound:                             Westbound:
         ---------                              ----------

         SCA to CHI:          - 1.964%          CHI to SCA/SLC:      + 2.798%
         NCA to CHI:          - 1.964%          CHI to NCA:          - 1.608%
         NCA to MEM/MEM(X):   - 1.250%          MEM/MEM(X) to NCA:   - 1.250%
         PNW to CHI:          - 1.309%          CHI to PNW:          - 2.263%
         PNW to MEM/MEM(X):   + 1.250%          MEM/MEM(X) to NCA:   - 2.500%

B.       Average DDT Adjustment Scale:

                  The following Scale will be used to determine the percentage
increase or decrease to Domestic rates based upon the change in the Average DDT:

         Change in Average DDT                   % Increase or Decrease in Rates
         ---------------------                   -------------------------------

                - 10                                        + 1.25%
                - 20                                        + 2.50%
                - 30                                        + 3.75%
                - 40                                        + 5.00%
                - 50                                        + 6.25%
           - More than 50                       + 1.25% for each increment of 10

                + 10                                        - 1.25%
                + 20                                        - 2.50%
                + 30                                        - 3.75%
                + 40                                        - 5.00%
                + 50                                        - 6.25%
           + More than 50                       - 1.25% for each increment of 10

C.       Threshold Rates:

                  The parties will determine the upper and lower limits using
the methodology established in previous agreements.

                                    Exhibit Y

<PAGE>

                                                                       EXHIBIT Z

                    UP INTERMODAL RULES NOT APPLICABLE TO APL

The following UP Intermodal Rules found in UPRR Exempt Rules Circular 20-B or
successive revisions thereof will be considered exempt from application to APL
for shipments made under provisions of this Agreement:

         ITEM         SUBJECT
         ----         -------

         1.03         Rate Increase
         12           Alternate Routing
         27           Alternative Routing via UP, MP and CNW
         35           Application of Rates and Services
         40           Transportation Obligation
         45           Combination Rates
         55           Pick-Up and Delivery Service
         60           Loading and Unloading of Trailers in Plans II and II 1/4
         65           Loading and Unloading of Trailers in Plan II 1/2 and III
                      Service
         75           Failure to Make Delivery
         80           Free Time for Detention
         82           Free Time Allow and/"Document Delay" Charges
         83           Intermodal Shipments for Export to Mexico via Brownsville
                      or Laredo Ramps
         84           Broker Payment of Detention and Storage Charges for Export
                      Shipments to Mexico via Brownsville or Laredo Ramps
         85           Responsibility for Detention Charges Unless Otherwise
                      Specifically Agreed to by an Office of the UP
         90           Detention Charges
         95           Detention of Tractor or Employee of Carrier
         100          Diversion or Reconsignment
         120          Shipments Loaded on Elevated Truck Pallets or Platforms or
                      Lift Truck Skids
         125          Prior or Subsequent Movement by Motor Carrier
         128          EMP Equipment Charges
         130          Trailer Use Rules
         135          Equipment Ordered, Accepted or Furnished and Not Used
         140          Loaded Shipment Returned to Consignor at Origin
         165          Storage of Vehicles
         166          Container Free Time and Storage [NOTE - this Item does
                      apply to Participant, TPI]
         168          Payment of Destination Storage Charges
         170          Excess Dimensions
         180          Vehicle Specifications
         190          Mechanical Protective Service
         200          Payment of Charges
         210          Suit to Collect Charges

                                 Ex. Z - Page 1

<PAGE>

         262          Liability For Loss or Damage of Vehicle
         285          Application of Increases in Rates & Charges
         290          Mixed Commodities - FAK
         295          Pick up or delivery, Container Yard
         300          Empty Movement of Trailers or Containers Furnished by
                      Shippers
         501          Repositioning of Shippers Equipment
         502          (Continued)
         503          Shipments Consolidated By Ocean Carrier at Overseas
                      Origins
         600          Return of Used Pallets, Platforms or Skids
         601          Provisions Governing Return Movement of Pallets for Plan
                      2.5 Shipments
         705          Storage of Vehicles on Railroad Premises
         710          Storage of Privately Owned or Leased Chassis
         720          Rules Covering Vehicle Interchanges
         730          Charges - Vehicles Exceeding 45' but not exceeding 48'
         735          Charges - Vehicles Exceeding 48' but not exceeding 53'
         760          Required Documentation for Intermodal Shipments
         765          Transportation Agreement
         770          Required Documentation for International Shipments
         785          Specimen Intermodal Agreement
         795          Rates/Equipment Size
         800          Operating Procedures for Los Angeles and Long Beach

                                 Ex. Z - Page 2<PAGE>

                                                                     Exhibit 4.1

                   AEGIS ASSET BACKED SECURITIES CORPORATION,

                                    Depositor

                       [________________________________]

                                [Master Servicer]

                       [________________________________]

                                    Servicer

                           [AEGIS MORTGAGE CORPORATION

                                     Seller]

                                       and

                       [________________________________]

                                     Trustee

              _____________________________________________________

                         POOLING AND SERVICING AGREEMENT

                          Dated as of        1, 200
                                     _______       ___

              _____________________________________________________

                  AEGIS ASSET BACKED SECURITIES TRUST 200   -
                                                         ___ ___

            MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 200   -
                                                               ___ ___

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----
<S>                                                                                        <C>
ARTICLE 1 DEFINITIONS.......................................................................16
     Section 1.1    Defined Terms...........................................................16

ARTICLE 2 CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES......................41
     Section 2.1    Conveyance of Mortgage Loans............................................41
     Section 2.2    Acceptance by Trustee of the Mortgage Loans.............................44
     Section 2.3    Representations, Warranties and Covenants of the Depositor,
                    Seller, Servicer and [Master Servicer]..................................46
     Section 2.4    Delivery of Opinion of Counsel in Connection with Substitutions.........53
     Section 2.5    Execution and Delivery of Certificates..................................53
     Section 2.6    [Purchase of Subsequent Mortgage Loans..................................53
     Section 2.7    [Pre-Funding Account....................................................55

ARTICLE 3 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS....................................56
     Section 3.1    Servicer to Service Mortgage Loans......................................56
     Section 3.2    Subservicing; Enforcement of the Obligations of Servicers...............57
     Section 3.3    Rights of the Depositor and the Trustee in Respect of the Servicer......58
     Section 3.4    Master Servicer to Act as Servicer......................................58
     Section 3.5    Collection of Mortgage Loan Payments; Collection Account;
                    Distribution Account....................................................59
     Section 3.6    Collection of Taxes, Assessments and Similar Items; Escrow
                    Accounts................................................................62
     Section 3.7    Access to Certain Documentation and Information Regarding the
                    Mortgage Loans..........................................................62
     Section 3.8    Permitted Withdrawals from the Collection Account, [Master Servicer
                    Custodial Account] and Distribution Account.............................63
     Section 3.9    Maintenance of Hazard Insurance; Maintenance of Primary Insurance
                    Policies................................................................64
     Section 3.10   Enforcement of Due-on-Sale Clauses; Assumption Agreements...............66
     Section 3.11   Realization Upon Defaulted Mortgage Loans; Repurchase of Certain
                    Mortgage Loans..........................................................67
     Section 3.12   Trustee to Cooperate; Release of Mortgage Files.........................71
     Section 3.13   Documents Records and Funds in Possession of Servicer to
                    be Held for the Trustee.................................................72
     Section 3.14   Servicing Compensation..................................................72
     Section 3.15   Access to Certain Documentation.........................................73
     Section 3.16   Annual Statement as to Compliance.......................................73
     Section 3.17   Annual Independent Public Accountants' Servicing Statement;
                    Financial Statements....................................................73
     Section 3.18   Errors and Omissions Insurance; Fidelity Bonds..........................74
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                        <C>
     Section 3.19   Advances................................................................74
     Section 3.20   [Advance Facility.......................................................74
     Section 3.21   Prepayment Penalties....................................................75

ARTICLE 4 DISTRIBUTIONS.....................................................................76
     Section 4.1    Priorities of Distribution..............................................76
     Section 4.2    Method of Distribution..................................................80
     Section 4.3    Allocation of Losses....................................................81
     Section 4.4    Reports to the Depositor and the Trustee................................81
     Section 4.5    Reports by or on Behalf of the [Master] Servicer........................82
     Section 4.6    Basis Risk Reserve Fund.................................................84
     Section 4.7    The Instrument..........................................................84
     Section 4.8    The Calculation Agent...................................................85

ARTICLE 5 THE CERTIFICATES..................................................................85
     Section 5.1    The Certificates........................................................85
     Section 5.2    Certificate Register; Registration of Transfer and Exchange of
                    Certificates............................................................86
     Section 5.3    Mutilated, Destroyed, Lost or Stolen Certificates.......................91
     Section 5.4    Persons Deemed Owners...................................................91
     Section 5.5    Access to List of Certificateholders' Names and Addresses...............91
     Section 5.6    Maintenance of Office or Agency.........................................91

ARTICLE 6 THE DEPOSITOR, THE SERVICER AND [MASTER SERVICER].................................92
     Section 6.1    Respective Liabilities of the Depositor, Servicer
                    [and Master Servicer]...................................................92
     Section 6.2    Merger or Consolidation of the Depositor, Servicer and
                    Master Servicer.........................................................92
     Section 6.3    Limitation on Liability of the Depositor, the Servicer, the Master
                    Servicer and Others.....................................................92
     Section 6.4    Limitation on Resignation of Servicer...................................93

ARTICLE 7 SERVICER DEFAULT..................................................................93
     Section 7.1    Events of Default.......................................................93
     Section 7.2    Notification to Certificateholders......................................95

ARTICLE 8 CONCERNING THE TRUSTEE............................................................95
     Section 8.1    Duties of Trustee.......................................................95
     Section 8.2    Certain Matters Affecting the Trustee...................................97
     Section 8.3    Trustee Not Liable for Certificates or Mortgage Loans...................99
     Section 8.4    Trustee May Own Certificates............................................99
     Section 8.5    Trustee's Fees and Expenses.............................................99
     Section 8.6    Eligibility Requirements for Trustee...................................100
     Section 8.7    Resignation and Removal of Trustee.....................................100
     Section 8.8    Successor Trustee......................................................101
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                        <C>
     Section 8.9    Merger or Consolidation of Trustee.....................................101
     Section 8.10   Appointment of Co-Trustee or Separate Trustee..........................102
     Section 8.11   Tax Matters............................................................103
     Section 8.12   Periodic Filings.......................................................105

ARTICLE 9 TERMINATION......................................................................105
     Section 9.1    Termination upon Liquidation or Purchase of all Mortgage Loans.........105
     Section 9.2    Final Distribution on the Certificates.................................106
     Section 9.3    Additional Termination Requirements....................................107

ARTICLE 10 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER...........108
     Section 10.1   Duties of the Master Servicer..........................................108
     Section 10.2   Compensation to the Master Servicer....................................108
     Section 10.3   Termination of Master Servicer; Trustee to Act.........................109
     Section 10.4   Notification to Certificateholders.....................................111

ARTICLE 11 MISCELLANEOUS PROVISIONS........................................................111
     Section 11.1   Amendment..............................................................111
     Section 11.2   Recordation of Agreement; Counterparts.................................113
     Section 11.3   Governing Law..........................................................113
     Section 11.4   Intention of Parties...................................................113
     Section 11.5   Notices................................................................114
     Section 11.6   Severability of Provisions.............................................115
     Section 11.7   Assignment.............................................................115
     Section 11.8   Limitation on Rights of Certificateholders.............................115
     Section 11.9   Inspection and Audit Rights............................................116
     Section 11.10  Certificates Nonassessable and Fully Paid..............................116
     Section 11.11  Limitations on Actions; No Proceedings.................................116
</TABLE>

<PAGE>

        THIS POOLING AND SERVICING AGREEMENT, dated as of _______ 1, 200__ (this
"Agreement") among AEGIS ASSET BACKED SECURITIES CORPORATION, a Delaware
corporation, as depositor (the "Depositor"), [___________________________, an
________ corporation, as master servicer (the "Master Servicer")], AEGIS
MORTGAGE CORPORATION,] as seller (the "Seller"), an Oklahoma corporation, as
servicer (the "Servicer"), and [__________________], a __________ banking
corporation, as trustee (the "Trustee"),

                                 WITNESSETH THAT

        In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

                              PRELIMINARY STATEMENT

        The Depositor is the owner of the assets that are hereby conveyed to the
Trustee in return for the Certificates. For federal income tax purposes, the
Trust Fund shall comprise [multiple] REMICs organized in [a tiered] REMIC
structure in the manner set forth in Schedule III hereto. The Certificates will
represent the entire beneficial ownership interest in the Trust Fund.

        The following table sets forth the initial Class Certificate Balances of
the Certificates and the minimum denominations (or Percentage Interests) and
integral multiples in excess thereof in which such Classes shall be issuable
(except that one Certificate of each Class of Certificates may be issued in a
different amount and, in addition, one Residual Certificate representing the Tax
Matters Person Certificate may be issued in a different Percentage Interest):

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                              Initial Class         Minimum Percentage    Integral Multiples in
   Class Designation       Certificate Balance    Interest/Denomination       Excess Minimum
   -----------------       -------------------    ---------------------       --------------
-------------------------------------------------------------------------------------------------
<S>                         <C>                      <C>                        <C>
Class AF-____                          $                       $                      $
-------------------------------------------------------------------------------------------------
Class AV-____                   Notional               1,000,000                  1,000
-------------------------------------------------------------------------------------------------
Class M-__                                               100,000                  1,000
-------------------------------------------------------------------------------------------------
Class M-__                                               100,000                  1,000
-------------------------------------------------------------------------------------------------
Class B                                                  100,000                  1,000
-------------------------------------------------------------------------------------------------
Class R                              N/A                     100%                   N/A
-------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                <C>
Account Designation:                Aegis Asset Backed Securities Trust Mortgage Loan Asset Backed
                                    Certificates, Series 200___-___.

Assumed Investment Rate:            Not applicable.

Book-Entry Certificates:            All Classes of Certificates other than the Physical Certificates.
</TABLE>

                                       5
<PAGE>

<TABLE>
<S>                                <C>
Calculation Agent:                  [______________________], a [             ]banking corporation,

                                    and its successors and assigns in such capacity.

Class C Distribution Amount:        With respect to any Distribution Date, any amounts distributable pursuant
                                    to Section 4.1(i) hereof.

Closing Date:                       _________, 200___.

Component Certificates:             None.

Components:                         For purposes of calculating distributions,
                                    the Component Certificates will be comprised
                                    of multiple payment components having the
                                    designations, Initial Component Balances and
                                    Pass-Through Rates set forth below:

                                                           Initial Component     Pass-Through
                                        Designation             Balance              Rate
                                        -----------             -------              ----
                                            N/A                   N/A                N/A

Custodial Agreement:                The Custodial Agreement between the Custodian and Trustee dated as of
                                    ______1, 200___.

Custodian:                          [_______________], and its successors and assigns in such capacity.

Cut Off Date:                       _______,200___.

Delay Certificates:                 All interest-bearing Classes of Certificates other than the Non-Delay
                                    Certificates.

ERISA-Restricted Certificates:      Any of the Class __ Certificates.

ERISA                               Qualifying Underwriting: A best efforts or
                                    firm commitment underwriting that meets the
                                    requirements of either Prohibited
                                    Transaction Exemption 83-1 or an
                                    "Underwriter's Exemption," as defined in
                                    Section V(h) of Prohibited Transaction
                                    Exemption 95-60, except the requirements
                                    that the Certificates (i) not be
                                    subordinated to the rights and interest of
                                    other Certificates issued by the Trust and
                                    (ii) have a rating that is one of the top
                                    three ratings categories.

Extra Principal Distribution
Amount lesser of:                   With respect to any Distribution Date, the

</TABLE>

                                       6
<PAGE>

<Table>
<S>                            <C>
                                (x)     the Interest Funds available after
                                        payment of the amounts set forth in
                                        Section 4.1(g)(i) through (v), and:

                                (y)     the excess of:

                                        (i)   the Required Overcollateralization
                                              Amount for such date, over

                                        (ii)  the Overcollateralization Amount
                                              for such date (assuming that all
                                              Principal Funds are distributed as
                                              principal to the Certificates on
                                              such date).

Funding Period Termination Date:_________, 200___.

Group:                          Group I and Group II.

Group I:                        The pool of Mortgage Loans identified in
                                the Mortgage Loan Schedule as having been
                                assigned to Group I, including any related
                                Subsequent Mortgage Loans and any Substitute
                                Mortgage Loans delivered in replacement of
                                any Mortgage Loan or Subsequent Mortgage
                                Loan.

Group I Certificate:            Any of the Class AF-__ Certificates.

Group I Class A Certificate:    Any Group I Certificate.

Group I Class A Certificate
Principal Balance:              For any Distribution Date, the sum of the
                                Certificate Principal Balances
                                for the Group I Class A Certificates.

Group II:                       The pool of Mortgage Loans identified in
                                the Mortgage Loan Schedule as having been
                                assigned to Group II, including any related
                                Subsequent Mortgage Loans and any Substitute
                                Mortgage Loans delivered in replacement of
                                any Mortgage Loan or Subsequent Mortgage
                                Loan.

Group II Certificate:           Any of the Class AV-___ Certificates.

Group II Class A Certificates:  Any Group II Certificate.

Group II Class A Certificate
Principal Balance:              For any Distribution Date, the sum of the
                                Certificate Principal Balances of Group II Class
                                A Certificates.
</TABLE>

                                       7
<PAGE>

<TABLE>
<S>                            <C>
Initial Distribution Date:      _______ 25, 200___.

Initial Optional Termination
Date:                           The first Distribution Date on which the
                                aggregate Assumed Principal Balance of the
                                Mortgage Loans is less than __% of the
                                aggregate Assumed Principal Balance thereof
                                as of the Cut Off Date.

Interest Determination Date:    With respect to the first Accrual Period
                                for the Variable Rate Certificates, _________,
                                200__, and with respect to any subsequent
                                Accrual Period for the Variable Rate
                                Certificates, the second London Business Day
                                preceding such Accrual Period.

Interest Only Certificates:     The Class A-__ Certificates.

Lower Tier Interest:            Any interest created in REMIC 1, REMIC 2 or
                                REMIC 3.

Master Servicing Fee Rate:      ____% per annum.

Maximum Cap Rate:               For any Distribution Date, a per annum rate
                                that would equal the Net WAC Cap for such date
                                if such Net WAC Cap were determined under the
                                assumption that (i) each adjustable rate
                                Mortgage Loan had an interest rate equal to the
                                maximum rate permitted under the terms of the
                                related mortgage note, and (ii) each fixed rate
                                Mortgage Loan had an interest rate equal to its
                                stated fixed rate.

Mortgage Loan Group:            Group I or Group II.

Net Pledged Prepayment
Penalties:                      For each Distribution Date means the Pledged
                                Prepayment Penalties remaining after payment of
                                any Cap Carryover Amounts for such date.

Net Rate:                       As to each Mortgage Loan and Distribution Date,
                                the related Mortgage Rate as of the
                                Determination Date immediately preceding such
                                Distribution Date less the sum of the related
                                Servicing Fee Rate and Master Servicing Fee Rate
                                with respect to each Mortgage Loan.

Net WAC Cap:                    For any Distribution Date and each Certificate
                                other than the Variable Rate Certificates, a per
                                annum rate equal to the Weighted Average Net
                                Rate of the Mortgage Loans less,
</TABLE>

                                       8
<PAGE>
<TABLE>
<S>                            <C>

                                (x)     the Pass-Through Rate for the Class ____
                                        Certificates for such Distribution Date
                                        multiplied by a fraction equal to:

                                        (i)    the Notional Principal Balance of
                                               the Class _____ Certificates
                                               prior to such Distribution Date
                                               divided by;

                                        (ii)   the Assumed Principal Balance as
                                               of such Distribution Date; and

                                (y)     the Pass-Through Rate for the Class __
                                        Certificates for such Distribution Date
                                        multiplied by a fraction equal to:

                                        (i)    the Notional Principal Balance of
                                               the Class __ Certificates prior
                                               to such Distribution Date divided
                                               by;

                                        (ii)   the Assumed Principal Balance as
                                               of such Distribution Date.

        For any Distribution Date and the Variable Rate Certificates, the Net
        WAC Cap equals the product of

                                (a)     the rate determined under the
                                        above-described formula and

                                (b)     a fraction, the numerator of which is 30
                                        and the denominator of which is the
                                        actual number of days in the Accrual
                                        Period applicable to such Certificates.

Non-Delay Certificates:             Any of the Class ____ Certificates.

Notional Amount Certificates:       The Class ____ Certificates.

Notional Principal Balance:         Principal Balance: With respect to each
                                    Distribution Date and the Class _____
                                    Certificates, the lesser of the Assumed
                                    Principal Balance for such date and the
                                    amount determined for such date with
                                    reference to the following schedule:
</TABLE>

                           <TABLE>
                           <CAPTION>

                                   DISTRIBUTION DATES              NOTIONAL AMOUNT
                                   ------------------              ---------------
                                   <S>                              <C>
                                     [1 - 6                                $
                           </TABLE>

                                       9
<PAGE>

                            <TABLE>

                                 <S>                              <C>
                                      7 - 9
                                     10 - 12
                                     13 - 15
                                     16 - 18
                                     19 - 21
                                     22 - 24
                                     25 - 27
                                     28 - 31
                                     32 and thereafter]                    0
                            </TABLE>

<TABLE>
<S>                            <C>
                                        With respect to each Distribution Date
                                and the Class _____ Certificates, the Assumed
                                Principal Balance of the Mortgage Loans for such
                                date.

                                With respect to the Class __ Certificates and
                                each Distribution Date, on or prior to the
                                thirty-sixth Distribution Date after the Closing
                                Date, the aggregate Stated Principal Balance of
                                each adjustable rate Mortgage Loans for such
                                Distribution Date that has not reached its
                                Initial Adjustment Date. Following the
                                thirty-sixth Distribution Date, the Notional
                                Principal Balance of the Class ___ Certificates
                                will be zero.

Offered Certificates:           The Class AF-__, Class AV-__, Class M-__, Class
                                M-__ and Class B Certificates.

Original Pre-Funded Amount:     $_______________, $___________________of which
                                may be applied to the purchase of additional
                                fixed rate Mortgage Loans for Group I,
                                $_____________of which may be applied to the
                                purchase of additional adjustable rate Mortgage
                                Loans for Group II.

Physical Certificates:          The Private Certificates.

Pledged Prepayment Penalties:   For any Distribution Date and each Group of
                                Mortgage Loans, an amount equal to the sum of
                                (i) the lesser of (x) Prepayment Penalties
                                collected on the Mortgage Loans in such Group
                                during the related Prepayment Period and (y)
                                ___% of the Prepayment Penalties owed and not
                                waived by the Servicer for the related
                                Prepayment Period, and (ii) the aggregate
                                amount, if any, by which (i)(y) exceeded (i)(x)
                                for prior Distribution Dates for such Group.

Principal Only Certificates:    None.

</TABLE>

                                       10
<PAGE>

<TABLE>
<S>                            <C>
Principal Percentage:           With respect to each Distribution Date and
                                Group, the percentage equivalent of a fraction,
                                the numerator of which is the Principal Funds
                                for such Group and date, and the denominator of
                                which is the Principal Funds for all of the
                                Groups and such Distribution Date.

Priority Principal
Distribution Amount:            With respect to any Distribution Date:

                                (x)    the product of :

                                       (i)    a fraction the numerator of
                                              which is the Certificate
                                              Principal Balance of the
                                              Class ____ Certificates and
                                              the denominator of which is
                                              the Group I Class A
                                              Certificate Principal
                                              Balance, in each case,
                                              immediately prior to such
                                              Distribution Date,

                                       (ii)   the Senior Principal Distribution
                                              Amount for Group I for such
                                              Distribution Date, and

                                       (iii)  the applicable percentage for such
                                              Distribution Date set forth below:
</TABLE>
                                 <TABLE>
                                 <CAPTION>
                                           Distribution Date                Percentage
                                           -----------------                ----------
                                   <S>                                       <C>
                                    [____l 200__ - _____ 200__                  %
                                     ____  200__ - _____ 200__
                                     ____  200__ - _____ 200__
                                     ____  200__ - _____ 200__
                                     ____  200__ and thereafter]
                                  </TABLE>

<TABLE>
<S>                            <C>
Private Certificate:            Any Class ___ or Class R Certificate.

Rating Agencies:                ____________ and _____________.

Record Date:                    With respect to Delay Certificates and any
                                Distribution Date, the close of business on the
                                last Business Day of the month preceding the
                                month in which such Distribution Date occurs.
                                With respect to Non-Delay Certificates and any
                                Distribution Date, the close of business on the
                                Business Day immediately preceding such
                                Distribution Date.

Regular Certificates:           Any of the Offered Certificates and the Class
                                __ Certificates.

</TABLE>

                                       11
<PAGE>

<TABLE>
<S>                                <C>
Required Overcollateralization
Amount:                             With respect to any Distribution Date:

                                            (i)    prior to the Stepdown Date, ____% of the
                                                   Assumed Principal Balance of the Mortgage
                                                   Loans as of the Cut Off Date;

                                            (ii)   on and after the Stepdown Date, if a Trigger
                                                   Event is not in effect, the greater of:

                                                   (x)    the lesser of:

                                                          (I)    _____% of the Assumed Principal
                                                                 Balance for the Mortgage Loans
                                                                 as of the Cut Off Date, and

                                                          (II)   _____% of the Assumed Principal
                                                                 Balance of the Mortgage Loans on
                                                                 the preceding Determination Date,
                                                                 and

                                                   (y)    _____% of the Assumed Principal Balance
                                                          of the Mortgage Loans as of the Cut Off
                                                          Date; and

                                            (iii)  if a Trigger Event is in effect, the
                                                   Overcollateralization Amount as of the
                                                   preceding Distribution Date.

Required Reserve Fund Deposit:      For any Distribution Date on which the
                                    difference between (a) the excess of the Net WAC
                                    Cap over the rate payable on the Class _____
                                    Certificates for such date, and (b) the weighted
                                    average of the rates on the Offered
                                    Certificates, other than the Class _____
                                    Certificates, is less than ____%, an amount that
                                    would cause the balance held in the Basis Risk
                                    Reserve Fund to equal _____ % of the Assumed
                                    Principal Balance of the Mortgage Loans for such
                                    date, and, for any other Distribution Date, the
                                    amount that would cause the balance held in the
                                    Basis Risk Reserve Fund to equal $_____.

Residual Certificates:              The Class R Certificates.
</TABLE>

                                       12
<PAGE>

<TABLE>
<S>                                <C>
Sales Agreement:                    The Sales Agreement dated _____ ___, 200__, between
                                    the Depositor and _____ regarding the sale of the
                                    Mortgage Loans.

Senior Certificates:                Any Class of Certificates including the letter "A"
                                    or the letter "S" in its class designation.

Servicing Fee Rate:                 As set forth in the Mortgage Loan Schedule.

Stepdown Date:                      The earlier to occur of:

                                            (i)    the later to occur of:

                                                   (A)    the Distribution Date in ______
                                                          200__, and

                                                   (B)    the first Distribution Date on which the
                                                          Group I Class A Certificate Principal
                                                          Balance and Group II Class A Certificate
                                                          Principal Balance immediately prior to
                                                          such Distribution Date (less the Principal
                                                          Funds for such Distribution Date) is
                                                          less than or equal to ____ % of the Assumed
                                                          Principal Balance on such date, and

                                            (ii)   the Distribution Date after which the Group
                                                   I Class A Certificate Principal Balance
                                                   and Group II Class A Certificate Principal Balance
                                                   have been reduced to zero.

Subordinate Certificates:           Any Class M-__ and Class B Certificate.

Subsequent Delivery
Requirements:                       (a)     After giving effect to the acquisition of all Subsequent Mortgage
                                            Loans, the Mortgage Loans in Group I (which shall all be Mortgage
                                            Loans bearing interest at fixed rates of interest) as of their
                                            respective Cut Off Dates:

                                            (i)    shall have a weighted average Mortgage Rate of not less
                                                   than _____ % per annum;
</TABLE>

                                       13
<PAGE>

<TABLE>
<S>                                <C>
                                            (ii)   shall have a weighted average original combined loan to
                                                   value ratio not in excess of _____%;

                                            (iii)  shall be Mortgage Loans no more than _____% of which (by
                                                   Stated Principal Balance) were made in connection with
                                                   a cash out refinancing;

                                            (iv)   shall be Mortgage Loans at least _____% of which (by
                                                   Stated Principal Balance) shall be classified by Aegis
                                                   Mortgage Corporation as "A-" or better;

                                            (v)    shall be Mortgage Loans at least _____ % of which (by
                                                   Stated Principal Balance) will have been originated
                                                   pursuant to a full documentation program; and

                                            (vi)   shall have a weighted average credit score of not less
                                                   than _____.

                                    (b)     After giving effect to the acquisition of all the Subsequent
                                            Mortgage Loans, the Mortgage Loans in Group II (which shall
                                            all be first lien Mortgage Loans bearing interest at adjustable
                                            rates) as of their respective Cut Off Dates:

                                            (i)    shall have a weighted average Mortgage Rate of not less
                                                   than _____ % per annum;

                                            (ii)   shall have a weighted average original Loan to Value Ratio
                                                   not in excess of _____ %;

                                            (iii)  shall be Mortgage Loans at least _____ % of which (by
                                                   Stated Principal Balance) shall be classified by Aegis
                                                   Mortgage Corporation as "A-" or better; and

                                            (iv)   shall have a weighted average credit score of not less
                                                   than _____.

Target Percentage:                  For the Senior Certificates, _____%; for the Class M-__ Certificates,
                                    _____%; for the Class M-__ Certificates, _____%; and for the Class B
                                    Certificates, _____%.
</TABLE>

                                       14
<PAGE>

<TABLE>
<S>                                <C>
Trigger Event:                      With respect to any Distribution Date after the Stepdown Date, a Trigger
                                    Event exists if  either (x) the quotient (expressed as a percentage) of:

                                            (i)    the Stated Principal Balances of all 60 or more days
                                                   Delinquent Mortgage Loans (including Mortgage Loans
                                                   subject to bankruptcy or foreclosure proceedings and
                                                   REO Property), divided by

                                            (ii)   the Assumed Principal Balance of the Mortgage Loans as of
                                                   the preceding Determination Date

                                    equals or exceeds 50% of the Senior Credit
                                    Enhancement Percentage or (y) Realized
                                    Losses occurring since the Closing Date as a
                                    percentage of the Assumed Principal Balance
                                    as of the Cut Off Date, for the related
                                    Distribution Date, are greater than:
</TABLE>

                           <TABLE>
                           <CAPTION>
                                  Distribution Date          Cumulative Loss Percentage
                                  -----------------          --------------------------
                                  <S>                            <C>
                                    [37 to 48                              %
                                    49 to 60
                                    61 and thereafter]
                           </TABLE>

<TABLE>
<S>                              <C>
Trustee Fee Rate:                   _____% per annum.

Trustee Series Designation:         Aegis 200__-__ (AG___)

Underwriters:                       _________________________..

Upper Tier REMIC:                   REMIC 4

Variable Rate Certificates:         Any of the Class _____ Certificates.

Voting Rights:                      The voting rights of the trust will be allocated as follows:

                                            (i)    _____% to each of the Class _____ and
                                                   Class _____ Certificates;

                                            (ii)   _____% to the Class __ Certificates;

                                            (iii)  _____ % to the Class __ Certificates;

</TABLE>

                                       15
<PAGE>

<Table>
<S>                                        <C>
                                            (iv)   _____% to the Group I
                                                   Certificates and Group II
                                                   Certificates in proportion to
                                                   their respective outstanding
                                                   Certificate Principal
                                                   Balances; and

                                            (v)    _____% to each of the Class
                                                   __ and Class __ Certificates.
</Table>

        With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.

                                    ARTICLE 1

                                   DEFINITIONS

        Section 1.1 Defined Terms

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

        Accrual Period: With respect to each Lower Tier Interest and each Class
of Delay Certificates and any Distribution Date, the calendar month immediately
preceding such Distribution Date. With respect to each Class of Non-Delay
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 the current
Distribution Date.

        Advance:  Each P&I Advance and Servicing Advance.

        Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.

        Allocable Portion: For each Group, Distribution Date and each of the
Class ___ Certificates and Class ___ Certificates, an amount equal to the (i)
Interest Funds for such Group and date; divided by (ii) the Interest Funds for
all groups related to such Class of Certificates and such date.

        Applied Realized Loss Amount: As to any Distribution Date and Class of
Subordinate Certificates, the sum of any Realized Losses which have been applied
in reduction of the Certificate Principal Balance of such Class of Certificates
on such date.

                                       16
<PAGE>

        Assumed Principal Balance: As of any Distribution Date, the sum of:

                (i)     the aggregate Stated Principal Balances of the Mortgage
        Loans as of such Distribution Date, plus

                (ii)    [the aggregate amount on deposit in any Pre-Funding
        Account (less all amounts representing investment earnings thereon).]

        Available Funds: As to any Distribution Date, the sum of all Principal
Funds and Interest Funds for such date.

        Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.

        Basis Risk Payment: For any Distribution Date, an amount to be deposited
into the Basis Risk Reserve Fund equal to the sum of (i) any Cap Carryover
Amounts for such Distribution Date and (ii) any Required Reserve Fund Deposit
for such Distribution Date, provided however, the amount of the Basis Risk
Payment for any Distribution Date cannot exceed the amount available for
distribution therefor pursuant to priorities for distributions pursuant to
Section 4.1(g).

        Basis Risk Reserve Fund: Any fund created hereunder and held as part of
the Trust Fund but not as part of any REMIC created hereunder, to provide a
source for payments of Cap Carryover Amounts.

        Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.

        Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in New York City or the city in which any of
the Custodian, the Servicer, the Master Servicer, or the Corporate Trust Office
of the Trustee is located are authorized or obligated by law or executive order
to be closed.

        Cap Carryover Amount: On any Distribution Date and as to any Class whose
Pass-Through Rate is subject to a cap equal to the Net WAC Cap, the sum of:

                (i)     if the Pass-Through Rate for such Distribution Date and
        Class is based on the Net WAC Cap, the excess of (A) the amount of
        interest that would have been distributable on such Certificates for
        such Distribution Date had the interest rate thereon been calculated
        without regard to the Net WAC Cap, over (B) the amount of interest
        distributable based on the Net WAC Cap, and

                (ii)    the excess of the amount described in clause (i)(A)
        above over the amount described in clause (i)(B) above for all prior
        Distribution Dates, together with interest thereon calculated at the
        applicable Pass-Through Rate (determined without regard to the Net WAC
        Cap), reduced by all amounts previously distributed with respect to such
        Class

                                       17
<PAGE>

        pursuant to Section 4.1(g) in respect of Cap Carryover Amounts on all
        such prior Distribution Dates.

        Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.

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

        Certificate Principal Balance: With respect to any Certificate and as of
any Distribution Date, the Certificate Principal Balance on the date of the
initial issuance of such Certificate as set forth on the face thereof, as
reduced by:

                (i)     all amounts distributed on previous Distribution Dates
                        on such Certificate in reduction of the Certificate
                        Principal Balance thereof; and

                (ii)    in the case of a Subordinate Certificate, such
                        Certificate's pro rata share, if any, of any Applied
                        Realized Loss Amounts for the related Class on previous
                        Distribution Dates; and

        Certificate Register: The register maintained pursuant to Section 5.2
hereof.

        Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, 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 the Preliminary Statement.

        Class B Principal Distribution Amount: With respect to any Distribution
Date before the Stepdown Date or for which a Trigger Event is in effect, zero,
and with respect to any Distribution Date on and after the Stepdown Date and as
long as a Trigger Event is not in effect the excess of:

                (i) the sum of:

                                       18
<PAGE>

                        (A)     the Group I Class A Certificate Principal
                                Balance, the Group II Class A Certificate
                                Principal Balance and the Group III Class A
                                Certificate Principal Balance (in each case,
                                after giving effect to distributions on that
                                date),

                        (B)     the Class Certificate Balance of the Class M-__
                                Certificates (after giving effect to
                                distributions on that date),

                        (C)     the Class Certificate Balance of the Class M-__
                                Certificates (after giving effect to
                                distributions on that date), and

                        (D)     the Class Certificate Balance of the Class B
                                Certificates immediately prior to such
                                Distribution Date over

                (ii)    the lesser of:

                        (A)     related Target Percentage of the Assumed
                                Principal Balance of the Mortgage Loans on the
                                preceding Determination Date, and

                        (B)     the excess, if any, of:

                                (I)     the Assumed Principal Balance of the
                                        Mortgage Loans on the preceding
                                        Determination Date over

                                (II)    the Assumed Principal Balance of the
                                        Mortgage Loans on the preceding
                                        Determination Date less 0.50% of the
                                        Assumed Principal Balance as of the Cut
                                        Off Date (but in no event less than
                                        zero).

        Class Certificate Balance: With respect to any Class of Certificates and
as of any Distribution Date, the aggregate of the Certificate Principal Balances
of all Certificates of such Class as of such date.

        Class M-__ Principal Distribution Amount: With respect to any
Distribution Date before the Stepdown Date or for which a Trigger Event is in
effect, zero, and with respect to any Distribution Date on or after the Stepdown
Date and as long as a Trigger Event is not in effect the excess of:

                (i)     the sum of:

                        (A)     the Group I Class A Certificate Principal
                                Balance and the Group II Class A Certificate
                                Principal Balance (after giving effect to
                                distributions on that date), and

                                       19
<PAGE>

                        (B)     the Class Certificate Balance of the Class M-__
                                Certificates immediately prior to such
                                Distribution Date over

                (ii)    the lesser of:

                        (A)     the related Target Percentage of the Assumed
                                Principal Balance of the Mortgage Loans on the
                                preceding Determination Date, and

                        (B)     the excess, if any, of:

                                (I)     the Assumed Principal Balance of the
                                        Mortgage Loans on the preceding
                                        Determination Date over

                                (II)    the Assumed Principal Balance of the
                                        Mortgage Loans on the preceding
                                        Determination Date less 0.50% of the
                                        Assumed Principal Balance as of the Cut
                                        Off Date (but in no event less than
                                        zero).

        Class M-__ Principal Distribution Amount: With respect to any
Distribution Date before the Stepdown Date or for which a Trigger Event is in
effect, zero, and with respect to any Distribution Date on or after the Stepdown
Date and as long as a Trigger Event is not in effect the excess of:

                (i)     the sum of:

                        (A)     the Group I Class A Certificate Principal
                                Balance and the Group II Class A Certificate
                                Principal Balance (after giving effect to
                                distributions on that date),

                        (B)     the Class Certificate Balance of the Class M-__
                                Certificates (after giving effect to
                                distributions on that date), and

                        (C)     the Class Certificate Balance of the Class M-__
                                Certificates immediately prior to such
                                Distribution Date over

                (ii)    the lesser of:

                        (A)     the related Target Percentage of the Assumed
                                Principal Balance of the Mortgage Loans on the
                                preceding Determination Date, and

                        (B)     the excess, if any, of:

                                (I)     the Assumed Principal Balance of the
                                        Mortgage Loans on the preceding
                                        Determination Date over

                                       20
<PAGE>

                                (II)    the Assumed Principal Balance of the
                                        Mortgage Loans on the preceding
                                        Determination Date less _____ % of the
                                        Assumed Principal Balance as of the Cut
                                        Off Date (but in no event less than
                                        zero).

        Class __ Prepayment Amount: As to each Distribution Date, the excess, if
any, of Prepayment Penalties collected with respect to the Mortgage Loans during
the related Prepayment Period over the Pledged Prepayment Penalties for such
Distribution Date.

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

        Collection Account: The separate Eligible Account or Accounts created
and maintained by the Servicer pursuant to Section 3.5 hereof with a depository
institution for the benefit of the Trustee on behalf of Certificateholders and
designated with the applicable Account Designation.

        Compensating Interest: As to any Distribution Date and any Principal
Prepayment in Full in respect of a Mortgage Loan that is received during the
period from the eighteenth day of the month prior to the month of such
Distribution Date through the last day of such month, an additional payment made
by the Servicer, to the extent funds are available from the total Servicing Fee
payable for such Distribution Date, equal to the amount of interest at the
Mortgage Rate (less the applicable Servicing Fee Rate) for that Mortgage Loan
from the date of the prepayment through the last day of the month of such
Distribution Date. For the avoidance of doubt, no Compensating Interest payment
shall be required in connection with any shortfalls resulting from Principal
Prepayments in part or the application of the Relief Act.

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

        Coop Shares: Shares issued by a Cooperative Corporation.

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

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

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

        Corporate Trust Office: The designated office of the Trustee at which at
any particular time its corporate trust business with respect to this Agreement
shall be administered.

                                       21
<PAGE>

        Credit Support Depletion Date: The Distribution Date on which the
Certificate Principal Balance of each of the Class M-__, Class M-__ and Class B
Certificates has been reduced to zero.

        Current Interest: With respect to any Distribution Date and any Class of
Certificates, the interest accrued on the Class Certificate Balance (or Notional
Principal Balance) thereof immediately prior to such Distribution Date during
the related Accrual Period at the applicable Pass-Through Rate; provided,
however, that such Current Interest shall be reduced by such Class's pro rata
share (based on the amount of Current Interest distributable on such Class) of
any Net Prepayment Interest Shortfalls and Relief Act Shortfalls for such
Distribution Date. All calculations of interest on each Class of Delay
Certificates will be made on the basis of a 360-day year assumed to consist of
twelve 30-day months and all calculations of interest on each Class of Non-Delay
Certificates will be made on the basis of the actual number of days elapsed in
the related Accrual Period and a 360-day year.

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

        Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.2 or 2.3.

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

        Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.2(e).

        Deleted Mortgage Loan: As defined in Section 2.3(e) hereof.

        Delinquent: A Mortgage Loan is "Delinquent" if any payment due thereon
is not made by the close of business on the Determination Date immediately
following 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 Determination Date immediately succeeding the Determination Date on which
such payment was categorized as "Delinquent." 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 Certificate Balance of this Certificate" or the
Percentage Interest appearing on the face thereof.

                                       22
<PAGE>

        Depositor: Aegis Asset Backed Securities Corporation, a Delaware
corporation, or its successor in interest.

        Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.

        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: As to any Distribution Date, the earlier of (i) the
17th day of each month, or (ii) if such day is not a Business Day, the
immediately preceding Business Day.

        Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.5(d) in the name of the Trustee
for the benefit of the Certificateholders and designated with the applicable
Account Designation.

        Distribution Account Deposit Date: As to any Distribution Date, the
Business Day immediately preceding such Distribution Date.

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

        Due Date: With respect to any Distribution Date and each Mortgage Loan,
the day of the month in which each Distribution Date occurs on which the related
mortgage payment is due (or, in the case of an Odd Due Date Mortgage Loan, such
day in the preceding month).

        Due Period: With respect to any Distribution Date, the period from and
including the second day of each month through and including the first day of
the following month.

        Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF, as applicable) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the

                                       23
<PAGE>

depository institution or trust company in which such account is maintained, or
(iii) a trust account or accounts maintained with (a) the trust department of a
federal or state chartered depository institution or (b) a trust company, acting
in its fiduciary capacity or (iv) any other account acceptable to each Rating
Agency. Eligible Accounts may bear interest, and may include, if otherwise
qualified under this definition, accounts maintained with the Trustee.

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

        Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.6(a) hereof.

        Event of Default: As defined in Section 7.1 hereof.

        Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage
Loan received during the Prepayment Period in which such Mortgage Loan became a
Liquidated Mortgage Loan, net of any amounts [note] previously reimbursed to the
Master Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.8(a)(iii), exceeds (i) the unpaid principal balance of
such Liquidated Mortgage Loan as of the Due Date in the month in which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at
the Mortgage Rate from the Due Date as to which interest was last paid or
advanced (and not reimbursed) to Certificateholders up to the Due Date
applicable to the Distribution Date immediately following the Prepayment Period
during which such liquidation occurred. Notwithstanding the foregoing, Excess
Proceeds with respect to any Nonrecoverable Mortgage Loan shall be equal to the
amount, if any, by which Subsequent Recoveries with respect to such
Nonrecoverable Mortgage Loan exceed the Realized Loss with respect thereto.

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

        FHLMC: The Federal Home Loan Mortgage Corporation, 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.

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

        Fitch: Fitch Ratings or any successor thereto. If Fitch is designated as
a Rating Agency in the Preliminary Statement, the address for notices to Fitch
shall be Fitch Ratings, One State Street Plaza, New York, New York 10004,
Attention: Residential Mortgage Surveillance Group, or such other address as
Fitch may hereafter furnish to the Depositor and the Master Servicer.

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

                                       24
<PAGE>

        [Funding Period: The period commencing on the Closing Date and ending on
the earliest to occur of :

                (i)     the date on which the amount on deposit in the
                        Pre-Funding Account (exclusive of any investment
                        earnings) is less than $________,

                (ii)    the date on which an Event of Default occurs, and

                (iii)   the Funding Period Termination Date.]

        Group: Any grouping of Mortgage Loans described in the Preliminary
Statement.

        Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.

        Initial Adjustment Date: As to each adjustable rate Mortgage Loan, the
first date upon which the monthly interest rate thereon is reset.

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

        Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, 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: With respect to each Distribution Date
and Class, the sum of:

                (i)     the excess of:

                        (A)     Current Interest for such Class with respect to
                                prior Distribution Dates (excluding any Cap
                                Carryover Amount) over

                        (B)     the amount actually distributed to such Class
                                (other than in respect of any applicable Cap
                                Carryover Amount) with respect to interest on
                                such prior Distribution Dates, and

                (ii)    interest thereon at the applicable Pass-Through Rate for
                        the related Accrual Period.]

                                       25
<PAGE>

        Interest Funds: With respect to any Group and any Determination Date,
the sum, without duplication, of:

                (i)     all scheduled interest due during the related Due Period
                        (and received by the related Determination Date) with
                        respect to such Group less the related Servicing Fee and
                        the Master Servicing Fee,

                (ii)    all Advances relating to interest with respect to such
                        Group,

                (iii)   any Compensating Interest payment with respect to such
                        Group,

                (iv)    any Prepayment Interest Excess with respect to such
                        Group,

                (v)     Liquidation Proceeds with respect to such Group (to the
                        extent such Liquidation Proceeds relate to interest)
                        less all Non-Recoverable Advances relating to interest
                        and expenses, and

                (vi)    any Subsequent Recoveries added to the Interest Funds
                        for such group pursuant to Section 4.1(j).

        Last Endorsee:  As defined in Section 2.1(b).

        Latest Possible Maturity Date: The Distribution Date following the third
anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut Off Date.

        Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated by the
Servicer or Master Servicer in any manner, including but not limited to a
disposition pursuant to Section 3.11(i), in the Prepayment Period for such
Distribution Date and as to which the Servicer has determined (in accordance
with this Agreement) that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan, including the final
disposition of an REO Property.

        Liquidation Proceeds: Amounts, including Insurance Proceeds, received by
the Servicer or Master Servicer in connection with the partial or complete
liquidation of defaulted Mortgage Loans, whether through trustee's sale,
foreclosure sale, disposition pursuant to Section 3.11(i), 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 Servicing Fees, Servicing
Advances and P&I Advances.

        Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of

                                       26
<PAGE>

which is the lesser of the purchase price of the related Mortgaged Property and
the appraised value of the related Mortgaged Property.

        London Business Day: A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.

        Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.

        Maintenance: With respect to any Cooperative Unit, the rent paid by the
Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.

        Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at least 51%
of the Percentage Interests evidenced by all Certificates of such Class.

        Master Servicer: [__________________, a [_______] corporation, and its
successors and assigns, in its capacity as master servicer hereunder.

        Master Servicer Custodial Account: The separate Eligible Account created
and maintained by the Master Servicer pursuant to Section 3.5(c) for the benefit
of Certificateholders and designated with the applicable Account Designation.

        Master Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount payable out of each full payment of interest received on such
Mortgage Loan and equal to one-twelfth of the Master Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the first
day of the month prior to the month of such Distribution Date.

        Master Servicer Reporting Date: The opening of business on the third
Business Day preceding each Distribution Date.

        Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.5.

        Moody's: Moody's Investors Service, Inc., or any successor thereto. If
Moody's is designated as a Rating Agency in the Preliminary Statement, the
address for notices to Moody's shall be Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007, Attention: Residential Pass-Through
Monitoring, or such other address as Moody's may hereafter furnish to the
Depositor or the Master Servicer.

        Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.

                                       27
<PAGE>

        Mortgage File: The mortgage documents listed in Section 2.1 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 Loan Documents: As defined in Section 2.1 hereof.

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

        Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Master Servicer to reflect the addition of Substitute or
Subsequent Mortgage Loans and the deletion of Deleted 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
Schedule I, setting forth the following information with respect to each
Mortgage Loan:

                (i)     the loan number;

                (ii)    the Mortgagor's name;

                (iv)    the original principal balance;

                (v)     the Stated Principal Balance as of the Cut Off Date;

                (vi)    Mortgage Rate;

                (vii)   Servicing Fee; and

                (vii)   Group.

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

        Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time, net of any insurance premium charged by the mortgagee to obtain or
maintain any Primary Insurance Policy.

        Mortgaged Property: The underlying property securing a Mortgage Loan,
which, in the case of a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.

        Mortgagor: Any obligor on a Mortgage Note.

        Net Prepayment Interest Shortfall: As to any Distribution Date and
Group, the amount by which the aggregate of Prepayment Interest Shortfalls
during the related Prepayment Period for

                                       28
<PAGE>

such Group exceeds an amount equal to the Compensating Interest for such Group,
if any, for such Distribution Date.

        Nonrecoverable Advance: Any portion of any P&I Advance or Servicing
Advance previously made or proposed to be made by the Servicer [or Master
Servicer] that, in the good faith judgment of the advancing party, will not be
ultimately recoverable by such advancing party from the related Mortgagor,
related Liquidation Proceeds or otherwise.

        Nonrecoverable Mortgage Loan: Any Mortgage Loan that has been determined
to be a Nonrecoverable Mortgage Loan pursuant to Section 3.11(f) hereof and is
identified in an Officer's Certificate signed by a Servicing Officer delivered
to the Master Servicer pursuant to Section 3.11(f) hereof. For the avoidance of
doubt, Mortgage Loans represented by REO Property shall not constitute
Nonrecoverable Mortgage Loans.

        Nonrecoverable Mortgage Loan Purchase Price: As to any Nonrecoverable
Mortgage Loan, an amount equal to the sum of (i) the Projected Net Liquidation
Value thereof on the date of purchase of such loan pursuant to this Agreement;
and (ii) any accrued interest at the applicable Mortgage Rate from the date
through which interest was last paid by the Mortgagor to the Due Date occurring
in the Due Period immediately preceding the Distribution Date on which the
Nonrecoverable Mortgage Loan Purchase Price is to be distributed to
Certificateholders.

        Notice Address: For purposes hereof, the addresses of the Depositor, the
[Master Servicer], the Servicer and the Trustee, are as follows:

                        (i)     If to the Depositor:

                                Aegis Asset Backed Securities Corporation
                                11111 Wilcrest Green
                                Suite 250
                                Houston, Texas 77042

                        (ii)    [If to the Master Servicer:

                                 _____________________]

                        (iii)   [If to the Trustee:

                                ______________________]

                        (iv)    [If to the Servicer:

                                ______________________]

                                       29
<PAGE>

        Notice of Final Distribution: The notice to be provided pursuant to
Section 9.2 hereof to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender thereof.

        Odd Due Date Mortgage Loan: Any Mortgage Loan whose monthly payments are
due on a day other than the first day of the month.

        Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the entity required by the terms of this Agreement to deliver
such certificate, or by such officer of such entity as may be required to sign
such certificate by the terms of this Agreement relating to such particular
certificate.

        One Month LIBOR: As of any Interest Determination Date, the rate for
one-month U.S. dollar deposits which appears in the Telerate Page 3750, as of
11:00 a.m., London time, on such Interest Determination Date. If such rate does
not appear on Telerate Page 3750, the rate for that day will be determined on
the basis of the rates at which deposits in United States dollars are offered by
the Reference Banks at approximately 11:00 a.m., London time, on that day to
prime banks in the London interbank market for a period equal to the relevant
Accrual Period (commencing on the first day of such Accrual Period). The
Calculation Agent, as agent for the [Master] Servicer, will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that day
will be the arithmetic-mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that day will be the arithmetic-mean of the
rates quoted by major banks in New York City, selected by the Master Servicer,
at approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks for a period equal to the relevant
Accrual Period (commencing on the first day of such Accrual Period). The
Calculation Agent, as agent for the Master Servicer, shall review Telerate Page
3750 as of the required time, make the required requests to the principal
offices of the Reference Banks and selections of major banks in New York City
and shall determine the rate which constitutes One Month LIBOR for each Interest
Determination Date.

        Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, Servicer or [the Master Servicer], including, in-house counsel,
reasonably acceptable to the Trustee.

        Optional Termination: The termination of the trust created hereunder in
connection with the purchase of the Mortgage Loans pursuant to Section 9.1
hereof.

        Original Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.

                                       30
<PAGE>

        OTS: The Office of Thrift Supervision.

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

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

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

        Outstanding Mortgage Loan: As of any Determination Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Determination Date and which did not
become a Liquidated Mortgage Loan prior to such Determination Date.

        Overcollateralization Amount: With respect to any Distribution Date, the
excess, if any, of the Assumed Principal Balance of the Mortgage Loans over the
aggregate Certificate Principal Balance of the Certificates after giving effect
to principal distributions on such Distribution Date.

        Ownership Interest: As to any Residual 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.

        P&I Advance: The payment required to be made by the Servicer with
respect to any Distribution Date pursuant to Section 3.19 hereof, the amount of
any such payment being equal to the aggregate of payments of principal and
interest (net of the related Servicing Fee and any net income in the case of any
REO Property) on the Mortgage Loans that were due during the related 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 or
Master Servicer has determined would constitute a Nonrecoverable Advance if
advanced.

        Pass-Through Rate: For any interest bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described in
the Pass-Through Rate Schedule.

        Pass-Through Rate Schedule: The Schedule setting forth the Pass-Through
Rates of the Certificates, attached as Schedule II hereto.

        Paying Agent: [________________], a [___________] banking corporation,
and its successors and assigns in such capacity.

        Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.

                                       31
<PAGE>

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

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

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

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

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

                (v)     interest-bearing 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 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 either 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 (iv) above, provided that the long-term or
        short-term unsecured debt obligations of the party agreeing to
        repurchase such obligations are at the time rated by each Rating Agency
        in one of its highest long-term unsecured debt rating categories or its
        highest short-term unsecured debt rating category, respectively;

                                       32
<PAGE>

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

                (ix)    units of a taxable money-market portfolio having the
        highest rating assigned by each Rating Agency (except if Fitch is a
        Rating Agency and has not rated the portfolio, then the highest rating
        assigned by Moody's) and restricted to obligations issued or guaranteed
        by the United States of America or entities whose obligations are backed
        by the full faith and credit of the United States of America and
        repurchase agreements collateralized by such obligations; and

                (x)     such other investments bearing interest or sold at a
        discount acceptable to each Rating Agency as will not result in the
        downgrading or withdrawal of the rating then assigned to the
        Certificates by either Rating Agency, as evidenced by a signed writing
        delivered by each Rating Agency;

        provided that no such instrument shall be a Permitted Investment if such
        instrument evidences the right to receive interest only payments with
        respect to the obligations underlying such instrument.

        Permitted Transferee: Any person other than a "disqualified
organization" as defined in section 860E(e)(5) of the Code.

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

        Pool Principal Balance: As to any Distribution Date, the aggregate of
the Stated Principal Balances of the Mortgage Loans which were Outstanding
Mortgage Loans on the Determination Date in the month preceding the month of
such Distribution Date.

        [Pre-Funded Amount: With respect to any date and Group, the amount
remaining on deposit in the Pre-Funding Account with respect to such Group
(exclusive of any related Pre-Funding Account Earnings).]

        [Pre-Funding Account: The account created and maintained with the Paying
Agent by the Trust pursuant to Section 2.7 hereof.]

                                       33
<PAGE>

        [Pre-Funding Account Earnings: With respect to each Distribution Date to
and including the date immediately preceding the Distribution Date immediately
following the end of the Funding Period, the actual interest and investment
earnings on the Pre-Funded Amount as calculated by the Master Servicer (based on
information supplied by the Trustee).]

        Prepayment Interest Excess: As to any Principal Prepayment in Full
received by the Servicer from the first day through the 17th day of any calendar
month (other than the calendar month in which the Cut Off Date occurs), all
amounts paid by the related Mortgagor in respect of interest on such Principal
Prepayment.

        Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment received (a) during the period from the eighteenth
day of the month preceding the month of such Distribution Date through the last
day of such month, in the case of a Principal Prepayment in Full, or (b) during
the month preceding the month of such Distribution Date, in the case of a
partial Principal Prepayment, the amount, if any, by which one month's interest
at the related Mortgage Rate (less the related Servicing Fee) on such Principal
Prepayment exceeds the amount of interest actually paid by the Mortgagor in
connection with such Principal Prepayment.

        Prepayment Penalty: With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the Servicer [or Master
Servicer] from a Mortgagor pursuant to the terms of the related Mortgage Note.

        Prepayment Period: As to each Distribution Date, the period from but
excluding the Cut Off Date to and including the 17th day of the month in which
the first Determination Date occurs and each period thereafter from and
including the 18th day of a month (or, if the prior Prepayment Period ended on a
later day, such later day) to and including the Determination Date occurring in
the following month.

        Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.

        Principal Distribution Amount: With respect to each Group and
Distribution Date, the excess of:

                (i)     the sum of:

                        (A)     the Principal Funds for that Distribution Date
                                and Group, and

                        (B)     the related Principal Percentage of any Extra
                                Principal Distribution Amount for that
                                Distribution Date over

                (ii)    the related Principal Percentage of the Released
        Principal Amount for that Distribution Date.

                                       34
<PAGE>

        Principal Funds: With respect to each Group of Mortgage Loans and any
Determination Date the sum, without duplication, of:

                (i)     all scheduled principal with respect to such Group
        collected by the Servicer during the related Due Period or advanced on
        or before such Determination Date,

                (ii)    prepayments with respect to such Group collected by the
        Servicer in the related Prepayment Period,

                (iii)   the Stated Principal Balance of each Mortgage Loan in
        such Group repurchased by the [Depositor] in the related Prepayment
        Period,

                (iv)    any Substitution Adjustment Amount with respect to such
        Group for such date,

                (v)     all Liquidation Proceeds with respect to such Group
        collected by the Servicer during the related Due Period (to the extent
        such Liquidation Proceeds related to principal) less all non-recoverable
        Advances relating to principal with respect to such Group reimbursed
        during the related Due Period, and

                (vi)    [any remaining related Pre-Funded Amount immediately
        following the end of the Funding Period.]

        Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount 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.

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

        Projected Net Liquidation Value: With respect to any Nonrecoverable
Mortgage Loan, the amount, set forth in an Officer's Certificate signed by a
Servicing Officer in a form acceptable to the [Master Servicer], equal to (i)
the fair market value of the related Mortgaged Property as determined by a real
estate broker meeting the qualifications, and applying broker's price opinion
methodology generally acceptable to, residential mortgage servicers, or other
property valuation opinion methodology customarily used by residential mortgage
servicers with respect to defaulted loans, less (ii) the Servicer's good faith
estimate of the total of all related costs of liquidation, Servicing Fees, and
Advances reasonably expected to be incurred in the event the Mortgaged Property
were the subject of foreclosure or otherwise converted to, and sold as, REO
Property.

                                       35
<PAGE>

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

        PUD: Planned Unit Development.

        Purchase Price: With respect to any Mortgage Loan, an amount equal to
the sum of (i) 100% of the unpaid principal balance of such Mortgage Loan on the
date of such purchase, and (ii) accrued interest thereon at the applicable
Mortgage Rate from the date through which interest was last paid by the
Mortgagor to the Due Date occurring in the Due Period immediately preceding the
Distribution Date on which the Purchase Price is to be distributed to
Certificateholders.

        Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is 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 any Mortgage Loan (other than a
Nonrecoverable Mortgage Loan), the amount by which the unpaid principal balance
thereof exceeds the net amount recovered in liquidation thereof (after payment
of expenses of liquidation, unpaid Servicing Fees, and reimbursement of
Advances), after payment of accrued interest on such Mortgage Loan and after
application of any Insurance Proceeds with respect thereto. With respect to any
Nonrecoverable Mortgage Loan, the sum of (i) the amount by which the unpaid
principal balance thereof exceeds the Projected Net Liquidation Value thereof
and (ii) the amount, if any, by which the Projected Net Liquidation Value
thereof exceeds Liquidation Proceeds received in respect thereof. The Realized
Loss in respect of any Nonrecoverable Mortgage Loan calculated pursuant to
clause (i) of the preceding sentence shall be given effect as of the Prepayment
Period during which the Servicer [or Master Servicer] classifies such loan as a
Nonrecoverable Mortgage Loan.

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

        Reference Bank: Leading banks selected by the [Master Servicer] and
engaged in transactions in U.S. dollar deposits in the London interbank market.

        Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.

        Released Principal Amount: With respect to any Distribution Date, the
amount by which the Overcollateralization Amount (assuming for such purpose that
all Principal Funds for such

                                       36
<PAGE>

Distribution Date are distributed as principal to the Certificates) exceeds the
Required Overcollateralization Amount for such date.

        Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.

        Relief Act Shortfall: With respect to any Mortgage Loan as to which
there has been a reduction in the amount of interest collectible thereon as a
result of application of the Relief Act, any amount by which interest
collectible on such Mortgage Loan for the Due Date in the related Due Period is
less than interest accrued thereon for the applicable one-month period at the
Net Rate without giving effect to such reduction.

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

        REMIC Change of Law: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.

        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
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.

        Remittance Agency Agreement:  As defined in Section 2.2 hereof.

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

        Request for Release: The Request for Release submitted by the Servicer
to the Trustee, substantially in the form of Exhibits I and J, as appropriate.

        Required Recordation States: The states of Florida and Mississippi.

        Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Agreement and also
to whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.

        S&P: Standard & Poor's Ratings Service, a division of The McGraw-Hill
Companies, Inc. If S&P is designated as a Rating Agency in the Preliminary
Statement, the address for notices to S&P shall be Standard & Poor's, 26
Broadway, 15th Floor, New York, New York 10004, Attention: Mortgage Surveillance
Monitoring, or such other address as S&P may hereafter furnish to the Depositor
and the Master Servicer.

                                       37
<PAGE>

        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
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.

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

        Security Release Certification:  As defined in Section 2.2 hereof.

        Seller: Aegis Mortgage Corporation and its permitted successors and
assigns.

        Senior Credit Enhancement Percentage: As of any Distribution Date is
equal to a fraction, expressed as a percentage, the numerator of which is the
sum of the aggregate Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date and the Overcollateralization Amount for
such Distribution Date, and the denominator of which is the Assumed Principal
Balance of the Mortgage Loans as of such Distribution Date.

        Senior Principal Distribution Amount: With respect to each Group and any
Distribution Date before the Stepdown Date or as to which a Trigger Event has
occurred, 100% of the Principal Distribution Amount for such Group and
Distribution Date, and with respect to any Distribution Date on or after the
Stepdown Date and as to which a Trigger Event has not occurred, the related
Principal Percentage of the excess of:

                (i)     the Group I, Group II and Group III Class A Certificate
Principal Balances immediately prior to such Distribution Date over

                (ii)    the lesser of:

                        (A)     the related Target Percentage of the Assumed
                                Principal Balance of the Mortgage Loans on the
                                preceding Determination Date, and

                        (B)     the Assumed Principal Balance of the Mortgage
                                Loans on the preceding Determination Date less
                                0.50% of the Assumed Principal Balance as of the
                                Cut Off Date (but in no event less than zero).

        Servicer: [_______] and its permitted successors and assigns.

        Servicer Deposit Date: The twenty-first day of each month, or if such
day is not a Business Day, the next succeeding day.

        Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations hereunder, including, but not limited to, the cost of (i)
the preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Servicer pursuant to Section 3.11 hereof and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management

                                       38
<PAGE>

and liquidation of any REO Property and (iv) compliance with the obligations
under Section 3.1 and Section 3.9 thereof.

        Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount payable out of each full payment of interest received on such Mortgage
Loan and equal to one-twelfth of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the Due Date in of the month prior
to the month of such Distribution Date (or, in the case of an Odd Due Date
Mortgage Loan, the Due Date occurring in the second month preceding the month of
such Distribution Date).

        Servicing Officer: Any of the President, any Vice President (however
denominated), or Assistant Vice President of the Servicer involved in, or
responsible for, the administration and servicing of one or more Mortgage Loans
at the time of performance of the relevant activity of the Servicer.

        Startup Day: The Closing Date.

        Stated Principal Balance: As to any Mortgage Loan and Determination
Date, the unpaid principal balance of such Mortgage Loan as of the applicable
Due Date as specified in the amortization schedule at the time relating thereto
(before any adjustment to such amortization schedule by reason of any moratorium
or similar waiver or grace period) after giving effect to (i) any previous
partial Principal Prepayments and Liquidation Proceeds allocable to principal
(other than with respect to any Liquidated Mortgage Loan), (ii) the payment of
principal due on such Due Date, and (iii) in the case of any Nonrecoverable
Mortgage Loan, the amount of any Realized Loss in respect thereof (but otherwise
determined, in each case, regardless of any delinquency in payment by the
related Mortgagor).

        Subservicer: Any person to whom the Servicer [(or Master Servicer)] has
contracted for the servicing of all or a portion of the Mortgage Loans pursuant
to Section 3.2 hereof.

        [Subsequent Cut Off Date: The date specified in a Subsequent Sales
Agreement with respect to those Subsequent Mortgage Loans which are transferred
and assigned to the Trust Fund pursuant to the related Subsequent Sales
Agreement.]

        [Subsequent Mortgage Loans: The Mortgage Loans listed on a Mortgage Loan
Schedule attached to a Subsequent Sales Agreement.]

        Subsequent Recoveries: As to any Nonrecoverable Mortgage Loan, the
excess of (i) any net Liquidation Proceeds received in respect of such loan;
over (ii) the Projected Net Liquidation Value thereof.

        [Subsequent Sales Agreement: Each Subsequent Sales Agreement dated as of
a Subsequent Sales Date by which Subsequent Mortgage Loans are sold and assigned
to the Trust.]

        [Subsequent Sales Date: The date specified in each Subsequent Sales
Agreement.

                                       39
<PAGE>

        Substitute Mortgage Loan: A Mortgage Loan substituted by the Depositor
or [Master] Servicer 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, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) accrue interest on the same basis as the Deleted
Mortgage Loan and be accruing interest at a rate no lower than and not more than
1% per annum higher than, that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) not
be a Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative Loan;
and (v) comply with each representation and warranty set forth in Section 2.3
hereof. Any of the characteristics described above may be satisfied in the
aggregate by one or more Substitute Mortgage Loans.

        Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.3 hereof.

        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. Initially, the Tax Matters Person shall be
the Trustee.

        Tax Matters Person Certificate: The Class R Certificate with a
Denomination of _______%.

        Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Market Report (or such other page as may replace that page on
that service for the purpose of displaying comparable rates or prices).

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

        Trustee: [__________________________] and its successors and, if a
successor trustee is appointed hereunder, such successor.

        Trustee Fee: As to any Distribution Date, an amount equal to one-twelfth
of the Trustee Fee Rate multiplied by the Pool Principal Balance with respect to
such Distribution Date, to be paid by the Master Servicer from the [Master]
Servicing Fee.

        Trust Fund: As described in Section 2.1 hereof.

        Unpaid Realized Loss Amount: As to any Distribution Date and any Class,
the excess of:

                (i)     the Applied Realized Loss Amount for such Class over

                (ii)    the sum of all distributions in reduction of such
                        Applied Realized Loss Amount on all previous
                        Distribution Dates.

                                       40
<PAGE>

        Weighted Average Net Rate: The weighted average of the Mortgage Rates of
the Mortgage Loans less the sum of the Servicing Fee Rate and the Master
Servicing Fee Rate, as applicable, provided, however, that for the first three
Distribution Dates, the Weighted Average Net Rate shall equal the product of (i)
the weighted average of the Mortgage Rates of only those Mortgage Loans
transferred to the Trust Fund on the Closing Date less the sum of the Servicing
Fee Rate and the Master Servicing Fee Rate, as applicable, multiplied by (ii) a
fraction, the numerator of which is the aggregate principal balance of the
Mortgage Loans transferred to the Trust Fund on the Closing Date and the
denominator of which is the Assumed Principal Balance as of such Distribution
Date.

                                   ARTICLE 2

          CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

        Section 2.1    Conveyance of Mortgage Loans.

        (a) To provide for the distribution of the principal of and interest on
the Certificates in accordance with their terms, the distribution of all other
sums distributable hereunder with respect to the Certificates and the
performance of the covenants contained herein, the Depositor hereby bargains,
sells, conveys, assigns and transfers to the Trustee, in trust, without recourse
and for the exclusive benefit of the Certificateholders as their interests may
appear, all the Depositor's right, title and interest in and to any and all
benefits accruing to the Depositor from: (i) the Mortgage Loans, which the
Depositor is causing to be delivered to the Trustee (or the Custodian) herewith
(and all Substitute Mortgage Loans substituted therefor), together in each case
with the related Mortgage Files and the Depositor's interest in any collateral
that secured a Mortgage Loan but that is acquired by foreclosure or deed-in-lieu
of foreclosure after the Closing Date, and all Scheduled Payments due after the
Cut Off Date and all principal prepayments received with respect to the Mortgage
Loans paid by the borrower after the Cut Off Date and proceeds of the
conversion, voluntary or involuntary, of the foregoing; (ii) any Subsequent
Mortgage Loans; (iii) the Sales Agreement, [except that the Depositor does not
assign to the Trustee any of its rights under Sections 9 and 12 of the Sales
Agreement]; [(iv) any Pre-Funding Account whether in the form of cash,
instruments, securities or other properties] and (v) all proceeds of any of the
foregoing (including, but not limited to, all proceeds of any mortgage
insurance, hazard insurance, or title insurance policy relating to the Mortgage
Loans, cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, rights to payment of any and every
kind, and other forms of obligations and receivables, which at any time
constitute all or part or are included in the proceeds of any of the foregoing)
to pay the Certificates as specified herein (items (i) through (v) above
collectively, the "Trust Fund").

        With respect to any Mortgage Loan that does not have a first payment
date on or before the last day of the Due Period immediately preceding the first
Distribution Date, the [Depositor] shall deposit into the Distribution Account
on or before the Distribution Account Deposit Date

                                       41
<PAGE>

relating to the first Distribution Date, an amount equal to one month's interest
at the related Net Rate on the Cut Off Date Principal Balance of such Mortgage
Loan.

        (b) In connection with the transfer set forth in clause (a) above, the
Depositor has delivered or caused to be delivered to the Trustee or the
Custodian on its behalf for the benefit of the Certificateholders the following
documents or instruments (collectively, the "Mortgage Loan Documents") with
respect to each Mortgage Loan so transferred:

                (i)     (A) the original Mortgage Note endorsed by manual or
        facsimile signature to the Trustee or the Custodian or in blank, without
        recourse, with all intervening endorsements showing a complete chain of
        endorsement from the originator to the Person endorsing the Mortgage
        Note (the "Last Endorsee") (each such endorsement being sufficient to
        transfer all right, title and interest of the party so endorsing, as
        noteholder or assignee thereof, in and to that Mortgage Note); or

                        (B) with respect to any Lost Mortgage Note, a lost note
                affidavit from the Depositor stating that the original Mortgage
                Note was lost or destroyed, together with a copy of such
                Mortgage Note;

                (ii)    except with respect to any Cooperative Loan, the
        original recorded Mortgage or a copy of such Mortgage certified by the
        Depositor, the originating lender, settlement agent, or escrow company
        as being a true and complete copy of the Mortgage;

                (iii)   except with respect to any Mortgage Loan for which the
        related Mortgage names the Custodian as nominee for the originating
        lender (or similar designation satisfactory to the Custodian), as
        beneficiary or mortgagee, either (A) a duly executed assignment of the
        Mortgage in blank, or (B) an original recorded assignment of the
        Mortgage from the Last Endorsee to the Custodian or a copy of such
        assignment of Mortgage certified by the Depositor, the originating
        lender, settlement agent, or escrow company as being a true and complete
        copy thereof which in either case may be included in a blanket
        assignment or assignments;

                (iv)    each interim recorded assignment of such Mortgage, or a
        copy of each such interim recorded assignment of Mortgage certified by
        the Depositor, the originating lender, settlement agent, or escrow
        company as being a true and complete copy thereof;

                (v)     the original or copies of each assumption, modification,
        written assurance or substitution agreement, if any;

                (vi)    except as to any second lien Mortgage Loan in the
        original principal amount of $[_______] or less, either the original or
        duplicate original title policy (including all riders thereto) with
        respect to the related Mortgaged Property, if available, provided that
        the title policy (including all riders thereto) will be delivered as
        soon as it becomes available, and if the title policy is not available,
        and to the extent required pursuant to the second paragraph below or
        otherwise in connection with the rating of the

                                       42
<PAGE>

        Certificates, a written commitment or interim binder or preliminary
        report of the title issued by the title insurance or escrow company with
        respect to the Mortgaged Property; and

                (vii)   in the case of a Cooperative Loan, the originals of the
        following documents or instruments:

                        (a)     The Coop Shares, together with a stock power in
                                blank;
                        (b)     The executed Security Agreement;
                        (c)     The executed Proprietary Lease;
                        (d)     The executed Recognition Agreement;
                        (e)     The executed UCC-1 financing statement with
                                evidence of recording thereon which have been
                                filed in all places required to perfect the
                                Depositor's interest in the Coop Shares and the
                                Proprietary Lease; and
                        (f)     Executed UCC-3 financing statements or other
                                appropriate UCC financing statements required by
                                state law, evidencing a complete and unbroken
                                line from the mortgagee to the Trustee with
                                evidence of recording thereon (or in a form
                                suitable for recordation).

        In the event that in connection with any Mortgage Loan the Depositor
cannot deliver (a) the original recorded Mortgage or (b) any recorded
assignments or interim assignments satisfying the requirements of clause (iii)
or (iv) above, respectively, concurrently with the execution and delivery hereof
because such document or documents have not been returned from the applicable
public recording office, the Depositor shall deliver such documents to the
Trustee or the Custodian on its behalf as promptly as possible upon receipt
thereof and, in any event, within ___ days following the Closing Date. The
Depositor or [Seller] shall forward or cause to be forwarded to the Trustee or
the Custodian on its behalf (a) from time to time additional original documents
evidencing an assumption or modification of a Mortgage Loan and (b) any other
documents required to be delivered by the Depositor or the [Seller] to the
Trustee. In the case where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, the Depositor shall deliver to the Trustee a copy of
such Mortgage certified (to the extent such certification is reasonably
obtainable) by such public recording office to be a true and complete copy of
the original recorded Mortgage.

        In addition, in the event that in connection with any Mortgage Loan the
Depositor cannot deliver the original or duplicate original lender's title
policy (together with all riders thereto), satisfying the requirements of clause
(vi) above, concurrently with the execution and delivery hereof because the
related Mortgage or a related assignment has not been returned from the
applicable public recording office, the Depositor shall promptly deliver to the
Trustee or the Custodian on its behalf such original or duplicate original
lender's title policy (together with all riders thereto) upon receipt thereof
from the applicable title insurer, and in any event, within days following the
Closing Date.

                                       43
<PAGE>

        Subject to the immediately following sentence, as promptly as
practicable subsequent to the transfer set forth in clause (a) of this Section
2.1, and in any event, within thirty (30) days thereafter, the [SELLER] shall as
to any Mortgage Loan with respect to which the Depositor delivers an assignment
of the Mortgage in blank pursuant to clause (b)(iii)(A) of this Section 2.1, (i)
complete each such assignment of Mortgage to conform to clause (b)(iii)(B) of
this Section 2.1, (ii) cause such assignment to be in proper form for recording
in the appropriate public office for real property records, and (iii) cause to
be delivered for recording in the appropriate public office for real property
records each such assignment of the Mortgages, except that, with respect to any
assignments of Mortgage as to which the [Seller] has not received the
information required to prepare such assignments in recordable form, the
[Seller's] obligation to do so and to deliver the same for such recording shall
be as soon as practicable after receipt of such information and in any event
within thirty (30) days after receipt thereof. Notwithstanding the foregoing,
the [Seller] need not cause to be recorded any assignment which relates to a
Mortgage Loan in any state other than the Required Recordation States.

        In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee or the Custodian on its behalf, will deposit in the Collection Account
the portion of such payment that is required to be deposited in the Collection
Account pursuant to Section 3.8 hereof.

        Section 2.2     Acceptance by Trustee of the Mortgage Loans.

        The Trustee or the Custodian, on behalf of the Trustee acknowledges
receipt of the documents identified in the initial certification in the form
annexed hereto as Exhibit C (the "Initial Certification") and declares that it
or the Custodian holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it or the Custodian
holds or will hold such other assets as are included in the Trust Fund, in trust
for the exclusive use and benefit of all present and future Certificateholders.

        The Trustee agrees to execute and deliver or to cause the Custodian to
execute and deliver on the Closing Date to the Depositor, the Seller, [the
Master Servicer] and the Servicer an Initial Certification in the form annexed
hereto as Exhibit C. Based on its or the Custodian's review and examination, and
only as to the documents identified in such Initial Certification, the
Custodian, on behalf of the Trustee acknowledges that such documents appear
regular on their face and relate to such Mortgage Loan. Neither the Trustee nor
the Custodian shall be under any duty or obligation to inspect, review or
examine said documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records or
that they are other than what they purport to be on their face.

        Not later than 360 days after the Closing Date, the Trustee shall
deliver or shall cause the Custodian to deliver to the Depositor, the Seller,
[the Master Servicer]and the Servicer a Final Certification in the form annexed
hereto as Exhibit D, with any applicable exceptions noted thereon.
Notwithstanding anything to the contrary contained herein, in the event there
are

                                       44
<PAGE>

exceptions to the Final Certification, the Trustee may transmit such exceptions
electronically (via email) to the Depositor, the Seller, [the Master
Servicer]and the Servicer, subject to the prior approval of the Depositor, the
Seller, [the Master Servicer]and the Servicer.

        If, in the course of such review, the Trustee or the Custodian, on
behalf of the Trustee finds any document constituting a part of a Mortgage File
which does not meet the requirements of Section 2.1 hereof, the Trustee shall
list or shall cause the Custodian to list such as an exception in the Final
Certification; provided, however that neither the Trustee nor the Custodian
shall make any determination as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as noteholder
or assignee thereof, in and to that Mortgage Note or (ii) any assignment is in
recordable form or is sufficient to effect the assignment of and transfer to the
assignee thereof under the mortgage to which the assignment relates.
[Depositor/Seller] shall promptly correct or cure such defect within 90 days
from the date it was so notified of such defect and, if [Depositor/Seller] does
not correct or cure such defect within such period, [Depositor/Seller] shall
either (a) substitute for the related Mortgage Loan a Substitute Mortgage Loan,
which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.3 hereof, or (b) purchase such Mortgage Loan
from the Trustee within 90 days from the date [Depositor/Seller] was notified of
such defect in writing at the Purchase Price of such Mortgage Loan; provided,
however, that in no event shall such substitution or purchase occur more than
540 days from the Closing Date, except that if the substitution or purchase of a
Mortgage Loan pursuant to this provision is required by reason of a delay in
delivery of any documents by the appropriate recording office, and there is a
dispute between either the Depositor or Seller and the Trustee over the location
or status of the recorded document, then such substitution or purchase shall
occur within 720 days from the Closing Date. Any such substitution pursuant to
(a) above shall not be effected prior to the delivery to the Trustee of the
Opinion of Counsel required by Section 2.4 hereof, if any, and any substitution
pursuant to (a) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit I. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Mortgage Loan
shall be deposited by Seller in the Collection Account on or prior to the
Distribution Account Deposit Date for the Distribution Date in the month
following the month of repurchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit J hereto, the Trustee
shall cause the Custodian to release the related Mortgage File to Seller and
shall execute and deliver at Seller's request such instruments of transfer or
assignment prepared by Seller, in each case without recourse, as shall be
necessary to vest in Seller, or a designee, the Trustee's interest in any
Mortgage Loan released pursuant hereto.

        The Trustee shall retain or shall cause the Custodian to retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions set forth herein. The Servicer shall promptly deliver
to the Trustee or the Custodian on its behalf, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File as come into the possession of the Servicer from time to time.

                                       45
<PAGE>

        It is understood and agreed that the obligation of Seller to substitute
for or to purchase any Mortgage Loan which does not meet the requirements of
Section 2.1 hereof shall constitute the sole remedy respecting such defect
available to the Trustee and any Certificateholder against the Depositor or
Seller.

        In order to facilitate sales and deliveries of Mortgage Loans to the
Trust Fund, the Trustee may execute and deliver one or more remittance agency
agreements in substantially the form of Exhibit K hereto (each, a "Remittance
Agency Agreement"), and in such event the Trustee: (i) shall perform the duties
of Remittance Agent (as that term is defined in the related Remittance Agency
Agreement); and (ii) may accept as conclusive evidence of the release of the
related security interests one or more security release certifications in
substantially the form attached as Exhibit L hereto (each, a "Security Release
Certification").

        Section 2.3.    Representations, Warranties and Covenants of the
                        Depositor, Seller, Servicer and [Master Servicer].

        (a)     The Servicer represents and warrants to the Trustee that, as of
                the Closing Date:

                (i)     the Servicer is a corporation licensed as a mortgage
        servicer duly organized, validly existing and in good standing under the
        laws of the state of its incorporation and has, and had at all relevant
        times, full corporate power to service the Mortgage Loans, to own its
        property, to carry on its business as presently conducted and to enter
        into and perform its obligations under this Agreement. The Servicer has
        all necessary licenses and is qualified to transact business in and is
        in good standing under the laws of each state where any Mortgaged
        Property is located or is otherwise exempt under applicable law from
        such qualification or is otherwise not required under applicable law to
        effect such qualification and no demand for such qualification has been
        made upon the Servicer by any state having jurisdiction;

                (ii)    the execution and delivery of this Agreement by the
        Servicer and the performance by it of and compliance with the terms of
        this Agreement will not (A) violate the Servicer's articles of
        incorporation or by-laws or constitute a default (or an event which,
        with notice or lapse of time or both, would constitute a default) under,
        or result in the breach or acceleration of, any material contract,
        agreement or other instrument to which the Servicer is a party or which
        may be applicable to the Servicer or any of its assets or (B) result in
        the creation or imposition of any lien, charge or encumbrance upon any
        of its properties pursuant to the terms of any such contract, agreement
        or other instrument;

                (iii)   the Servicer has the full power and authority to enter
        into and consummate all transactions contemplated by this Agreement to
        be consummated by it, has duly authorized the execution, delivery and
        performance of this Agreement, and has duly executed and delivered this
        Agreement. This Agreement, assuming due authorization, execution and
        delivery by the other parties hereto, constitutes a valid, legal and
        binding

                                       46
<PAGE>

        obligation of the Servicer, enforceable against it in accordance with
        the terms hereof, except as such enforcement may be limited by
        bankruptcy, insolvency, reorganization, receivership, moratorium or
        other similar laws relating to or affecting the rights of creditors
        generally, and by general equity principles (regardless of whether such
        enforcement is considered in a proceeding in equity or at law);

                (iv)    the Servicer is not in violation of, and the execution
        and delivery of this Agreement by the Servicer and the performance by it
        and compliance with the terms of this Agreement will not constitute a
        violation with respect to, any order or decree of any court or any order
        or regulation of any federal, state, municipal or governmental agency
        having jurisdiction, which violation would materially and adversely
        affect the condition (financial or otherwise) or operations of the
        Servicer or any of its properties or materially and adversely affect the
        performance of any of its duties hereunder; and

                (v)     there are no actions or proceedings against, or
        investigations of, the Servicer pending or, to the knowledge of the
        Servicer, threatened, before any court, administrative agency or other
        tribunal (A) that, if determined adversely, would prohibit its entering
        into this Agreement, (B) seeking to prevent the consummation of any of
        the transactions contemplated by this Agreement or (C) that, if
        determined adversely, would prohibit or materially and adversely affect
        the performance by the Servicer of any of its obligations under, or the
        validity or enforceability of, this Agreement.

            (b) The Master Servicer represents and warrants to the Trustee
that, as of the Closing Date:

                (i)     the Master Servicer is a corporation licensed as a
        mortgage banker duly organized, validly existing and in good standing
        under the laws of the state of its incorporation and has, and had at all
        relevant times, full corporate power to service the Mortgage Loans, to
        own its property, to carry on its business as presently conducted and to
        enter into and perform its obligations under this Agreement. The Master
        Servicer has all necessary licenses and is qualified to transact
        business in and is in good standing under the laws of each state where a
        Mortgaged Property is located or is otherwise exempt under applicable
        law from such qualification or is otherwise not required under
        applicable law to effect such qualification and no demand for such
        qualification has been made upon the Master Servicer by any state having
        jurisdiction;

                (ii)    the execution and delivery of this Agreement by the
        Master Servicer and the performance by it of and compliance with the
        terms of this Agreement will not (A) violate the Master Servicer's
        articles of incorporation or by-laws or constitute a default (or an
        event which, with notice or lapse of time or both, would constitute a
        default) under, or result in the breach or acceleration of, any material
        contract, agreement or other instrument to which the Master Servicer is
        a party or which may be applicable to the Master Servicer or any of its
        assets or (B) result in the creation or imposition of any lien,

                                       47
<PAGE>

        charge or encumbrance upon any of its properties pursuant to the terms
        of any such contract, agreement or other instrument;

                (iii)   the Master Servicer has the full power and authority to
        enter into and consummate all transactions contemplated by this
        Agreement to be consummated by it, has duly authorized the execution,
        delivery and performance of this Agreement, and has duly executed and
        delivered this Agreement. This Agreement, assuming due authorization,
        execution and delivery by the other parties hereto, constitutes a valid,
        legal and binding obligation of the Master Servicer, enforceable against
        it in accordance with the terms hereof, except as such enforcement may
        be limited by bankruptcy, insolvency, reorganization, receivership,
        moratorium or other similar laws relating to or affecting the rights of
        creditors generally, and by general equity principles (regardless of
        whether such enforcement is considered in a proceeding in equity or at
        law);

                (iv)    the Master Servicer is not in violation of, and the
        execution and delivery of this Agreement by the Master Servicer and the
        performance by it and compliance with the terms of this Agreement will
        not constitute a violation with respect to, any order or decree of any
        court or any order or regulation of any federal, state, municipal or
        governmental agency having jurisdiction, which violation would
        materially and adversely affect the condition (financial or otherwise)
        or operations of the Master Servicer or any of its properties or
        materially and adversely affect the performance of any of its duties
        hereunder; and

                (v)     there are no actions or proceedings against, or
        investigations of, the Master Servicer pending or, to the knowledge of
        the Master Servicer, threatened, before any court, administrative agency
        or other tribunal (A) that, if determined adversely, would prohibit its
        entering into this Agreement, (B) seeking to prevent the consummation of
        any of the transactions contemplated by this Agreement or (C) that, if
        determined adversely, would prohibit or materially and adversely affect
        the performance by the Master Servicer of any of its obligations under,
        or the validity or enforceability of, this Agreement.

            (c) The Depositor represents and warrants to the Trustee that,
        as of the Closing Date:

                (i)     the Depositor is a corporation, duly organized, validly
        existing and in good standing under the laws of the state of its
        incorporation and has, and had at all relevant times, full corporate
        power to own its property, to carry on its business as presently
        conducted and to enter into and perform its obligations under this
        Agreement;

                (ii)    the execution and delivery of this Agreement by the
        Depositor and the performance by it of and compliance with the terms of
        this Agreement will not (A) violate the Depositor's articles of
        incorporation or by-laws or constitute a default (or an event which,
        with notice or lapse of time or both, would constitute a default) under,
        or result in the breach or acceleration of, any material contract,
        agreement or other

                                       48
<PAGE>

        instrument to which the Depositor is a party or which may be applicable
        to the Depositor or any of its assets or (B) result in the creation or
        imposition of any lien, charge or encumbrance upon any of its properties
        pursuant to the terms of any such contract, agreement or other
        instrument;

                (iii)   the Depositor has the full power and authority to enter
        into and consummate all transactions contemplated by this Agreement to
        be consummated by it, has duly authorized the execution, delivery and
        performance of this Agreement, and has duly executed and delivered this
        Agreement. This Agreement, assuming due authorization, execution and
        delivery by the other parties hereto, constitutes a valid, legal and
        binding obligation of the Depositor, enforceable against it in
        accordance with the terms hereof, except as such enforcement may be
        limited by bankruptcy, insolvency, reorganization, receivership,
        moratorium or other similar laws relating to or affecting the rights of
        creditors generally, and by general equity principles (regardless of
        whether such enforcement is considered in a proceeding in equity or at
        law);

                (iv)    the Depositor is not in violation of, and the execution
        and delivery of this Agreement by the Depositor and the performance by
        it and compliance with the terms of this Agreement will not constitute a
        violation with respect to, any order or decree of any court or any order
        or regulation of any federal, state, municipal or governmental agency
        having jurisdiction, which violation would materially and adversely
        affect the condition (financial or otherwise) or operations of the
        Depositor or any of its properties or materially and adversely affect
        the performance of any of its duties hereunder; and

                (v)     there are no actions or proceedings against, or
        investigations of, the Depositor pending or, to the knowledge of the
        Depositor, threatened, before any court, administrative agency or other
        tribunal (A) that, if determined adversely, would prohibit its entering
        into this Agreement, (B) seeking to prevent the consummation of any of
        the transactions contemplated by this Agreement or (C) that, if
        determined adversely, would prohibit or materially and adversely affect
        the performance by the Depositor of any of its obligations under, or the
        validity or enforceability of, this Agreement.

            (d) The Seller represents and warrants to the Trustee that, as
of the Closing Date:

                (i)     the Seller is a corporation, duly organized, validly
        existing and in good standing under the laws of the state of its
        incorporation and has, and had at all relevant times, full corporate
        power to own its property, to carry on its business as presently
        conducted and to enter into and perform its obligations under this
        Agreement;

                (ii)    the execution and delivery of this Agreement by the
        Seller and the performance by it of and compliance with the terms of
        this Agreement will not (A) violate the Seller's articles of
        incorporation or by-laws or constitute a default (or an event which,
        with notice or lapse of time or both, would constitute a default) under,
        or result in the breach or acceleration of, any material contract,
        agreement or other instrument to

                                       49
<PAGE>

        which the Seller is a party or which may be applicable to the Seller or
        any of its assets or (B) result in the creation or imposition of any
        lien, charge or encumbrance upon any of its properties pursuant to the
        terms of any such contract, agreement or other instrument;

                (iii)   the Seller has the full power and authority to enter
        into and consummate all transactions contemplated by this Agreement to
        be consummated by it, has duly authorized the execution, delivery and
        performance of this Agreement, and has duly executed and delivered this
        Agreement. This Agreement, assuming due authorization, execution and
        delivery by the other parties hereto, constitutes a valid, legal and
        binding obligation of the Seller, enforceable against it in accordance
        with the terms hereof, except as such enforcement may be limited by
        bankruptcy, insolvency, reorganization, receivership, moratorium or
        other similar laws relating to or affecting the rights of creditors
        generally, and by general equity principles (regardless of whether such
        enforcement is considered in a proceeding in equity or at law);

                (iv)    the Seller is not in violation of, and the execution and
        delivery of this Agreement by the Seller and the performance by it and
        compliance with the terms of this Agreement will not constitute a
        violation with respect to, any order or decree of any court or any order
        or regulation of any federal, state, municipal or governmental agency
        having jurisdiction, which violation would materially and adversely
        affect the condition (financial or otherwise) or operations of the
        Seller or any of its properties or materially and adversely affect the
        performance of any of its duties hereunder; and

                (v)     there are no actions or proceedings against, or
        investigations of, the Seller pending or, to the knowledge of the
        Seller, threatened, before any court, administrative agency or other
        tribunal (A) that, if determined adversely, would prohibit its entering
        into this Agreement, (B) seeking to prevent the consummation of any of
        the transactions contemplated by this Agreement or (C) that, if
        determined adversely, would prohibit or materially and adversely affect
        the performance by the Seller of any of its obligations under, or the
        validity or enforceability of, this Agreement.; and

            (e) Pursuant to Section 2.1(a)(iii) hereof, the Depositor has
assigned to the Trustee, for the benefit of Certificateholders, its rights under
the Sales Agreement, including each representation and warranty of Seller set
forth in such Sales Agreement in respect of the Mortgage Loans.

        Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by Seller in respect of the Mortgage Loans that
materially and adversely affects the interests of the Certificateholders in any
such Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties. Seller hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a
breach such of any representation or warranty which materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan (it being
understood that any such breach shall be deemed to materially and adversely
affect the value of such Mortgage Loan or the interest of the

                                       50
<PAGE>

Trust Fund therein, if the Trust Fund incurs a loss as the result of such
breach), it shall cure such breach in all material respects, and if such breach
is not so cured, shall, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a Substitute Mortgage
Loan, in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth below; provided, however, that any
such substitution pursuant to (i) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section 2.4(a)
hereof, if any, and any such substitution pursuant to (i) above shall not be
effected prior to the additional delivery to the Trustee or the Custodian on its
behalf of a Request for Release substantially in the form of Exhibit J and the
Mortgage File for any such Substitute Mortgage Loan. Seller shall promptly
reimburse the Servicer and the Trustee for any expenses reasonably incurred by
the Servicer or the Trustee in respect of enforcing the remedies for such
breach. With respect to the representations and warranties described in this
Section which are made to the best of Seller's knowledge, if it is discovered by
either the Servicer or the Trustee that the substance of such representation and
warranty is inaccurate and such inaccuracy materially and adversely affects the
value of the related Mortgage Loan or the interests of the Certificateholders
therein, notwithstanding Seller's lack of knowledge with respect to the
substance of such representation or warranty, such inaccuracy shall be deemed a
breach of the applicable representation or warranty.

        With respect to any Substitute Mortgage Loan, Seller shall deliver to
the Trustee or the Custodian on its behalf for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.1, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.1. No substitution is permitted to be made in any calendar month after
the Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of substitution shall not be part of the
Trust Fund and will be retained by Seller on the next succeeding Distribution
Date. For the month of substitution, distributions to Certificateholders will
include the monthly payment due on any Deleted Mortgage Loan for such month and
thereafter Seller shall be entitled to retain all amounts received in respect of
such Deleted Mortgage Loan. The Servicer shall amend the Mortgage Loan Schedule
for the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and Seller shall be deemed to
have made with respect to such Substitute Mortgage Loan or Loans, as of the date
of substitution, the representations and warranties made by Seller pursuant to
the Sales Agreement with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Collection Account of the amount required to
be deposited therein in connection with such substitution as described in the
following paragraph, the Trustee shall release or shall cause the Custodian to
release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to Seller and shall execute and deliver
at Seller's direction such instruments of transfer or assignment prepared by
Seller , in each case

                                       51
<PAGE>

without recourse, as shall be necessary to vest title in Seller, or its
designee, the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.3.

        For any month in which Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the month of substitution). The amount of such shortage (the "Substitution
Adjustment Amount") plus an amount equal to the aggregate of any unreimbursed
Advances with respect to such Deleted Mortgage Loans shall be deposited in the
Collection Account by Seller on or before the Distribution Account Deposit Date
for the Distribution Date in the month succeeding the calendar month during
which the related Mortgage Loan became required to be purchased or replaced
hereunder.

        In the event that Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Distribution Account prior to
the Distribution Date in the month following the month during which Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.4 hereof and receipt of a Request for Release in the form
of Exhibit I hereto, the Trustee shall release or shall cause the Custodian to
release the related Mortgage File held for the benefit of the Certificateholders
to Seller, and the Trustee shall execute and deliver or shall cause the
Custodian to execute and deliver at Seller's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of Seller to cure, repurchase or
replace any Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on their behalf.

        The representations and warranties made pursuant to this Section 2.3
(and the representations and warranties with respect to the Mortgage Loans made
in the Sales Agreement) shall survive delivery of the respective Mortgage Files
to the Trustee or the Custodian for the benefit of the Certificateholders.

            (f) Upon discovery by the Depositor, the Servicer, the Master
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 five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require Seller, at Seller's option, to
either (i) substitute, if the conditions in Section 2.3(e) with respect to
substitutions are satisfied, a Substitute 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 made pursuant to this Section 2.3. The Trustee shall
reconvey or shall cause the Custodian to reconvey to Seller the Mortgage Loan to
be released pursuant hereto in

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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 this
Section 2.3.

        Section 2.4.    Delivery of Opinion of Counsel in Connection with
                        Substitutions.

          (a)   Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.2 or Section 2.3 shall be made more than 90
days after the Closing Date unless the Depositor or Seller delivers to the
Trustee an Opinion of Counsel, which Opinion of Counsel shall not be at the
expense of either the Trustee or the Trust Fund, addressed to the Trustee, to
the effect that such substitution will not (i) result in the imposition of the
tax on "prohibited transactions" on the Trust Fund or contributions after the
Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively, or (ii) cause any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding.

        Section 2.5     Execution and Delivery of Certificates.

        The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.

        Section 2.6     [Purchase of Subsequent Mortgage Loans.

          (a)   Subject to the satisfaction of the conditions set forth in
paragraph (b) below in consideration of the delivery on a Subsequent Sales Date
to or upon the order of the Depositor of all or a portion of the Pre-Funded
Amount, as the case may be, the Depositor shall on such Subsequent Sales Date
sell, transfer, assign, set over and otherwise convey without recourse, to the
Trust Fund, and the Trustee shall purchase on behalf of the Trust Fund, all the
Depositor's right, title and interest in and to the Subsequent Mortgage Loans,
together with the related Mortgage Loan Files, covered by the Subsequent Sales
Agreement delivered on such date.

          (b)   The obligation of the Trust to acquire Subsequent Mortgage Loans
is subject to the satisfaction of each of the following conditions on or prior
to the related Subsequent Sales Date:

                (i)     the Depositor shall have delivered to the Trustee with a
        copy to the Master Servicer a duly executed written Subsequent Sales
        Agreement, which shall include a Schedule of Subsequent Mortgage Loans,
        and specifying the amount to be withdrawn from the Pre-Funding Account;

                (ii)    the remaining term to maturity of each Subsequent
        Mortgage Loan may not exceed 30 years;

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<PAGE>

                (iii)   no Subsequent Mortgage Loan will have been selected in a
        manner adverse to the interests of Certificateholders;

                (iv)    the addition of the Subsequent Mortgage Loans will not
        result in the reduction, qualification or withdrawal of the then current
        ratings of the Certificates;

                (v)     no Subsequent Mortgage Loan may have a Loan-to-Value
        Ratio greater than [100.00%];

                (vi)    each Subsequent Mortgage Loan will be underwritten in
        accordance with the Depositor's underwriting guidelines;

                (vii)   after giving effect to the acquisition of all the
        Subsequent Mortgage Loans, the Mortgage Loans in the applicable Group
        shall conform to the applicable Subsequent Delivery Requirements;

                (viii)  the Depositor shall have provided the Master Servicer
        and the Trustee any information reasonably requested by any of them with
        respect to the Subsequent Mortgage Loans then to be sold to the Trust
        Fund;

                (ix)    the Depositor shall have delivered to the Trustee a
        letter from an independent accountant stating whether or not the
        characteristics of the Subsequent Mortgage Loans conform to the
        characteristics of the Mortgage Loans required in Section 2.6(b);

                (x)     as of each Subsequent Sales Date, neither the Depositor
        nor Seller shall be insolvent, nor will either of them be made insolvent
        by such transfer;

                (xi)    the Funding Period shall not have ended; and

                (xii)   the Depositor and Seller each shall have delivered to
        the Master Servicer and the Trustee an Officer's Certificate confirming
        the satisfaction of each condition precedent specified in this paragraph
        (b) and in the related Subsequent Sales Agreement and opinions of
        counsel with respect to corporate, bankruptcy and tax matters relating
        to the transfer of Subsequent Mortgage Loans in the forms substantially
        similar to those delivered on the Closing Date.

            (c) Pursuant to Section 2.6(b) hereof, the Trustee shall remit
on each Subsequent Sales Date to or upon the order of the Depositor from the
Pre-Funding Account the amount specified by the Master Servicer only upon the
Trustee's receipt of:

                (i)     a fully executed Subsequent Sales Agreement;

                (ii)    the two Officer's Certificates required by Section
        2.6(b) hereof;

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<PAGE>

                (iii)   an Opinion or Opinions of Counsel from each of the
        Depositor and Seller required by Section 2.6(b);

                (iv)    a letter from each Rating Agency on the final Subsequent
        Sale Date confirming the condition provided in Section 2.6(b);

                (v)     a letter from an independent accountant as required by
        Section 2.6(b); and

                (vi)    the written instruction from the Master Servicer setting
        forth the amounts to be paid as required by Section 2.6(b) hereof. The
        Trustee may rely and shall be protected in relying on all such Officer's
        Certificates as evidencing full compliance with all conditions precedent
        specified in Section 2.6(b), without any further duty of inquiry with
        respect thereto.

            (d) On each Subsequent Sales Date and on the Determination Date
immediately following the end of the Funding Period, the Master Servicer shall
determine:

                (i)     the amount and correct disposition of the Pre-Funded
        Amount, and

                (ii)    any other necessary matters in connection with the
        administration of the Pre-Funding Account. If any amounts are released
        as a result of an error in calculation to the Holders or the Depositor
        from the Pre-Funding Account, the Depositor shall immediately repay such
        amounts to the Master Servicer.

            (e) The Depositor shall deliver (or cause to be delivered) to
the Master Servicer for deposit in the Master Servicer Custodial Account on the
related Servicer Deposit Date all principal and interest due in respect of such
Subsequent Mortgage Loans after the related Subsequent Cut Off Date.]

        Section 2.7     [Pre-Funding Account.

            (a) The Trustee shall establish and maintain the Pre-Funding Account
to be held in trust for the benefit of the Certificateholders. The Pre-Funding
Account shall be an Eligible Account. On the Closing Date, the Depositor will
cause to be deposited in the Pre-Funding Account the Original Pre-Funded Amount.

            (b) On any Subsequent Sales Date, the Master Servicer shall instruct
the Trustee, with a copy to the Depositor,

                (i)     to withdraw from the Pre-Funded Amount in the
        Pre-Funding Account an amount equal to [___]% of the aggregate Stated
        Principal Balances of the Subsequent Mortgage Loans as of the applicable
        Subsequent Cut Off Date sold to the Trust on such Subsequent Sales Date,
        and

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<PAGE>

                (ii)    to pay such amounts to or upon the order of the
        Depositor upon satisfaction of the conditions set forth in Section
        2.6(c) hereof with respect thereto. In no event shall the Trustee
        withdraw from the Pre-Funding Account an amount in excess of the
        Original Pre-Funded Amount.

            (c) On the Business Day immediately following the end of the
Funding Period, the Master Servicer shall instruct the Trustee to transfer the
Pre-Funded Amount to the Distribution Account for distribution to the Holders of
the Certificates in accordance with Article 4. The Pre-Funded Amount shall not
be invested during the time such Pre-Funded Amount is held in the Distribution
Account.

            (d) The Pre-Funding Account shall not be an asset of any REMIC
created pursuant to this Agreement.]

                                   ARTICLE 3

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

        Section 3.1     Servicer to Service Mortgage Loans.

        For and on behalf of the Certificateholders, the Servicer shall service
and administer the Mortgage Loans in accordance with the terms of this Agreement
and [customary and usual standards of practice of prudent mortgage loan
servicers.] 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 3.2 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 Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Servicer shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests in mortgage loans in its own portfolio
in any claim, proceeding or litigation regarding a Mortgage Loan, provided,
however, that unless (x) the Mortgagor is in default with respect to the
Mortgage Loan, or such default is, in the judgment of the Servicer, imminent or
(y) in the absence of default or imminent default, any such waiver,
modification, postponement or indulgence would not cause any REMIC created
hereunder to be disqualified or result in the imposition of any tax under
Section 860F(a) or Section 860G(d) of the Code, the Servicer may not permit any
modification with respect to any Mortgage Loan. Without limiting the generality
of the foregoing, the Servicer, in its own name or in the name of

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<PAGE>

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 either or
both of them as are necessary or appropriate to enable the Servicer to service
and administer the Mortgage Loans to the extent that the Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee shall
promptly execute such documents and deliver them to the Servicer.

        In accordance with the standards of the preceding paragraph, the
Servicer shall make Servicing Advances 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 3.6 hereof, and further as provided in Section
3.8 hereof. The 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 purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balances of the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.

        Upon request of the Servicer, the Trustee and the Custodian shall
furnish the Servicer with any powers of attorney necessary or appropriate to
enable Servicer to execute in the name of the Trustee or the Custodian, as
applicable, all documents reasonably required to perform the servicing functions
described in this Article 3.

        Section 3.2     Subservicing; Enforcement of the Obligations of
                        Servicers.

            (a) The Servicer may arrange for the subservicing of any Mortgage
Loan by a Subservicer pursuant to a subservicing agreement; provided, however,
that 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. Unless the
context otherwise requires, references in this Agreement to actions taken or to
be taken by the Servicer in servicing the Mortgage Loans include actions taken
or to be taken by a Subservicer on behalf of the Servicer. 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. All

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<PAGE>

actions of 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.

            (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.

        Section 3.3     Rights of the Depositor and the Trustee in Respect of
                        the Servicer.

        The Depositor may, but is not obligated to, enforce the obligations of
the Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights of
the Servicer hereunder; provided that the Servicer shall not be relieved of any
of its obligations hereunder by virtue of such performance by the Depositor or
its designee. Neither the Trustee nor the Depositor shall have any
responsibility or liability for any action or failure to act by the Servicer nor
shall the Trustee or the Depositor be obligated to supervise the performance of
the Servicer hereunder or otherwise.

        Section 3.4     Master Servicer to Act as Servicer.

        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 Master
Servicer or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the Master
Servicer shall not be (i) liable for losses of the Servicer pursuant to Section
3.9 hereof or any acts or omissions of the predecessor Servicer hereunder, (ii)
obligated to make Advances if it is prohibited from doing so by applicable law,
(iii) obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder including, but not limited to, repurchases or substitutions of
Mortgage Loans pursuant to Section 2.2 or 2.3 hereof, (iv) responsible for
expenses of the Servicer pursuant to Section 2.3 hereof or (v) deemed to have
made any representations and warranties of the Servicer hereunder). If the
Servicer shall for any reason no longer be the Servicer (including by reason of
any Event of Default), the Master Servicer or its successor shall succeed to any
rights and obligations of the Servicer under each subservicing agreement.

        The Servicer shall, upon request of the Master Servicer, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement or substitute subservicing agreement and
the Mortgage Loans then being serviced thereunder and an accounting of amounts
collected or held by it and otherwise use its best efforts to effect the orderly
and efficient transfer of the substitute subservicing agreement to the assuming
party.

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<PAGE>

        Section 3.5     Collection of Mortgage Loan Payments; Collection
                        Account; Distribution Account.

            (a) The Servicer shall make [reasonable] efforts in accordance with
the [customary and usual standards of practice of prudent mortgage servicers] 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.
Consistent with the foregoing, and subject to the provisions of Section 3.1
hereof, the Servicer may in its discretion (i) waive any late payment charge or
penalty interest and (ii) extend the due dates for payments due on a Mortgage
Note for a period not greater than 180 days; provided, however, that the
Servicer cannot extend the maturity of any such Mortgage Loan past the date on
which the final payment is due on the latest maturing Mortgage Loan as of the
Cut Off Date. In the event of any such arrangement, any P&I Advance required to
be made by the Servicer on the related Mortgage Loan in accordance with the
provisions hereof [(i) with respect to the Prepayment Period in which such
arrangement became effective shall be made in accordance with the amortization
schedule of such Mortgage Loan without giving effect to the modification thereof
by reason of such arrangements and (ii) with respect to any Prepayment Period
thereafter shall be made in accordance with the amortization schedule of such
Mortgage Loan as so modified.] 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.

        The Servicer shall comply with the provisions of Section 3.21 hereof
with respect to each Prepayment Penalty related to the Mortgage Loans.

            (b) The Servicer shall establish and maintain a Collection Account
into which the Servicer shall deposit or cause to be deposited as soon as
practicable following receipt but in no event no later than two Business Days
after receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by Subservicers or received by it in respect
of Mortgage Loans subsequent to the Cut Off Date (other than in respect of
principal and interest due on the Mortgage Loans on or before the Cut Off Date)
and the following amounts required to be deposited hereunder:

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

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

                (iii)   each Prepayment Penalty required to be deposited by the
        Servicer hereunder;

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<PAGE>

                (iv)    all Insurance Proceeds and 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;

                (v)     any amount required to be deposited by the Servicer
        pursuant to Section 3.5(e) in connection with any losses on Permitted
        Investments;

                (vi)    any amounts required to be deposited by the Servicer
        pursuant to Section 3.9(b) and (d) hereof, and in respect of net monthly
        rental income from REO Property pursuant to Section 3.11 hereof;

                (vii)   all Substitution Adjustment Amounts; and

                (viii)  all P&I Advances made by the Servicer pursuant to
        Section 3.19 hereof.

        In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Servicer shall cause funds to be
deposited into the Collection Account in an amount required to cause an amount
of interest to be paid with respect to such Mortgage Loan equal to the amount of
interest that has accrued on such Mortgage Loan from the preceding Due Date at
the related Mortgage Rate (net of the Servicing Fee Rate) on such date.

        The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges, assumption
fees or amounts attributable to reimbursements of Advances, if collected, need
not be remitted by the Servicer. In the event that the Servicer shall remit any
amount not required to be remitted, it may at any time withdraw or direct the
institution maintaining the Collection Account to withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding. Such
withdrawal or direction may be accomplished by delivering written notice thereof
to the Trustee or such other institution maintaining the Collection Account
which describes the amounts deposited in error in the Collection Account. 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 3.8.

            (c) [The Master Servicer shall establish and maintain, for the
benefit of Certificateholders, a Master Servicer Custodial Account. On each
Servicer Deposit Date, the Servicer shall remit to the Master Servicer for
deposit in the Master Servicer Custodial Account, the Available Funds for such
date. In addition, the Master Servicer shall deposit any amounts pursuant to
Section 3.5(e) in connection with losses on Permitted Investments in the Master
Servicer Custodial Account.]

            (d) The Trustee shall establish and maintain, on behalf of
Certificateholders, the Distribution Account. On each Distribution Account
Deposit Date, the [Master] Servicer shall remit to the Trustee for deposit in
the Distribution Account the Available Funds for such date. In

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<PAGE>

addition, the Trustee shall deposit any amounts received from the [Master]
Servicer pursuant to Section 3.5(e) in connection with losses on permitted
Investments in the Distribution Account.

        In the event that the Servicer [or Master Servicer] shall remit any
amount not required to be remitted, it may at any time direct the Trustee to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering an
Officer's Certificate to the Trustee which describes the amounts deposited in
error in the Distribution Account. All funds deposited in the Distribution
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 3.8. In no event shall the Trustee incur liability for withdrawals from
the Distribution Account at the direction of the Servicer.

            (e) The institutions at which the Collection Account, [Master
Servicer Custodial Account] and Distribution Account are maintained shall invest
funds as directed by the [Master] Servicer in Permitted Investments which in
each case shall mature not later than (i) in the case of the Collection Account,
the second Business Day next preceding the related Servicer Deposit Date (except
that if such Permitted Investment is an obligation of the institution that
maintains such account, then such Permitted Investment shall mature not later
than the Business Day next preceding such Servicer Deposit Date), [(ii) in the
case of the Master Servicer Custodial Account, the second Business Day next
preceding the related Distribution Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
account, then such Permitted Investment shall mature not later than the Business
Day next preceding such Distribution Account Deposit Date),] and (iii) in the
case of the Distribution Account, the Business Day next preceding the related
Distribution Date (except that if such Permitted Investment is an obligation of
the institution that maintains such fund or account, 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 of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any such
investment of funds on deposit in the Collection Account shall be for the
benefit of the Servicer as servicing compensation and all income and gain net of
any losses realized from any such investment of funds on deposit in the [Master
Servicer Custodial Account AND] the Distribution Account shall be for the
benefit of the [Master] Servicer. The amount of any realized losses in the
Collection Account in respect of any such investments shall promptly be
deposited by the Servicer in the Collection Account and the amount of any
realized losses in the [Master Servicer Custodial Account and] the Distribution
Account in respect of any such investments shall promptly be deposited therein
by the [Master] Servicer. The Trustee in its fiduciary capacity shall not be
liable for the amount of any loss incurred in respect of any investment or lack
of investment of funds held in the Collection Account or the [Master Servicer
Custodial Account] and made in accordance with this Section 3.5.

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        Section 3.6     Collection of Taxes, Assessments and Similar Items;
                        Escrow Accounts.

            (a) To the extent required by the related Mortgage Note and not
violative of current law, 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.

            (b) 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 3.1 hereof (with respect to taxes and assessments and insurance
premiums) and 3.9 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums 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 9.1 hereof. The
Escrow Accounts shall not be a part of the Trust Fund.

            (c) The Servicer shall advance, as Servicing Advances, any payments
referred to in Section 3.6(a) that are not timely paid by the Mortgagors on the
date when the tax, premium or other cost for which such payment is intended is
due, provided, however that the Servicer shall not be required to make any such
advance if such advance, in the good faith judgment of the Servicer, would
constitute a Nonrecoverable Advance.

        Section 3.7     Access to Certain Documentation and Information
                        Regarding the Mortgage Loans.

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

        Upon reasonable advance notice in writing, the Servicer will provide to
each Certificateholder which 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.

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<PAGE>

        Section 3.8     Permitted Withdrawals from the Collection Account,
                        [Master Servicer Custodial Account] and Distribution
                        Account.

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

                (i)     to the extent not previously retained by the Servicer,
        to pay to the Servicer the servicing compensation to which it is
        entitled pursuant to Section 3.14, and earnings on or investment income
        with respect to funds in or credited to the Collection Account as
        additional servicing compensation;

                (ii)    to the extent not previously retained by the Servicer,
        to reimburse the Servicer for unreimbursed Advances made by it, such
        right of reimbursement pursuant to this subclause (ii) being limited to
        amounts received on the Mortgage Loan(s) in respect of which any such
        Advance was made;

                (iii)   to reimburse the Servicer for any Nonrecoverable Advance
        previously made;

                (iv)    to reimburse the Servicer for Insured Expenses from the
        related Insurance Proceeds;

                (v)     to reimburse the Servicer for unpaid Servicing Fees as
        provided in Section 3.11 hereof;

                (vi)    to pay to the purchaser, with respect to each Mortgage
        Loan or property acquired in respect thereof that has been purchased
        pursuant to Section 2.2, 2.3 or 3.11, all amounts received thereon after
        the date of such purchase;

                (vii)   to reimburse the [Master Servicer,] the Servicer or the
        Depositor for expenses incurred by any of them and reimbursable pursuant
        to Section 6.3 hereof;

                (viii)  [to pay to the Master Servicer any accrued compensation
        to which it is entitled hereunder (and any amount to which it is
        entitled to reimbursement herewith)];

                (ix)    to withdraw any amount deposited in the Collection
        Account and not required to be deposited therein;

                (x)     on or prior to each Servicer Deposit Date, to withdraw
        an amount equal to the related Available Funds [and remit such amount to
        the Master Servicer for deposit in the Master Servicer Custodial
        Account]; and

                (xi)    to clear and terminate the Collection Account upon
        termination of this Agreement pursuant to Section 9.1 hereof.

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<PAGE>

        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 pursuant to such subclauses (i), (ii), (iv), (v) and
(vi). Prior to making any withdrawal from the Collection Account pursuant to
subclause (iii), the Servicer shall deliver to the [Master] Servicer an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loan(s), and their respective portions of such
Nonrecoverable Advance.

            (b) [The Master Servicer may from time to time make withdrawals from
the Master Servicer Custodial Account for the following purposes:

                (i)     to pay to itself any compensation due it hereunder;

                (ii)    to pay to itself earnings or investment income with
        respect to funds in the Master Servicer Custodial Account;

                (iii)   on each Distribution Account Deposit Date, to withdraw
        the Available Funds for such date and remit such amount to the Trustee
        for deposit in the Distribution Account; and

                (iv)    to clear and terminate the Master Servicer Custodial
        Account upon termination of the Agreement pursuant to Section 9.1
        hereof.]

            (c) The Trustee shall withdraw funds from the Distribution Account
for distributions to Certificateholders in the manner specified in this
Agreement. In addition, the Trustee may prior to making the distribution
pursuant to Section 4.1 from time to time make withdrawals from the Distribution
Account for the following purposes:

                (i)     to pay to itself the Trustee Fee for the related
        Distribution Date (allocated pro rata by Group, if applicable);

                (ii)    [to pay to the Master Servicer earnings on or investment
        income with respect to funds in the Distribution Account;]

                (iii)   to withdraw and return to the Servicer [or Master
        Servicer] any amount deposited in the Distribution Account and not
        required to be deposited therein; and

                (iv)    to clear and terminate the Distribution Account upon
        termination of the Agreement pursuant to Section 9.1 hereof.

        Section 3.9     Maintenance of Hazard Insurance; Maintenance of Primary
                        Insurance Policies.

            (a) 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

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maximum insurable value of the improvements securing such Mortgage Loan; (ii)
the outstanding principal balance of the Mortgage Loan and (iii) the maximum
amount available in the locality of the related Mortgaged Property from insurers
generally acceptable to institutional residential mortgage lenders without
payment of extraordinary premium. Each such policy of standard hazard insurance
shall contain, or have an accompanying endorsement that contains, a standard
mortgagee clause. 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 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 as
Servicing Advances or, if applicable, as Nonrecoverable Advances. 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 least of (i) the original principal
balance of the related Mortgage Loan, (ii) the replacement value of the
improvements which are part of such Mortgaged Property, and (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program.

            (b) In the event that the Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on any or 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 with respect to all of the Mortgage
Loans so covered, 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, 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.

            (c) The Servicer shall not take any action which would result in
non-coverage under any applicable Primary Insurance Policy of any loss which,
but for the actions of the Servicer, would have been covered thereunder. The
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
that is in effect at the date of the initial issuance of the Certificates and

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<PAGE>

is required to be kept in force hereunder unless the replacement Primary
Insurance Policy for such canceled or non-renewed policy is maintained with a
Qualified Insurer.

        The Servicer shall not be required to maintain any Primary Insurance
Policy (i) with respect to any Mortgage Loan with a Loan-to-Value Ratio less
than or equal to [__]% (or such lower Loan-to-Value Ratio as may be provided by
applicable law) as of any date of determination or, based on a new appraisal,
the principal balance of such Mortgage Loan represents [__}% or less of the new
appraised value (or other method of determination as may be provided by
applicable law) or (ii) if maintaining such Primary Insurance Policy is
otherwise prohibited by applicable law.

        The Servicer agrees to effect the timely payment of the premiums on each
Primary Insurance Policy, and such costs not otherwise recoverable shall be
recoverable by the Servicer as Servicing Advances or, if applicable, as
Nonrecoverable Advances.

            (d) In connection with its activities as Servicer of the Mortgage
Loans, the Servicer agrees to present on behalf of itself, the Trustee and
Certificateholders, claims to the insurer under any Primary Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Insurance Policies respecting defaulted
Mortgage Loans. Any amounts collected by the Servicer under any Primary
Insurance Policies shall be deposited in the Collection Account.

        Section 3.10    Enforcement of Due-on-Sale Clauses; Assumption
                        Agreements.

            (a) Except as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Servicer shall to
the extent that it has knowledge of such conveyance enforce any due-on-sale
clause contained in any Mortgage Note or Mortgage, to the extent, in the
Servicer's reasonable judgment, enforcement is permitted under applicable law
and governmental regulations. Notwithstanding the foregoing, the Servicer is not
required to exercise such rights with respect to a Mortgage Loan if the Person
to whom the related Mortgaged Property has been conveyed or is proposed to be
conveyed satisfies the terms and conditions contained in the Mortgage Note and
Mortgage related thereto and the consent of the mortgagee under such Mortgage
Note or Mortgage is not otherwise so required under such Mortgage Note or
Mortgage as a condition to such transfer. In the event that the Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.10(b), to take or enter into an assumption and modification
agreement from or with the person to whom such property has been or is about to
be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, unless prohibited by applicable state law, the Mortgagor remains
liable thereon, provided that the Mortgage Loan shall continue to be covered (if
so covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.10(b), is also authorized
with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted

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<PAGE>

as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
by reason of any transfer or assumption which the Servicer reasonably believes
it is restricted by law from preventing, for any reason whatsoever.

            (b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.10(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer shall prepare and
deliver or cause to be prepared and delivered to the Trustee for signature and
shall direct, in writing, the Trustee to execute the assumption agreement with
the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. In addition, the substitute Mortgagor and the Mortgaged Property
must be acceptable to the Servicer in accordance with its underwriting standards
as then in effect. Together with each such substitution, assumption or other
agreement or instrument delivered to the Trustee for execution by it, the
Servicer shall deliver an Officer's Certificate signed by a Servicing Officer
stating that the requirements of this subsection have been met in connection
therewith. The Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an assumption or substitution of liability
agreement will be retained by the Servicer as additional servicing compensation.

        Section 3.11    Realization Upon Defaulted Mortgage Loans; Repurchase of
                        Certain Mortgage Loans.

            (a) Subject to the limitations set forth in Sections 3.5(a),
3.11(b), 3.11(f), and 3.11(i), the Servicer shall use reasonable efforts 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
advisable and as shall be normal and usual in its general mortgage servicing
activities; provided, however, that the Servicer shall not be required to expend
its own funds in connection with any foreclosure or towards the restoration of
any property unless it shall determine (i) that such restoration and/or
foreclosure will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses

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<PAGE>

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). 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 Liquidation Proceeds
with respect to the related Mortgaged Property, as Servicing Advances or, if
applicable, as Nonrecoverable Advances.

            (b) If the Servicer has actual knowledge that a Mortgaged Property
which the Servicer is contemplating acquiring in foreclosure or by deed in lieu
of foreclosure is located within a one mile radius of any site with material
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and shall proceed
with such in foreclosure or by deed in lieu of foreclosure only if the Servicer
reasonably determines that doing so shall more like than not be in the best
interests of the Trust Fund, considering all relevant factors including such
environmental matters. For the purpose of this Section, actual knowledge of the
Servicer means actual knowledge of a Servicing Officer involved in the servicing
of the relevant Mortgage Loan at the time such knowledge was acquired. Actual
knowledge of the Servicer does not include knowledge imputable by virtue of the
availability of or accessibility to information relating to environmental or
hazardous waste sites or the locations thereof.

            (c) With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders,
provided that the Servicers may cause title to be placed in the name of the
Custodian or the Servicer if the Servicer reasonably determines that such manner
of holding title is required or advisable in order to facilitate the foreclosure
process as to any one or more particular Mortgage Loans. The Trustee's name
shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Servicer shall ensure that the
title to such REO Property references this Agreement and the Trustee's capacity
thereunder. 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, in its
sole discretion, rent or decline to rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Certificateholders for the
period prior to the sale of such REO Property. The Servicer shall prepare for
and deliver to the Trustee a statement with respect to any REO Property that has
been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Collection Account no later
than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding required by Sections 1445 and 6050J of
the Code with respect to foreclosures and abandonments, the tax reporting
required by Section 6050H of the Code with respect to the receipt of mortgage
interest from individuals and any tax reporting required by Section 6050P of the
Code with respect to the cancellation of

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indebtedness by certain financial entities, by preparing such tax and
information returns as may be required, in the form required, and delivering the
same to the Trustee for filing.

            (d) 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 close of the third taxable year after its acquisition by the Trust Fund
unless the Trustee shall have been supplied with an Opinion of Counsel to the
effect that the holding by the Trust Fund of such Mortgaged Property subsequent
to such three-year period will not result in the imposition of taxes on
"prohibited transactions" of any REMIC created hereunder as defined in section
860F of the Code or cause any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
(ii) subject any REMIC created hereunder to the imposition of any federal, state
or local income taxes on the income earned from such Mortgaged Property, unless
the Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.

            (e) In the event of a default on a Mortgage Loan one or more of
whose obligor is not a "United States person," as that term is defined in
Section 7701(a)(30) of the Code, in connection with any foreclosure or
acquisition of a deed in lieu of foreclosure (together, "foreclosure") in
respect of such Mortgage Loan, the Servicer will cause compliance with the
provisions of Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto) necessary to assure that no withholding tax obligation arises with
respect to the proceeds of such foreclosure except to the extent, if any, that
proceeds of such foreclosure are required to be remitted to the obligor on such
Mortgage Loan.

            (f) The decision of the Servicer to foreclose, or to continue the
foreclosure process, on a defaulted Mortgage Loan shall be subject to a
determination by the Servicer that the proceeds of such foreclosure would more
likely than not exceed the costs and expenses of bringing such a proceeding and
liquidating the REO expected to be obtained through such foreclosure. Promptly
upon making any determination in accordance with the preceding sentence not to
foreclose, or to discontinue the foreclosure process, as to any Mortgage Loan,
the Servicer shall deliver to the Master Servicer an Officer's Certificate
signed by a Servicing Officer identifying the Mortgage Loans as to which such
determination has been made (each such Mortgage Loan, upon acceptance of such
Officer's Certificate by the Master Servicer, a "Nonrecoverable Mortgage Loan")
setting forth the basis for such determination in a form acceptable to the
Master Servicer.

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<PAGE>

            (g) The income earned from the management of any REO Properties, net
of reimbursement to the Servicer for expenses incurred (including any property
or other taxes) in connection with such management and net of unreimbursed
Master Servicing Fees, Advances and Servicing Advances, 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 net income
received during any calendar month is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan for such calendar month, such excess shall be considered
to be a partial prepayment of principal of the related Mortgage Loan.

            (h) The proceeds from any liquidation of a Mortgage Loan, as well as
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; second, to reimburse the Servicer for any
unreimbursed Advances; third, to reimburse the Collection Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn by
the Servicer pursuant to Section 3.8(a)(iii) that related to such Mortgage Loan;
fourth, to accrued and unpaid interest (to the extent no Advance has been made
for such amount or any such Advance has been reimbursed) on the Mortgage Loan or
related REO Property, at the Mortgage Rate (net of the Servicing Fee Rate) to
the Due Date occurring in the month in which such amounts are required to be
distributed; and fifth, as a recovery of principal of the Mortgage Loan. Excess
Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will be
retained by the Servicer as additional servicing compensation pursuant to
Section 3.14.

            (i) Notwithstanding any provision hereof, in connection with the
foreclosure or other conversion of defaulted assets, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable in its
sole discretion, and as shall be normal and usual in its general mortgage
servicing activities. In connection therewith, the [Master Servicer] shall have
the sole discretion to determine whenever an immediate sale of any REO or
Nonrecoverable Mortgage Loan, or continued management of such REO or
Nonrecoverable Mortgage Loan, is in the best interest of certificateholders to
maximize recoveries. Any such disposition (including by means of a "whole loan
sale") shall be conducted by the Servicer on terms and conditions approved by
the Master Servicer in its sole discretion. The foregoing notwithstanding, the
Master Servicer shall not approve any such disposition that would (i) result in
the imposition of the tax on "prohibited transactions" on the Trust Fund, as
defined in Sections 860F(a)(2) of the Code, or (ii) cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding.

            (j) The [Master Servicer], in its sole discretion, shall have the
right to purchase for its own account from the Trust Fund any Mortgage Loan
which is 91 days or more Delinquent at a price equal to the Purchase Price;
provided however, that for any such Mortgage Loan that is a Nonrecoverable
Mortgage Loan, such purchase shall be at a price equal to the Nonrecoverable
Mortgage Loan Purchase Price, and provided further that any REO Property may be
disposed of

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<PAGE>

pursuant to the preceding Section 3.11(i). The total price calculated pursuant
to the preceding sentence for any Mortgage Loan purchased hereunder shall be
deposited in the Collection Account and the Trustee, upon receipt of the Request
for Release from the Servicer in the form of Exhibit J hereto, shall release or
cause to be released to the purchaser of such Mortgage Loan the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment
prepared by the purchaser of such Mortgage Loan, in each case without recourse,
as shall be necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan
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 purchaser of such
Mortgage Loan 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.

        Section 3.12    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 immediately notify the Trustee by
delivering, or causing to be delivered a Request for Release substantially in
the form of Exhibit J. Upon receipt of such request, the Trustee shall or shall
cause the Custodian to promptly release the related Mortgage File to the
Servicer, and the Trustee shall at the Servicer's 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 as provided by the Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. In lieu of the document execution
process described in the preceding two sentences, the Servicer shall be
authorized to execute each such Request for Release, request for reconveyance,
deed of reconveyance, and release, satisfaction of mortgage, or such instrument
releasing the lien of the Mortgage as attorney in fact for the Trustee (or the
Custodian, if applicable) pursuant to the powers of attorney described in
Section 3.1. Expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the related 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 shall,
upon delivery to the Trustee of a Request for Release in the form of Exhibit K
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
Custodian 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, in which case the Servicer shall deliver to the Trustee a
Request for Release in the form of Exhibit L, signed by a Servicing Officer.

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<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, 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.

        Section 3.13    Documents Records and Funds in Possession of Servicer to
                        be Held for the Trustee.

        Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee, or the Custodian on its behalf, all documents and
instruments described in Section 2.1(b), and shall hold as Servicer and agent of
the Trustee all other documents, in respect of a Mortgage Loan coming into the
possession of the Servicer from time to time and shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan. All Mortgage Files and funds collected or held by, or under the
control of, the Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the 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 Trustee, subject to the applicable
provisions of this Agreement. The Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Collection Account, Distribution Account or 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 setoff against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that the
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Servicer under this Agreement.

        Section 3.14    Servicing Compensation.

        As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account an amount equal to
the Servicing Fee for each Mortgage Loan, provided that the aggregate Servicing
Fee with respect to any Distribution Date shall be reduced (i) by the amount of
any Compensating Interest paid by the Servicer with respect to such Distribution
Date, and (ii) with respect to the first Distribution Date, an amount equal to
any amount to be deposited into the Distribution Account by the Depositor
pursuant to Section 2.1(a) and not so deposited.

        Additional servicing compensation in the form of (i) Prepayment Interest
Excess and all income and gain net of any losses realized from Permitted
Investments and (ii) assumption fees, late payment charges, and other receipts
not required to be deposited to the Collection Account

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<PAGE>

pursuant to Section 3.5 hereof, including any Excess Proceeds, shall be retained
by the Servicer as additional servicing compensation. The Servicer and [Master
Servicer] shall be required to pay all expenses incurred by them respectively in
connection with their respective activities hereunder to the extent such
expenses do not constitute Advances or Nonrecoverable Advances as defined in
this Agreement and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.

        Section 3.15    Access to Certain Documentation.

        The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate 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 designated by the Servicer. 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.

        Section 3.16    Annual Statement as to Compliance.

        The Servicer shall deliver to the Depositor and the Trustee on or before
120 days after the end of the Servicer's fiscal year, commencing with its 200__
fiscal year, an Officer's Certificate stating, as to the signer thereof, that
(i) a review of the activities of the Servicer during the preceding fiscal year
and of the performance of the Servicer under this Agreement has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all of its material obligations
under this Agreement throughout such year, or, if there has been a material
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. The Trustee shall
forward a copy of each such statement to each Rating Agency.

        Section 3.17    Annual Independent Public Accountants' Servicing
                        Statement; Financial Statements.

        On or before 120 days after the end of the Servicer's fiscal year,
commencing with its 200__ fiscal year, the Servicer at its expense shall cause a
nationally or regionally recognized firm of independent public accountants (who
may also render other services to the Servicer, the Depositor or any affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trustee and the Depositor to the
effect that such firm has examined certain documents and records relating to the
servicing of the Mortgage Loans under this Agreement or of mortgage loans under
pooling and servicing agreements substantially similar to this Agreement (such
statement to have attached thereto a schedule setting forth the pooling and
servicing agreements covered thereby) substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or alternatively, if the
[Master Servicer] has so

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<PAGE>

elected, the Audit Program for Mortgages serviced for FNMA and FHLMC, and
setting forth such firm's conclusions relating thereto in accordance with the
applicable attestation program or audit program. In rendering such statement,
such firm may rely, as to matters relating to direct servicing of mortgage loans
by Subservicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for FNMA and FHLMC
(rendered within one year of such statement) of independent public accountants
with respect to the related Subservicer. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request at the Servicer's
expense, provided such statement is delivered by the Servicer to the Trustee.

        Section 3.18    Errors and Omissions Insurance; Fidelity Bonds.

        The Servicer shall for so long as it acts as 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. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for persons performing servicing
for mortgage loans purchased by FNMA or FHLMC. In the event that any such policy
or bond ceases to be in effect, the Servicer shall 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.

        Section 3.19    Advances.

        The Servicer shall determine on or before each Determination Date
whether it is required to make a P&I Advance pursuant to the definition thereof.
If the Servicer determines it is required to make a P&I Advance, it shall,
before the Distribution Account Deposit Date, deposit into the [Master Servicer]
Custodial Account an amount equal to the P&I Advance. The Servicer shall be
entitled to be reimbursed for all P&I Advances of its own funds made pursuant to
this Section as provided in Section 3.8 hereof. The obligation to make P&I
Advances with respect to any Mortgage Loan shall continue if such Mortgage Loan
has been foreclosed or otherwise terminated and the related Mortgaged Property
has not been liquidated, provided that in no event shall the Servicer be
required to make any proposed Advance that, if made, would in the good faith
judgment of the Servicer to be a Nonrecoverable Advance.

        The Servicer shall deliver to the [Master] Servicer on the related
Servicer Deposit Date an Officer's Certificate of a Servicing Officer indicating
the amount of any proposed Advance that, if made, would in the good faith
judgment of the Servicer be a Nonrecoverable Advance.

        Section 3.20    [Advance Facility.

            (a) The Servicer is hereby authorized to enter into any facility
with any Person (any such Person, an "Advance Facility Counterparty") which
provides that the Servicer may pledge or sell its rights to receive
reimbursement of Advances pursuant to this Agreement ("Advance

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Reimbursement Rights") pursuant to credit facilities, repurchase facilities, or
similar facilities providing liquidity for the funding of Advances, including
facilities providing that such Advance Facility Counterparty may make all or a
portion of the Advances (any such facility, an "Advance Facility"), although no
Advance Facility shall reduce or otherwise affect the Servicer's obligations to
fund such Advances. If so required pursuant to the terms of an Advance Facility,
to the extent that an Advance Facility Counterparty makes all or a portion of
any Advance and the Advance Facility Counterparty and the Servicer provide the
Trustee with notice acknowledged by the Servicer that such Advancing Servicer is
entitled to reimbursement, such Advancing Servicer shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided.
Such notice from the Advance Facility Counterparty and the Servicer must specify
the amount of the reimbursement and must specify which Section of this Agreement
permits the Advance to be reimbursed. The Trustee shall be entitled to rely
without independent investigation on the Advance Facility Counterparty's
statement with respect to the amount of any reimbursement pursuant to this
Section 3.20 and with respect to the Advance Facility Counterparty's statement
with respect to the Section of this Agreement permits the Advance to be
reimbursed. An Advance Facility Counterparty whose obligations are limited to
the making of Advances will not be deemed to be a Subservicer under this
Agreement.

            (b) If so required pursuant to the terms of an Advance Facility, the
Servicer may direct, and if so directed the Trustee is hereby authorized to and
shall pay to the Advance Facility Counterparty (i) reimbursements for Advances;
and (ii) all or such portion of the Servicing Fee as may be so specified in the
Advance Facility, that would otherwise be payable to the Servicer pursuant to
this Agreement or the Servicing Agreement.

            (c) Upon request of the Servicer, the Trustee agrees to execute such
acknowledgments, certificates, and other documents recognizing the interests of
any Advance Facility Counterparty in such Advance Reimbursement Rights and
Servicing Fees as the Servicer may cause to be made subject to Advance
Facilities pursuant to this Section 3.20, and such other documents in connection
with such Advance Facilities as may be reasonably requested from time to time by
any Advance Facility Counterparty. The implementation of the arrangement
described in this Section shall not require the consent of Certificateholders or
the Trustee.]

        Section 3.21    Prepayment Penalties.

        The Servicer will not waive any Prepayment Penalty or part of a
Prepayment Penalty unless (i) such waiver would, in the reasonable judgment of
the Servicer, maximize recovery of total net proceeds taking into account the
value of such Prepayment Penalty and related Mortgage Loan and, if such waiver
is made in connection with a refinancing of the related Mortgage Loan, such
refinancing is related to a default or a reasonably foreseeable default; (ii)
the related Mortgage Loan indebtedness has been accelerated; or (iii) the
Servicer obtains an Opinion of Counsel, which may be in-house counsel for the
Servicer, opining that the Prepayment Penalty is not legally enforceable in the
circumstances under which the related prepayment occurs. 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 foreseen default.

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                                   ARTICLE 4

                                  DISTRIBUTIONS

        Section 4.1     Priorities of Distribution.

            (a) On each Distribution Date, the Trustee shall make the following
distributions from the Distribution Account of an amount equal to the Interest
Funds for each Group in the following order of priority:

                (i)     from the Interest Funds for each Group, to the related
        Senior Certificates, the Current Interest and any Interest Carry Forward
        Amount for the such Certificates (or, in the case of the Class [___]
        Certificates and Class [___] Certificates, the related Allocable Portion
        thereof); provided, however, that any shortfall in available amounts in
        respect of each Group shall be applied, pro rata, among the Senior
        Certificates of such Group; and

                (ii)    any remaining amounts from the Interest Funds for Group
        I, Group II and Group III shall be combined and distributed pursuant to
        Section 4.1(b) hereof.

            (b) On each Distribution Date, the Trustee shall apply all amounts
remaining pursuant to Section 4.1(a)(ii) in the following order of priority:

                (i)     to the Class M-[___] Certificates, the Current Interest
        thereon;

                (ii)    to the Class M-[___] Certificates, Current Interest
        thereon;

                (iii)   to the Class B Certificates, Current Interest thereon;

                (iv)    to the Class [___] Certificates, Current Interest
        thereon; and

                (v)     any remaining amounts pursuant to Section 4.1(g) hereof.

            (c) On each Distribution Date, the Trustee shall make the following
distributions from the Distribution Account of an amount equal to the Principal
Distribution Amount for each Group as follows:

                (i)     From the Principal Distribution Amount for Group I, in
        an amount up to the Senior Principal Distribution Amount for such Group
        as follows: (x) the Priority Principal Distribution Amount to the Class
        AF-[___] Certificates until the Class Certificate Balance thereof has
        been reduced to zero, and (y) the balance of the Senior Principal
        Distribution Amount for Group I sequentially to the Class AF-[___]
        Certificates, in that order, so that no such distribution pursuant to
        this clause (y) will be made to any such Class until the Certificate
        Principal Balances of all Group I Class A Certificates with a lower
        numeral designation shall have been reduced to zero; provided,

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        however, that, on any Distribution Date on or after the Credit Support
        Depletion Date, the Senior Principal Distribution Amount for Group I
        will be distributed pro rata and not sequentially to the Group I Class A
        Certificates;

                (ii)    From the Principal Distribution Amount for Group II, an
        amount up to the Senior Principal Distribution Amount for such Group
        shall be distributed to the Class AV-__ Certificates until the Class
        Certificate Balance thereof has been reduced to zero;

                (iii)   Reserved.

                (iv)    In the event the Certificate Principal Balance of one or
        more of the (A) Group I Class A Certificates, or the (B) the Group II
        Class A Certificates has been reduced to zero, on such Distribution Date
        and each Distribution Date thereafter principal distributions otherwise
        distributable to such retired Certificates will be applied to the
        remaining Senior Certificates related to the other Mortgage Loan Groups,
        pro rata, on the basis of their Class Certificate Balances (after giving
        effect to the distributions described in this Section 4.1(c)). Any such
        distributions in respect of the Group I Class A Certificates will be
        distributed to such Classes in the manner provided in the first
        subparagraph of this subsection.

            (d) On each Distribution Date, the Trustee shall distribute the
Principal Distribution Amount for all Groups remaining after distributions
pursuant to Section 4.1(c) in the following order of priority:

                (i)     to the Class M-__ Certificates, the Class M-__ Principal
        Distribution Amount, until the Class Certificate Balance thereof has
        been reduced to zero;

                (ii)    to the Class M-__ Certificates, the Class M-__ Principal
        Distribution Amount, until the Class Certificate Balance thereof has
        been reduced to zero; and

                (iii)   to the Class B Certificates, the Class B Principal
        Distribution Amount, until the Class Certificate Balance thereof has
        been reduced to zero.

            (e) Notwithstanding Section 4.1(c) and (d) hereof, before the
Stepdown Date or if a Trigger Event is in effect on any Distribution Date each
Principal Distribution Amount shall be distributed in the following order of
priority:

                (i)     to the related Class A Certificates (in the case of
        Group I, in the manner described in Section 4.1(c)) until the
        Certificate Principal Balance of such Class A Certificates has been
        reduced to zero;

                (ii)    after the Certificate Principal Balance of the Class A
        Certificates has been reduced to zero, the remaining combined Principal
        Distribution Amounts shall be distributed to the Class M-__ Certificates
        until the Class Certificate Balance of the Class M-__ Certificates has
        been reduced to zero;

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                (iii)   after the Class Certificate Balance of the Class M-__
        Certificates has been reduced to zero, the remaining combined Principal
        Distribution Amounts shall be distributed to the Class M-__ Certificates
        until the Class Certificate Balance of the Class M-__ Certificates has
        been reduced to zero, and

                (iv)    after the Class Certificate Balance of the Class M-__
        Certificates has been reduced to zero, the remaining combined Principal
        Distribution Amounts shall be distributed to the Class B Certificates
        until the Class Certificate Balance of the Class B Certificates has been
        reduced to zero.

            (F) [On each Distribution Date, the Trustee shall distribute Pledged
Prepayment Penalties for such Distribution Date in accordance with the
priorities set forth in clauses (xv) through (xviii) of Section 4.1(g) hereof
(without regard to references to the Basis Risk Reserve Fund).]

            (g) On each Distribution Date, the Trustee shall make the following
distributions from the Distribution Account of any remaining amounts pursuant to
Sections 4.1(b)(v) hereof, [together with any Net Pledged Prepayment Penalties
for such Distribution Date,] in the following order of priority:

                (i)     on each of the first three Distribution Dates only, to
                        the Basis Risk Reserve Fund, any Basis Risk Payment for
                        such date;

                (ii)    on each of the first three Distribution Dates only, from
                        and to the extent of amounts held in the Basis Risk
                        Reserve Fund, to the Class A Certificates, on a pro rata
                        basis any applicable Cap Carryover Amount;

                (iii)   on each of the first three Distribution Dates only, from
                        and to the extent of amounts held in the Basis Risk
                        Reserve Fund, to the Class M-__ Certificates, any
                        applicable Cap Carryover Amount;

                (iv)    on each of the first three Distribution Dates only, from
                        and to the extent of amounts held in the Basis Risk
                        Reserve Fund, to the Class M-__ Certificates, any
                        applicable Cap Carryover Amount;

                (v)     on each of the first three Distribution Dates only, from
                        and to the extent of amounts held in the Basis Risk
                        Reserve Fund, to the Class B Certificates, any
                        applicable Cap Carryover Amount;

                (vi)    the related Principal Percentage of the Extra Principal
                        Distribution Amount will be added to the Principal
                        Distribution Amount for Group I; and the Principal
                        Percentage for Group II of the Extra Principal
                        Distribution Amount will be added to the Principal
                        Distribution Amount for Group II;

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                (vii)   to the Class [___] Certificates, any related Interest
                        Carry Forward Amount;

                (viii)  to the Class M-__ Certificates, any related Interest
        Carry Forward Amount;

                (ix)    to the Class M-__ Certificates, any related Unpaid
                        Realized Loss Amount;

                (x)     to the Class M-__ Certificates, any related Interest
        Carry Forward Amount;

                (xi)    to the Class M-__ Certificates, any related Unpaid
                        Realized Loss Amount;

                (xii)   to the Class B Certificates, any related Interest Carry
                        Forward Amount;

                (xiii)  to the Class B Certificates, any related Unpaid Realized
                        Loss Amount;

                (xiv)   to the Basis Risk Reserve Fund, any Basis Risk Payment
                        for such date;

                (xv)    on any Distribution Date on or before the Distribution
                        Date on which the Class Certificate Balance thereof has
                        been reduced to zero, from and to the extent of amounts
                        held in the Basis Risk Reserve Fund, to the Class A
                        Certificates, on a pro rata basis any applicable Cap
                        Carryover Amount;

                (xvi)   on any Distribution Date on or before the Distribution
                        Date on which the Class Certificate Balance of the Class
                        M-__ Certificates has been reduced to zero, from and to
                        the extent of amounts held in the Basis Risk Reserve
                        Fund, to the Class M-__ Certificates, any applicable Cap
                        Carryover Amount;

                (xvii)  on any Distribution Date on or before the Distribution
                        Date on which the Class Certificate Balance of the Class
                        M-__ Certificates has been reduced to zero, from and to
                        the extent of amounts held in the Basis Risk Reserve
                        Fund, to the Class M-__ Certificates, any applicable Cap
                        Carryover Amount;

                (xviii) on any Distribution Date on or before the Distribution
                        Date on which the Class Certificate Balance of the Class
                        B Certificates has been reduced to zero, from and to the
                        extent of amounts held in the Basis Risk Reserve Fund,
                        to the Class B Certificates, any applicable Cap
                        Carryover Amount;

                (xix)   pro rata to the other Certificates to the extent of any
                        Unpaid Realized Loss Amount; and

                (xx)    the remainder pursuant to Section 4.1(i) hereof.

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            (h) On each Distribution Date, the Trustee shall distribute an
amount equal to the Class __ Prepayment Amount for such Distribution Date to the
Class __ Certificates.

            (i) On each Distribution Date, the Trustee shall distribute to the
Class C Certificates any remaining amounts pursuant to Section 4.1(g)(xx)
hereof, to the extent of the sum of the interest accrued thereon at the rate
described in Schedule III and that has not been distributed thereon on prior
Distribution Dates (amounts deposited in the Basis Risk Reserve Fund under
Section 4.1(g)(xiv) are treated as distributed for this purpose), amounts
representing earnings on the Basis Risk Reserve Fund, and any amounts released
from the Basis Risk Reserve Fund.

            (j) On each Distribution Date, to the extent the Servicer or Master
Servicer shall have collected any Subsequent Recoveries during the related
Prepayment Period, the Trustee shall apply such amounts as follows:

                first, sequentially, in order of priority, to each Class of
                Subordinate Certificates then outstanding, in reduction of any
                amounts previously applied to such Class to reduce the Class
                Certificate Balance thereof pursuant to Section 4.3 hereof
                (provided, however, that any such amounts distributed pursuant
                to this clause first to a Class of Subordinate Certificates
                shall not reduce the Class Certificate Balance thereof); and

                second, as part of the related Interest Funds for such
                Distribution Date for application pursuant to Section 4.1(a).

            (k) On each Distribution Date the Trustee shall distribute to the
Class R Certificates any remaining amounts.

        Section 4.2     Method of Distribution.

            (a) All distributions with respect to each Class of Certificates on
each Distribution Date shall be made pro rata among the outstanding Certificates
of such Class, based on the Percentage Interest in such Class represented by
each Certificate. Payments to the Certificateholders on each Distribution Date
shall be made by the Trustee to the Certificateholders of record on the related
Record Date by check or money order mailed to a Certificateholder at the address
appearing in the Certificate Register, or upon written request by such
Certificateholder to the Trustee made not later than the applicable Record Date,
by wire transfer to a U.S. depository institution acceptable to the Trustee, or
by such other means of payment as such Certificateholder and the Trustee shall
agree.

            (b) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each financial
intermediary for which it acts as agent. Each such financial intermediary shall
be

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responsible for disbursing funds to the Certificate Owners that it represents.
All such credits and disbursements with respect to a Book-Entry Certificate are
to be made by the Depository and the Depository Participants in accordance with
the provisions of the applicable Certificates. Neither the Trustee nor the
Master Servicer shall have any responsibility therefor except as otherwise
provided by applicable law.

            (c) The Trustee shall withhold or cause to be withheld such amounts
as it reasonably determines are required by the Code (giving full effect to any
exemptions from withholding and related certifications required to be furnished
by Certificateholders or Certificate Owners and any reductions to withholding by
virtue of any bilateral tax treaties and any applicable certification required
to be furnished by Certificateholders or Certificate Owners with respect
thereto) from distributions to be made to a "Foreign Person" as defined in
Section 1445(f)(3) of the Code.

        Section 4.3     Allocation of Losses.

        On each Distribution Date, the Trustee shall allocate any excess of the
aggregate Certificate Principal Balance of the Certificates over the Assumed
Principal Balance to reduce the Class Certificate Balances of the Subordinate
Certificates in the following order of priority:

                (i)     to the Class B Certificates until the Class Certificate
Balance thereof is reduced to zero;

                (ii)    to the Class M-__ Certificates until the Class
Certificate Balance thereof is reduced to zero; and

                (iii)   to the Class M-__ Certificates until the Class
Certificate Balance thereof is reduced to zero.

        Section 4.4     Reports to the Depositor and the Trustee.

        On or before the Business Day preceding each Distribution Date, based on
information provided by the Servicer at such times and in form and content, as
acceptable to the Master Servicer in its reasonable discretion, the Master
Servicer shall notify, or cause to be notified, the Depositor and the Trustee of
the following information with respect to the next Distribution Date (which
notification may be given by facsimile, electronic transmission or by telephone
promptly confirmed in writing):

            (a) the aggregate amount then on deposit in the Distribution Account
and the source thereof (identified as interest, scheduled principal or
unscheduled principal);

            (b) the amount of any Realized Losses, Applied Realized Loss Amounts
and Unpaid Realized Loss Amounts;

            (c) the application of the amounts distributed on such Distribution
Date pursuant to Section 4.1 hereof (including the distribution of any
Subsequent Recoveries);

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            (d) whether a Trigger Event has occurred; and

            (e) [For each Distribution Date during the Funding Period,

                (i)     the Pre-Funded Amount for each Group previously used to
acquire Subsequent Mortgage Loans;

                (ii)    the Pre-Funding Account Earnings for each Group
transferred to the Distribution Account; and

                (iii)   the Pre-Funded Amount and for the Distribution Date
following the end of the Funding Period, the Pre-Funded Amount distributed to
Certificateholders.]

        Section 4.5     Reports by or on Behalf of the [Master] Servicer.

            (a) On or as soon as practicable following each Distribution Date,
based on information provided by the Servicer at such times and in form and
content[, as acceptable to the Master Servicer in its reasonable discretion,]
the [Master] Servicer shall report or cause to be published on the Trustee's
website located at http://www.__________, or such other website designated by
the [Master] Servicer as may be set forth in a notice provided to the Holder of
each of the Certificates and each Rating Agency, the following information:

                (i)     with respect to each Class of Certificates (other than
                        Class C and Class R) (based on a Certificate in the
                        original principal amount of $1,000):

                        (A)     the amount of the aggregate distributions on
                                such Distribution Date;

                        (B)     the amount of such distribution allocable to
                                interest;

                        (C)     the amount of such distributions allocable to
                                principal, separately identifying the aggregate
                                amount of any prepayments, Substitution
                                Adjustment Amounts, repurchase amounts pursuant
                                to Article 2 or other recoveries of principal
                                included therein, any Extra Principal
                                Distribution Amount and any Class M-__, Class
                                M-__, Class B, Applied Realized Loss Amount with
                                respect to, and any Class M-__, Class M-__, and
                                Class B, Unpaid Realized Loss Amount at, such
                                Distribution Date;

                        (D)     the Class Certificate Balance after giving
                                effect to any distribution allocable to
                                principal; and

                        (E)     any Interest Carry Forward Amount and any Cap
                                Carryover Amount;

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                (ii)    the Net WAC Cap and the Maximum Cap Rate;

                (iii)   any Subsequent Recoveries and Realized Losses for Group
                        I and Group II for the period and since the Cut Off
                        Date;

                (iv)    the largest Mortgage Loan balance outstanding in each
                        Group;

                (v)     the Prepayment Penalties owed by borrowers and (if
                        different) collected by the Servicer [or the Master
                        Servicer];

                (vi)    the Servicing Fees [and Master Servicing Fees] allocable
                        to each Group;

                (vii)   One-Month LIBOR on the most recent Interest
                        Determination Date;

                (viii)  the Pass-Through Rates for the Certificates for the
                        current Accrual Period and whether such rates have been
                        capped;

                (ix)    for each Distribution Date during the Funding Period,
                        the Pre-Funded Amount allocable to each Group;

                (x)     the number and aggregate principal balances of Mortgage
                        Loans in each Group (a) 30-59 days Delinquent, (b) 60-89
                        days Delinquent and (c) 90 or more days Delinquent, as
                        of the close of business as of the end of the related
                        prepayment period;

                (xi)    the percentage that each of the Stated Principal
                        Balances set forth pursuant to clauses (a), (b) and (c)
                        of paragraph (i) above represent with respect to all
                        Mortgage Loans in each Group;

                (xii)   the number and Stated Principal Balance of all Mortgage
                        Loans in each Group in foreclosure proceedings as of the
                        close of business as of the end of the related
                        Prepayment Period and in the immediately preceding
                        Prepayment Period;

                (xiii)  the number of Mortgagors and the Stated Principal
                        Balances of Mortgage Loans in each Group involved in
                        bankruptcy proceedings as of the close of business as of
                        the end of the related Prepayment Period;

                (xiv)   the aggregate number and aggregate book value of any REO
                        Property in each Group as of the close of business as of
                        the end of the related Prepayment Period; and

                (xv)    the number and amount by principal balance of 60+ Day
                        Delinquent Loans in each Group, in each case by Servicer
                        and as of the end of the related Prepayment Period.

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            (b) All allocations made by the Trustee shall be based on
information the Trustee receives from the Master Servicer which the Trustee
shall be protected in relying on.

        Section 4.6     Basis Risk Reserve Fund.

            (a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the holders of the Certificates, other
than the Class ___, Class ___, Class ____, Class __, and Class R Certificates,
the Basis Risk Reserve Fund, into which the Depositor shall deposit $1,000. The
Basis Risk Reserve Fund shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including, without limitation, other moneys of the Trustee
held pursuant to this Agreement.

            (b) The Trustee shall make withdrawals from the Basis Risk Reserve
Fund to make distributions pursuant to Section 4.1(g) hereof.

            (c) Funds in the Basis Risk Reserve Fund shall be invested in
Eligible Investments. Any earnings on such amounts shall be distributed to the
Class ___ Certificateholder pursuant to Section 4.1(i). The Class ___
Certificate shall evidence ownership of the Basis Risk Reserve Fund for federal
income tax purposes and the Holder thereof shall direct the Trustee, in writing,
as to investment of amounts on deposit therein. The Class ___ Certificateholder
shall be liable for any losses incurred on such investments. In the absence of
written instructions from the Class ___ Certificateholder as to investment of
funds on deposit in the Basis Risk Reserve Fund, such funds shall be invested in
the __________ Prime Investment Money Market Fund or comparable investment
vehicle. Any amounts on deposit in the Basis Risk Reserve Fund in excess of the
Required Reserve Fund Deposit on any Distribution Date shall be distributed to
the Class ____ Certificateholder on the following Distribution Date. For all
Federal income tax purposes, amounts transferred by REMIC ___ to the Basis Risk
Reserve Fund shall be treated as amounts distributed by REMIC ___ to the Class
___ Certificateholder.

            (d) Upon termination of the Trust Fund, any amounts remaining in the
Basis Risk Reserve Fund shall be distributed to the Class C Certificateholder
pursuant to Section 4.1(i).

        Section 4.7     The Instrument.

        At any time on or after the Closing Date, the Depositor shall have the
right to deposit into the Trust Fund, solely for the benefit of the Holder of
the Class ___ Certificates, a derivative contract or comparable instrument. Any
such instrument shall constitute a fully prepaid agreement. All collections,
proceeds and other amounts in respect of such an instrument shall be distributed
to the Class ___ Certificates on the Distribution Date following receipt thereof
by the Trustee. In no event shall such an instrument constitute a part of any
REMIC created hereunder. In addition, in the event any such instrument is
deposited, the Trust Fund shall be deemed to be divided into two separate and
discrete sub-Trusts. The assets of one such sub-Trust shall consist

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of all the assets of the Trust other than the instrument and the assets of the
other sub-Trust shall consist solely of such instrument.

        Section 4.8     The Calculation Agent.

            (a) The Calculation Agent, as agent for the [Master] Servicer, shall
timely and accurately (i) perform and provide to the Trustee calculations of all
amounts of principal and interest required to be distributed on each
Distribution Date pursuant to this Article 4; (ii) in connection with such
calculations, determine the appropriate One Month LIBOR with respect to each
Interest Determination Date in accordance with the definition of "One Month
LIBOR" set forth in Section 1.1, and (iii) with respect to each Distribution
Date, determine the Pre-Funding Account Earnings in accordance with the
definition of "Pre-Funding Account Earnings" set forth in Section 1.1. The
Calculation Agent shall not resign from its capacity as the Calculation Agent on
fewer than sixty (60) prior written days notice to the [Master] Servicer.

            (b) The compensation of the Calculation Agent shall be the
responsibility of the [Master] Servicer, payable from the [Master] Servicing
Fee.

            (c) The [Master] Servicer may terminate the Calculation Agent, in
its capacity as the Calculation Agent, at any time, with or without cause, upon
thirty (30) days notice in writing to the Calculation Agent. No fee shall be
payable to the Calculation Agent in connection with any such termination.

                                   ARTICLE 5

                                THE CERTIFICATES

        Section 5.1    The Certificates.

        The Certificates shall be substantially in the forms attached as
exhibits hereto. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class ___et forth in the Preliminary Statement.

        Subject to Section 9.2 hereof respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such Holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold (A) 100% of the Class Certificate Balance
of any Class of Certificates or (B) Certificates of any Class with aggregate
principal Denominations of not less than $1,000,000 or (y) by check mailed by
first class mail to such Certificateholder at the address of such Holder
appearing in the Certificate Register.

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

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

        Section 5.2     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 5.6 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 execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.

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

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

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

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            (b) No Person shall transfer a Private Certificate unless such
transfer (i) is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or (ii) is exempt from
the registration requirements under said Act and such state securities laws. In
the event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer and
such Certificateholder's prospective transferee shall each certify to the
Trustee 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 at the expense of the transferor an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
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 and the Master Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

        No transfer of an ERISA-Restricted Certificate shall be made unless 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 (in the event such Certificate is a Private Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit G-1), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA or a plan or arrangement subject to Section 4975
of the Code, nor a person acting on behalf of any such plan or arrangement, nor
using the assets of any such plan or arrangement to effect such transfer, (ii)
if the purchaser is an insurance company, a representation in the form of
Exhibit G-2 that (a) the purchaser is an insurance company which 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 ("PTCE 95-60")) and (b) all of the requirements of PTCE 95-60
are met, including the requirement that an ERISA Qualifying Underwriting
applies, to exempt the acquisition and holding of such Certificates and the
transactions in connection with the servicing, management and operation of the
trust from the prohibited transaction rules of ERISA and the Code; or (iii) in
the case of any such ERISA-Restricted Certificate presented for registration in
the name of an employee benefit plan subject to ERISA, or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement,

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or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee, which Opinion of Counsel shall not be an expense of either the
Trustee or the Trust Fund, addressed to the Trustee to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee to any obligation in addition to those expressly undertaken in this
Agreement or to any liability. 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 ERISA or to the Code 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.

        To the extent permitted under applicable law (including, but not limited
to, ERISA), 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 5.2(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.

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

                (i)     Each Person holding or acquiring any Ownership Interest
        in a Residual Certificate shall be a Permitted Transferee.

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

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

                (iv)    Any attempted or purported Transfer of any Ownership
        Interest in a Residual Certificate in violation of the provisions of
        this Section 5.2(c) shall be

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        absolutely null and void and shall vest no rights in the purported
        Transferee. If any purported transferee shall become a Holder of a
        Residual Certificate in violation of the provisions of this Section
        5.2(c), then the last preceding Permitted Transferee shall be restored
        to all rights as Holder thereof retroactive to the date of registration
        of Transfer of such Residual Certificate. The Trustee shall be under no
        liability to any Person for any registration of Transfer of a Residual
        Certificate that is in fact not permitted by Section 5.2(b) and this
        Section 5.2(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, Transferor
        Certificate and either the Rule 144A Letter or the Investment Letter.
        The Trustee shall be entitled but not obligated to recover from any
        Holder of a Residual Certificate that was in fact not a Permitted
        Transferee at the time it became a Holder or, at such subsequent time as
        it became other than a Permitted Transferee, all payments made on such
        Residual Certificate at and after either such time. Any such payments so
        recovered by the Trustee shall be paid and delivered by the Trustee to
        the last preceding Permitted Transferee of such Certificate.

                (v)     The Depositor shall use its best efforts to make
        available, upon receipt of written request from the Trustee, all
        information necessary to compute any tax imposed under Section 860E(e)
        of the Code as a result of a Transfer of an Ownership Interest in a
        Residual Certificate to any Holder who is not a Permitted Transferee.

        The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.2(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Depositor
or the Master Servicer, to the effect that the elimination of such restrictions
will not cause any REMIC created hereunder 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. Each Person holding or acquiring any Ownership Interest
in a Residual Certificate hereby consents to any amendment of this Agreement
which, 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 Residual Certificate is not transferred, directly or indirectly, to a
Person that is not a Permitted Transferee and (b) to provide for a means to
compel the Transfer of a Residual Certificate which is held by a Person that is
not a Permitted Transferee to a Holder that is a Permitted Transferee.

            (d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.2 in connection with transfer shall be at
the expense of the parties to such transfers.

            (e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers

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of such Book-Entry Certificates; (iii) ownership and transfers of registration
of the Book-Entry Certificates on the books of the Depository shall be governed
by applicable rules established by the Depository; (iv) the Depository may
collect its usual and customary fees, charges and expenses from its Depository
Participants; (v) the Trustee shall deal with the Depository, Depository
Participants and indirect participating firms as representatives of the
Certificate Owners of the Book-Entry Certificates for purposes of exercising the
rights of holders under this Agreement, and requests and directions for and
votes of such representatives shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (vi) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.

        All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.

        If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, or (z) after the occurrence of an Event of Default, Certificate
Owners representing at least 51% of the Class Certificate Balance of the
Book-Entry Certificates together advise the Trustee and the Depository through
the Depository Participants in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Certificate Owners, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
definitive, fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Master Servicer, the Depositor nor the Trustee shall
be liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in relying on, such instructions.
The Master Servicer shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.

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        Section 5.3     Mutilated, Destroyed, Lost or Stolen Certificates.

        If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) there is delivered to the Master Servicer and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign 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 5.3, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.3 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.

        Section 5.4     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 5.5     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 which such Certificateholders propose to transmit, or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of such 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 5.6     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 in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates the office of the Trustee's agent, located at DTC Transfer Agent
Services, 55 Water Street, Jeanette Park Entrance, New York, New York

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10041, Attention: Vinny Brown, 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 6

                THE DEPOSITOR, THE SERVICER AND [MASTER SERVICER]

        Section 6.1     Respective Liabilities of the Depositor, Servicer [and
                        Master Servicer].

        The Depositor, Servicer [and Master Servicer] 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 6.2     Merger or Consolidation of the Depositor, Servicer and
                        Master Servicer.

        The Depositor, Servicer [and Master Servicer] will each keep in full
effect its existence, rights and franchises as a corporation 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, Servicer [or the Master Servicer]
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, Servicer [or the Master Servicer] shall be
a party, or any person succeeding to the business of the Depositor, Servicer [or
the Master Servicer], shall be the successor of the Depositor, Servicer [or the
Master Servicer], as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, FNMA or FHLMC.

        Section 6.3     Limitation on Liability of the Depositor, the Servicer,
                        the Master Servicer and Others.

        None of the Depositor, the Servicer, [the Master Servicer] or any of the
directors, officers, employees or agents of the Depositor, the Servicer [or the
Master Servicer] shall be under any liability to the 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, the Servicer, [the Master
Servicer] or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer, [the Master Servicer]
or any such Person from any liability which 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, the Servicer, [the Master Servicer] and any director, officer,
employee or agent of the Depositor, the Servicer [or the Master Servicer] may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Servicer, [the Master Servicer] and any director, officer, employee or agent
of the

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Depositor, the Servicer [or the Master Servicer] shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense 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 performance thereof, or the Certificates, other than any loss, liability or
expense related to any specific Mortgage Loan or Mortgage Loans (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. None of the
Depositor, the Servicer [or the Master 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 which in its opinion may involve it in any
expense or liability; provided, however, that any of the Depositor, the Servicer
[or the Master Servicer] may in its discretion undertake any such action that it
may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto 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, the Servicer and [the Master
Servicer] shall be entitled to be reimbursed therefor out of the Collection
Account.

        Section 6.4     Limitation on Resignation of Servicer.

        The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor servicer and receipt by
the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates, or (b) upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination under clause (b)
permitting the resignation of the 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 master servicer shall have
assumed the Servicer's responsibilities, duties, liabilities and obligations
hereunder.

                                   ARTICLE 7

                                SERVICER DEFAULT

        Section 7.1     Events of Default.

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

                (i)     any failure by the Servicer to deposit in the Collection
        Account or remit to the Trustee any payment required to be made under
        the terms of this Agreement, [which

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        failure shall continue unremedied for one day after the date upon which
        written notice of such failure shall have been given to the Servicer by
        the Trustee or the Depositor [or to the Master Servicer] and the Trustee
        by the Holders of Certificates having not less than 51% 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, which failure materially
        affects the rights of Certificateholders, which failure continues
        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, [the Master Servicer], or the Depositor, or to the Servicer and
        the Trustee by the Holders of Certificates evidencing not less than 51%
        of the Voting Rights evidenced by the Certificates; provided, however,
        that the 60-day cure period shall not apply to the initial delivery of
        the Mortgage File for Delay Delivery Mortgage Loans nor the failure to
        substitute or repurchase in lieu thereof; or

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

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

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

        Upon its obtaining actual knowledge of the occurrence of an Event of
Default, the [Master Servicer] shall promptly deliver to the Trustee, an
Officer's Certificate that an event has occurred that may justify termination of
the Servicer hereunder and describing the circumstances surrounding such event.
Upon determination by the [Master Servicer] that an Event of Default has
occurred, the [Master Servicer] shall promptly deliver to the Trustee an
Officer's Certificate to that effect, and the [Master Servicer] (a) may
terminate the Servicer hereunder, if in its judgment such termination is in the
best interests of the Trust Fund; or (b) shall terminate the Servicer hereunder,
if instructed to do so by the Trustee. The Trustee shall so instruct the [Master
Servicer] if directed to do so by the Holders of Certificates evidencing not
less than 51% of the Voting Rights evidenced by the Certificates exercised in
writing following delivery to

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such Holders by the Trustee of notice of the occurrence of such Event of Default
pursuant to Section 7.2(b).

        Upon any such termination, the [Master Servicer] shall enter into a
substitute servicing arrangement with another mortgage loan servicing company
acceptable to the [Master Servicer] and Rating Agency under which such mortgage
loan servicing company shall assume, satisfy, perform and carry out all
liabilities, duties, responsibilities and obligations that are to be, or
otherwise were to have been, satisfied, performed and carried out by the
terminated Servicer hereunder. Until such time as the [Master Servicer] enters
into a substitute servicing agreement with respect to the Mortgage Loans, the
[Master Servicer] shall assume, satisfy, perform and carry out all obligations
which otherwise were to have been satisfied, performed and carried out by the
terminated Servicer. As compensation to the [Master Servicer] for any servicing
obligations fulfilled or assumed by the [Master Servicer], the [Master Servicer]
shall be entitled to any servicing compensation to which the terminated Servicer
would have been entitled if such Servicer had not been terminated.

        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 which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.8(a)(i) through (viii), and any other
amounts payable to such [Master Servicer] hereunder the entitlement to which
arose prior to the termination of its activities hereunder.

        Section 7.2     Notification to Certificateholders.

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

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

                                   ARTICLE 8

                             CONCERNING THE TRUSTEE

        Section 8.1     Duties of Trustee.

        The Trustee, prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge 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 of which a Responsible Officer of the Trustee has
actual knowledge has occurred and remains uncured, the Trustee shall exercise
such

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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.

        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 are in the form
required by this Agreement; provided, however, that the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Trustee shall notify the Certificateholders of such
instrument in the event that the Trustee, after so requesting, does not receive
a satisfactorily corrected instrument.

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

                (i)     unless an Event of Default of which a Responsible
        Officer of the Trustee has actual knowledge shall have occurred and be
        continuing, 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 which it 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 it shall be finally proven that the Trustee was
        negligent in ascertaining the pertinent facts;

                (iii)   the Trustee shall not be liable with respect to any
        action taken, suffered or omitted to be taken by it in good faith in
        accordance with the direction of Holders of Certificates evidencing not
        less than 25% of the Voting Rights of Certificates 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;

                (iv)    the Trustee shall not be required to expend or risk its
        own funds or otherwise incur financial liability in the performance of
        any of its duties hereunder or the exercise of any of its rights or
        powers if there is reasonable ground for believing that the repayment of
        such funds or adequate indemnity against such risk or liability is not

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        assured to it, and none of the provisions contained in this Agreement
        shall in any event require the Trustee to perform, or be responsible for
        the manner of performance of, any of the obligations of the Master
        Servicer under this Agreement except during such time, if any, as the
        Trustee shall be the successor to, and be vested with the rights,
        duties, powers and privileges of, the Master Servicer; and

                (v)     without limiting the generality of this Section 8.1, 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 recording or filing
        or deposit or to any rerecording, refiling or redepositing of any
        thereof, (B) to see to any insurance, (C) to see to the payment or
        discharge of any tax, assessment, or other governmental charge or any
        lien or encumbrance of any kind owing with respect to, assessed or
        levied against, any part of the Trust Fund other than from funds
        available in the Distribution Account (D) to confirm or verify the
        contents of any reports or certificates of the Servicer delivered to the
        Trustee pursuant to this Agreement believed by the Trustee to be genuine
        and to have been signed or presented by the proper party or parties.

        Section 8.2     Certain Matters Affecting the Trustee.

                Except as otherwise provided in Section 8.1:

                (i)     the Trustee may request and rely upon and shall be
        protected in acting or refraining from acting upon any resolution,
        Officers' Certificate, certificate of auditors or any other certificate,
        statement, instrument, opinion, report, notice, request, consent, order,
        appraisal, bond or other paper or document believed by it to be genuine
        and to have been signed or presented by the proper party or parties and
        the Trustee shall have no responsibility to ascertain or confirm the
        genuineness of any signature of any such party or parties;

                (ii)    the Trustee may consult with counsel, financial advisers
        or accountants and the advice of any such counsel, financial advisers or
        accountants and any Opinion of Counsel shall be full and complete
        authorization and protection in respect of any action taken or suffered
        or omitted by it hereunder in good faith and in accordance with such
        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)    the Trustee shall not be bound to make any investigation
        into the facts or matters stated in any resolution, certificate,
        statement, instrument, opinion, report, notice, request, consent, order,
        approval, bond or other paper or document, unless requested in

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        writing so to do by Holders of Certificates evidencing not less than 25%
        of the Voting Rights allocated to each Class of Certificates; provided,
        however, that if the payment within a reasonable time to the Trustee of
        the costs, expenses or liabilities likely to be incurred by it in the
        making of such investigation is, in the opinion of the Trustee, not
        assured to the Trustee by the security afforded to it by the terms of
        this Agreement, the Trustee may require indemnity satisfactory to the
        Trustee against such cost, expense or liability as a condition to taking
        any such action.

                (v)     the Trustee may execute any of the trusts or powers
        hereunder or perform any duties hereunder either directly or by or
        through agents, accountants or attorneys and the Trustee shall not be
        responsible for any misconduct or negligence on the part of such agent,
        accountant or attorney appointed by the Trustee with due care;

                (vi)    the Trustee shall not be required to risk or expend its
        own funds or otherwise incur any financial liability in the performance
        of any of its duties or in the exercise of any of its rights or powers
        hereunder if it shall have reasonable grounds for believing that
        repayment of such funds or adequate indemnity against such risk or
        liability is not assured to it;

                (vii)   the Trustee shall not be liable 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 and in the absence of such notice, the
        Trustee may conclusively assume that there is no Event of Default;

                (ix)    the Trustee shall be under no obligation to exercise any
        of the trusts, rights or powers vested in it by this Agreement or to
        institute, conduct or defend any litigation hereunder or in relation
        hereto at the request, order or direction of any of the
        Certificateholders, pursuant to the provisions of this Agreement, unless
        such Certificateholders shall have offered to the Trustee reasonable
        security or indemnity satisfactory to the Trustee against the costs,
        expenses and liabilities which may be incurred therein or thereby;

                (x)     the right of the Trustee to perform any discretionary
        act enumerated in this Agreement shall not be construed as a duty, and
        the Trustee shall not be answerable for other than its negligence or
        willful misconduct in the performance of such act; and

                (xi)    the Trustee shall not be required to give any bond or
        surety in respect of the execution of the Trust Fund created hereby or
        the powers granted hereunder.

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        Section 8.3     Trustee Not Liable for Certificates or Mortgage Loans.

        The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor, the Depositor or Master Servicer, as the case
may be, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Certificates or of any Mortgage Loan or related document
other than with respect to the Trustee's execution and counter-signature of the
Certificates. The Trustee shall not be accountable for the use or application by
the Depositor or the Master Servicer of any funds paid to the Depositor or the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account by the Depositor or the Master Servicer.

        Section 8.4     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 8.5     Trustee's Fees and Expenses.

        The Trustee, as compensation for its activities prior to making the
distributions pursuant to Section 4.1 hereunder, shall be entitled to deduct
from the Master Servicing Fee on each Distribution Date an amount equal to the
Trustee Fee and reasonable expenses for such Distribution Date. Saxon shall
indemnify and hold harmless the Trustee, the Paying Agent or the Custodian and
any director, officer, employee or agent thereof against any loss, liability or
expense, including reasonable attorney's fees, incurred in connection with or
arising out of or in connection with this Agreement, any custodial agreement or
the Certificates, including, but not limited to, any such loss, liability or
expense incurred in connection with any legal action against the Trust or the
Trustee, the Paying Agent or the Custodian or any director, officer, employee or
agent thereof, or the performance of any of the duties of the Trustee or the
Paying Agent under this Agreement or the duties of the Custodian under any
custodial agreement (including, but not limited to, the execution and delivery
of documents in connection with a foreclosure sale, trustee's sale, or deed in
lieu of foreclosure of a Mortgage Loan, including, but not, limited to, any deed
of reconveyance, any substitution of trustee documents or any other documents to
release, satisfy, cancel or discharge any Mortgage Loan) other than any loss,
liability or expense incurred by reason of the willful misfeasance, bad faith or
negligence in the performance of the duties under this Agreement or by reason of
the willful misfeasance, bad faith or gross negligence of the Custodian under
any custodial agreement (including specifically any loss, liability or expense
incurred by the Custodian by reason of simple negligence under any custodial
agreement). The provisions of this Section 8.5 shall survive the resignation or
removal of the Trustee or the Paying Agent and the termination of this Agreement
and the resignation or removal of the Custodian under any custodial agreement.
The Trustee may receive an additional indemnity from a party acceptable to the
Trustee.

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        Section 8.6     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 super-vision or
examination by federal or state authority and with a credit rating which would
not cause either of the Rating Agencies to reduce their respective then current
ratings of the Certificates (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 8.6 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 8.6, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.7 hereof. The entity serving
as Trustee may have normal banking and trust relationships with the Depositor
and its affiliates or the Master Servicer and its affiliates; provided, however,
that such entity cannot be an affiliate of the Master Servicer other than the
Trustee in its role as successor to the Master Servicer.

        Section 8.7     Resignation and Removal of Trustee.

        The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor and the
Master Servicer and each Rating Agency not less than 60 days before the date
specified in such notice when, subject to Section 8.8, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.8 meeting the qualifications set forth in Section 8.6. If no successor trustee
meeting such qualifications 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 the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.6 hereof and shall fail to resign after written
request thereto by the Depositor, or if at any time 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, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Master Servicer
may remove the Trustee and 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 Master Servicer and one copy to the
successor trustee.

        The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in

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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 Master 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 8.7 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.8 hereof.

        Section 8.8     Successor Trustee.

        Any successor trustee appointed as provided in Section 8.7 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Master Servicer 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. The Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties, and obligations.

        No successor trustee shall accept appointment as provided in this
Section 8.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.6 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 8.8, 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 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.

        Section 8.9     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 the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be eligible under
the provisions of Section 8.6 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.

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        Section 8.10    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 Master Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.6 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.8.

        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)     To the extent necessary to effectuate the purposes of
        this Section 8.10, all rights, powers, duties and obligations conferred
        or imposed upon the Trustee shall be conferred or imposed upon and
        exercised or performed by the Trustee and such separate trustee or
        co-trustee jointly (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 Master Servicer
        hereunder), the Trustee shall be incompetent or unqualified to perform
        such act or acts, in which event such rights, powers, duties and
        obligations (including the holding of title to the applicable 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 such
        appointment shall not, and shall not be deemed to, constitute any such
        separate trustee or co-trustee as agent of the Trustee;

                (iii)   The Trustee may at any time accept the resignation of or
        remove any separate trustee or co-trustee; and

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                (iv)    The Master Servicer, and not the Trustee, shall be
        liable for the payment of reasonable compensation, reimbursement and
        indemnification to any such 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 separate trustees and co-trustees, when
and 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
Master Servicer and the Depositor.

        Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

        Section 8.11    Tax Matters.

        It is intended that the assets with respect to which the REMIC elections
are to be made, as set forth in Schedule III, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as REMICs as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Master Servicer covenants and agrees that it
shall act as agent (and the Master Servicer is hereby appointed to act as agent)
on behalf of each such REMIC 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 such REMIC, containing such information and at the times
and in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the Holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code; (c) make or cause to be made REMIC
elections as directed in Schedule III on the federal tax returns for each such
REMIC's first taxable year (and, if

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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, 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 Residual Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-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 matters relating to such assets at all times that any
Certificates are outstanding so as to maintain the status of each REMIC created
hereunder under the REMIC Provisions; (g) not knowingly or intentionally take
any action or omit to take any action that would cause the termination of REMIC
status or result in the imposition of tax on any REMIC; (h) pay the amount of
any federal or state tax, including prohibited transaction taxes as described
below, imposed on any such REMIC prior to its termination when and as the same
shall be due and payable (but such obligation shall not prevent the Master
Servicer or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Master Servicer from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); (i) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other person as may
be required to sign such returns by the Code or state or local laws, regulations
or rules; (j) maintain records relating to any such REMIC, including but not
limited to the income, expenses, assets and liabilities thereof and the fair
market value and adjusted basis of the assets determined at such intervals as
may be required by the Code, as may be necessary to prepare the foregoing
returns, schedules, statements or information; and (k) as and when necessary and
appropriate, represent any such REMIC 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
such REMIC, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of any such
REMIC, and otherwise act on behalf of any such REMIC in relation to any tax
matter or controversy involving it.

        To enable the [Master Servicer] to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the [Master
Servicer] within ten (10) days after the Closing Date all information or data
that the [Master Servicer] 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 [Master Servicer] promptly upon written request
therefor, any such additional information or data that the [Master Servicer]
may, from time to time, reasonably request in order to enable the [Master
Servicer] to perform its duties as set forth herein. The Depositor hereby
indemnifies the [Master Servicer] for any losses, liabilities, damages, claims
or expenses of the Master Servicer arising from any errors or miscalculations of
the [Master Servicer] that result from any failure of the

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Depositor to provide, or to cause to be provided, accurate information or data
to the [Master Servicer] on a timely basis.

        Section 8.12    Periodic Filings.

        The Trustee shall prepare, execute and file all periodic reports
required under the Securities Exchange Act of 1934 in conformity with the terms
of the "no-action" relief granted by the SEC to issuers of asset-backed
securities such as the Certificates. In connection with the preparation and
filing of such periodic reports, the Depositor [and the Master Servicer] shall
timely provide to the Trustee all material information available to them which
is required to be included in such reports and not known to them to be in the
possession of the Trustee and such other information as the Trustee reasonably
may request from either of them and otherwise reasonably shall cooperate with
the Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.

                                   ARTICLE 9

                                   TERMINATION

        Section 9.1     Termination upon Liquidation or Purchase of all Mortgage
                        Loans.

            (a) Subject to Section 9.3, the obligations and responsibilities of
the Depositor, the Master Servicer and the Trustee created hereby with respect
to the Trust Fund shall terminate upon the earlier of:

                (i)     the purchase by the [Master Servicer] or its designee of
        all Mortgage Loans (including REO Properties not otherwise disposed of
        pursuant to Section 3.11(i)) remaining in the Trust Fund at a price
        equal to the sum of (A) 100% of the Stated Principal Balance of each
        Mortgage Loan that is not a Nonrecoverable Mortgage Loan; (B) the
        Projected Net Liquidation Value of each Nonrecoverable Mortgage Loan
        (not including any REO), and (C) the lesser of (x) the appraised value
        of any REO Property as determined by a real estate broker meeting the
        qualifications, and applying broker's price opinion methodology,
        generally acceptable to residential mortgage servicers, or other
        property valuation opinion methodology customarily used by residential
        mortgage servicers with respect to defaulted loans and (y) the Stated
        Principal Balance of each Mortgage Loan related to any REO Property. In
        addition, such purchase price shall include with respect to the Mortgage
        Loans (including REO Properties) accrued and unpaid interest thereon at
        the applicable Net Rate, except to the extent the Servicer was not or
        would not be required to make a P&I Advance hereunder; and

                (ii)    the later of (A) the maturity or other liquidation (or
        any Advance with respect thereto) of the last Mortgage Loan remaining in
        the Trust Fund and the

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        disposition of all REO Property and (B) the distribution to
        Certificateholders of all amounts required to be distributed to them
        pursuant to this Agreement. In no event shall the trusts created hereby
        continue beyond the earlier of (i) the expiration of 21 years from the
        death of the 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.

        The right to purchase all Mortgage Loans and REO Properties pursuant to
clause (i) above shall be conditioned upon the Pool Principal Balance, at the
time of any such repurchase, aggregating less than ten percent of the Assumed
Principal Balance of the Mortgage Loans as of the Cut-Off Date.

            (b) With respect to any purchase pursuant to subsection (a), upon
deposit of the price determined pursuant to subsection (a)(i) in the
Distribution Account, the Trustee shall release or cause to be released to the
purchaser of each such Mortgage Loan the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment prepared by the purchaser
of such Mortgage Loan (including appropriate instruments with respect to any REO
Property), in each case without recourse, as shall be necessary to vest in the
purchaser of such Mortgage Loan any Mortgage Loan sold pursuant hereto, and the
purchaser of such Mortgage Loan 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 purchaser of such Mortgage Loan 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.

        Section 9.2     Final Distribution on the Certificates.

        If on any Determination Date, the [Master Servicer] determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Collection Account, the [Master Servicer]
shall direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Master Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.1, at least 20 days prior to the date notice
is to be mailed to the affected Certificateholders, the [Master Servicer] shall
notify the Depositor and the Trustee of the date the [Master Servicer] 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 next preceding the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record

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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 Master Servicer will give such
notice to each Rating Agency at the time such notice is given to
Certificateholders.

        In the event such notice is given, the [Master Servicer] shall cause all
funds in the Collection Account to be remitted to the Trustee for deposit in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the [Master Servicer] the Mortgage Files for the Mortgage
Loans.

        Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in the order
set forth in Section 4.2 hereof, on the final Distribution Date, in the case of
the Certificateholders, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, an amount equal to (i) as
to each Class of Regular Certificates, the Class Certificate Balance thereof
plus accrued interest thereon (or on their Notional Amount, if applicable) in
the case of an interest bearing Certificate, and (ii) as to the Residual
Certificates, the amount, if any, which remains on deposit in the Distribution
Account (other than the amounts retained to meet claims) after application
pursuant to clause (i) above.

        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 which 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 holder of each of the
Class R Certificates shall be entitled to all unclaimed funds and other assets
of the REMICs held for distribution to such Certificateholders, which remain
subject hereto.

        Section 9.3     Additional Termination Requirements.

            (a) In the event the [Master Servicer] exercises its purchase option
as provided in Section 9.1, 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 the Master Servicer, to the effect
that the failure to comply with the requirements of this Section 9.3 will not
(i) result in the imposition of taxes on "prohibited transactions" on any REMIC
as defined in section 860F of the Code, or (ii) cause any REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                                      107
<PAGE>

                (i)     The Trustee shall sell all of the assets that constitute
        the Trust Fund for cash as provided in Section 9.01(a)(i), and, within
        90 days of such sale, shall distribute to (or credit to the account of)
        the Holders of the Certificates the proceeds of such sale together with
        other cash on hand (less amounts retained to meet claims) in complete
        liquidation of the Trust Fund and each REMIC created hereunder; and

                (ii)    The Trustee shall attach a statement to the final
        federal income tax return for each REMIC created hereunder stating that
        pursuant to Treasury Regulation Section 1.860F-1, the first day of the
        90-day liquidation period for each such REMIC was the date on which the
        Trustee sold the assets of the Trust Fund pursuant to Section
        9.01(a)(i).

            (b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Trustee to undertake the above-described actions.

                                   ARTICLE 10

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
                             BY THE MASTER SERVICER

        Section 10.1    Duties of the Master Servicer.

            (a) The Certificateholders, by their purchase and acceptance of the
Certificates, appoint ___________________. as Master Servicer. For and on behalf
of the Depositor, the Trustee and the Certificateholders, the Master Servicer
shall master service the Mortgage Loans in accordance with the provisions of
this Agreement.

            (b) The Master Servicer shall supervise and provide oversight of the
Servicer's performance of its obligations hereunder. The Master Servicer shall,
for the benefit of Certificateholders, use its reasonable best efforts to
enforce the obligations of the Servicer hereunder, and, upon its obtaining
actual knowledge of an Event of Default, shall take such action as is required
by Section 7.1.

            (c) To the extent the Servicer defaults in its obligation to timely
make an P&I Advance required hereunder, upon notice of such failure, the Master
Servicer shall be required to make such P&I Advance by the related Distribution
Date. All rights of reimbursement otherwise available to the Servicer hereunder
in respect of any Advance shall be fully available to the Master Servicer.

            (d) The Master Servicer shall, in the manner and at such times
specified, prepare and furnish the reports described in Sections 4.4 and 4.5
hereof.

        Section 10.2    Compensation to the Master Servicer.

        The Master Servicer shall be entitled to the Master Servicing Fee on
each Distribution Date from amounts on deposit in the Master Servicer Custodial
Account. If, on any Distribution

                                      108
<PAGE>

Date such fee is not distributed as provided herein, the Master Servicer shall
be entitled to direct the Trustee to pay the Master Servicing Fee to the Master
Servicer by withdrawal from the Distribution Account. The Master Servicer shall
be entitled to deposit account earnings as provided in Section 3.5 as additional
master servicing compensation.

        Section 10.3    Termination of Master Servicer; Trustee to Act.

        Each of the following shall constitute an event of default by the Master
Servicer (a "Master Servicer Event of Default") of its obligations hereunder:

            (a) any failure of the Master Servicer to remit to the Trustee any
payment required to be made to the Trustee for the benefit of Certificateholders
under the terms of this Agreement within five days of the due date therefor;

            (b) the Master Servicer shall fail duly to observe or perform in any
material respect any of its covenants or agreements (other than its obligation
to make an Advance) contained herein and such failure shall continue unremedied
for a period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master Servicer
by the Trustee or to the Master Servicer and the Trustee by the Holders of
Certificates entitled to at least 51% of the Voting Rights; or

            (c) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and 1iabilities or similar proceeding, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged and unstayed for a period of 60 days; or

            (d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding of or relating to the
Master Servicer or relating to all or substantially all its property; or

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

        The rights and obligations of the Master Servicer under this Agreement
may be terminated only upon the occurrence of a Master Servicer Event of
Default. If a Master Servicer Event of Default described in clauses (a) through
(d) of this Section 10.3 shall occur, then, and in each and every such case, so
long as such Master Servicer Event of Default shall not have been remedied, the
Trustee may, and at the direction of the Holders of Certificates entitled to at
least 51% of the Voting Rights, the Trustee shall, by notice in writing to the
Master Servicer,

                                      109
<PAGE>

terminate all the rights and obligations of the Master Servicer hereunder, other
than its rights as a Certificateholder. If a Master Servicer Event of Default
described in clause (e) of this Section 10.3 shall occur, the Trustee may
terminate, by notice in writing to the Master Servicer, all the rights and
obligations of the Master Servicer hereunder, other than its rights as a
Certificateholder. On and after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer hereunder,
whether with respect to the Certificates (other than as a Holder thereof) or the
Mortgage Loans or otherwise, shall, to the maximum extent permitted by law, pass
to and be vested in the Trustee pursuant to and under this Section 10.3
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it hereunder on or prior to the date of
such termination. Without limiting the generality of the foregoing, the Trustee
is hereby authorized and empowered to execute and deliver on behalf of and at
the expense of the Master Servicer, as the Master Servicer's attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things that in the Trustee's sole and absolute judgment may be
necessary or appropriate, to effect such termination. Notwithstanding the
foregoing, upon any such termination the Master Servicer shall do all things
reasonably requested by the Trustee to effect the termination of the Master
Servicer's responsibilities, rights and powers hereunder, and the transfer
thereof to the Trustee, including, but not limited to, promptly providing to the
Trustee (and in no event later than ten Business Days subsequent to such notice)
all documents and records electronic and otherwise reasonably requested by the
Trustee to enable the Trustee or its designee to assume and carry out the duties
and obligations that otherwise were to have been performed and carried out by
the Master Servicer but for such termination.

        As successor Master Servicer, the Trustee shall be entitled to the fees
to which the Master Servicer would have been entitled if the Master Servicer had
continued to act as such. The Trustee shall also, as successor Master Servicer,
be entitled to all the protections and indemnification afforded to the Master
Servicer hereunder.

        Notwithstanding the above, upon the occurrence of a Master Servicer
Event of Default, if the Trustee shall be unwilling so to act, or shall, if it
is unable so to act or, if the Holders of Certificates entitled to at least 51%
of the Voting Rights so request in writing to the Trustee, promptly appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution acceptable to each Rating Agency and having a net
worth of not less than $15,000,000 as the successor to the Master Servicer. No
appointment of a successor to the Master Servicer shall be effective until the
assumption by such successor of all future responsibilities, duties and
liabilities of the Master Servicer hereunder. Pending appointment of a successor
to the Master Servicer, the Trustee or an affiliate shall, to the maximum extent
permitted by law, act in such capacity as hereinabove provided.

        In connection with any such appointment and assumption described herein,
the Trustee may make such arrangements for the compensation of such successor
out of payments received on the assets included in .the Trust Fund as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Master Servicer hereunder.

                                      110
<PAGE>

The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.

        Section 10.4    Notification to Certificateholders.

        Upon any termination pursuant to Section 10.3 hereof, or any appointment
of a successor to the Master Servicer, the Trustee shall give prompt written
notice thereof to the Certificateholders at their respective addresses appearing
in the Certificate Register.

                                   ARTICLE 11

                            MISCELLANEOUS PROVISIONS

        Section 11.1    Amendment.

        This Agreement may be amended from time to time by the Depositor,
Servicer, the Seller, the [Master] Servicer and the Trustee without the consent
of any of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to
cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Certificates, the Trust
Fund or this Agreement in any disclosure document pursuant to which any
Certificates were offered; to correct any defective provision herein or to
supplement any provision herein which may be inconsistent with any other
provision herein, (iii) to add to the duties of the Depositor, the Servicer or
the [Master] Servicer, (iv) to add any other provisions with respect to matters
or questions arising hereunder or (v) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement; provided that any
action pursuant to clauses (iv) or (v) above shall not, as evidenced by an
Opinion of Counsel delivered to the Trustee (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund), adversely affect in any
material respect the interests of any Certificateholder; provided, however, that
the amendment shall not be deemed to adversely affect in any material respect
the interests of the Certificateholders if the Person requesting the amendment
obtains a letter from each Rating Agency stating that the amendment would not
result in the downgrading or withdrawal of the respective ratings then assigned
to the Certificates; it being understood and agreed that any such 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. The Trustee, Servicer, the Seller, the Depositor and
the Master Servicer also may at any time and from time to time amend this
Agreement without the consent of the Certificateholders to modify, eliminate or
add to any of its provisions to such extent as shall be necessary or helpful to
(i) maintain the qualification of each REMIC created hereunder as a REMIC under
the Code, (ii) avoid or minimize the risk of the imposition of any tax on any
such REMIC pursuant to the Code that would be a claim at any time prior to the
final redemption of the Certificates or (iii) comply with any other requirements
of the Code, provided that the Trustee have been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or

                                      111
<PAGE>

minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.

        This Agreement may also be amended from time to time by the Depositor,
Servicer, the Seller, the Master Servicer and the Trustee with the consent of
the Holders of a Majority in Interest of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments 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, as to such Class, Percentage Interests aggregating 66%, 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 not be an expense of the
Trustee or the Trust Fund, to the effect that such amendment will not cause the
imposition of any tax on any REMIC created hereunder or the Certificateholders
or cause any REMIC created hereunder 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 or a copy 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 (which Opinion shall not be an
expense of the Trustee or the Trust Fund), 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 11.1.

                                      112
<PAGE>

        Section 11.2    Recordation of Agreement; Counterparts.

        This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the [Master] Servicer at its expense, but
only upon direction by a majority of the Certificateholders to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders. However, the foregoing sentence notwithstanding, the
Servicer may provide copies hereof to counsel, judicial officers, and government
agencies, or may cause this Agreement to be recorded, in any jurisdiction in
which, in the Servicer's judgment, such disclosure or recording may facilitate
foreclosure or other recovery with respect to any one or more of the Mortgage
Loans.

        For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed (by
facsimile or otherwise) 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 11.3    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.

        Section 11.4    Intention of Parties.

        It is the express intent of the parties hereto that the conveyance of
the Trust Fund by the Depositor to the Trustee be, and be construed as, absolute
sales thereof to the Trustee. It is, further, not the intention of the parties
that such conveyances 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
Trust Fund, such security interest would be deemed to

                                      113
<PAGE>

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 11.5    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:

                1.      any material change or amendment to this Agreement;

                2.      the occurrence of any Event of Default that has not been
        cured;

                3.      the resignation or termination of the Servicer, [the
        Master Servicer] or the Trustee and the appointment of any successor;

                4.      the repurchase or substitution of Mortgage Loans
        pursuant to Section 2.3 hereof;

                5.      the final payment to Certificateholders; and

                6.      any rating action involving the long-term credit rating
        of the Master Servicer, which notice shall be made by first-class mail
        within two Business Days after the Trustee gains actual knowledge
        thereof.

        In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:

                1.      Each report to Certificateholders described in Section
        4.6 hereof;

                2.      Each annual statement as to compliance described in
        Section 3.16 hereof;

                3.      Each annual independent public accountants' servicing
        report described in Section 3.17 hereof; and

                4.      Any notice of a purchase of a Mortgage Loan pursuant to
        Section 2.2, 2.3 or 3.11 hereof.

            (b) All directions, demands, authorizations, consents, waivers,
communications and notices hereunder shall be in writing and shall be deemed to
have been duly given when delivered by first class mail, facsimile or courier to
the applicable Notice Address, or in the case of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency. Notices to Certificateholders shall be deemed given when mailed,
first Class postage prepaid, to their respective addresses appearing in the
Certificate Register.

                                      114
<PAGE>

        Section 11.6    Severability of Provisions.

        If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

        Section 11.7    Assignment.

        Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Master
Servicer without the prior written consent of the Trustee and Depositor.

        Section 11.8    Limitation on Rights of Certificateholders.

        The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, 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 created hereby, 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 herein provided, and
unless 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 reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
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

                                      115
<PAGE>

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 11.8, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.

        Section 11.9    Inspection and Audit Rights.

        The Servicer agrees that, on reasonable prior notice, it will permit and
will cause each Subservicer to 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 the 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 and independent public accountants
(and by this provision the Master Servicer hereby authorizes said accountants to
discuss with such representative such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor or the Trustee
of any right under this Section 11.9 shall be borne by the party requesting such
inspection; all other such expenses shall be borne by the Servicer or the
related Subservicer.

        Section 11.10   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 11.11   Limitations on Actions; No Proceedings.

            (a) Other than pursuant to this Agreement, or in connection with or
incidental to the provisions or purposes of this Agreement, the trust created
hereunder shall not (i) issue debt or otherwise borrow money, (ii) merge or
consolidate with any other entity reorganize, liquidate or transfer all or
substantially all of its assets to any other entity, or (iii) otherwise engage
in any activity or exercise any power not provided for in this Agreement.

            (b) Notwithstanding any prior termination of this Agreement, the
Trustee, the Servicer, [the Master ServicerB] and the Depositor shall not, prior
to the date which is one year and one day after the termination of this
Agreement, acquiesce, petition or otherwise invoke or cause any Person to invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against the Depositor or the Trust Fund under any federal
or state bankruptcy, insolvency or other similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Depositor or the Trust Fund or any

                                      116
<PAGE>

substantial part of their respective property, or ordering the winding up or
liquidation of the affairs of the Depositor or the Trust Fund.

                                      * * *

                                      117

<PAGE>

        IN WITNESS WHEREOF, the Depositor, Master Servicer, Servicer and the
Trustee, have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.

                                    AEGIS ASSET BACKED SECURITIES CORPORATION

                                    By:
                                       ----------------------------------------
                                         NAME:
                                         TITLE:

                                    AEGIS MORTGAGE CORPORATION

                                    By:
                                       ----------------------------------------
                                         NAME:
                                         TITLE:

                                    [SERVICER]

                                    By:
                                       ----------------------------------------
                                         NAME:
                                         TITLE:

                                    [TRUSTEE]

                                    By:
                                       ----------------------------------------
                                         NAME:
                                         TITLE:

                                      118

<PAGE>

                                    SCHEDULES

<TABLE>
<S>               <C>
Schedule I:       Mortgage Loan Schedule (By Group)......................................S-I-1
Schedule II:      Pass-Through Rate Schedule............................................S-II-1
Schedule III:     REMIC Structure......................................................S-III-1
</TABLE>

                                    EXHIBITS
<TABLE>
<S>               <C>
Exhibit A:        Form of Senior Certificates..............................................A-1
Exhibit B:        Form of Subordinate Certificates.........................................B-1
</TABLE>

<PAGE>

                                                                      SCHEDULE I

                        MORTGAGE LOAN SCHEDULE (BY GROUP)

                                      I-1

<PAGE>

                                                                     SCHEDULE II

                           PASS-THROUGH RATE SCHEDULE

                                      II-1
<PAGE>

                                                                    SCHEDULE III

                                 REMIC STRUCTURE

                                     III-1
<PAGE>

                                    EXHIBIT A

THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO SELLER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                      AEGIS ASSET SECURITIES TRUST 200_-__

             MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 200_-_

                             CLASS AF-__ CERTIFICATE

THE PRINCIPAL OF THIS CERTIFICATE IS SUBJECT TO PREPAYMENT FROM TIME TO TIME
WITHOUT SURRENDER OF OR NOTATION ON THIS CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET
FORTH BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE.

THIS CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST FOR FEDERAL INCOME TAX
PURPOSES.

<TABLE>
<S>                                              <C>
DENOMINATION: $__________                        INITIAL PRINCIPAL BALANCE: $__________

PASS-THROUGH RATE:

REGISTERED HOLDER: CEDE & CO.
CERTIFICATE NO. AF-__-__                         CUSIP NO: _________
</TABLE>

        This Certificate evidences a beneficial ownership interest in a Trust
consisting primarily of a pool of Mortgage Loans (collectively, the "Mortgage
Loans") formed and sold by

                    AEGIS ASSET BACKED SECURITIES CORPORATION

        THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AEGIS ASSET BACKED SECURITIES CORPORATION, THE MASTER SERVICER, ANY SERVICER,
THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.

        The Registered Holder named above is the owner of the Percentage
Interest calculated as set forth below in the above mentioned Class of
Certificates issued by the Trust (the "Trust") created pursuant to a Pooling and
Servicing Agreement dated as of ________ 1, 200__ (the "Pooling and Servicing
Agreement"), among Aegis Asset Backed Securities Corporation (herein called the
"Depositor," which term includes any successor entity under the Pooling and
Servicing Agreement), Aegis Mortgage, Inc., as Master Servicer,
___________________, as Servicer, and ______________________, as Trustee, a
summary of certain of the pertinent provisions of which is set forth herein. To
the extent not defined herein, capitalized terms used herein have the meanings
assigned in the Pooling and Servicing Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Pooling

                                       A-1
<PAGE>

and Servicing Agreement to which Pooling and Servicing Agreement the Holder of
this Certificate, by virtue of the acceptance hereof, assents and by which such
Holder is bound.

        This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Loan Asset Backed Certificates, Series 200__-__ (herein
called the "Certificates") and represents a Percentage Interest in the above
mentioned Class of Certificates equal to the quotient, expressed as a
percentage, obtained by dividing the Denomination of this Certificate specified
above by the Initial Principal Balance specified above of the above mentioned
Class of Certificates. The Certificates are issued in multiple Classes
designated as specifically set forth in the Pooling and Servicing Agreement. The
Certificates will evidence in the aggregate 100% of the beneficial ownership of
the Trust.

        To the extent and subject to the limitations set forth in the Pooling
and Servicing Agreement, the Person in whose name this Certificate is registered
at the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date") is entitled to
receive an amount equal to the product of such Person's Percentage Interest and
the Distribution Amount (as defined in the Pooling and Servicing Agreement) with
respect to the above mentioned Class of Certificates on the 25th day of each
month or, if such 25th day is not a Business Day, the next succeeding Business
Day (each a "Distribution Date"), commencing in ______ 200__. All amounts
distributable with respect to this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.

        The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Distribution Account and related accounts shall
be made from time to time for purposes other than distributions to Holders of
the Certificates, such purposes including reimbursement of Advances made, or
certain expenses incurred, with respect to the Mortgage Loans and administration
of the Trust Fund.

        So long as this Certificate is registered in the name of a clearing
agency or its nominee, the Paying Agent will make distributions on this
Certificate by wire transfer of immediately available funds to the Clearing
agency or its nominee. Otherwise, all distributions under the Pooling and
Servicing Agreement will be made by the Paying Agent either (i) by check mailed
to the address of the Holder as it appears on the Certificate Register on the
related Record Date or (ii) upon request to the Paying Agent in writing by the
Record Date immediately prior to the Distribution Date of any Holder of
Certificates of this Class having an aggregate initial principal amount equal to
or in excess of $1,000,000, by wire transfer of immediately available funds to
the account of such Holder. A fee may be charged by the Paying Agent to a
Certificateholder for any payment made by wire transfer. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of a pendency of such distribution and only upon
presentation and surrender of this Certificate at its principal Corporate Trust
Office or such other offices or agencies appointed by the Paying Agent for that
purpose and such other locations provided in the Pooling and Servicing
Agreement.

        The Trustee will duly and punctually make distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code by any Person from
a distribution to any Holder shall be considered as having been distributed to
such Holder for all purposes of the Pooling and Servicing Agreement.

        The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the Holders of
the Certificates under the Pooling and Servicing Agreement at any time by the
Depositor, the Master Servicer and the Trustee with consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Pooling and
Servicing Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

        As provided in the Pooling and Servicing Agreement and subject to any
limitations on transfer of this Certificate by a clearing agency or its nominee
and certain limitations set forth in the Pooling and Servicing Agreement, the
transfer of this Certificate is registerable in the Certificate Register upon
surrender of this Certificate

                                       A-2

<PAGE>

for registration of transfer at the principal Corporate Trust Office of the
Trustee or such other offices or agencies appointed by the Trustee for that
purpose and such other locations provided in the Pooling and Servicing
Agreement, duly endorsed by or accompanied by an assignment in the form below or
other written instrument of transfer in form satisfactory to the Trustee and
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in the
same aggregate principal balance will be issued to the designated transferee or
transferees.

        Subject to the terms of the Pooling and Servicing Agreement, the
Certificates of this Class will be registered as one or more certificates held
by a clearing agency or its nominee and beneficial interests will be held by
Beneficial Owners through the book-entry facilities of such Clearing agency or
its nominee in minimum denominations of $25,000 and integral multiples of $1,000
in excess thereof.

        As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for a
new Certificate of the same Class in the same denomination. No service charge
will be made for any such registration of transfer or exchange, but the Trustee
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

        The Depositor, the Master Servicer, the Trustee and the Paying Agent and
any agent of the Depositor, the Master Servicer, the Trustee and the Paying
Agent may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

        The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Holders of all
Certificates of all amounts held by the Trustee and required to be paid to such
Holders pursuant to the Pooling and Servicing Agreement or the last to occur of
(a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Fund, (b) the disposition of all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund
and (c) at any time when a qualified liquidation of the Trust Fund is effected
as described in the Pooling and Servicing Agreement.

        The Pooling and Servicing Agreement also provides that (i) on and after
the Initial Optional Termination Date, the Master Servicer may purchase the
Mortgage Loans then remaining in the Trust Fund and apply the proceeds of such
sale to effect early retirement of the Certificates and (ii) under certain
circumstances relating to the qualification of any REMIC as a REMIC under the
Code the Mortgage Loans may be sold, thereby effecting the early retirement of
the Certificates.

        Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Pooling and Servicing Agreement or be valid for any purpose.

        THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK.

        The Trustee has executed this Certificate on behalf of the Trust not in
its individual capacity but solely as Trustee under the Pooling and Servicing
Agreement, and the Trustee shall be liable hereunder only in respect of the
assets of the Trust.

                                       A-3
<PAGE>

        IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.

Dated: __________ ___, 200__

                                            ------------------------------------
                                            AS TRUSTEE

                                            BY:
                                                  ------------------------------
                                                  Authorized Officer

[SEAL]

ATTEST:

                          CERTIFICATE OF AUTHENTICATION

THIS IS ONE OF THE CLASS AF-__ CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
POOLING AND SERVICING AGREEMENT.

Dated: ____________ ___, 200__
                                            ------------------------------------
                                            AS TRUSTEE

                                            BY:
                                                 -------------------------------
                                                 Authorized Signatory

                                      A-4
<PAGE>

                                FORM OF TRANSFER

        FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
___________________________________________________________________________

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE___________________________________________________________________
___________________________________________________________________________

            (Please print or typewrite name and address of assignee)

the within Certificate and does hereby irrevocably constitute and appoint
_________________________ (Attorney) to transfer the said Certificate in the
Certificate Register of the within-named Trust, with full power of substitution
in the premises.

Dated:_______________

________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of this Certificate in every particular without alteration
or enlargement or any change whatever.

______________________________________________________
SIGNATURE GUARANTEED: The signature must be guaranteed by a commercial bank or
trust company or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.

                                  ABBREVIATIONS

        The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                                     <C>
        TEN COM   as tenants in common                  UNIF GIFT MIN ACT   Custodian..............

                                                                                (Cus)(Minors)

        TEN ENT.  as tenants by the entireties                  Under Uniform Gifts to Minors Act

        JT TEN.   as joint tenants with rights of                 ..............................

                  survivorship and not as                                                      [State]

                  Tenants in Common
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                            DISTRIBUTION INSTRUCTIONS

        The assignee should include the following for purposes of distribution:

        Distributions shall be made, by wire transfer or otherwise, in
immediately available funds, to _________________, for the account of
____________, account number _______________, or, if mailed by check, to
_____________. Applicable reports and statements should be mailed to
___________. This information is provided by _____________________, the assignee
named above, or _____________________, as its agent.

                                      A-5
<PAGE>

                                    EXHIBIT B

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO SELLER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                      AEGIS ASSET SECURITIES TRUST 200__-__

            MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 200__-__

                               CLASS B CERTIFICATE

THE PRINCIPAL OF THIS CERTIFICATE IS SUBJECT TO PREPAYMENT FROM TIME TO TIME
WITHOUT SURRENDER OF OR NOTATION ON THIS CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET
FORTH BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE.

THIS CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST FOR FEDERAL INCOME TAX
PURPOSES.

THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.

<TABLE>
<S>                                              <C>
DENOMINATION: $__________                        INITIAL PRINCIPAL BALANCE: $__________

PASS-THROUGH RATE:

REGISTERED HOLDER: CEDE & CO.
CERTIFICATE NO. B-__                             CUSIP NO: __________
</TABLE>

        This Certificate evidences a beneficial ownership interest in a Trust
consisting primarily of a pool of Mortgage Loans (collectively, the "Mortgage
Loans") formed and sold by

                    AEGIS ASSET BACKED SECURITIES CORPORATION

        THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
AEGIS ASSET BACKED SECURITIES CORPORATION, THE MASTER SERVICER, ANY SERVICER,
THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.

                                       B-1
<PAGE>

        The Registered Holder named above is the owner of the Percentage
Interest calculated as set forth below in the above mentioned Class of
Certificates issued by the Trust (the "Trust") created pursuant to a Pooling and
Servicing Agreement dated as of ________, 200__ (the "Pooling and Servicing
Agreement"), among Aegis Asset Backed Securities Corporation (herein called the
"Depositor," which term includes any successor entity under the Pooling and
Servicing Agreement), Aegis Mortgage, Inc., as Master Servicer,
____________________, as Servicer, and ____________________, as Trustee, a
summary of certain of the pertinent provisions of which is set forth herein. To
the extent not defined herein, capitalized terms used herein have the meanings
assigned in the Pooling and Servicing Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Pooling and
Servicing Agreement to which Pooling and Servicing Agreement the Holder of this
Certificate, by virtue of the acceptance hereof, assents and by which such
Holder is bound.

        This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Loan Asset Backed Certificates, Series 200__-__ (herein
called the "Certificates") and represents a Percentage Interest in the above
mentioned Class of Certificates equal to the quotient, expressed as a
percentage, obtained by dividing the Denomination of this Certificate specified
above by the Initial Principal Balance specified above of the above mentioned
Class of Certificates. The Certificates are issued in multiple Classes
designated as specifically set forth in the Pooling and Servicing Agreement. The
Certificates will evidence in the aggregate 100% of the beneficial ownership of
the Trust.

        To the extent and subject to the limitations set forth in the Pooling
and Servicing Agreement, the Person in whose name this Certificate is registered
at the close of business on the last Business Day of the month immediately
preceding the month of such distribution (the "Record Date") is entitled to
receive an amount equal to the product of such Person's Percentage Interest and
the Distribution Amount (as defined in the Pooling and Servicing Agreement) with
respect to the above mentioned Class of Certificates on the 25th day of each
month or, if such 25th day is not a Business Day, the next succeeding Business
Day (each a "Distribution Date"), commencing in _______ 200__. All amounts
distributable with respect to this Certificate are payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.

        The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
in the Pooling and Servicing Agreement. As provided in the Pooling and Servicing
Agreement, withdrawals from the Distribution Account and related accounts shall
be made from time to time for purposes other than distributions to Holders of
the Certificates, such purposes including reimbursement of Advances made, or
certain expenses incurred, with respect to the Mortgage Loans and administration
of the Trust Fund.

        So long as this Certificate is registered in the name of a clearing
agency or its nominee, the Paying Agent will make distributions on this
Certificate by wire transfer of immediately available funds to the Clearing
agency or its nominee. Otherwise, all distributions under the Pooling and
Servicing Agreement will be made by the Paying Agent either (i) by check mailed
to the address of the Holder as it appears on the Certificate Register on the
related Record Date or (ii) upon request to the Paying Agent in writing by the
Record Date immediately prior to the Distribution Date of any Holder of
Certificates of this Class having an aggregate initial principal amount equal to
or in excess of $1,000,000, by wire transfer of immediately available funds to
the account of such Holder. A fee may be charged by the Paying Agent to a
Certificateholder for any payment made by wire transfer. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of a pendency of such distribution and only upon
presentation and surrender of this Certificate at its principal Corporate Trust
Office or such other offices or agencies appointed by the Paying Agent for that
purpose and such other locations provided in the Pooling and Servicing
Agreement.

        The Trustee will duly and punctually make distributions with respect to
this Certificate in accordance with the terms hereof and the Pooling and
Servicing Agreement. Amounts properly withheld under the Code by any Person from
a distribution to any Holder shall be considered as having been distributed to
such Holder for all purposes of the Pooling and Servicing Agreement.

        The Pooling and Servicing Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the Holders of
the Certificates under the Pooling and Servicing Agreement at any time by the
Depositor, the Master

                                       B-2
<PAGE>

Servicer and the Trustee with consent of the Holders of Certificates entitled to
at least 66% of the Voting Rights. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Pooling and Servicing Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

        As provided in the Pooling and Servicing Agreement and subject to any
limitations on transfer of this Certificate by a clearing agency or its nominee
and certain limitations set forth in the Pooling and Servicing Agreement, the
transfer of this Certificate is registerable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the principal
Corporate Trust Office of the Trustee or such other offices or agencies
appointed by the Trustee for that purpose and such other locations provided in
the Pooling and Servicing Agreement, duly endorsed by or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in the same aggregate principal balance will be
issued to the designated transferee or transferees.

        Subject to the terms of the Pooling and Servicing Agreement, the
Certificates of this Class will be registered as one or more certificates held
by a clearing agency or its nominee and beneficial interests will be held by
Beneficial Owners through the book-entry facilities of such Clearing agency or
its nominee in minimum denominations of $100,000 and integral multiples of
$1,000 in excess thereof.

        As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for a
new Certificate of the same Class in the same denomination. No service charge
will be made for any such registration of transfer or exchange, but the Trustee
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.

        The Depositor, the Master Servicer, the Trustee and the Paying Agent and
any agent of the Depositor, the Master Servicer, the Trustee and the Paying
Agent may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

        The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Holders of all
Certificates of all amounts held by the Trustee and required to be paid to such
Holders pursuant to the Pooling and Servicing Agreement or the last to occur of
(a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Fund, (b) the disposition of all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund
and (c) at any time when a qualified liquidation of the Trust Fund is effected
as described in the Pooling and Servicing Agreement.

        The Pooling and Servicing Agreement also provides that (i) on and after
the Initial Optional Termination Date, the Master Servicer may purchase the
Mortgage Loans then remaining in the Trust Fund and apply the proceeds of such
sale to effect early retirement of the Certificates and (ii) under certain
circumstances relating to the qualification of any REMIC as a REMIC under the
Code the Mortgage Loans may be sold, thereby effecting the early retirement of
the Certificates.

        Unless the certificate of authentication hereon has been executed by the
Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Pooling and Servicing Agreement or be valid for any purpose.

        THIS CERTIFICATE AND THE POOLING AND SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK.

                                       B-3
<PAGE>

        The Trustee has executed this Certificate on behalf of the Trust not in
its individual capacity but solely as Trustee under the Pooling and Servicing
Agreement, and the Trustee shall be liable hereunder only in respect of the
assets of the Trust.

                                       B-4
<PAGE>

        IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Dated: __________ ___, 200__            ___________________________________
                                        AS TRUSTEE

                                      BY:   ________________________________
                                            Authorized Officer
[SEAL]
ATTEST:

                          CERTIFICATE OF AUTHENTICATION

THIS IS ONE OF THE CLASS B-__ CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
POOLING AND SERVICING AGREEMENT.

Dated: ________ ___, 200__              ___________________________________
                                        AS TRUSTEE

                                      BY: __________________________
                                          Authorized Signatory

                                       B-5
<PAGE>

                                FORM OF TRANSFER
        FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
___________________________________________________________________________

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE___________________________________________________________________
___________________________________________________________________________

            (Please print or typewrite name and address of assignee)

the within Certificate and does hereby irrevocably constitute and appoint
_________________________ (Attorney) to transfer the said Certificate in the
Certificate Register of the within-named Trust, with full power of substitution
in the premises.

Dated:_______________

________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of this Certificate in every particular without alteration
or enlargement or any change whatever.

______________________________________________________
SIGNATURE GUARANTEED: The signature must be guaranteed by a commercial bank or
trust company or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.

                                  ABBREVIATIONS

        The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                                     <C>
        TEN COM   as tenants in common                  UNIF GIFT MIN ACT   Custodian..............

                                                                                (Cus)(Minors)

        TEN ENT.  as tenants by the entireties                  Under Uniform Gifts to Minors Act

        JT TEN.   as joint tenants with rights of                 ..............................

                  survivorship and not as                                                      [State]

                  Tenants in Common
</TABLE>

        Additional abbreviations may also be used though not in the above list.

                            DISTRIBUTION INSTRUCTIONS

        The assignee should include the following for purposes of distribution:

        Distributions shall be made, by wire transfer or otherwise, in
immediately available funds, to _________________, for the account of
____________, account number _______________, or, if mailed by check, to
_____________. Applicable reports and statements should be mailed to
___________. This information is provided by _____________________, the assignee
named above, or _____________________, as its agent.

                                      B-6

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