Document:

<PAGE>

                                                                     EXHIBIT 4.4

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                      SEQUOIA RESIDENTIAL FUNDING, INC.,
                                  as Depositor

                               RWT HOLDINGS, INC.,
                                    as Seller

                          [__________________________],
                               as Master Servicer

                                       and

                           [________________________],
                                   as Trustee

                         POOLING AND SERVICING AGREEMENT

                         Dated as of _____________, 200_

                       Mortgage Pass-Through Certificates
                                  Series 200_-_

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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     Page No.
                                                                                                                     --------
<S>                                                                                                                  <C>
PRELIMINARY STATEMENT.................................................................................................  1

                                                           ARTICLE I

                                                          DEFINITIONS

Section 1.01   Definitions............................................................................................  3

                                                          ARTICLE II

                                  CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01   Conveyance of Mortgage Loans...........................................................................  28
Section 2.02   Acceptance By Trustee..................................................................................  29
Section 2.03      Representations and Warranties of the Seller, the Depositor
                    and the Trustee...................................................................................  30
Section 2.04      Substitution of Mortgage Loans......................................................................  34
Section 2.05      Designation of Interests in REMIC...................................................................  36
Section 2.06      Designation of Start-up Day.........................................................................  36
Section 2.07      REMIC Certificate Maturity Date.....................................................................  36
Section 2.08      Purchase of Converted Mortgage Loans................................................................  36

                                                          ARTICLE III

                                        ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 3.01      The Master Servicer to Act as Servicer..............................................................  36
Section 3.02      Servicing Agreements between Master Servicer and Servicers;
                    Enforcement of Servicer's and Seller's Obligations................................................  38
Section 3.03      Liability of the Master Servicer....................................................................  39
Section 3.04      Collection of Certain Mortgage Loan Payments; Certificate
                    Account; Distribution Account.....................................................................  39
Section 3.05      Collection of Taxes, Assessments and Similar Items;
                    Master Servicing Accounts.........................................................................  42
Section 3.06      Permitted Withdrawals from the Certificate Account..................................................  42
Section 3.07      Maintenance of the Primary Insurance Policies;
                    Collections Thereunder............................................................................  43
Section 3.08      Maintenance of Hazard Insurance and Errors and Omissions
                    and Fidelity Coverage.............................................................................  44
Section 3.09      Enforcement of Due-on-Sale Clauses; Assumption Agreements...........................................  45
Section 3.10      Realization upon Defaulted Mortgage Loans...........................................................  46
Section 3.11      Trustee to Cooperate; Release of Mortgage Files.....................................................  47
Section 3.12      Servicing and Other Compensation; Payment of Certain Expenses
                    by the Master Servicer............................................................................  48
Section 3.13      Annual Statement as to Compliance...................................................................  49
</TABLE>

                                        i
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<TABLE>
<S>                                                                                                                     <C>
Section 3.14      Annual Independent Public Accountants' Servicing Report.............................................  50
Section 3.15      Access to Certain Documentation and Information Regarding the
                    Mortgage Loans....................................................................................  50
Section 3.16      Rights of the Depositor in Respect of the Master Servicer...........................................  50
Section 3.17      Bankruptcy Bond.....................................................................................  51
Section 3.18      Maintenance of the Pool Insurance Policy............................................................  51
Section 3.19      Bankruptcy Reserve Fund.............................................................................  52
Section 3.20      Maintenance of Special Hazard Policy................................................................  53

                                                          ARTICLE IV

                                        MASTER SERVICER'S CERTIFICATE; MONTHLY ADVANCES

Section 4.01      Master Servicer's Certificate.......................................................................  55
Section 4.02      Monthly Advances....................................................................................  55

                                                           ARTICLE V

                                         PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS

Section 5.01      Distributions.......................................................................................  55
Section 5.02      Priorities of Distribution..........................................................................  56
Section 5.03      Allocation of Net Realized Losses...................................................................  58
Section 5.04      Statements to Certificateholders....................................................................  58
Section 5.05      Tax Returns and Reports to Certificateholders.......................................................  61
Section 5.06      Tax Matters Person..................................................................................  62
Section 5.07      Right of the Tax Matters Person in Respect of the Trustee...........................................  62
Section 5.08      REMIC Related Covenants.............................................................................  62
Section 5.09      Determination of Pass-Through Rates for COFI Certificates...........................................  63
Section 5.10      Determination of Pass-Through Rates for LIBOR Certificates..........................................  65

                                                           ARTICLE VI

                                                        THE CERTIFICATES

Section 6.01      The Certificates....................................................................................  66
Section 6.02      Registration of Transfer and Exchange of Certificates...............................................  67
Section 6.03      Mutilated, Destroyed, Loss or Stolen Certificates...................................................  71
Section 6.04      Persons Deemed Owners...............................................................................  71

                                                         ARTICLE VII

                                             THE DEPOSITOR AND THE MASTER SERVICER

Section 7.01      Respective Liabilities of the Depositor and the Master Servicer.....................................  71
Section 7.02      Merger or Consolidation of the Depositor or the Master Servicer.....................................  71
Section 7.03      Limitation on Liability of Depositor, the Master Servicer and Others................................  72
Section 7.04      Depositor and Master Servicer Not to Resign.........................................................  72
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                                                     <C>
                                                         ARTICLE VIII

                                                            DEFAULT

Section 8.01      Events of Default...................................................................................  73
Section 8.02      Remedies of Trustee.................................................................................  74
Section 8.03      Directions by Certificateholders and Duties of Trustee During
                        Event of Default..............................................................................  74
Section 8.04      Action upon Certain Failures of the Master Servicer and upon
                        Event of Default..............................................................................  75
Section 8.05      Trustee to Act; Appointment of Successor............................................................  75
Section 8.06      Notification to Certificateholders..................................................................  76

                                                          ARTICLE IX

                                                         THE TRUSTEE

Section 9.01      Duties of Trustee...................................................................................  76
Section 9.02      Certain Matters Affecting the Trustee...............................................................  77
Section 9.03      Trustee Not Liable for Certificates.................................................................  77
Section 9.04      Trustee May Own Certificates........................................................................  78
Section 9.05      Eligibility Requirements for Trustee................................................................  78
Section 9.06      Resignation and Removal of Trustee..................................................................  78
Section 9.07      Successor Trustee...................................................................................  79
Section 9.08      Merger or Consolidation of Trustee..................................................................  79
Section 9.09      Appointment of Co-Trustee or Separate Trustee.......................................................  80
Section 9.10      Authenticating Agents...............................................................................  80
Section 9.11      Trustee's Fees and Expenses.........................................................................  81
Section 9.12      Tax Returns.........................................................................................  82

                                                           ARTICLE X

                                                          TERMINATION

Section 10.01     Termination upon Purchase by the Master Servicer or Liquidation
                        of All Mortgage Loans.........................................................................  82
Section 10.02     Additional Termination Requirements.................................................................  83

                                                          ARTICLE XI

                                                   MISCELLANEOUS PROVISIONS

Section 11.01     Amendment...........................................................................................  84
Section 11.02     Recordation of Agreement............................................................................  85
Section 11.03     Limitation on Rights of Certificateholders..........................................................  85
Section 11.04     Governing Law.......................................................................................  86
Section 11.05     Notices.............................................................................................  86
</TABLE>

                                      iii
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<TABLE>
<S>                                                                                                                     <C>
Section 11.06     Severability of Provisions..........................................................................  86
Section 11.07     Certificates Nonassessable and Fully Paid...........................................................  87
Section 11.08     Access to List of Certificateholders................................................................  87
</TABLE>

Exhibit A       Form of Senior Certificate
Exhibit B       Form of Residual Certificate
Exhibit C
Exhibit D       Form of Subordinated Certificate
Exhibit E       Mortgage Pass-Through Certificate, Series 200__-_
Exhibit F       Mortgage Loan Schedule
Exhibit G       Seller's Agreement for Mortgage Loans
Exhibit H       Request for Release of Documents
Exhibit I       Transfer Affidavit
Exhibit J       Investment Letter
Exhibit K       Principal and Interest Distribution Summary
Exhibit L       Form of Opinion of Counsel Pursuant to Section 6.02

                                       iv
<PAGE>

      THIS POOLING AND SERVICING AGREEMENT, dated as of __________, among
Sequoia Residential Funding, Inc., as depositor (together with its permitted
successors and assigns, the "Depositor"), RWT Holdings, Inc., as seller
(together with its permitted successors and assigns, the "Seller"),
[_________________] as master servicer (together with its permitted successors
and assigns, the "Master Servicer"), and [________________] as trustee (together
with its permitted successors and assigns, the "Trustee").

                          W I T N E S S E T H T H A T:

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

                              PRELIMINARY STATEMENT

      The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. [The Trust Fund for federal income
tax purposes will consist of a single REMIC. The Certificates will represent the
entire beneficial ownership interest in the Trust Fund. The Regular Certificates
will represent the "regular interest" in the REMIC and the Residual Certificates
will represent the single "residual interest" in the REMIC. The "latest possible
maturity date" for federal income tax purposes of all interests created hereby
will be the Latest Possible Maturity Date.]

      The following table sets forth characteristics of the Certificates,
together with the minimum denominations 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 any amount in excess of the minimum
denomination and, in addition, one Residual Certificate representing the Tax
Matters Person Certificate may be issued in a different amount):

<TABLE>
<CAPTION>
                                Class                                                                      Integral Multiples in
                             Certificate                                              Minimum                Excess of Minimum
                               Balance               Pass-Through Rate              Denomination               Denomination
                             -----------             -----------------              ------------           ---------------------
<S>                          <C>               <C>                                  <C>                    <C>
Class A-1                                      [Variable Rate (1)]
Class X                          (2)                       (3)
[Class R]                        [ ]                       [ ]                          [ ]                        [N/A]
Class M-1                                      [( )% (Variable Rate (1)]
Class B-1                                      [( )% (Variable Rate (1)]
Class B-2                                      [( )% (Variable Rate (1)]
</TABLE>

----------

[(1)  The Pass-Through Rate for any Distribution Date will equal the weighted
      average of the Net Mortgage Rates then in effect for each Mortgage Loan.
      The Net Mortgage Rate for each Mortgage Loan will equal the Mortgage Rate
      thereon on the first date of the month of the related Distribution Date
      less the related Expense Rate. The Pass-Through Rate for the first
      Distribution Date is expected to be approximately % per annum.]

(2)   The Class X Certificates will have no principal balances and will bear
      interest on the Notional Amount.

(3)   The Pass-Through Rate for this Class for any Distribution Date will be
      equal to the excess of (a) the weighted average of the Net Mortgage Rates
      of the Mortgage Loans over (b) _____%.

                                       1
<PAGE>

      Set forth below are designations of Classes of Certificates to the
categories used herein:

<TABLE>
<S>                                                                    <C>
      Accretion Directed Certificates............................      [      ].

      Accrual Certificates.......................................      [      ].

      Book-Entry Certificates....................................      All Classes of Certificates other than the Physical
                                                                       Certificates.

      COFI Certificates..........................................      [      ].

      Component Certificates.....................................      [      ].

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

<TABLE>
<CAPTION>
                                                                                                Initial
                                                                                               Component            Pass-Through
                                                                       Designation              Balance                Rate
<S>                                                                                            <C>                  <C>
                                                                            N/A                   N/A                   N/A
</TABLE>

<TABLE>
<S>                                                                    <C>
      Delay Certificates.........................................      All interest-bearing Classes of Certificates other than the
                                                                       Non-Delay Certificates, if any.

      ERISA-Restricted Certificates..............................      The Class M-1, Class B-1 and Class B-2.

      Floating Rate Certificates.................................      [      ].

      Inverse Floating Rate

          Certificates...........................................      [      ].

      LIBOR Certificates.........................................      [      ].

      Mezzanine Certificates.....................................      The Class M-1 Certificates.

      Non-Delay Certificates.....................................      [      ].

      Notional Amount Certificates...............................      The Class X Certificates.

      Offered Certificates.......................................      All Classes of Certificates other than the Private
                                                                       Certificates.

      Physical Certificates......................................      The [Class X,] Class R and Subordinated
</TABLE>

                                       2
<PAGE>

<TABLE>
<S>                                                                    <C>
                                                                       Certificates.

      Planned Principal Classes                                        [      ].

      Primary Planned Principal Classes..........................      [      ].

      Principal Only Certificates................................      [      ].

      Private Certificates.......................................      The Class R, Class B-1 and Class B-2 Certificates.

      Rating Agencies............................................      [      ].

      Regular Certificates.......................................      All Classes of Certificates other than the Class R
                                                                       Certificates.

      Residual Certificates......................................      Class R Certificates.

      Scheduled Classes..........................................      [      ].

      Secondary Planned Principal Classes........................      [      ].

      Senior Certificates........................................      Class A-1, Class X and [Class R] Certificates.

      Subordinated Certificates..................................      The Mezzanine Certificates, Class B-1 and Class B-2
                                                                       Certificates.

      Targeted Principal Classes.................................      [      ].
</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 I

                                   DEFINITIONS

      Section 1.01. Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article.

      Accretion Directed Certificates: As specified in the Preliminary
Statement.

                                       3
<PAGE>

      Accrual Amount: With respect to any Class of Accrual Certificates and any
Distribution Date prior to the Accrual Termination Date, the amount allocable to
interest on each such Class of Accrual Certificates with respect to such
Distribution Date pursuant to Section 5.02(a)(i).

      Accrual Certificates: As specified in the Preliminary Statement.

      Accrual Termination Date:

      Advancing Date: The fourth Business Day preceding the related Distribution
Date.

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

      Allocable Share: As to each Class of Regular Certificates, such Class'
share of the interest reduction in respect of any Debt Service Reduction
Mortgage Loan or Deficient Valuation Mortgage Loan or any Mortgage Loan that is
the subject of a Relief Act Reduction, such share being determined by the ratio
of one month's interest at the related Pass-Through Rate on such Class' Senior
Percentage or, in the case of the Subordinate Certificates, the Subordinate
Percentage Allocation of the Scheduled Principal Balance of such Mortgage Loan
and one month's interest on the Scheduled Principal Balance of such Mortgage
Loan at the related Net Mortgage Rate.

      [Allocated Amount]:

      [Allocated Amount Decline: As to each respective Allocated Amount and
Distribution Date, the excess of (x) such Allocated Amount immediately following
the Due Date in the month preceding the month of such Distribution Date over (y)
such Allocated Amount immediately following the Due Date in the month of such
Distribution Date; provided that the Allocated Amount determined pursuant to
clause (y) shall be zero immediately following the

      Due Date in the month in which the Final Distribution Date occurs.]

      Amortization Payment: As to any REO Mortgage Loan and any month, the
payment of principal and accrued interest due in such month in accordance with
the terms of the related Mortgage Note as contemplated by the second paragraph
of Section 3.10.

      Amount Held for Future Distribution: As to any Distribution Date, the
total of the amounts held in the Certificate Account at the close of business on
the preceding Determination Date on account of (i) Principal Prepayments and
Liquidation Proceeds received or made in the month of such Distribution Date and
(ii) payments which represent receipt of scheduled payments of principal and
interest in respect of a Due Date or Due Dates subsequent to the related Due
Date.

      [Applicable Credit Support Percentage: As defined in Section 5.02(d).]

      Appraised Value: The value of the property underlying a Mortgage Loan
based, in the case of origination of such Mortgage Loan, on the lower of an
appraisal at the time of origination

                                       4
<PAGE>

or the sales price of such property or based, in the case of a refinancing, on
an appraisal at the time of refinancing.

      Available Funds: As to any Distribution Date, an amount equal to (a) the
sum of (i) the amount collected in respect of the Mortgage Loans as of the close
of business on the preceding Determination Date, (ii) the amount of any Monthly
Advance made on the preceding Certificate Account Deposit Date, (iii) the
aggregate of the Purchase Prices for Defective Mortgage Loans repurchased on
such Distribution Date pursuant to Sections 2.02 or 2.03, (iv) the aggregate of
the Substitution Adjustment Amounts in connection with any Substitute Mortgage
Loans substituted for Defective Mortgage Loans on such Distribution Date
pursuant to Section 2.04, (v) any amount required to be deposited in the
Certificate Account on the preceding Certificate Account Deposit Date pursuant
to Section 3.04(a), reduced by (b) the sum as of the close of business on such
preceding Determination Date of (x) the Amount Held for Future Distribution, (y)
amounts permitted to be withdrawn by the Master Servicer from the Certificate
Account in respect of the Mortgage Loans pursuant to clauses (i)-(vi),
inclusive, of Section 3.06 and (z) all income from Permitted Investments that
are held in the Investment Account for the account of the Master Servicer.

      [Balloon Payment: The principal component of a payment due on a Mortgage
Loan on its maturity date.]

      [Bankruptcy Bond: The limited purpose bond with respect to proceedings
relating to Mortgagors under the Federal Bankruptcy Code, which proceedings
result in Bankruptcy Losses, and all amendments or endorsements thereto, or any
replacement bond obtained by the Master Servicer pursuant to Section 3.17.]

      Bankruptcy Coverage Termination Date: The point of time at which the
Current Bankruptcy Amount is reduced to zero.

      Bankruptcy Loss: Any Deficient Valuation or Debt Service Reduction.

      [Blanket Mortgage: The mortgage or mortgages encumbering the Cooperative
Property.]

      Book-Entry Certificate: As specified in the Preliminary Statement.

      Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the State of North Carolina or in the state
where the Corporate Trust Office is located are required or authorized by law or
executive order to be closed.

      Certificate: Any Regular Certificate or Residual Certificate.

      Certificate Account: The segregated account or accounts established and
maintained by the Master Servicer pursuant to Section 3.04(b). Such accounts
shall be entitled "___________ , as Trustee, for the benefit of
Certificateholders of Mortgage Pass-Through Certificates, Series 200 -
Certificate Account" and shall each be an Eligible Account. Funds deposited in
the Certificate Account (other than any income on Permitted Investments included
therein) shall be held in trust for Certificateholders.

                                       5
<PAGE>

      Certificate Account Deposit Date: As to any Distribution Date, the
Business Day preceding such Distribution Date or if the Certificate Account is
held at ____________________, such Distribution Date.

      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, the Master Servicer or any affiliate thereof 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 any such consent has been obtained,
unless such entity is the registered owner of the entire Class of Certificates,
provided that the Trustee shall not be responsible for knowing that any
Certificate is registered in the name of such an affiliate unless one of its
Responsible Officers has actual knowledge.

      [Certificate Insurance Policy: The certificate guaranty surety bond,
policy number [ ], dated ___________, 20__, issued by the Certificate Insurer in
favor of the Trustee for the benefit of the Certificateholders.]

      Certificate Insurance Premium: The semiannual premium payable by the
Trustee to the Certificate Insurer under the Certificate Insurance Policy
specified in the agreement between the Certificate Insurer and the Depositor.

      Certificate Insurance Proceeds: Any proceeds of the Certificate Insurance
Policy.

      Certificate Insurer: So long as the Certificate Insurance Policy is in
force, [ ], a [ ], or any successor thereto, as issuer of the Certificate
Insurance Policy.]

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

      Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 6.02.

      Class: As to the Certificates, the Class A-1, Class X, Class M-1, Class
B-1 and Class B-2 Certificates or the Residual Certificates, as the case may be.

      Class Certificate Balance: As to any Distribution Date and any Class of
Regular Certificates (other than the Notional Amount Certificates), the related
Initial Class Certificate Balance reduced by the sum of (i) the amount
distributed to Holders of such Class of Certificates on prior Distribution Dates
and allocable to principal and (ii) the sum of (a) in the case of such Classes
of Regular Certificates, the amount of the related Net Realized Losses
previously applied in reduction of the Class Certificate Balance of such Class
pursuant to Section 5.03 hereof and (b) in the case of the Class of Subordinate
Certificates then outstanding with the lowest priority of distribution pursuant
to Section 5.02(a), the amount by which the Pool Scheduled Principal Balance as
of the Due Date in the month of such Distribution Date exceeds the aggregate of
the Class Certificate Balances as of such Distribution Date (after giving effect
to (x) distributions to Holders of Regular Certificates on such Distribution
Date allocable to principal and (y) any allocation of the related Net Realized
Losses on such Distribution Date).

                                       6
<PAGE>

      Class Interest Shortfall: As to any Distribution Date and Class of Regular
Certificates, the amount by which the amount described in clause (i) of the
definition of Class Optimum Interest Distribution Amount for the related Class
of Certificates exceeds the amount of interest actually distributed on such
Class of Certificates on such Distribution Date.

      Class Optimum Interest Distribution Amount: As to any Distribution Date
and each Class of Regular Certificates, the sum of (i) one month's interest
accrued during the related Interest Accrual Period at the related Pass-Through
Rate on the applicable Class Certificate Balance or Notional Amount, subject to
reduction pursuant to Section 5.02(b), and (ii) any Class Unpaid Interest
Shortfall for such Class.

      [Class Subordination Percentage: With respect to any Distribution Date and
each Class of Subordinated Certificates, the quotient (expressed as a
percentage) of (a) the Class Certificate Balance of such Class of Certificates
immediately prior to such Distribution Date divided by (b) the aggregate of the
Class Certificate Balances immediately prior to such Distribution Date of all
Classes of Certificates.]

      Class Unpaid Interest Shortfall: As to any Distribution Date and each
Class of Regular Certificates, the amount by which the aggregate Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds the amount of
interest actually distributed on such Class on such prior Distribution Dates
pursuant to clause (ii) of the definition of Class Optimum Interest Distribution
Amount.

      Closing Date: __________, 200_.

      Code: The Internal Revenue Code of 1986, as the same may be amended from
time to time.

      [COFI: The Monthly Weighted Average Cost of Funds Index for the Eleventh
District Savings Institutions published by the Federal Home Loan Bank of San
Francisco.]

      [COFI Certificates: As specified in the Preliminary Statement.]

      [Component: As specified in the Preliminary Statement.]

      [Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, less all
amounts applied in reduction of the principal balance of such Component and Net
Realized Losses allocated thereto on previous Distribution Dates.]

      Component Certificates: As specified in the Preliminary Statement.

      [Converted Mortgage Loan: A Convertible Mortgage Loan that has converted
from an adjustable Mortgage Rate to a fixed Mortgage Rate.

                                       7
<PAGE>

      Convertible Mortgage Loan: A Mortgage Loan with a Mortgage Note that
provides for the conversion thereof at the option of the Mortgagor from an
adjustable Mortgage Interest Rate to a fixed Mortgage Interest Rate.]

      [Coop Shares: Shares issued by a Cooperative Corporation.]

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

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

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

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

      [Core Percentage:]

      Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate business shall be administered, which office
at the date of the execution of this instrument is located at
_______________________________.

      [Credit Enhancement Fee: As to each Mortgage Loan, the amount payable to
the Pool Insurer and the Special Hazard Insurer in respect of such Mortgage
Loan.]

      [Credit Enhancement Fee Rate: With respect to any Mortgage Loan, the sum
of the Pool Insurer Fee Rate and the Special Hazard Fee Rate.]

      Credit Support Termination Date: The point of time at which the Class
Certificate Balances of all of the Subordinate Certificates are reduced to zero.

      Current Bankruptcy Amount: As of any Determination Date, the Current
Bankruptcy Amount shall equal the Initial Bankruptcy Coverage Amount as reduced
by the aggregate amount of Bankruptcy Losses previously incurred during the
period from the Cut-Off Date through the last day of the month preceding the
month of such Distribution Date; provided, however, that such amount may be
reduced from time to time with the written consent of the Rating Agencies
without resulting in a downgrading to the current rating of the Certificates.

      Curtailment: Either any Principal Prepayment which is not a Principal
Prepayment in Full, any REO Proceeds treated as such pursuant to the second
paragraph of Section 3.10 or any Deficient Valuation that was covered by the
Current Bankruptcy Amount.

      Custodian: [_______________].

                                       8
<PAGE>

      Cut-Off Date: __________ 1, 200_.

      Cut-Off Date Pool Principal Balance: The aggregate of the Cut-Off Date
Principal Balances of the Mortgage Loans which is $[________].

      Cut-Off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-Off Date,
reduced by all installments of principal due on or prior thereto and not paid.

      Debt Service Reduction: As to any Mortgage Loan and any Determination
Date, the excess of (i) the installment of principal and interest due on the
related Due Date under the terms of such Mortgage Loan over (ii) the amount of
the monthly payment of principal and/or interest required to be paid with
respect to such Due Date by the Mortgagor as established by a court of competent
jurisdiction (pursuant to an order which has become final and nonappealable) as
a result of a proceeding initiated by or against the related Mortgagor under the
Bankruptcy Code, as amended from time to time (11 U.S.C.); provided that no such
occurrence shall be considered a Debt Service Reduction so long as the Master
Servicer is pursuing an appeal of the court order giving rise to any such
modification and (a) such Mortgage Loan is not in default with respect to
payment due thereunder in accordance with the terms of such Mortgage Loan as in
effect on the Cut-Off Date or (b) scheduled monthly payments of principal and
interest are being advanced by the Master Servicer in accordance with the terms
of such Mortgage Loan as in effect on the Cut-Off Date.

      Debt Service Reduction Mortgage Loan: Any Mortgage Loan that became the
subject of a Debt Service Reduction.

      Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.

      Deficient Valuation: As to any Mortgage Loan and any Determination Date,
the excess of (i) the then outstanding indebtedness under such Mortgage Loan
over (ii) the secured valuation thereof established by a court of competent
jurisdiction (pursuant to an order which has become final and nonappealable) as
a result of a proceeding initiated by or against the related Mortgagor under the
Bankruptcy Code, as amended from time to time (11 U.S.C.), pursuant to which
such Mortgagor retained such Mortgaged Property; provided that no such
occurrence shall be considered a Deficient Valuation so long as the Master
Servicer is pursuing an appeal of the court order giving rise to any such
modification and (a) such Mortgage Loan is not in default with respect to
payments due thereunder in accordance with the terms of such Mortgage Loan as in
effect on the Cut-Off Date or (b) scheduled monthly payments of principal and
interest are being advanced by the Master Servicer in accordance with the terms
of such Mortgage Loan as in effect on the Cut-Off Date.

      Deficient Valuation Mortgage Loan: Any Mortgage Loan that became the
subject of a Deficient Valuation.

      Definitive Certificates: As defined in Section 6.02.

                                       9
<PAGE>

      Delinquent Installments: The aggregate of interest installments at the
related Mortgage Interest Rate (net of the Master Servicing Fee Rate and the
Servicing Fee Rate for such Mortgage Loan), together with the aggregate of
principal installments on the Mortgage Loans due from and payable by Mortgagors
on the Due Date for a month, in the amounts required under the Mortgage Notes as
in effect on the Cut-Off Date, but not paid as of the close of business on the
Withdrawal Date in such calendar month, regardless of whether the unpaid
installments are a result of a bankruptcy court's reduction of the principal
balance of or the interest rate on a Mortgage Loan, including a reduction in
interest payable as a result of a principal reduction during the pendency of a
proceeding under the Bankruptcy Code, or a reduction resulting from the
extension of the term of a Mortgage Loan by the bankruptcy court.

      Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.

      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(3) 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 day of each month or
if such day is not a Business Day the next succeeding Business Day; provided,
however, that if such next succeeding Business Day is less than two Business
Days prior to the related Distribution Date the Determination Date shall be the
next Business Day preceding the day of such month.

      Distribution Date: The day of each month beginning 200 or, if such day is
not a Business Day, the Business Day immediately following.

      Due Date: As to any Distribution Date and Mortgage Loan the first day in
the calendar month of such Distribution Date.

      Duff & Phelps: Duff & Phelps Credit Rating Company, or any successor
thereto.

      Eligible Account: Either (A) segregated account or accounts maintained
with an institution whose deposits are insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC, the unsecured and
uncollateralized debt obligations of which shall be rated at least "[ ]" by
[__________] and "[ ]" by [__________], and which has a short term rating of at
least "[ ]" by [__________] and "[ ]" by [__________], and which is either (i) a
federal savings and loan association duly organized, validly existing and in
good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws and (iv) a
principal subsidiary of a bank holding company or (B) a trust account (which
shall be a "special deposit account") maintained with the trust department of a
federal or state chartered depository

                                       10
<PAGE>

institution or of a trust company, having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity. Any Eligible Accounts maintained
with the Trustee shall conform to the preceding clause (B).

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

      Escrow Account: The Escrow Account or Accounts established and maintained
as separate accounts by each Servicer pursuant to its Servicing Agreement and
caused to be established and maintained by the Master Servicer, pursuant to
Section 3.05.

      Event of Default: As defined in Section 8.01.

      Expenses: As to each Mortgage Loan, the sum of the related Servicing Fee,
Master Servicing Fee and Trustee Fee.

      Expense Fee: As to each Mortgage Loan and Distribution Date the sum of the
related Servicing Fee, Master Servicing Fee and Trustee Fee multiplied by the
Scheduled Principal Balance of such Mortgage Loan on the Due Date in the month
preceding such Distribution Date.

      Expense Rate: As to each Mortgage Loan, the sum of the related Servicing
Fee Rate, Master Servicing Fee Rate, the Trustee Fee Rate [and the Credit
Enhancement Fee Rate].

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

      FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.

      Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
10.01.

      Fitch: Fitch, Inc., or any successor thereto.

      FNMA: The Federal National Mortgage Association, or any successor thereto.

      Fraud Coverage Termination Date: The point of time at which the Fraud Loss
Coverage Amount is reduced to zero.

      Fraud Loan: Any Liquidated Mortgage Loan as to which a loss is sustained
by reason of a denial of coverage under any related Primary Insurance Policy
because of fraud, dishonesty or misrepresentation.

      Fraud Loss: As to any Fraud Loan, the Net Realized Loss with respect
thereto.

      Fraud Loss Coverage Amount: As of any Distribution Date an amount equal to
(i) during the period from the Cut-Off Date to the first anniversary thereof,
the Initial Fraud Loss Coverage Amount, reduced by Fraud Losses allocated to the
Certificates since the Closing Date (ii) during the period from the first
anniversary to the _____ anniversary of the Cut-Off Date, an amount equal to the
lesser of (a) ___% of the Pool Scheduled Principal Balance immediately prior to
each such anniversary reduced by Fraud Losses allocated to the Certificates
since such

                                       11
<PAGE>

anniversary and (b) the excess of the Initial Fraud Loss Coverage Amount over
the cumulative amount of Fraud Losses allocated to the Certificates prior to
such Distribution Date, (iii) during the period from the _____ anniversary to
the _____ anniversary of the Cut-Off Date, an amount equal to the lesser of (a)
____% of the Pool Scheduled Principal Balance immediately prior to each such
anniversary reduced by Fraud Losses allocated to the Certificates since such
anniversary and (b) the excess of the Initial Fraud Loss Coverage Amount over
the cumulative amount of Fraud Losses allocated to the Certificates prior to
such Distribution Date, and (iv) after the _____ anniversary of the Closing
Date, zero. The Fraud Loss Coverage Amount may be further reduced from time to
time below the amounts specified above with the written consent of the Rating
Agencies and without resulting in a downgrading to the then current rating of
the Certificates.

      Fraud Loss Coverage Termination Date: The point in time at which the Fraud
Loss Coverage Amount is reduced to zero.

      [Gross Margin: With respect to each Mortgage Loan, the percentage set
forth in the related Mortgage Note to be added to the Index to determine the
Mortgage Rate on each Adjustment Date, and which is set forth in the Mortgage
Loan Schedule.]

      [Guide:]

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

      [Index: As to each Mortgage Loan, the index for the adjustment of the
Mortgage Rate set forth as such in the related Mortgage Note, such index being
[the average weekly quoted yield on U.S. Treasury securities adjusted to a
constant maturity of one year as published in the Federal Reserve Statistical
Release H.15(519)] [the weekly average of secondary market interest rates on
six-month negotiable certificates of deposit as published in the Federal Reserve
Statistical Release H.15(519)] [the average of the London interbank offered
rates for six month dollar deposits in the London market based on quotations at
five major banks, as set forth in the "Money Rates" section of The Wall Street
Journal, Western Edition], or, if the [Federal Reserve Statistical Release
H.15(519)] [Money rates] section ceases to be published or becomes unavailable
for any reason, then as set forth in a comparable publication selected by the
Master Servicer, in each case as of a date 45 days preceding such Mortgage
Loan's Adjustment Date. Should the Index become unavailable, the Master
Servicer, on behalf of the Trustee, will select a new index that is based upon
comparable information.

      [Initial Adjustment Date: As to each Mortgage Loan, its first Adjustment
Date following the origination of such Mortgage Loan.]

      Initial Bankruptcy Coverage Amount: $ .

                                       12
<PAGE>

      Initial Class Certificate Balance: As to each Class of Certificates, the
aggregate of the Initial Class Certificate Balances of all Certificates of the
same Class, which is as follows:

                       Class A-1                             $
                       Class M-1                             $
                       Class B-1                             $
                       Class B-2                             $
                       Class R                               $

      As to each Certificate of the same Class of Certificates, the Initial
Class Certificate Balance set forth on the face thereof.

      Initial Component Balance: As specified in the Preliminary Statement.

      Initial Fraud Loss Coverage Amount: $[______].

      Initial LIBOR Rate: [________]

      Initial Special Hazard Coverage Amount: $[______].

      Insurance Proceeds: Proceeds paid by any insurer pursuant to any Primary
Insurance Policy and any insurance policy covering a Mortgage Loan, including
any amounts required to be paid pursuant to Section 3.08(a), in each case other
than (i) any amount included in such Insurance Proceeds in respect of Insured
Expenses and (ii) amounts required to be paid over to the Mortgagor pursuant to
law or the related Mortgage or Mortgage Note.

      Insured Expenses: Expenses in connection with a Mortgage Loan covered by
any Primary Insurance Policy or any other insurance policy.

      Interest Accrual Period: As to any Distribution Date and each Class of
Regular Certificates, the period from and including the first day of the month
preceding the calendar month of such Distribution Date to but not including the
first day of the calendar month of such Distribution Date.

      Investment Depository: A bank or trust company so long as the long-term
debt obligations of such other bank or trust company have been assigned
short-term ratings of at least [________] by [__________] and of at least "K" by
[__________].

      LIBOR Certificates: As specified in the Preliminary Statement.

      Liquidated Deficient Valuation Loss: As to any Liquidated Deficient
Valuation Mortgage Loan, the Net Realized Loss with respect thereto.

      Liquidated Deficient Valuation Mortgage Loan: Any Mortgage Loan that
became the subject of a Deficient Valuation after the Bankruptcy Coverage
Termination Date and subsequently became a Liquidated Mortgage Loan.

                                       13
<PAGE>

      Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer has determined that all amounts which it expects to recover from
or on account of such Mortgage Loan have been recovered.

      Liquidation Expenses: Expenses which are incurred by the Master Servicer
in connection with the liquidation of any defaulted Mortgage Loan and not
recovered by the Master Servicer under any Primary Insurance Policy or any other
insurance policy for reasons other than the Master Servicer's failure to comply
with Section 3.07, such expenses including, without limitation, legal fees and
expenses, any unreimbursed amount expended by the Master Servicer pursuant to
Section 3.08(a) (to the extent such amount is reimbursable under the terms of
Section 3.08(a)) respecting the related Mortgage Loan and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration or preservation.

      Liquidation Period: The period beginning on the date of adoption by the
Residual Certificateholders of a plan of complete liquidation of the Pool and
ending on the day that is 90 days after the date such plan is adopted.

      Liquidation Proceeds: Cash (including Insurance Proceeds and any REO
Proceeds) received in connection with the liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise.

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

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

      Master Servicer: [_________________], or its successor in interest, or any
successor servicer appointed as herein provided.

      Master Servicer's Certificate: A certificate completed by and executed on
behalf of the Master Servicer in accordance with Section 4.01.

      Master Servicing Fee: The amount payable to the Master Servicer pursuant
to Section 3.12 hereof.

      Master Servicing Fee Rate: As to any Mortgage Loan, [ ]% per annum.

      [Maximum Rate: With respect to each Mortgage Loan, the maximum rate of
interest set forth as such in the related Mortgage Note.]

      Mezzanine Certificates: As specified in the Preliminary Statement.

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

                                       14
<PAGE>

      Monthly Advance: As to any Distribution Date, the aggregate of the
advances made by the Master Servicer pursuant to Section 4.02, the amount of any
such Monthly Advance being equal to the Delinquent Installments on the Mortgage
Loans for the month during which such Distribution Date occurs, to the extent
that the Master Servicer determines that such Monthly Advance will not be a
Nonrecoverable Advance.

      Moody's: Moody's Investors Service, Inc., or any successor thereto.

      Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on a Mortgaged Property securing a Mortgage Note or creating a first lien
on a leasehold interest.

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

      Mortgage Interest Rate: As to any Mortgage Loan, the per annum rate of
interest at which interest accrues on the principal balance of such Mortgage
Loan in accordance with the terms of the related Mortgage Note.

      Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to Section 2.01 as from time to time are held as a part of the
Pool, including any Substitute Mortgage Loans and REO Mortgage Loans, the
Mortgage Loans originally so held being identified in the Mortgage Loan
Schedule.

      Mortgage Loan Schedule: As of any date of determination, the schedule of
Mortgage Loans included in the Pool. The initial schedule of such Mortgage Loans
as of the Cut-Off Date is attached hereto as Exhibit F, such schedule setting
forth the following information as to each such Mortgage Loan: (i) the Mortgage
Loan identifying number; (ii) the Mortgagor's name; (iii) the street address of
the Mortgaged Property, including the state; (iv) the property type of the
related Mortgaged Property; (v) the original number of months to maturity; (vi)
the Loan-to-Value Ratio as of the Cut-Off Date; (vii) the Mortgage Interest Rate
as of the date of origination; (viii) the scheduled amount of the monthly
installment of principal and interest; (ix) the original principal amount; (x)
the Cut-Off Date Principal Balance; and (xi) the related Servicing Fee Rate and
Master Servicing Fee Rate.

      Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with all riders thereto and amendments thereof.

      Mortgaged Property: The property subject to a Mortgage[, which, with
respect to a Cooperative Loan, is the related Coop Shares and Proprietary
Lease].

      Mortgagor: The obligor on a Mortgage Note.

      Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of Liquidation Expenses.

                                       15
<PAGE>

      Net Mortgage Interest Rate or NMR: As to any Mortgage Loan, such Mortgage
Loan's Mortgage Interest Rate reduced by the related Expense Rate.

      Net Prepayment Interest Shortfalls: As to any Distribution Date, the
amount by which the aggregate of Prepayment Interest Shortfalls during the
calendar month preceding the month of such Distribution Date exceeds the Master
Servicing Fee for such period.

      Net Realized Loss: Any of the following:

      (a) as to any Liquidated Mortgage Loan, the amount, if any, by which (i)
the Scheduled Principal Balance of such Liquidated Mortgage Loan or the Reduced
Scheduled Principal Balance if such Liquidated Mortgage Loan is a Liquidated
Deficient Valuation Mortgage Loan exceeds (ii) the portion of Net Liquidation
Proceeds realized thereon that is applied to a reduction of the principal
balance of such Mortgage Loan;

      (b) as to any Mortgage Loan that is subject to a Debt Service Reduction
and as to any Determination Date, the lesser of (i) the excess, if any, of (A)
the principal component of the monthly installment of principal and interest
(without giving effect to the Debt Service Reduction) over (B) the amount
applied in reduction of the principal balance of such Mortgage Loan on the
related Due Date (from Insurance Proceeds, Liquidation Proceeds or payments by
the Mortgagor) and (ii) the principal component of such Debt Service Reduction
for such Due Date; and

      (c) (i) as to any Mortgage Loan that is a Liquidated Deficient Valuation
Mortgage Loan, the amount of the related Deficient Valuation and (ii) as to any
Mortgage Loan that experiences a Deficient Valuation prior to the Bankruptcy
Coverage Termination Date, the Deficient Valuation with respect thereto.

      Net Special Hazard Losses: As to any Special Hazard Mortgage Loan, the Net
Realized Loss with respect thereto.

      NMR: See definition of Net Mortgage Interest Rate.

      Nonrecoverable Advance: Any Monthly Advance or any portion of a Monthly
Advance previously made or proposed to be made in respect of a Mortgage Loan
which has not been previously reimbursed and which, in the good faith judgment
of the Master

      Servicer, will not or, in the case of a proposed Monthly Advance, would
not be ultimately recoverable from Liquidation Proceeds or other recoveries in
respect of the related Mortgage Loan. The determination by the Master Servicer
that it has made a Nonrecoverable Advance or that any proposed advance, if made,
would constitute a Nonrecoverable Advance, shall be evidenced by a certificate
of a Servicing Officer of the Master Servicer delivered to the Trustee and the
Depositor and detailing the reasons for such determination.

      Non-Delay Certificates: As specified in the Preliminary Statement.

      Non-U.S. Person: An individual, corporation, partnership or other person
other than a citizen or resident of the United States, a corporation,
partnership or other entity created or

                                       16
<PAGE>

organized in or under the laws of the United States or any political subdivision
thereof, or an estate or trust that is subject to U.S. federal income tax
regardless of the source of its income.

      Notional Amount: [As to any Distribution Date, the Pool Scheduled
Principal Balance].

      Notional Amount Certificates: As specified in the Preliminary Statement.

      Offered Certificates: As specified in the Preliminary Statement.

      Officers' Certificate: A certificate signed by the Chairman of the Board,
Vice Chairman of the Board, President, a Vice President [and by] the Treasurer,
the Secretary or one of the Assistant Treasurers or Assistant Secretaries, or
any other duly authorized officer of the Depositor or the Master Servicer, as
the case may be, and delivered to the Trustee.

      Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee, who may be counsel for the Depositor or the Master Servicer[, except
that any opinion of counsel relating to the qualification of the Trust Fund as a
REMIC or compliance with the REMIC Provisions must be an opinion of Independent
counsel.]

      [Original Applicable Credit Support Percentage: With respect to each of
the following Classes of Subordinate Certificates, the corresponding percentage
described below, as of the Closing Date:

      Class M-1 ______% Class B-1 ______% Class B-2 ______%]

      Original Mortgage Loans: The Mortgage Loans identified in Exhibit F
hereto, and conveyed, transferred, sold and assigned to, and deposited with, the
Trustee pursuant to Section 2.01 hereof on the Closing Date.

      Original Subordinate Certificate Balance: $__________.

      [Outside Reference Date: As to any Interest Accrual Period for the COFI
Certificates, the close of business on the tenth day thereof.]

      Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan which was
not the subject of a Principal Prepayment in Full prior to such Due Date, which
did not become a Liquidated Mortgage Loan prior to such Due Date and which was
not purchased prior to such Due Date pursuant to Section 2.02 or 2.03.

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

                                       17
<PAGE>

      Pass-Through Rate: As to each Class of Regular Certificates, the per annum
rate set forth or described below:

<TABLE>
<CAPTION>
           Class of Certificates                             Pass-Through Rate
           ---------------------                             -----------------
<S>                                                          <C>
                     A-1                                           _____%
                     X                                             _____%
                     M-1                                           _____%
                     B-1                                           _____%
                     B-2                                           _____%
</TABLE>

      Paying Agent: ___________________________________ or such other successor
paying agent appointed by the Trustee which is authorized to make distributions
with respect to the Certificates on behalf of the Trustee, and authorized to
exercise corporate trust powers under the laws of its jurisdiction of
organization.

      Percentage Interest: As to any Certificate, the percentage interest 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.

      Periodic Rate Cap: The provision in each Mortgage Note that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than one percentage point.

      Permitted Investments: One or more of the following:

      (i) Direct obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States, FHLMC, FNMA, the Farm
Credit Banks (but only if acceptable to the Rating Agencies), the Student Loan
Marketing Association (but only with respect to obligations backed by letters of
credit or senior obligations) or any agency or instrumentality of the United
States the obligations of which are backed by the full faith and credit of the
United States; provided, however, that no instrument or security evidences a
right to receive only interest payments or the right to receive principal and
interest payments derived from the underlying investment which provides a yield
to maturity in excess of 120% of the yield to maturity at par of such underlying
instrument;

      (ii) Repurchase agreements with an entity whose unsecured obligations are
rated not less than "[ ]" by [ ] and "[ ]" by [ ] with respect to any security
described in clause (i) above or any other security issued or guaranteed by an
agency or instrumentality of the United States, the obligations of which are
backed by the full faith and credit of the United States;

      (iii) Federal funds, certificates of deposit, time deposit and bankers'
acceptances of any U.S. bank or trust company incorporated under the laws of the
United States or any state, provided that the unsecured short term debt
obligations of such bank or trust company (or, in the case of the principal bank
in a bank holding company system, debt obligations of the bank holding company)
at the date of acquisition thereof have a rating of not less than "[ ] from [ ]
and "[ ] from [ ]; and money market funds investing exclusively in any of the
investments discussed in this definition of Permitted Investments;

                                       18
<PAGE>

      (iv) Any demand or time deposit or certificate of deposit which is fully
insured by the FDIC; and

      (v) Commercial paper of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has a rating
of not less than "[ ]" from [ ] and "[ ]" from [ ].

      Permitted Transferee: Any Person other than (i) the United States, or any
State or any political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) (except
certain farmers' cooperatives described in Code section 521), (iv) rural
electric and telephone cooperatives described in Code section 1381(a)(2)(C), (v)
any Non-U.S. Person and (vi) any other Person so designated by the Master
Servicer based on an Opinion of Counsel to the effect that any transfer to such
Person may cause the Pool or any other Holder of a Residual Certificate to incur
tax liability that would not be imposed other than on account of such transfer.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Code section 7701 or successor provisions.

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

      Physical Certificates: As specified in the Preliminary Statement.

      Planned Principal Classes: As specified in the Preliminary Statement.

      Pool or Trust Fund: The corpus of the trust created by this Agreement, to
the extent described herein, consisting of the Mortgage Loans, such assets as
shall from time to time be identified as deposited in the Certificate Account,
in accordance with this Agreement, property which secured a Mortgage Loan and
which has been acquired by foreclosure or deed in lieu of foreclosure or
otherwise, the Primary Insurance Policies, and any Required Insurance Policy.

      [Pool Insurance Policy: ].

      [Pool Insurer: ].

      Pool Scheduled Principal Balance: As to any Distribution Date, the
aggregate Scheduled Principal Balances of each Mortgage Loan that was an
Outstanding Mortgage Loan on the Due Date in the applicable month as to which
such determination is being made.

      Prepayment Interest Shortfall: As to any Mortgage Loan and Principal
Prepayment, and as to any Liquidated Mortgage Loan, the amount by which one
month's interest at the related Net Mortgage Interest Rate on such Principal
Prepayment or the Scheduled Principal Balance of such Liquidated Mortgage Loan,
as the case may be, exceeds the amount of interest paid in connection with such
Principal Prepayments or interest at the related Net Mortgage Interest Rate

                                       19
<PAGE>

for the number of days in the month prior to the date such Liquidated Mortgage
Loan was liquidated, as the case may be.

      Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance issued by a Qualified Insurer or any replacement policy therefor
referred to in Section 2.03(a)(viii).

      Principal Only Certificates: As specified in the Preliminary Statement.

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

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

      Private Certificates: As specified in the Preliminary Statement.

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

      Prospectus: The Prospectus Supplement together with the related Prospectus
dated _____________, 200_.

      Prospectus Supplement: The Prospectus Supplement, dated ________, 200_,
relating to the offering of the Senior Certificates and the Mezzanine
Certificates.

      Purchase Price: As to any Defective Mortgage Loan repurchased on any date
pursuant to Section 2.02, 2.03 or 2.08, an amount equal to the sum of (i) the
unpaid principal balance thereof and (ii) the unpaid accrued interest thereon at
the applicable Mortgage Interest Rate from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Mortgage Loan became eligible to be repurchased; provided, however,
that if at the time of repurchase the Seller is the Master Servicer, the amount
described in clause (ii) shall be computed at the Mortgage Interest Rate net of
the Master Servicing Fee Rate.

      Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying ability rating of at
least "[ ]" by [ ]. Any replacement insurer with respect to a Mortgage Loan must
have at least as high a claims paying ability rating by [ ] and [ ] as the
insurer it replaces had on the Closing Date.

      Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If either 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

                                       20
<PAGE>

a given rating or rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.

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

      Record Date: The last day of the month (or if such last day is not a
Business Day, the Business Day immediately preceding such last day) next
preceding the month of the related Distribution Date.

      Reduced Scheduled Principal Balance: As to any Liquidated Deficient
Valuation Mortgage Loan, the Scheduled Principal Balance thereof reduced by any
Deficient Valuation at the time of the related Deficient Valuation.

      Reference Date: As defined in Section 5.09.

      Regular Certificate: As specified in the Preliminary Statement.

      Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.

      Relief Act Reductions: With respect to any Distribution Date, for any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month is
less than (ii) interest accrued pursuant to the Mortgage Note on the same
principal amount and for the same period as the interest collectible on such
Mortgage Loan for the most recently ended calendar month.

      Remaining Liquidated Amount: As to any Distribution Date and Mortgage Loan
which became a Liquidated Mortgage Loan during the preceding calendar month, the
lesser of (a) Subordinate Percentage of the applicable Core Percentage of the
Scheduled Principal Balance of such Liquidated Mortgage Loan and (b) the
applicable Core Percentage of Net Liquidation Proceeds applied to the reduction
of the principal balance of such Liquidated Mortgage Loan, reduced by the Senior
Liquidated Amount for such Mortgage Loan without giving effect to any reduction
pursuant to clause (B) of the definition thereof.

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

      REMIC Certificate Maturity Date: The "latest possible maturity date" of
the Regular Certificates as that term is defined in Section 2.07.

      REMIC Change of Law: Any proposed, temporary or final regulation, revenue
ruling, revenue procedure or other official announcement or interpretation
relating to the REMIC and the REMIC Provisions issued after the Closing Date.

                                       21
<PAGE>

      REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 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.

      REO Mortgage Loan: Any defaulted Mortgage Loan which is not a Liquidated
Mortgage Loan and as to which the related Mortgaged Property is held as part of
the Pool.

      REO Proceeds: Proceeds, net of any related expenses of the Master
Servicer, received in respect of any REO Mortgage Loan (including, without
limitation, proceeds from the rental of the related Mortgaged Property) which
are received prior to the final liquidation of such Mortgaged Property.

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

      Residual Certificates: The Certificates signed by the Depositor and
countersigned by the Trustee, substantially in the form of Exhibits B and E.

      Responsible Officer: When used with respect to the Trustee, any officer in
its corporate trust department or successor group.

      S&P: Standard & Poor's Ratings Group.

      Scheduled Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of the 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 any previous Curtailments and to the
payment of principal due on such Due Date and irrespective of any delinquency in
payment by the related Mortgagor. For purposes of calculating the Allocated
Amounts, the Scheduled Principal Balance of a Mortgage Loan shall be zero
immediately following the Due Date in the month such Mortgage Loan becomes a
Liquidated Mortgage Loan or is required to be repurchased pursuant to Section
2.02 or 2.03.

      Seller: [ ], as seller of the Mortgage Loans under the Seller's Agreement
as the context requires.

      Seller's Agreement: The Seller's Agreement dated as of __________, 200_,
between the Seller and Depositor, as purchaser with respect to the sale of the
Mortgage Loans.

      Senior Certificate: Any one of the Class A-1 and Class X Certificates
signed by the Depositor and countersigned by the Trustee, substantially in the
form of Exhibits A and E, hereto.

      [Senior Certificate Balance: As to any Distribution Date, the aggregate of
the Class Certificate Balances of all Classes of Senior Certificates on such
Distribution Date.]

                                       22
<PAGE>

      Senior Percentage: With respect to any Distribution Date, the lesser of
(i) 100% and (ii) the percentage carried six places rounded up, obtained by
dividing the Class Certificate Balance of the Class A-1 Certificates,
immediately prior to such Distribution Date by the aggregate of the Scheduled
Principal Balances of the Mortgage Loans immediately prior to the Due Date in
the month of any such Distribution Date.

      Senior Prepayment Percentage: [For any Distribution Date occurring during
the first five years beginning on the first Distribution Date shall be, except
as provided herein, equal to 100%. The Senior Prepayment Percentage for any
Distribution Date occurring on or after the fifth anniversary of the first
Distribution Date will be as follows: for any Distribution Date in the first
year thereafter the Senior Percentage for such Distribution Date plus 70% of the
Subordinate Percentage for such Distribution Date; for any Distribution Date in
the second year thereafter, the Senior Percentage for such Distribution Date
plus 60% of the Subordinate Percentage for such Distribution Date; in the third
year thereafter, the Senior Percentage for such Distribution Date plus 40% of
the Subordinate Percentage for such Distribution Date; in the fourth year
thereafter, the Senior Percentage for such Distribution Date plus 20% of the
Subordinate Percentage for such Distribution Date; and for any Distribution Date
thereafter, the Senior Percentage for such Distribution Date (unless on any of
the foregoing Distribution Dates the Senior Percentage exceeds the initial
Senior Percentage, in which case the Senior Prepayment Percentage for such
Distribution Date will once again equal 100%). Notwithstanding the foregoing, no
reduction to the Senior Prepayment Percentage will occur if (i) as of the first
Distribution Date as to which any such reduction applies, the dollar amount of
all monthly payments on the Mortgage Loans due in each of the preceding six
months that are delinquent 60 days or more exceeds a monthly average of % of all
monthly payments due in such month (including for this purpose any Mortgage
Loans in foreclosure and Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust Fund) and (ii) cumulative
Realized Losses with respect to the Mortgage Loans exceed (a) with respect to
the Distribution Date in on the fifth anniversary of the first Distribution Date
% of the Original Subordinate Certificate Balance, (b) with respect to the
Distribution Date on the sixth anniversary of the first Distribution Date, % of
the Original Subordinate Certificate Balance, (c) with respect to the
Distribution Date on the seventh anniversary of the first Distribution Date, %
of the Original Subordinate Certificate Balance, (d) with respect to the
Distribution Date on the eighth anniversary of the first Distribution Date, % of
the Original Subordinate Certificate Balance, and (e) with respect to the
Distribution Date on the ninth anniversary of the first Distribution Date, % of
the Original Subordinate Certificate Balance.]

      Senior Principal Distribution Amount: As to any Distribution Date and the
Class A-1 Certificates, the sum of (a) the Senior Percentage of (i) all
scheduled payments of principal due on each Outstanding Mortgage Loan on the Due
Date for such Mortgage Loan in the month in which such Distribution Date occurs,
(ii) the Scheduled Principal Balance of each Mortgage Loan that was repurchased
by the Seller or another person on the related Certificate Account Deposit Date
pursuant to Sections 2.02 or 2.03, (iii) the Substitution Adjustment Amount in
connection with any substitution of the Mortgage Loans on the related
Certificate Account Deposit Date pursuant to Section 2.04, (iv) Liquidation
Proceeds received during such preceding calendar month and allocable to
recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage
Loans, and (v) the Scheduled Principal Balance of each Mortgage Loan that became
a Liquidated Mortgage Loan during the month preceding the month of such
Distribution Date and (b) the Senior Prepayment

                                       23
<PAGE>

      Percentage of all Curtailments and all Principal Prepayments in Full for
such Distribution Date.

      Servicer: Any Person with which the Master Servicer has entered into a
Servicing Agreement and which satisfies the requirements set forth therein.

      Servicing Fee: The amount payable to the Servicers pursuant to Section
3.12 hereof.

      Servicing Fee Rate: With respect to any Mortgage Loan, the rate specified
as such on the Mortgage Loan Schedule.

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

      Special Hazard Coverage Termination Date: The point of time at which the
Special Hazard Loss Coverage Amount is reduced to zero.

      Special Hazard Event: As to a Mortgaged Property, any loss on account of
direct physical loss, exclusive of (i) any loss covered by a hazard policy or a
flood insurance policy maintained in respect of such Mortgaged Property pursuant
to Section 3.11 and (ii) any loss caused by or resulting from:

            (a)    (i) wear and tear, deterioration, rust or corrosion, mold,
      wet or dry rot; inherent vice or latent defect; animals, birds, vermin,
      insects;

                  (ii) settling, subsidence, cracking, shrinkage, building or
      expansion of pavements, foundations, walls, floors, roofs or ceilings.

            (b) errors in design, faulty workmanship or faulty materials, unless
      the collapse of the property or a part thereof ensues and then only for
      the ensuing loss;

            (c) nuclear or chemical reaction or nuclear radiation or radioactive
      or chemical contamination, all whether controlled or uncontrolled, and
      whether such loss is direct or indirect, proximate or remote or be in
      whole or in part caused by, contributed to or aggravated by a peril
      insured against in the Special Hazard Insurance Policy; and

            (d)    (i) hostile or warlike action in time of peace or war,
      including action in hindering, combating or defending against an actual,
      impending or expected attack (a) by any government or sovereign power (de
      jure or de facto), or by any authority maintaining or using military,
      naval or air forces; or (b) by military, naval or air forces; or (c) by an
      agent of any such government, power, authority or forces;

                  (ii) any weapon or war or facility for producing same
      employing atomic fission, radioactive force or chemical or biological
      contaminants, whether in time of peace or war;

                                       24
<PAGE>

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

      Special Hazard Fee: As to any Distribution Date and Mortgage Loan,
one-twelfth of the Special Hazard Fee Rate on the Scheduled Principal Balance of
such Mortgage Loan on the first day of the month preceding such Distribution
Date.

      Special Hazard Fee Rate: With respect to any Mortgage Loan, [ ]%.

      Special Hazard Insurance Policy: The Special Hazard Insurance Policy
issued by the Special Hazard Insurer insuring the Mortgage Loans and all
amendments or endorsements thereto, or any replacement policy obtained by the
Master Servicer pursuant to Section 3.20 hereof.

      Special Hazard Insurer: [ ], or any successor thereto or the named insurer
in any replacement policy obtained by the Master Servicer pursuant to Section
3.20 hereof.

      Special Hazard Loss Coverage Amount: [As to any Distribution Date, the
lesser of (a) the greatest of (i) 1% of the aggregate principal balance of the
Mortgage Loans, (ii) twice the principal balance of the largest Mortgage Loan,
and (iii) the aggregate principal balance of all Mortgage Loans secured by the
Mortgage Properties located in the single [State] postal zip code having the
highest aggregate principal balance of any zip code area, all principal balances
to be calculated as of the first day of the month preceding such Distribution
Date after giving effect to scheduled installments of principal and interest on
the Mortgage Loans then due, whether or not paid and (b) $__________, reduced
(but not below zero) by the amount of Net Realized Losses in respect of Special
Hazard Mortgage Loans previously incurred during the period from the Cut-Off
Date through the last day of the month preceding the month of such Distribution
Date.] The

      Special Hazard Loss Coverage Amount may be further reduced from time to
time below the amounts specified above with the written consent of the Rating
Agencies and without resulting in a downgrading to the then current rating of
the Certificates.

      Special Hazard Mortgage Loan: Any Liquidated Mortgage Loan as to which the
ability to recover thereon was substantially impaired by reason of a Special
Hazard Event.

      Splinter Loss: A Net Realized Loss (x) with respect to a Special Hazard
Mortgage Loan or a Fraud Loan or (y) specified in subclauses (b) and (c) of the
definition of Net Realized Loss.

      Subordinate Certificate: Any one of the Class M-1, Class B-1 or Class B-2
Certificates signed by the Depositor and countersigned by the Trustee,
substantially in the form of Exhibits D and E, hereto.

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

                                       25
<PAGE>

      Subordinate Percentage Allocation: For any Distribution Date and Class of
Subordinate Certificates, a fraction, the numerator of which is the related
Class Certificate Balance immediately prior to such date and the denominator of
which is the aggregate of the Class Certificate Balances of all Subordinate
Certificates immediately prior to such date.

      Subordinate Prepayment Percentage: As to any Distribution Date, 100% minus
the Senior Prepayment Percentage for such Distribution Date.

      Subordinate Prepayment Percentage Allocation: As to any Distribution Date
and any Class of Subordinate Certificates, the portion of the Subordinate
Prepayment Percentage allocated to such Class equal to the Subordinate
Prepayment Percentage for such Distribution Date multiplied by a fraction the
numerator of which is the Class Certificate Balance of any such Class and the
denominator of which is the aggregate Class Certificate Balance of the
Subordinate Certificates.

      Subordinate Principal Distribution Amount: As to any Distribution Date and
each Class of Subordinate Certificates, the sum of (a) the Subordinate
Percentage Allocation of the sum of (i) all scheduled payments of principal due
on each Outstanding Mortgage Loan on the Due Date for such Mortgage Loan in the
month in which such Distribution Date occurs, (ii) the Scheduled Principal
Balance of each Mortgage Loan that was repurchased by the Seller or another
person on the related Certificate Account Deposit Date pursuant to Section 2.02
or 2.03, (iii) the Substitution Adjustment Amount in connection with any
substitution of

      Mortgage Loans on the related Certificate Account Deposit Date pursuant to
Section 2.04, (iv) Liquidation Proceeds received during such preceding calendar
month and allocable to recoveries of principal of Mortgage Loans that are not
yet Liquidated Mortgage Loans, and (v) the Scheduled Principal Balance of each
Mortgage Loan that became a Liquidated Mortgage Loan during the month preceding
the month of such Distribution Date and (b) the Subordinate Prepayment
Percentage Allocation of all Curtailments and all Principal Prepayments in Full
for such Distribution Date.

      Substitute Mortgage Loan: A Mortgage Loan delivered to the Trustee on a
Substitution Date pursuant to Section 2.04 hereof for which all payments of
principal and interest due on or before the Substitution Date have been received
and which has the following characteristics:

            (a)    (i) a Mortgage Interest Rate at least equal to and not more
      than 2% greater than that of the Mortgage Loan for which it is being
      substituted and (ii) Loan-to-Value Ratio not greater than that of the
      Mortgage Loan for which it is being substituted;

            (b) a date of maturity no later than, and no more than one year
      prior to, that of the Mortgage Loan or Mortgage Loans for which it is
      being substituted; and

            (c) an original term to maturity equal to that of the Mortgage Loan
      or Mortgage Loans for which it is being substituted.

      Any Substitute Mortgage Loan with a Mortgage Interest Rate greater but not
more than 2% greater than that of the Mortgage Loan for which it is being
substituted shall be treated for all

                                       26
<PAGE>

purposes under this Agreement as though it had the same Net Mortgage Interest
Rate as the Mortgage Loan for which it is being substituted.

      Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.04(b).

      Substitution Date: The meaning ascribed to such term pursuant to Section
2.04(b).

      Supplemental Mortgage Loan Schedule: As defined in Section 2.04(b).

      Targeted Principal Classes: As specified in the Preliminary Statement.

      Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulations

      ss. 1.860F-4(d) and temporary Treasury regulation ss. 301.6231(a)(7)-IT.
Initially, the Tax Matters Person shall be [__________].

      Tax Matters Person Certificate: The Class R Certificate with a
denomination of __________.

      Trust Fund or Pool: See definition of Pool.

      Trustee Fee: The amount payable to the Trustee pursuant to an agreement
between the Trustee and the Master Servicer.

      Trustee Fee Rate: With respect to any Mortgage Loan, the rate specified in
the agreement between the Trustee and the Master Servicer.

      Underwriter: _____________ as underwriter of the public offering of the
Regular Certificates.

      Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. As of any date of determination, (a) 1%
of all Voting Rights shall be allocated to each Class of Notional Amount
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (b) the remaining Voting Rights (or 100% of the Voting Rights if
there is no Class of Notional Amount Certificates) shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.

      Withdrawal Date: As to any Distribution Date, the Business Day preceding
such Distribution Date.

      [Yield Maintenance Premium: The amount payable as a prepayment penalty or
yield maintenance premium by a Mortgagor in connection with the prepayment in
whole or in part of a Mortgage Loan.]

                                       27
<PAGE>

                                   ARTICLE II

         CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

      Section 2.01. Conveyance of Mortgage Loans.

      (a) The Depositor, concurrently with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and otherwise convey to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the Mortgage Loans and the Mortgage Notes, including all interest and
principal received on or with respect to the Mortgage Loans (other than payments
of principal and interest due and payable on the Mortgage Loans on or before the
Cut-Off Date) together with the Depositor's rights under the Seller's Agreement,
the representations and warranties of the Seller thereunder together with all
rights of the Depositor to require the Seller to cure any breach thereof or to
repurchase or substitute for any affected Mortgage Loan in accordance with the
Seller's Agreement and any proceeds of the foregoing.

      (b) In connection with the above transfer and assignment, the Depositor
hereby deposits with the Trustee, with respect to each Mortgage Loan, (i) the
original Mortgage Note, endorsed without recourse to the order of the Trustee
and showing an unbroken chain of endorsements from the original payee thereof to
the Person endorsing it to the Trustee, (ii) the original Mortgage, which shall
have been recorded, with evidence of such recording indicated thereon, (iii) the
assignment (which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Mortgage, with evidence or recording with respect to each Mortgage Loan in the
name of the Trustee thereon, (iv) all intervening assignments of the Mortgage,
if any, to the extent available to the Depositor with evidence of recording
thereon, (v) the original or a copy of the policy or certificate of primary
mortgage guaranty insurance, to the extent available, if any, (vi) the original
policy of title insurance or mortgagee's certificate of title insurance or
commitment or binder for title insurance and (vii) originals of all assumption
and modification agreements, if any; provided, however, that in lieu of the
foregoing, the Depositor may deliver the following documents, under the
circumstances set forth below: (x) in lieu of the original policy of title
insurance, the Depositor may deliver a binder or commitment therefor, or, in
California, a preliminary title report, or, in Iowa, an attorney's certificate;
(y) in lieu of the original Mortgage or intervening assignments thereof or
assumption or modification agreements which have been delivered or are being
delivered to recording offices for recording and have not been returned to the
Depositor in time to permit their delivery as specified above, the Depositor may
deliver a true copy thereof with a certification by the Seller or the title
company issuing the commitment for title insurance, on the face of such copy,
substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; and (z) in lieu of the
Mortgage, assignment to the Trustee or intervening assignments thereof or
assumption or modification agreements, if the original has been lost or the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Seller to such effect) the Depositor may deliver
photocopies of such documents containing an original certification by the
judicial or other governmental authority of the jurisdiction where such
documents were recorded; and provided, further, however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-Off Date and prior
the Closing Date, the Depositor, in lieu of delivering the above documents, may
deliver to the Trustee a certification of a Servicing Officer to such effect and
shall deposit all amounts paid in respect of such Mortgage Loans in the
Certificate Account on

                                       28
<PAGE>

the Closing Date. The Depositor shall deliver such original documents (including
any original documents as to which certified copies had previously been
delivered) or such certified copies together with the original title insurance
policy (or, if a master title policy has been issued by the title insurer, a
mortgagee's certificate of title insurance) if a title insurance binder or
commitment or other assurance of title was originally deposited, to the Trustee
promptly after they are received. The Master Servicer shall cause, at its
expense, the Mortgage and intervening assignments, if any, and the assignment of
the Mortgage to the Trustee to be recorded not later than 270 days after the
Closing Date.

      Section 2.02. Acceptance by Trustee. The Trustee acknowledges receipt of
the documents referred to in Section 2.01 subject to the examination referred to
below, and declares that the Trustee holds and will hold such documents in
trust, upon the terms herein set forth, for the use and benefit of all present
and future Certificateholders. The Trustee agrees, for the benefit of
Certificateholders, to have the Custodian review each Mortgage File within 90
days after execution and delivery of this Agreement, to ascertain that all
required documents have been executed, received and recorded, if applicable, and
that such documents relate to the Mortgage Loans identified in Exhibit F hereto.
In performing such review, the Trustee may rely upon the purported genuineness
and due execution of any such document and on the purported genuineness of any
signature thereon. If in the course of such review the Trustee finds any
document or documents constituting a part of a Mortgage File to have been
omitted or be defective in any material respect, the Trustee shall promptly so
notify the Master Servicer, the Seller and the Depositor. The Master Servicer
shall promptly request that the Seller correct or cure such omission or defect
within 90 days from the date the Seller was notified of such omission or defect
and, if the Seller does not correct or cure such omission or defect within such
period, the Seller shall purchase such Mortgage Loan from the Trustee (i) on the
Distribution Date in the month following the month in which such 90-day period
expired at the Purchase Price of such Mortgage Loan or (ii) upon the expiration
of such 90-day period if the omission or defect would result in the related
Mortgage Loan not being a Qualified Mortgage Loan for purposes of Section
860G(a)(3) of the Code; provided, however, that if such defect relates solely to
the inability of Seller to deliver the original Security Instrument or
intervening assignments thereof or assumption or modification agreement, or a
certified copy because the originals of such documents, or a certified copy have
not been returned by the applicable jurisdiction, Seller shall not be required
to purchase such Mortgage Loan if Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 270 days after
the Closing Date. The Purchase Price for the purchased Mortgage Loan shall be
deposited in the Certificate Account no later than the related Certificate
Account Deposit Date and, upon receipt by the Trustee of written notification of
such deposit signed by an officer of the Seller, the Trustee shall release to
the applicable Seller the related Mortgage File and the Trustee shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary to vest in the Seller or its designee any
Mortgage Loan released pursuant hereto. It is understood and agreed that the
obligation of the Seller to purchase any Mortgage Loan as to which a material
defect in or omission of a constituent document exists shall constitute the sole
remedy against the Seller respecting such defect or omission available to
Certificateholders or the Trustee on behalf of Certificateholders. An Opinion of
Counsel to the effect set forth in Section 2.04(d) shall be delivered to the
Trustee in connection with any such repurchase.

                                       29
<PAGE>

      Section 2.03. Representations and Warranties of the Seller, the Depositor
and the Trustee.

      (a) The Seller hereby represents and warrants to the Trustee, as to the
Mortgage Loans sold by it to the Depositor, that:

            (i) As of the Cut-Off Date, no Mortgage Loan is 30 days or more
delinquent in payment of principal and interest and no Mortgage Loan was 30
days;

            (ii) The information set forth in Exhibit F hereto with respect to
each Mortgage Loan is true and correct in all material respects at the date or
dates respecting which such information is furnished;

            (iii) As of the Closing Date, and prior to the transfer of the
Mortgage Loans to the Depositor, the Seller had good title to the Mortgage Loans
and the Mortgage Notes were subject to no offsets, defenses or counterclaims;

            (iv) Each Mortgage Loan was originated by (a) an institution which
is a member of the Federal Reserve system or the deposits of which are insured
by the FDIC, or (b) an institution which is an "approved mortgagee" by the
Federal Housing Administration;

            (v) Each Mortgage Loan was originated in compliance with all
applicable state and federal laws including usury, equal credit opportunity,
disclosure and recording laws;

            (vi) Other than with respect to Mortgaged Property underlying a
Cooperative Loan, the Mortgage Loans are conventional, [fixed rate], [adjustable
rate] mortgage loans with original terms to maturity of months; each Mortgage
Note is payable in monthly installments of principal and interest, with interest
payable in arrears on a monthly basis;

            (vii) As of the Closing Date, the issuer of each Primary Insurance
Policy is a Qualified Insurer and each such policy is valid and remains in full
force and effect;

            (viii) A lender's title policy (or preliminary report (binder)) or
opinion of title was issued on the date of the origination of each Mortgage Loan
and each such policy or other evidence of title is valid and remains in full
force and effect;

            (ix) As of the Closing Date, [and any Mortgage Loan that is not a
Cooperative Loan,] each related Mortgage is a valid first lien on the related
Mortgaged Property (subject only to (a) liens for current real property taxes
and special assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as of
the date of recording of such Mortgage, such exceptions appearing of record
being acceptable to mortgage lending institutions generally or specifically
reflected in the mortgage originator's appraisal, and (c) other matters to which
like properties are commonly subject which either individually or in the
aggregate do not materially interfere with the benefits of the security intended
to be provided by the Mortgage);

            (x) As of the Closing Date, each Mortgaged Property is free of
damage and is in good repair;

                                       30
<PAGE>

            (xi) As of the Closing Date, there are no delinquent tax or
assessment liens against any Mortgaged Property;

            (xii) Each Mortgage Property is a [single family] [multifamily]
residential property containing [no more than four units] [five or more units];

            (xiii) Each Mortgage Note has been endorsed to the Trustee in a form
and in a manner sufficient to convey to the Trustee all right, title and
interest therein of the Seller in all relevant jurisdictions;

            (xiv) Each Mortgage Loan is secured by a fee simple interest in the
related Mortgaged Property [and not by a leasehold interest];

            (xv) Each Cooperative Loan is secured by a valid, subsisting and
enforceable perfected first lien and security interest in the related Mortgaged
Property, subject only to (i) the rights of the Cooperative Corporation to
collect Maintenance and assessments from the Mortgagor, (ii) the lien of the
Blanket Mortgage, if any, on the Cooperative Property and of real property
taxes, water and sewer charges, rents and assessments on the Cooperative
Property not yet due and payable, and (iii) other matters to which like
Cooperative Units are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by the Security Agreement
or the use, enjoyment, value or marketability of the Cooperative Unit. Each
original UCC financing statement, continuation statement or other governmental
filing or recordation necessary to create or preserve the perfection and
priority of the first priority lien and security interest in the Coop Shares and
Proprietary Lease has been timely and properly made. Any security agreement,
chattel mortgage or equivalent document related to the Cooperative Loan and
delivered to the Depositor or its designee establishes in the Seller a valid and
subsisting perfected first lien on and security interest in the property
described therein, and the Seller has full right to sell and assign the same;
and

            (xvi) As of the Closing Date, all policies of insurance covering the
Seller or any Servicer, and required by this Agreement or by a Servicing
Agreement have been validly issued and remain in full force and effect.

      It is understood and agreed that the representations and warranties set
forth in this Section 2.03(a) shall survive delivery of the respective Mortgage
Files to the Trustee or any Custodian.

      Upon discovery by any of the Depositor, the Master Servicer or the Trustee
of a breach of any of the representations and warranties set forth in this
Section 2.03(a) which materially and adversely affects the value of the Mortgage
Loans or the interests of the Certificateholders in the related Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other
parties. Within 60 days of its discovery or its receipt of notice of breach, or,
with the prior written consent of a Responsible Officer of the Trustee, such
longer period specified in such consent, the Seller shall cure such breach in
all material respects or shall purchase the Mortgage Loan from the Trustee. Any
such purchase by the Seller shall, in the case of a breach of a representation
or warranty, be at the Purchase Price, and in each case shall be accomplished in
the manner set forth in Section 2.02. It is understood and agreed that the
obligation of the Seller to purchase any Mortgage Loan as to which such a breach
has occurred and is continuing shall constitute the sole remedy against the
Seller respecting such breach available to

                                       31
<PAGE>

Certificateholders or the Trustee on behalf of Certificateholders. An Officers'
Certificate and Opinion of Counsel to the effect set forth in Section 2.04(d)
shall be delivered to the Trustee in connection with any such repurchase.

      (b) Pursuant to Section 2.01, the Depositor has hereby assigned,
transferred and conveyed to the Trustee its rights under the Seller's Agreement,
including without limitation, the representations, warranties and covenants of
the Seller therein and set forth in Section 2.03(a), together with all rights of
the Depositor to require the Seller to cure any breach thereof or to repurchase
or substitute for any affected Mortgage Loan in accordance with the Seller's
Agreement and the Trustee hereby accepts such assignment. It is understood and
agreed that the representations, warranties and covenants so assigned shall
survive delivery of the respective Mortgage Files to the Trustee.

      (c) The Depositor hereby represents and warrants to the Trustee as
follows:

            (i) The Depositor has entered into the Seller's Agreement with the
Seller from which it acquired the Mortgage Loans;

            (ii) The Seller has made the foregoing representations, warranties
and covenants in the Seller's Agreement as to the Mortgage Loans sold by it to
the Depositor and that such representations, warranties and covenants run to and
are for the benefit of the Depositor;

            (iii) Pursuant to Section 2.01 and 2.03(b) of this Agreement the
Depositor has transferred and assigned to the Trustee all rights of the
Depositor to cause the Seller to repurchase a Mortgage Loan in the event of a
breach of the foregoing representations, warranties and covenants and that the
each Seller has agreed to repurchase a Mortgage Loan as to which there has
occurred an uncured breach of such representations, warranties and covenants in
accordance with the provisions of the Seller's Agreement;

            (iv) Immediately prior to the delivery of the Mortgage Loans to the
Trustee on the Closing Date, the Depositor will own full legal and equitable
title to each Mortgage Loan and will have good and marketable title thereto free
and clear of any equity, lien, encumbrance, pledge, charge, security interest or
other claim. Upon endorsement and delivery to the Trustee of the executed
original Mortgage Notes and execution and delivery of the related assignments of
all of the Mortgages by the Depositor in favor of the Trustee, all of the
Depositor's right, title and interest in and to the Mortgage Loans will be
validly and effectively transferred to the Trustee free and clear of any equity,
lien, encumbrance, pledge, charge, security interest or other claim; and

            (v) Except as otherwise described in the Prospectus Supplement, each
Mortgage Loan was underwritten in accordance with the applicable Seller's
standards applicable at the time the Depositor acquired such Mortgage Loan, and
that the Seller meets all the requirements of an approved seller for the loan
purchase program and has complied with all the terms, conditions and
requirements for the sale for Mortgage Loans set forth in the Seller's
Agreement.

      (d) The Trustee hereby represents and warrants to the Master Servicer, as
of the Closing Date, that:

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<PAGE>

            (i) The Trustee is a [national] banking [association] in good
standing under the [federal] banking laws of [the United States];

            (ii) The Trustee has full power, authority and legal right to
execute and deliver this Agreement and to authenticate the Certificates and to
perform its obligations under this Agreement and the Certificates, and has taken
all necessary action to authorize the execution, delivery and performance by it
of this Agreement and the authentication and performance of the Certificates;
and

            (iii) To the best of the Trustee's knowledge, after reasonable
investigation, the execution and delivery by the Trustee of this Agreement and
the authentication of Certificates and the performance by the Trustee of its
obligations under this Agreement and the Certificates will not violate any
provision of any law or regulation governing the Trustee or any order, writ,
judgment or decree of any court, arbitrator or governmental authority or agency
applicable to the Trustee or any of its assets. To the best of the Trustee's
knowledge, after reasonable investigation, such execution, delivery,
authentication and performance will not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with, or the
taking of any other action with respect to, any governmental authority or agency
regulating the activities of national banking associations. To the best of the
Trustee's knowledge, after reasonable investigation, such execution, delivery,
authentication and performance will not conflict with, or result in a breach or
violation of, any material indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Trustee is bound.

      (e) Seller hereby represents and warrants to the Trustee as of the Closing
Date that:

            (i) It is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and is in good
standing as a foreign corporation in each jurisdiction where such qualification
is necessary and throughout the term of this Agreement will remain a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation or any state of reincorporation and in good standing
as a foreign corporation in each jurisdiction where such qualification is
necessary (except, in the case of foreign corporation qualification both on the
date hereof and in the future, where the failure so to qualify would not
reasonably be expected to have a material adverse effect on the Master
Servicer's ability to enter into this Agreement or to perform its obligations
hereunder), and has the corporate power and authority to perform its obligations
under this Agreement;

            (ii) The execution and delivery of this Agreement have been duly
authorized by all requisite corporate action;

            (iii) This Agreement, assuming due authorization, execution, and
delivery by the other parties hereto, will constitute its legal, valid and
binding obligation, enforceable in accordance with its terms, except only as
such enforcement may be limited by applicable Debtor Relief Laws and that
certain equitable remedies may not be available regardless of whether
enforcement is sought in equity or at law;

            (iv) Its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not (A) violate
its certificate of incorporation

                                       33
<PAGE>

or bylaws (B) to its knowledge, violate any law or regulation, or any
administrative or judicial decree or order to which it is subject or (C)
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which it is a party or which may be
applicable to it or any of its assets;

            (v) To its best knowledge, after reasonable investigation, it is not
in default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or governmental agency,
which default would reasonably be expected to have consequences that would
materially and adversely affect its financial condition or operations or its
performance hereunder;

            (vi) It does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement to be performed by it;

            (vii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of its business;

            (viii) No litigation is pending or, to its best knowledge,
threatened against it, which could be reasonably expected to materially and
adversely affect its entering into this Agreement or performing its obligations
under this Agreement or which would have a material adverse effect on its
financial condition; and

            (ix) As to each Mortgage Loan, the Seller's Agreement is in full
force and effect.

      Section 2.04. Substitution of Mortgage Loans.

      (a) On a Distribution Date within two years following the Closing Date and
which is on or before the date on which the Seller would otherwise be required
to repurchase a Mortgage Loan under Section 2.01 or 2.02, the Seller may deliver
to the Trustee one or more Substitute Mortgage Loans in substitution for any one
or more of the Original Mortgage Loans which the Seller would otherwise be
required to repurchase pursuant to Sections 2.02 and 2.03; provided, however,
that:

            (1) Substitute Mortgage Loans must have an aggregate unpaid
principal balance not greater than, nor more than 30% less than the Scheduled
Principal Balance of the Original Mortgage Loans for which they will be
substituted; and

            (2) Substitute Mortgage Loans will not have a scheduled maturity
date later than the latest maturity date of any Mortgage Loan prior to any such
substitution;

      (b) The Seller shall notify the Master Servicer and the Trustee in writing
not less than five Business Days before the related Distribution Date which is
on or before the date of which the Seller would otherwise be required to
repurchase such Mortgage Loan pursuant to Section 2.02 or 2.03 of its intention
to effect a substitution under this Section. On such Distribution Date (the
"Substitution Date"), the Seller shall deliver to the Trustee (1) the Substitute
Mortgage Loans to be substituted for the Original Mortgage Loans, (2) a list of
the Original Mortgage

                                       34
<PAGE>

Loans to be substituted for by such Substitute Mortgage Loans, (3) an Officers'
Certificate (A) stating that no failure by the Master Servicer described in
Section 8.01 shall have occurred and be continuing, (B) stating that the
aggregate principal balance of all Substitute Mortgage Loans (determined with
respect to each Substitute Mortgage Loan as of the Distribution Date on which it
was substituted) including the principal balance of Substitute Mortgage Loans
being substituted on such Distribution Date does not exceed an amount equal to
5% of the aggregate principal balance of all Mortgage Loans as of the Closing
Date, (C) stating that all conditions precedent to such substitution specified
in subsection (a) have been satisfied and attaching as an exhibit a supplemental
Mortgage Loan schedule (the "Supplemental Mortgage Loan Schedule") setting forth
the same type of information as appears on the Mortgage Loan Schedule and
representing as to the accuracy thereof and (D) confirming that the
representations and warranties contained in Section 2.03 (excluding paragraph
(ii) of Section 2.03(a)) are true and correct in all material respects with
respect to the Substitute Mortgage Loans on and as of such Distribution Date,
provided that remedies for the inaccuracy of such representations are limited as
set forth in Sections 2.02, 2.03 and this Section 2.04, (4) an Opinion of
Counsel and Officers' Certificate to the effect set forth below and (5) a
certificate stating that cash in the amount by which the aggregate unpaid
principal balance of the Substitute Mortgage Loans is less than the Scheduled
Principal Balance of the Mortgage Loans for which they are being substituted
(which amount cannot be more than 15% of the Scheduled Principal Balance of the
Mortgage Loans for which they are being substituted) has been deposited in the
Certificate Account no later than the related Certificate Account Deposit Date
(such amount, the "Substitution Adjustment Amount").

      Upon receipt of the foregoing, the Trustee shall release such Original
Mortgage Loans to the Seller.

      (c) Concurrently with the satisfaction of the conditions set forth in
Section 2.04(a) and (b) above and the grant of such Substitute Mortgage Loans to
the Trustee pursuant to Section 2.04(a) above, Exhibit F to this Agreement shall
be deemed to be amended to exclude all Mortgage Loans being replaced by such
Substitute Mortgage Loans and to include, the information set forth on the
Supplemental Mortgage Loan Schedule with respect to such Substitute Mortgage
Loans, and all references in this Agreement to Mortgage Loans shall include such
Substitute Mortgage Loans.

      [(d) In connection with any Mortgage Loan that the Seller is required to
purchase or replace, the Seller shall deliver to the Trustee an Opinion of
Counsel to the effect that such purchase or substitution will not cause (x) any
federal tax to be imposed on the REMIC, including without limitation, any
Federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of the
Code or on "contributions after the start-up day" under Section 860G(d)(1) of
the Code or (y) any portion of the Trust Fund to fail to qualify as a REMIC at
any time that any Certificate is outstanding. In the event that such opinion or
certificate indicates that a repurchase or substitution will result in the
imposition of a prohibited transaction tax, give rise to net taxable income or
be deemed a contribution to the REMIC after the "start-up day", the Seller shall
not be required to repurchase or replace any such Mortgage Loan unless and until
the Master Servicer has determined there is an actual or imminent default with
respect thereto or that such defect or breach adversely affects the
enforceability of such Mortgage Loan.]

                                       35
<PAGE>

      Section 2.05. Designation of Interests in REMIC.

      (a) The Regular Certificates are hereby designated as the "regular
interests" and the Residual Certificates are hereby designated as the single
"residual interest" in the REMIC for purposes of the REMIC Provisions.

      (b) The Holder of the Residual Certificate is hereby designated as "tax
matters person" with respect to the REMIC for purposes of the REMIC Provisions.

      Section 2.06. Designation of Start-up Day. The Closing Date is hereby
designated as the "start-up day" of the REMIC within the meaning of Section
860G(a)(9) of the Code.

      Section 2.07. REMIC Certificate Maturity Date. Solely for purposes of
satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the "latest
possible maturity date" of each Class of Regular Certificates is the
Distribution Date in _________, 20__.

      [Section 2.08. Purchase of Converted Mortgage Loans. On the Business Day
immediately preceding the Due Date on which a Convertible Mortgage Loan becomes
a Converted Mortgage Loan, the Master Servicer shall notify the Depositor and
the Trustee in writing that such Mortgage Loan has become a Converted Mortgage
Loan. The [Seller] [Master Servicer] shall purchase such Converted Mortgage Loan
from the Trust Fund by paying to the [Master Servicer] [Trustee] for the benefit
of the Trustee the applicable Purchase Price on or before the Certificate
Account Deposit Date occurring in the month of such Due Date and the Trustee
shall enforce such obligation. The Purchase Price for such Converted Mortgage
Loan shall be deposited by the [Master Servicer] [Trustee] in the Certificate
Account and, upon receipt by the Trustee of written notification of such deposit
signed by a Servicing Officer, the Trustee shall release to the [Seller] [Master
Servicer] the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the [Seller] [Master Servicer] or its designee or
assignee title to any Mortgage Loan released pursuant hereto. The termination of
the Master Servicer obligation as Master Servicer shall not terminate its
obligation to purchase Converted Mortgage Loans pursuant to Section 2.05. [Any
successor Master Servicer under this Agreement, including, without limitation,
the Trustee acting in such capacity, shall not be required to purchase any
Converted Mortgage Loan.] In the event the [Seller] [Master Servicer] defaults
upon its obligation to repurchase any Converted Mortgage Loan, and such default
remains unremedied for a period of ten Business Days after written notice of
such default shall have been given by the Trustee to the [Seller] [Master
Servicer], the Trustee shall use its best efforts to cause such Converted
Mortgage Loan to be sold at a price equal to the Purchase Price for settlement
as soon as practicable thereafter. Any such Converted Mortgage Loan which is not
purchased by the [Seller] [Master Servicer] and which the Trustee is unable to
sell at the Purchase Price shall remain in the Trust Fund.]

                                   ARTICLE III

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

      Section 3.01. The Master Servicer to Act as Servicer. The Master Servicer
shall service and administer the Mortgage Loans and shall have full power and
authority, acting alone and/or through Servicers, to do any and all things in
connection with such servicing and administration

                                       36
<PAGE>

which it may deem necessary or desirable in connection therewith. Without
limiting the generality of the foregoing, the Master Servicer in its own name is
hereby authorized and empowered by the Trustee, to execute and deliver, on
behalf of the Certificateholders and the Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the properties subject to the Mortgages. The Trustee
shall furnish the Master Servicer with any powers of attorney and other
documents reasonably necessary or appropriate to enable the Master Servicer to
carry out its servicing and administrative duties hereunder.

      Unless otherwise specified herein with respect to specific obligations of
the Master Servicer, the Master Servicer shall service and administer the
Mortgage Loans in the best interests of and for the benefit of, the
Certificateholders, in accordance with prudent mortgage loan servicing standards
and procedures accepted in the mortgage banking industry and in accordance with
the Guide. The Master Servicer shall promptly notify the Trustee in writing of
any event, circumstance or occurrence which may adversely affect the ability of
the Master Servicer to service any Mortgage Loan or to otherwise perform and
carry out its duties, responsibilities and obligations under and in accordance
with this Agreement. The Master Servicer shall at all times maintain accurate
records and books of account and an adequate system of audit and internal
controls. All accounting and loan servicing records pertaining to each Mortgage
Loan shall be maintained in such manner as will permit the Trustee, or its duly
authorized representatives and designees to examine and audit and make legible
reproductions of records during reasonable business hours. [All such records
shall be maintained for the period required by the Guide or such longer period
as is required by law.]

      [The Master Servicer intends to perform its servicing and administration
functions, as Master Servicer, pursuant to this Agreement through its agent, the
Servicing Agent. All actions by the Servicing Agent with respect to the
servicing and administration of the Mortgage Loans shall be treated as though
done by the Master Servicer itself. All documents, instruments or contracts
executed by the Servicing Agent on behalf of the Master Servicer shall be
treated by the Trustee as though executed by the Master Servicer itself.]

      All costs incurred by the Master Servicer or by any Servicer in effecting
the timely payment of taxes and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loan so permit, and such
costs shall be recoverable by the Master Servicer to the extent permitted by
Section 3.06.

      [In the event that any tax is imposed on "prohibited transactions" under
Section 860F(a) of the Code or on "contributions after the start-up date" under
Section 860G(d) of the Code on the Trust Fund, such tax shall be charged (i) to
the Trustee pursuant to this Section 3.01, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under this Agreement,
which breach constitutes gross negligence or willful misconduct of the Trustee
or (ii) to the Master Servicer pursuant to this Section 3.01, if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under this Agreement or (iii) to the Depositor pursuant to this Section 3.01, if
such tax arises out of or results from a breach by the Depositor of any of its
obligations under this Agreement or (iv) to the Seller pursuant to this Section
3.01, if such tax arises out of or results from a breach by the Seller of any of
its

                                       37
<PAGE>

obligations under this agreement or (v) to the Residual Certificates on a pro
rata basis to the extent such taxes are not allocable pursuant to clauses (i)
through (iv) above. In no event will the Trustee be liable to pay or advance the
payment of any taxes referred to in this paragraph other than as provided in
clause (i) above. No taxes referred to in this paragraph shall be paid from any
assets constituting the Pool.]

      Section 3.02. Servicing Agreements between Master Servicer and Servicers;
Enforcement of Servicer's and Seller's Obligations.

      (a) The Master Servicer may enter into Servicing Agreements with Servicers
for the servicing and administration of certain of the Mortgage Loans.
References in this Agreement to actions taken or to be taken by the Master
Servicer in servicing the Mortgage Loans include actions taken or to be taken by
a Servicer on behalf of the Master Servicer. Each Servicing Agreement will be
upon such terms and conditions as are not inconsistent with this Agreement and
as the Master Servicer and the Servicer have agreed and as shall have been
approved by the Depositor and shall be effective as of the date of conveyance of
the Mortgage Loans by the Depositor to the Trustee. With the approval of the
Master Servicer, a Servicer may delegate its servicing obligations to
third-party servicers, but such Servicers will remain obligated under the
related Servicing Agreement. The Master Servicer and the Servicer may enter into
amendments thereto; provided, however, that any such amendments shall be
consistent with and not violate the provisions of this Agreement. [Each Servicer
shall be either (i) an institution the accounts of which are insured by the FDIC
or (ii) another entity that engages in the business of originating or servicing
mortgage loans, and in either case shall be authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Servicer to perform its obligations hereunder and under the Servicing Agreement,
and in either case shall be a FHLMC or FNMA approved mortgage servicer. Any
Servicing Agreement entered into by the Master Servicer shall include the
provision that such Agreement may be immediately terminated (x) with cause and
without any termination fee by any Master Servicer hereunder or (y) without
cause in which case the Master Servicer shall be responsible for any termination
fee or penalty resulting therefrom.]

      (b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Servicer under the related Servicing Agreement and of the
Seller under the Seller's Agreement, including, without limitation, the
obligation to make advances in respect of delinquent payments as required by a
Servicing Agreement, to purchase a Mortgage Loan on account of defective
documentation, as described in Section 2.02, or on account of a breach of a
representation or warranty, as described in Section 2.03. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Servicing Agreements and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, but shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement only to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loans or (ii) from a specific recovery of costs, expenses or attorneys fees
against the party against whom such enforcement is directed.

                                       38
<PAGE>

      Section 3.03. Liability of the Master Servicer. Notwithstanding any
Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer or a Servicer or
reference to actions taken through a Servicer or otherwise, the Master Servicer
shall remain obligated and liable to the Trustee and Certificateholders for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Servicing Agreements or arrangements or by virtue of
indemnification from the Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. For purposes of making distributions to
Certificateholders all amounts received by a Servicer in connection with the
Mortgage Loans shall be deemed to have been received by the Master Servicer, and
with respect to any successor Master Servicer from the time such successor
Master Servicer becomes the Master Servicer, whether or not such amounts are
actually remitted by the Servicer to the Master Servicer. The Master Servicer
shall be entitled to enter into any agreement with a Servicer or Seller for
indemnification of the Master Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.

      Section 3.04. Collection of Certain Mortgage Loan Payments; Certificate
Account; Distribution Account.

      (a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms of any related Primary Insurance Policy, follow such collection
procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans in its own servicing portfolio; provided, however, that the
Master Servicer agrees not to permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, forgive any
principal or interest, or change the terms of such Mortgage Note. Consistent
with the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or any assumption fees or other fees which may be collected in
the ordinary course of servicing such Mortgage Loan and (ii) arrange with a
Mortgagor a schedule for the payment of principal and interest due and unpaid
for a period of not more than 120 days after the applicable Due Date. Any
arrangement of the sort described in clause (ii) above shall not affect the
amount or timing of any Monthly Advance which is required to be made with
respect to a Mortgage Loan pursuant to the then current amortization schedule
applicable to such Mortgage Loan.

      In those cases where a Servicer is servicing Mortgage Loans pursuant to a
Servicing Agreement, the Master Servicer shall cause the Servicer, pursuant to
the Servicing Agreement, to establish and maintain one or more Servicing
Accounts, each of which shall be an Eligible Account. The Servicer will be
required under its Servicing Agreement to deposit into the Servicing Account on
a daily basis no later than the Business Day following receipt of all proceeds
of Mortgage Loans received by the Servicer, less its Servicing Fees and
unreimbursed Servicer Advances and expenses, to the extent permitted by the
Servicing Agreement. The Servicer shall not be required to deposit in the
Servicing Account payments or collections in the nature of pre- payment charges
or late charges.

      (b) The Master Servicer shall establish and maintain a Certificate Account
into which the Master Servicer shall deposit or cause to be deposited on a daily
basis within one Business Day of receipt, except as otherwise specifically
provided herein, the following payments and

                                       39
<PAGE>

collections remitted by Servicers 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 [and Balloon Payments] and the principal
      component of any Servicer Advance;

            (ii) all payments on account of interest on the Mortgage Loans, net
      of the sum of the related Master Servicing Fee and related Servicing Fee,
      and the interest component of any Servicer Advance [and any Yield
      Maintenance Premiums];

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

            (iv) any amount required to be deposited by the Master Servicer
      pursuant to Section 3.04(d) in connection with any losses on Permitted
      Investments;

            (v) any amounts required to be deposited by the Master Servicer
      pursuant to Sections 3.08 and 3.10 hereof;

            (vi) all Purchase Prices from the Master Servicer or Seller and all
      Substitution Adjustment Amounts;

            (vii) all Advances made by the Master Servicer pursuant to Section
      4.02; and

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

      The foregoing requirements for remittance by the Master Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of [prepayment penalties,] late payment
charges or assumption fees, if collected, need not be remitted by the Master
Servicer. In the event that the Master Servicer shall remit any amount not
required to be remitted, it may at any time withdraw or direct the institution
maintaining the Certificate Account to withdraw such amount from the Certificate
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 Certificate Account which
describes the amounts deposited in error in the Certificate Account. The Master
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Certificate Account shall
be held in trust for the Certificateholders until withdrawn in accordance with
Section 3.06.

            (c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:

                                       40
<PAGE>

            (i) the aggregate amount remitted by the Master Servicer to the
      Trustee pursuant to Section 3.06(vii);

            (ii) any amount deposited by the Master Servicer pursuant to Section
      3.04(d) in connection with any losses on Permitted Investments; and

            (iii) any other amounts deposited hereunder which are required to be
      deposited in the Distribution Account.

      In the event that the 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 3.06(b).
In no event shall the Trustee incur liability for withdrawals from the
Distribution Account at the direction of the Master Servicer.

      (d) Each institution at which the Certificate Account or the Distribution
Account is maintained shall invest the funds therein as directed in writing by
the Master Servicer in Permitted Investments, which shall mature not later than
(i) in the case of the Certificate Account, the second Business Day next
preceding the related Certificate 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 Certificate Account Deposit Date) and (ii) in the case
of the Distribution Account, the Business Day next preceding the Distribution
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 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 shall be
for the benefit of the Master Servicer as servicing compensation and shall be
remitted to it monthly as provided herein. The amount of any realized losses in
the Certificate Account or the Distribution Account incurred in any such account
in respect of any such investments shall promptly be deposited by the Master
Servicer in the Certificate Account or paid to the Trustee for deposit into the
Distribution Account, as applicable. 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 Certificate Account or the
Distribution Account and made in accordance with this Section 3.04.

      (e) The Master Servicer shall give notice to the Trustee, the Seller, each
Rating Agency and the Depositor of any proposed change of the location of the
Certificate Account not more than 45 days but in no event not less than 30 days
prior to any change thereof. The Trustee shall give notice to the Master
Servicer, the Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account not more than 45 days but in
no event not less than 30 days prior to any change thereof.

                                       41
<PAGE>

      Section 3.05. Collection of Taxes, Assessments and Similar Items; Master
Servicing Accounts.

      (a) To the extent required by the related Mortgage Note and not violative
of current law, the Master Servicer shall cause each Servicer to 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, [replacement reserves,] hazard insurance
premiums or comparable items for the account of the Mortgagors. Nothing herein
shall require the Master Servicer or any Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.

      (b) Withdrawals of amounts so collected from the Master Servicing Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, Primary Insurance Policy premiums, if applicable, to repair
or otherwise protect the Mortgaged Property or comparable items, to reimburse
the Master Servicer out of related collections for any payment of taxes or
assessments or any payments made pursuant to Sections 3.07 (with respect to the
Primary Insurance Policy) and 3.08 (with respect to hazard insurance), to refund
to any Mortgagors any sums as may be determined to be overages, to pay interest,
if required, to Mortgagors on balances in the Master Servicing Account or to
clear and terminate the Master Servicing Account at the termination of this
Agreement in accordance with Section 10.01.

      Section 3.06. Permitted Withdrawals from the Certificate Account.

      (a) The Master Servicer may, from time to time as provided herein, make
withdrawals from the Certificate Account of amounts on deposit therein
attributable to the Mortgage Loans for the following purposes:

            (i) as reimbursement for previously unreimbursed Monthly Advances
      made pursuant to Section 4.02, the right to withdraw amounts pursuant to
      this subclause (i) being limited to amounts received on particular
      Mortgage Loans (including, for this purpose, Insurance Proceeds,
      Liquidation Proceeds and proceeds from the repurchase of the Mortgage Loan
      pursuant to Sections 2.02 and 2.03) which represent late recoveries of
      payments of principal and/or interest with respect to which any such
      Monthly Advance was made;

            (ii) to pay as servicing compensation that portion of any payment as
      to interest as provided in Section 3.12;

            (iii) to pay to itself or the Seller, as the case may be, with
      respect to each Mortgage Loan or property acquired in respect thereof that
      has been purchased pursuant to Section 2.02, 2.03, 2.08 or 10.01, all
      amounts received thereon following such purchase and not distributed as of
      the date on which the related Scheduled Principal Balance or Purchase
      Price is determined;

            (iv) as reimbursement for any Nonrecoverable Advance in the manner
      and to the extent provided below or for the payment of taxes as permitted
      by the last paragraph of Section 3.01;

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<PAGE>

            (v) to pay, or reimburse itself for the payment of, the Trustee Fee,
      [specify other fees];

            (vi) as reimbursement for expenses incurred by and reimbursable to
      it or the Depositor pursuant to Section 7.03; and

            (vii) on or prior to each Certificate Account Deposit Date, to
      withdraw an amount equal to related Available Funds for such Distribution
      Date, and remit such amount to the Trustee for deposit in the Distribution
      Account.

      Since, in connection with withdrawals pursuant to subclauses (i) through
(iii), inclusive, the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such subclauses (i) through (iii), inclusive.

      The Master Servicer shall be entitled to reimburse itself for any Monthly
Advance made in respect of a Mortgage Loan that it determines to be a
Nonrecoverable Advance by withdrawal from the Certificate Account of amounts on
deposit therein attributable to the Mortgage Loans on the Business Day preceding
any Distribution Date first succeeding the date of such determination. The
Master Servicer's right of reimbursement in respect of a Nonrecoverable Advance
on any such Business Day shall be limited to an amount not exceeding the portion
of such Monthly Advance previously paid to Certificateholders (and not
thereto-fore reimbursed to the Master Servicer).

      (b) 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 from time to time make withdrawals from the
Distribution Account for the following purposes:

            (i) to pay to the Master Servicer as additional servicing
      compensation earnings on or investment income with respect to funds in the
      Distribution Account;

            (ii) to withdraw and return to the Master Servicer any amount
      deposited in the Distribution Account and not required to be deposited
      therein; and

            (iii) to clear and terminate the Distribution Account upon
      termination of the Agreement pursuant to Section 9.01 hereof.

      Section 3.07. Maintenance of the Primary Insurance Policies; Collections
Thereunder. The Master Servicer shall exercise its best reasonable efforts to
maintain and keep in full force and effect each Primary Insurance Policy, with
respect to each conventional Mortgage Loan as to which as of the Cut-Off Date
such a Primary Insurance Policy was in effect (or, in the case of a substitute
Mortgage Loan, the date of substitution) and the original principal amount of
the related Mortgage Note exceeded 80% of the Appraised Value, in an amount at
least equal to the excess of such original principal amount over 75% of such
Appraised Value until the principal amount of any such Mortgage Loan is reduced
below 80% of the Appraised Value or, based upon a new appraisal, the principal
amount of such Mortgage Loan represents less than 80% of the new appraised
value. The Master Servicer and the related Sub-Servicer shall have the power

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<PAGE>

to substitute for any Primary Insurance Policy another substantially equivalent
policy issued by another Qualified Insurer; provided that such substitution is
subject to the condition, to be evidenced by a writing from each Rating Agency,
that it would not cause the ratings on the Certificates to be downgraded or
withdrawn. The Master 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 from the related Liquidation
Proceeds.

      In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master 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. Pursuant to Section 3.04, any amounts collected by the
Master Servicer under any Primary Insurance Policies shall be deposited in the
Certificate Account, subject to withdrawal pursuant to Section 3.06.

      Section 3.08. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage.

      (a) The Master Servicer shall maintain and keep, with respect to each
Mortgage Loan, in full force and effect hazard insurance (fire insurance with
extended coverage) equal to at least the lesser of the Outstanding Principal
Balance of the Mortgage Loan or the current replacement cost of the Mortgage
Property, and containing a standard mortgagee clause; provided, however, that
the amount of hazard insurance may not be less than the amount necessary to
prevent loss due to the application of any co-insurance provision of the related
policy. Unless applicable state law requires a higher deductible, the deductible
on such hazard insurance policy may be no more than $1,000 or 1% of the
applicable amount of coverage, which ever is less. In the case of a condominium
unit or a unit in a planned unit development, the required hazard insurance
shall take the form of a multiperil policy covering the entire condominium
project or planned unit development, in an amount equal to at least 100% of the
insurable value based on replacement cost.

      (b) Any amounts collected by the Master Servicer under any such hazard
insurance policy (other than amounts to be applied to the restoration or repair
of the Mortgage Property or amounts released to the Mortgagor in accordance with
the Master Servicer's normal servicing procedures, the terms of the Mortgage
Note, the Mortgage or applicable law) shall be deposited in the Certificate
Account.

      (c) Any cost incurred by a Master Servicer in maintaining any such hazard
insurance policy shall not be added to the amount owing under the Mortgage Loan
for the purpose of calculating monthly distributions to Certificateholders,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer or a Sub-Servicer out of related late
payments by the Mortgagor or out of Insurance Proceeds or Liquidation Proceeds
or by the Master Servicer from the Repurchase Price, to the extent permitted by
Section 3.06.

      (d) No earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired with respect to a Security
Instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such

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<PAGE>

additional insurance. When, at the time of origination of the Mortgage Loan, the
Mortgage Property is located in a federally designated special flood hazard
area, the Master Servicer shall use its best reasonable efforts to cause with
respect to the Mortgage Loans, flood insurance (to the extent available and in
accordance with mortgage servicing industry practice) to be maintained. Such
flood insurance shall cover the Mortgaged Property, including all items taken
into account in arriving at the Appraised Value on which the Mortgage Loan was
based, and shall be in an amount equal to the lesser of (i) the Outstanding
Principal Balance of the related Mortgage Loan and (ii) the minimum amount
required under the terms of coverage to compensate for any damage or loss on a
replacement cost basis, but not more than the maximum amount of such insurance
available for the related Mortgaged Property under either the regular or
emergency programs of the National Flood Insurance Program (assuming that the
area in which such Mortgaged Property is located is participating in such
program). Unless applicable state law requires a higher deductible, the
deductible on such flood insurance may not exceed $1,000 or 1% of the applicable
amount of coverage, whichever is less.

      (e) If insurance has not been maintained complying with Subsections
3.08(a) and (d) and there shall have been a loss which would have been covered
by such insurance had it been maintained, the Master Servicer shall pay for any
necessary repairs.

      (f) The Master Servicer shall present claims under the related hazard
insurance or flood insurance policy.

      (g) The Master Servicer shall obtain and maintain at its own expense and
for the duration of this Agreement a blanket fidelity bond and shall cause each
Sub-Servicer to obtain and maintain an errors and omissions insurance policy
covering such Sub-Servicer's officers, employees and other persons acting on its
behalf in connection with its activities under this Agreement. The amount of
coverage shall be at least equal to the coverage maintained by the Master
Servicer acceptable to FNMA or FHLMC to service loans for it or otherwise in an
amount as is commercially available at a cost that is generally not regarded as
excessive by industry standards. The Master Servicer shall promptly notify the
Trustee of any material change in the terms of such bond or policy. The Master
Servicer shall provide annually to the trustee a certificate of insurance that
such bond and policy are in effect. If any such bond or policy ceases to be in
effect, the Master Servicer shall, to the extent possible, give the Trustee ten
days' notice prior to any such cessation and shall use its best efforts to
obtain an comparable replacement bond or policy, as the case may be. Any amounts
relating to the Mortgage Loans collected under such bond or policy shall be
remitted to the Certificate Account to the extent that such amounts have not
previously been paid to such account.

      Section 3.09. Enforcement of Due-On-Sale Clauses; Assumption Agreements.

      (a) In any case in which the Master Servicer is notified by any Mortgagor
that a Mortgaged Property relating to a Mortgage Loan has been or is about to be
conveyed by the Mortgagor, the Master Servicer shall enforce any due-on-sale
clause contained in the related Mortgage to the extent permitted under the terms
of the related Mortgage Note and by applicable law unless the Master Servicer
reasonably believes such enforcement is likely to result in legal action by the
Mortgagor. The Master Servicer may repurchase a Mortgage Loan at the Purchase
Price when the Master Servicer requires acceleration of the Mortgage Loan, but
only if the Master Servicer is satisfied, as evidenced by an Officer's
Certificate delivered to the Trustee, that

                                       45
<PAGE>

either (i) such Mortgage Loan is in default or default is reasonably foreseeable
or (ii) if such Mortgage Loan is not in default or default is not reasonably
foreseeable, such repurchase will have no adverse tax consequences for the Trust
Fund or any Certificateholder. If the Master Servicer reasonably believes that
such due-on-sale clause cannot be enforced under applicable law or if the
Mortgage Loan does not contain a due-on-sale clause, the Master Servicer is
authorized to consent to a conveyance subject to the lien of the Mortgage, and
to take or enter into an assumption 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 related Mortgage Note and unless prohibited by
applicable state law, such Mortgagor remains liable thereon, on condition,
however, that the related Mortgage Loan shall continue to be covered (if so
covered before the Master Servicer enters into such agreement) by any Primary
Insurance Policy. The Master Servicer shall notify the Trustee, whenever
possible, before the completion of such assumption agreement, and shall forward
to the Trustee the original copy of such assumption agreement, which copy shall
be added by the Trustee to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. In connection with
any such assumption agreement, the interest rate on the related Mortgage Loan
shall not be changed and no other material alterations in the Mortgage Loan
shall be made unless such material alteration would not cause the REMIC Trust to
fail to qualify as a REMIC for federal income tax purposes, as evidenced by an
Opinion of Counsel. Any fee or additional interest collected by the Master
Servicer for consenting to any such conveyance or entering into any such
assumption agreement may be retained by the Master Servicer as additional
servicing compensation.

      (b) Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any conveyance by the Mortgagor of the
related Mortgaged Property or assumption of a Mortgage Loan which the Master
Servicer reasonably believes it may be restricted by law from preventing, for
any reason whatsoever or if the exercise of such right would impair or threaten
to impair any recovery under any applicable Insurance Policy, or, in the Master
Servicer's judgment, be reasonably, likely to result in legal action by the
Mortgagor.

      Section 3.10. Realization upon Defaulted Mortgage Loans.

      (a) The Master Servicer shall foreclose upon or otherwise comparably
convert the ownership of properties securing any Mortgage Loans that come into
and continue in default and as to which no satisfactory arrangements can be made
for collection of delinquent payments pursuant to Section 3.04 except that the
Master Servicer shall not foreclose upon or otherwise comparably convert a
Mortgaged Property if there is evidence of toxic waste thereon and the Master
Servicer determines it would be imprudent to do so or not in accordance with
appropriate servicing standards. The Master Servicer can conclusively rely on
results of third party inspections from parties it reasonably believes are
qualified to conduct such inspections. In connection with such foreclosure or
other conversion, the Master Servicer shall use its best reasonable efforts to
preserve REO Property and to realize upon defaulted Mortgage Loans in such
manner as to maximize the receipt of principal and interest by the
Certificateholders, taking into account, among other things, the timing of
foreclosure and the considerations set forth in Subsection 3.10(b). The
foregoing is subject to the proviso that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of

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<PAGE>

an property unless it determines in good faith (i) that such restoration or
foreclosure will increase the proceeds of liquidation of the Mortgage Loan to
Certificateholders after reimbursement to itself for such expenses and (ii) that
such expenses will be recoverable to it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of reimbursements from the
Certificate Account pursuant to Section 3.06) or through Insurance Proceeds
(respecting which it shall have similar priority). The Master 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 (as well as its normal servicing compensation) to the extent that
transfers or withdrawals from the Certificate Account with respect thereto are
permitted under Section 3.06. Any income from or other funds (net of any income
taxes) generated by REO Property shall be deemed for purposes of this Agreement
to be Insurance Proceeds.

      (b) The Trust Fund shall not acquire any real property (or any personal
property incident to such real property) except in connection with a default or
imminent default of a Mortgage Loan. In the event that the Trust Fund acquires
any real property (or personal property incident to such real property) in
connection with a default or imminent default of a Mortgage Loan, such property
shall be disposed of by the Trust Fund within two years after its acquisition by
the Trust Fund unless the Trustee shall have received an Opinion of Counsel with
respect to such longer retention or the Master Servicer applies for and receives
an extension of the two-year period under Section 856(e)(3) of the Code, in
which case such two-year period will be extended by the period set forth in such
Opinion of Counsel or approved application, as the case may be. The Trustee
shall have no obligation to pay for such Opinion of Counsel.

      The Master Servicer shall prepare or cause to be prepared and submit to
the Trustee, and the Trustee shall file or cause to be filed with the Internal
Revenue Service a report and the Master Servicer shall deliver such report to
the Mortgagor in the manner required by applicable law and such report shall
contain the information required to be reported regarding any Mortgaged Property
which is abandoned or which has been foreclosed. The Master Servicer shall
provide a copy of any such report to the Trustee. In connection with any
Mortgage Loan as to which the Master Servicer has accepted a deed in lieu of
foreclosure, the Master Servicer shall insure that, at all times, the related
property constitutes "foreclosure property" within the meaning of Code Section
860G(a)(8) and that such property is administered so that no tax on "net income
from foreclosure property" within the meaning of Code Section 860G(c) is imposed
on the Trust Fund.

      Section 3.11. Trustee to Cooperate; Release of Mortgage Files.

      (a) Upon payment in full of any Mortgage Loan or the receipt by the Master
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Master Servicer will immediately notify the
Trustee by a certification signed by a Servicing Officer in the Form of Exhibit
H (which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Certificate Account have been or will be so deposited in the
appropriate subaccount thereof) and shall request delivery to the Master
Servicer of the Mortgage File. Upon receipt of such certification and request,
the Trustee shall promptly release the related Mortgage File to the Master
Servicer and execute and deliver to the Master Servicer, without recourse, the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage (furnished by the
Master Servicer), together with

                                       47
<PAGE>

the Mortgage Note with written evidence of cancellation thereon. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account.

      (b) From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan or collection under a Required Insurance Policy, the Master
Servicer shall deliver to the Trustee a Request for Release signed by a
Servicing Officer on behalf of the Master Servicer in substantially the form
attached as Exhibit H hereto. Upon receipt of the Request for Release, the
Trustee shall deliver the Mortgage File or any document therein to the Master
Servicer.

      (c) The Master Servicer shall cause each Mortgage File or any document
therein released pursuant to Subsection 3.11(b) to be returned to the Trustee
when the need therefor no longer exists, and in any event within 21 days of the
Master Servicer's receipt thereof, unless the Mortgage Loan has become a
Liquidated Mortgage Loan and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Certificate Account or such Mortgage File is
being used to pursue foreclosure or other legal proceedings. Prior to return of
a Mortgage File or any document to the Trustee, the Master Servicer or the
related Insurer to whom such file or document was delivered shall retain such
file or document in its respective control unless the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, to initiate or pursue legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. If a Mortgage Loan becomes a Liquidated
Mortgage Loan, the Trustee shall deliver the Request for Release with respect
thereto to the Master Servicer upon deposit of the related Liquidation Proceeds
in the Certificate Account.

      (d) The Trustee shall execute and deliver to the Master Servicer any court
pleadings, requests for trustee's sale or other documents necessary to (i) the
foreclosure or trustee's sale with respect to a Mortgaged Property; (ii) any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or Mortgage; (iii) obtain a deficiency judgment against the Mortgagor; or
(iv) enforce any other rights or remedies provided by the Mortgage Note or
Mortgage or otherwise available at law or equity. Together with such documents
or pleadings the Master Servicer shall deliver to the Trustee a certificate of a
Servicing Officer in which it requests the Trustee to execute the pleadings or
documents. The certificate shall certify and explain the reasons for which the
pleadings or documents are required. It shall further certify that the Trustee's
execution and delivery of the pleadings or documents will not invalidate any
insurance coverage under the Required Insurance Policies, affect the REMIC
status of the Trust or invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.

      Section 3.12. Servicing and Other Compensation; Payment of Certain
Expenses by the Master Servicer. The Master Servicer, as compensation for its
activities hereunder, shall be entitled to receive on each Distribution Date an
amount with respect to each Mortgage Loan as to which a monthly installment of
principal and interest has been received equal to one-twelfth of the Master
Servicing Fee Rate for such Mortgage Loan multiplied by the principal balance on
which such installment of interest accrued. The Master Servicer is also entitled
to retain

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<PAGE>

additional servicing compensation in the form of prepayment charges, if any,
assumption fees, tax service fees, fees for statement of account or payoff, late
payment charges, interest on amounts deposited in the Certificate Account or
Permitted Investments of such amounts, or otherwise. The Master Servicer may
retain, as additional servicing compensation, amounts in respect of interest
paid by borrowers in connection with any principal prepayment in full received
by the Master Servicer from the first day through the 15th day of each month,
other than the month of the Cut-off Date. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
(including payment of the fees of its counsel and all other fees and expenses
not expressly stated hereunder to be for the account of the Holders of
Certificates) and shall not be entitled to reimbursement therefor except as
specifically provided herein.

      As compensation for its activities under its Servicing Agreement, each
Servicer shall be entitled to an amount with respect to each Mortgage Loan as to
which a monthly installment of principal and interest has been received equal to
one-twelfth of the Servicing Fee Rate for such Mortgage Loan multiplied by the
principal balance on which such installment of interest accrued. Each Servicer
is required to pay all expenses incurred by it in connection with its servicing
activities under its Servicing Agreement (including payment of premiums for
Primary Mortgage Insurance Policies, if required) and shall not be entitled to
reimbursement therefor except as specifically provided in the Servicing
Agreement and not inconsistent with this Agreement.

      The Master Servicing Fee for any month shall be reduced to the extent
described as follows. Not later than the Determination Date in each month that
follows a month in which a Mortgage Loan was prepaid in full or in part or a
final liquidation of a Mortgage Loan has occurred, the Master Servicer shall
determine for each such Mortgage Loan the amount, if any, by which (x) the
annual interest at the related Mortgage Interest Rate (net of the related Master
Servicing Fee Rate and related Servicing Fee Rate) on the prepaid or liquidated
principal balance of such Mortgage Loan divided by twelve exceeds (y) the
interest required to be paid by the Mortgagor from the due date of the last
scheduled payment of principal and interest on such Mortgage Loan to the date of
such prepayment [or final liquidation or receipt of proceeds under the related
Pool Insurance Policy or Special Hazard Policy (adjusted to the Mortgage
Interest Rate (net of the related Master Servicing Fee Rate and related
Servicing Fee Rate)]. Not later than the Advancing Date immediately succeeding
such Determination Date, the Master Servicer shall deposit in the Certificate
Account from its own funds the amount determined by aggregating, for each such
Mortgage Loan for which the amount determined pursuant to (x) above exceeds the
amount determined pursuant to (y) above, the amount of each such excess, but
only to the extent of (and in reduction of) the compensation payable to it
pursuant to this Section 3.12 for the calendar month in which such prepaid or
liquidated principal balance is received.

      Section 3.13. Annual Statement as to Compliance. The Master Servicer, at
its expense, will deliver to each Rating Agency, the Trustee and the Depositor,
[on or before of each year, beginning with in the year that begins not less than
three months after the Cut-Off Date,] [quarterly on each _______, _______,
_______, and ______, beginning ____________ ____, _____] an Officers'
Certificate stating that (a) a review of the activities of the Master Servicer
during the preceding [calendar year] [quarter] and of its performance under this
Agreement has been made under such officers' supervision, and (b) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement throughout such [year]
[quarter], or, if there has been a default in the fulfillment of any such

                                       49
<PAGE>

obligation, specifying each such default known to such Officer and the nature
and status thereof and (c) to the best of such officer's knowledge, each
Servicer has fulfilled all its obligations under its Servicing Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of such statements shall be provided by the
Master Servicer to Holders of Certificates upon request or by the Trustee at the
expense of the Master Servicer should the Master Servicer fail to so provide
such copies.

      Section 3.14. Annual Independent Public Accountants' Servicing Report. On
or before of each year, beginning with the first that occurs at least three
months after the Cut-Off Date, the Master Servicer at its expense shall cause a
firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement to each Rating
Agency, the Depositor and the Trustee to the effect that such firm has examined
certain documents and records relating to the servicing of the mortgage loans
under pooling and servicing agreements substantially similar one to another
(such statement to have attached thereto a schedule setting forth the pooling
and servicing agreements covered thereby, including this Agreement) and that, on
the basis of such examination conducted substantially in compliance with the
Uniform Single Audit Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC, such servicing has been conducted in compliance
with such pooling and servicing agreements except for such significant
exceptions or errors in records that, in the opinion of such firm, the Uniform
Single Audit Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FHLMC requires it to report and which are set forth in such report.
Copies of the statement shall be provided by the Master Servicer to
Certificateholders, or by the Trustee at the Master Servicer's expense if the
Master Servicer fails to provide the requested copies.

      Section 3.15. Access to Certain Documentation and Information Regarding
the Mortgage Loans. The Master Servicer shall provide to the Trustee, the Office
of Thrift Supervision, Certificateholders which are federally insured savings
and loan associations, the FDIC and the Supervisory Agents and examiners of such
board and such corporation and their agents and accountants access to the
documentation regarding the Mortgage Loans requested by the Trustee, in case of
access by it, or required by applicable regulations, such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Master Servicer. Nothing in this Section 3.15 shall
derogate from the obligation of the Master 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 3.15 as a
result of such obligation shall not constitute a breach of this Section 3.15.

      Section 3.16. Rights of the Depositor in Respect of the Master Servicer.
The Master Servicer shall afford the Depositor, upon reasonable notice, during
normal business hours access to all records maintained by the Master Servicer in
respect of its rights and obligations hereunder and access to officers of the
Master Servicer responsible for such obligations. Upon request, the original
Master Servicer shall furnish the Depositor with its most recent financial
statements and such other information as the Master Servicer possesses regarding
its business, affairs, property and condition, financial or otherwise. Unless
there has been an Event of Default hereunder the Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer hereunder and may,
but is not obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer hereunder or exercise the rights of the Master
Servicer

                                       50
<PAGE>

hereunder; provided that the Master Servicer shall not be relieved of any of its
obligations hereunder by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

      [Section 3.17. Bankruptcy Bond. The Master Servicer shall obtain a
Bankruptcy Bond from ____________ covering (i) certain losses resulting from
Deficient Valuations or Debt Service Reductions on a Mortgage Loan, (ii) the
unpaid interest on the amount of any principal reduction during the pendency of
a proceeding under the Bankruptcy Code and (iii) losses resulting from the
extension of the term of the Mortgage Loan by a bankruptcy court. As of the
Closing Date, the Bankruptcy Bond shall be in the amount of the Bankruptcy
Coverage Initial Amount and any time thereafter be in the amount of the Current
Bankruptcy Amount. The coverage under the Bankruptcy Bond may be canceled or
reduced to the extent permitted by the Rating Agencies rating the Certificates,
so long as such cancellation or reduction does not adversely affect the ratings
then assigned to the Certificates by the Rating Agencies. The Master Servicer
shall use its reasonable efforts to maintain such Bankruptcy Bond and to
supervise the filing of claims with respect to such Bankruptcy Bond.

      In the event that the Bankruptcy Bond shall cease to be in effect or
________ or any successor thereto ceases to be a Qualified Insurer, the Master
Servicer shall exercise its reasonable efforts to obtain from a Qualified
Insurer, a comparable replacement policy or bond with a total coverage which is
equal to the previously existing coverage of the Bankruptcy Bond; provided,
however, that if the cost of any such replacement bond shall be greater than the
cost of the Bankruptcy Bond, the amount of coverage of such replacement bond
shall be reduced to a level such that the premium rate therefor shall not exceed
100% of the premium rate on the Bankruptcy Bond.

      At any time, the Master Servicer may substitute a surety bond, letter of
credit, another insurance policy or other credit enhancement for the Bankruptcy
Bond or any substitute therefor to the extent permitted by each Rating Agency
without a downgrading of the then current rating of the Certificates which shall
be confirmed in writing to the Trustee by each Rating Agency. [In addition,
prior to any such substitution, the Trustee shall have received an Opinion of
Counsel to the effect that such new bond, letter of credit, insurance policy or
other arrangement is an enforceable obligation of the issuer thereof and that
such substitution will not adversely affect the status of the Pool as a REMIC or
otherwise give rise to any prohibited transaction tax pursuant to Section
860F(a) of the Code or any tax on contributions after the start-up date under
Section 860G(a) of the Code.]

      [Section 3.18. Maintenance of the Pool Insurance Policy. The Master
Servicer shall exercise its best reasonable efforts to maintain and keep the
Pool Insurance Policy in full force and effect throughout the term of this
Agreement, unless coverage thereunder has been exhausted through payment of
claims. The Master Servicer agrees to remit the premiums as provided in Section
3.06 for the Pool Insurance Policy on a timely basis. The Master Servicer shall
use its reasonable efforts to file claims with respect to the Pool Insurance
Policy. In the event that (i) the Pool Insurer shall cease to be a Qualified
Insurer because it shall not be qualified to transact a mortgage guaranty
insurance business or financial guaranty insurance business, as applicable,
under the laws of the state of its principal place of business or any other
state which has

                                       51
<PAGE>

jurisdiction over such Pool Insurer in connection with the related Pool
Insurance Policy or (ii) the Pool Insurance Policy is cancelled or terminated
for any reason (other than the exhaustion of the total coverage), the Master
Servicer shall exercise its best reasonable efforts to obtain from another
Qualified Insurer a replacement policy comparable to such Pool Insurance Policy
with a total coverage which is equal to the then existing coverage of such Pool
Insurance Policy; provided, however, that if the cost of any such replacement
policy shall be greater than the cost of such Pool Insurance Policy, the amount
of coverage of such replacement policy shall be reduced to a level such that the
premium rate therefor shall not exceed 100% of the premium rate on such Pool
Insurance Policy. In the event that the Pool Insurer shall cease to be a
Qualified Insurer because it is no longer approved as an insurer by either FHLMC
or FNMA or because the rating assigned to the insurer by the Rating Agency has
been reduced below the rating category necessary to maintain the then current
rating of the Certificates assigned by such Rating Agency, the Master Servicer
agrees to review, not less often than quarterly, the financial condition of the
Pool Insurer with a view towards determining whether recoveries under the Pool
Insurance Policy are jeopardized for reasons related to the financial condition
of the Pool Insurer. If the Master Servicer determines that recoveries are so
jeopardized, the Master Servicer shall exercise its best reasonable efforts to
obtain from another Qualified Insurer a replacement insurance policy subject to
the cost limitation set forth above.

      At any time, the Master Servicer may substitute a surety bond, letter or
credit, another mortgage guaranty pool insurance policy or other credit
enhancement for the Pool Insurance Policy or any substitute therefor to the
extent permitted by the Rating Agency without a downgrading of the then current
rating of the Certificates which shall be confirmed in writing to the Trustee by
the Rating Agency.]

      [Section 3.19. Bankruptcy Reserve Fund.

      (a) The Master Servicer shall establish and maintain with the Trustee a
separate trust account to be designated the "Bankruptcy Reserve Fund for the
benefit of Holders of the Mortgage Pass-Through Certificates Series 200_-_.
Amounts on deposit in the Bankruptcy Reserve Fund shall be withdrawn therefrom
in accordance with this Section in satisfaction of the Master Servicer's
obligation to cover payment deficiencies on the Certificates occasioned by Debt
Service Reductions and/or Deficient Valuations (the "Bankruptcy Support
Obligation"). On the Closing Date, the Master Servicer shall deposit the Initial
Bankruptcy Coverage Amount in the Bankruptcy Reserve Fund. Neither the
Bankruptcy Reserve Fund nor any amounts deposited therein shall constitute a
part of the assets included in the Trust Fund.

      (b) The Master Servicer grants to the Trustee for the exclusive benefit of
the Certificateholders a valid and perfected first priority security interest in
and to all of its right, title and interest in the Bankruptcy Reserve Fund, all
amounts deposited therein and in the investments thereof and all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing to secure the
obligations of the Master Servicer pursuant to the final paragraph of Section
3.01; provided, however, that all income from the investment of funds in the
Bankruptcy Reserve Fund shall be excluded from such grant. This grant is made in
trust for the uses and purposes provided herein. The Trustee acknowledges such
grant and accepts the trusts under this Section in accordance with the
provisions hereof. The Trustee shall maintain the Bankruptcy Reserve Fund, the
amounts deposited therein and all investments thereof continuously in the State
of ___________________.

                                       52
<PAGE>

      (c) The Master Servicer will cause a valid and perfected first priority
security interest under the Uniform Commercial Code as in effect in the State of
____________ from time to time to be maintained in the Bankruptcy Reserve Fund,
the amounts deposited therein and the investments thereof (other than any income
from the investment of funds in the Bankruptcy Reserve Fund) in favor of the
Trustee for the benefit of the Certificateholders in order to secure the full
and timely performance by the Master Servicer of its Bankruptcy Support
Obligation provided by Section 3.01. In that regard, the Master Servicer will
cause to be filed, if required to maintain a perfected first priority security
interest, on or before the Closing Date appropriate financing statements where
required to perfect such security interest.

      (d) Amounts on deposit in the Bankruptcy Reserve Fund shall be invested by
the Trustee at the written direction of the Seller, in one or more Permitted
Investments in the name of the Trustee on behalf of the Certificateholders. The
amount of losses, if any, incurred in respect of any such investments of amounts
on deposit in the Bankruptcy Reserve Fund shall be deducted from the respective
amounts on deposit therein. The Trustee shall not be liable for any losses
realized on such investments made in accordance with this Section 3.19(d). Such
investments shall mature no later than the Business Day preceding the next
Distribution Date. On each Distribution Date the Trustee will withdraw from the
Bankruptcy Reserve Fund for remittance to the Seller the amount by which the
amount on deposit therein exceeds the Current Bankruptcy Amount. In addition, on
the Final Distribution Date the Trustee will withdraw from the Bankruptcy
Reserve Fund for remittance to the Seller the amount, if any, remaining on
deposit in the Bankruptcy Reserve Fund after distribution to the
Certificateholders on such Distribution Date.

      (e) On each Certificate Account Deposit Date, the Trustee shall withdraw
from the Bankruptcy Reserve Fund and deposit into the Certificate Account an
amount equal to the lesser of (i) the Current Bankruptcy Amount for such
Distribution Date and (ii) the Bankruptcy Support Obligation for such
Distribution Date.

      (f) At any time, the Master Servicer may substitute a surety bond, letter
of credit, insurance policy or other credit enhancement for the Bankruptcy
Reserve Fund and amounts on deposit therein or any substitute therefor to the
extent permitted by the Rating Agency without a downgrading of the then current
rating of the Certificates which shall be confirmed in writing to the Trustee by
the Rating Agency.]

      [Section 3.20. Maintenance of Special Hazard Policy.

      (a) The Master Servicer shall obtain a Special Hazard Insurance Policy
from the Special Hazard Insurer covering (i) physical loss or damage to
properties subject to defaulted Mortgage Loans caused by certain hazards
(including earthquakes, mud flows and to a limited extent, floods) not insured
against under customary standard forms of fire and hazard insurance policies
with extended coverage (or a flood insurance policy if the related Mortgaged
Property is in a federally designated flood area), and (ii) losses on such
Mortgage Loans caused by reason of the application of the co-insurance clause
typically contained in customary standard hazard insurance policies. Aggregate
claims under the Special Hazard Insurance Policy for the Mortgage Loans will be
limited to the Special Hazard Loss Coverage Amount on the Closing Date. The
Master Servicer shall use its reasonable efforts to maintain such Special Hazard

                                       53
<PAGE>

Insurance Policy and to file claims with respect to such Special Hazard
Insurance Policy. In the event that the rating on the claims paying ability of
the Special Hazard Insurer is reduced below such rating that was assigned by the
Rating Agency at the time the Special Hazard Insurer became the Special Hazard
Insurer, the Master Servicer shall exercise reasonable efforts to obtain from
another Qualified Insurer, acceptable to the Rating Agency, a replacement policy
comparable to such Special Hazard Policy with total coverage which is equal to
the then existing Special Hazard Policy provided that the annual cost of such
replacement policy shall not exceed 100% of the annual cost of the Special
Hazard Policy.

      In the event that the Special Hazard Insurance Policy shall cease to be in
effect, or the Special Hazard Insurer or any successor thereto ceases to be a
Qualified Insurer, the Master Servicer shall exercise its reasonable efforts to
obtain from a Qualified Insurer a comparable replacement policy with a total
coverage which is equal to the previously existing coverage as long as the
replacement policy can be obtained for the same premium. Any amounts collected
under any such policy (other than any amount to be applied to the restoration or
repair of the property encumbered by the related Mortgage Loan with respect to
which such amount was collected) shall be deposited in the Certificate Account
pursuant to Section 3.04 hereof.

      At any time, the Master Servicer may substitute a surety bond, letter of
credit, another special hazard insurance policy or other credit enhancement for
either Special Hazard Insurance Policy or any substitute therefor to the extent
permitted by each Rating Agency without a downgrading of the then current rating
of the Certificates which shall be confirmed in writing to the Trustee by the
Rating Agency.

      (b) On or before the Closing Date, the Trustee shall establish and
thereafter shall maintain an account (the "Special Hazard Premium Account")
entitled "Special Hazard Premium Account, _______ in trust for _______." On each
Distribution Date, the Trustee will deposit to the Special Hazard Premium
Account an amount equal to the Special Hazard Fee from amounts withdrawn from
the Certificate Account pursuant to Section 3.06(v) hereof. Amounts on deposit
in the Special Hazard Premium Account shall be invested in accordance with the
instructions of the Seller in Permitted Investments which shall mature not later
than the Business Day preceding the next Distribution Date (except that if such
Permitted Investments are an obligation of the Trustee, then such Permitted
Investment shall mature not later than such Distribution Date on which the
Annual Special Hazard premium is due). Neither the Special Hazard Premium
Account nor any amounts deposited therein shall constitute a part of the assets
of any trust created under this Agreement. Annually, on the Distribution Date
occurring in commencing in 200_, so long as the Special Hazard Insurer is not in
default of amounts payable under the Special Hazard Policy the Trustee will
withdraw from the Special Hazard Premium Account and pay to the Special Hazard
Insurer the premium amount due for such annual period pursuant to the terms of
the Special Hazard Insurance Policy. Any amount remaining in the Special Hazard
Premium Account following the above described withdrawal shall be withdrawn from
the Special Hazard Premium Account and remitted to the Seller.]

                                       54
<PAGE>

                                   ARTICLE IV

                MASTER SERVICER'S CERTIFICATE; MONTHLY ADVANCES

      Section 4.01. Master Servicer's Certificate. Each month, not later than
12:00 noon Eastern time on the Business Day following each Determination Date,
but in no event later than the close of business on the 20th day of the month or
the preceding Business Day if such 20th day is not a Business Day, the Master
Servicer shall deliver to the Trustee, a Master Servicer's Certificate
substantially in the form of Exhibit K, certified by a Servicing Officer.

      Such statement shall be provided by the Trustee to any Holder of a
Certificate upon request and shall also, to the extent available, include
information regarding delinquencies on Mortgage Loans, indicating the number and
aggregate principal amount of Mortgage Loans which are either one, two, three or
more than three months delinquent and the book value of any Mortgaged Property
acquired as part of the Pool through foreclosure, deed in lieu of foreclosure or
other exercise of a security interest in the Mortgaged Property.

      Section 4.02. Monthly Advances. On or before 11:00 A.M. New York time on
the Advancing Date [occurring on or before the Certificate Account Deposit Date
in _________], the Master Servicer shall (a) either (i) deposit in the
Certificate Account from its own funds an amount equal to the Monthly Advance,
if any, or (ii) cause to be made an appropriate entry in the records of the
Certificate Account that all or a portion of the Amount Held for Future
Distribution has been, as permitted by this Section 4.02, used by the Master
Servicer in discharge of any such Monthly Advance or (iii) make advances in the
form of any combination of clauses (i) and (ii) above aggregating the amount of
such Monthly Advance or (b) in the event that the Master Servicer is unable to
make such Monthly Advance, notify the Trustee in order to enable the Trustee to
exercise its remedies hereunder, including but not limited to Section 8.01. The
obligation of the Master Servicer or any successor Master Servicer to make the
Monthly Advance required by this Section 4.02 is not a guaranty of payment on
the Certificates and is contingent upon the Master Servicer's determination that
such Monthly Advances are recoverable in accordance herewith. Any portion of the
Amount Held for Future Distribution so used shall be replaced by the Master
Servicer by deposit in the Certificate Account on or before 11:00 A.M. Eastern
time on any future Certificate Account Deposit Date to the extent that funds
attributable to the Mortgage Loans that are available in the Certificate Account
on such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date.

                                    ARTICLE V

                  PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS

      Section 5.01. Distributions. On each Distribution Date, the Trustee shall
distribute out of the Distribution Account (i) to each Certificateholder of
record on the related Record Date (other than as provided in Section 10.01
respecting the final distribution) by check mailed to such Certificateholder
entitled to receive a distribution on such Distribution Date at the address
appearing in the Certificate Register, or upon written request by a Regular
Certificateholder (in the event such certificateholder owns of record Regular
Certificates of any Class having denominations aggregating at least $5,000,000),
by wire transfer or by such other means of

                                       55
<PAGE>

payment as such certificateholder and the Trustee shall agree upon, such
Certificateholder's Percentage Interest in, the amount to which the related
Class of Certificates is entitled in accordance with the priorities set forth
below in Section 5.02.

      Neither the Holders of any Class of Regular Certificates or the Residual
Certificates, the Master Servicer, nor the Trustee shall in any way be
responsible or liable to Holders of any Class of Certificates in respect of
amounts properly previously distributed on any Class of Regular Certificates.

      Amounts distributed with respect to any Class of Regular Certificates
shall be applied first to the distribution of interest thereon and then to
principal thereon.

      Section 5.02. Priorities of Distribution.

      (a) On each Distribution Date, the Trustee shall withdraw the Available
Funds from the Distribution Account and apply such funds to distributions on the
Certificates in the following order of priority and to the extent of Available
Funds:

            (i) to each Class of Senior Certificates, an amount allocable to
      interest equal to the related Class Optimum Interest Distribution Amount
      for such Distribution Date, any shortfall being allocated among such
      Classes in proportion to the amount of the Class Optimum Interest
      Distribution Amount that would have been distributed in the absence of
      such shortfall;

            (ii) to the Class A-1 Certificates, an amount allocable to principal
      equal to the Senior Principal Distribution Amount, up to the Class
      Certificate Balance thereof;

            (iii) subject to Section 5.02(d), to each Class of Subordinate
      Certificates as follows:

                  (A) to the Class M-1 Certificates, an amount allocable to
            interest equal to the Class Optimal Interest Distribution Amount for
            such Class for such Distribution Date;

                  (B) to Class M-1 Certificates, an amount allocable to
            principal equal to the Subordinate Principal Distribution Amount for
            such Class, up to the Class Certificate Balance thereof;

                  (C) to the Class B-1 Certificates, an amount allocable to
            interest equal to the Class Optimal Interest Distribution Amount for
            such Class for such Distribution Date;

                  (D) to Class B-1 Certificates, an amount allocable to
            principal equal to the Subordinate Principal Distribution Amount for
            such Class, up to the Class Certificate Balance thereof;

                                       56
<PAGE>

                  (E) to the Class B-2 Certificates, an amount allocable to
            interest equal to the Class Optimal Interest Distribution Amount for
            such Class for such Distribution Date; and

                  (F) to the Class B-2 Certificates, an amount allocable to
            principal equal to the Subordinate Principal Distribution Amount for
            such Class, up to the Class Certificate Balance thereof; and

            (iv) to the Residual Certificates any remaining Available Funds.

      (b) On each Distribution Date, the Class Optimum Interest Distribution
Amount for such Distribution Date for each interest-bearing Class of Regular
Certificates shall be reduced by (i) the related Class' pro rata share of Net
Prepayment Interest Shortfalls based on such Class' Class Optimum Interest
Distribution Amount without taking into account such Net Prepayment Interest
Shortfalls, (ii) after the Special Hazard Coverage Termination Date, with
respect to each Mortgage Loan that became a Special Hazard Mortgage Loan during
the preceding calendar month, the related Class' pro rata share (based on the
amount of interest such Class would otherwise have been entitled to receive in
respect of such Mortgage Loan) of one month's interest at the related Net
Mortgage Interest Rate on the Scheduled Principal Balance of such Mortgage Loan,
(iii) such Class' Allocable Share of (a) after the Bankruptcy Coverage
Termination Date, the interest portion of Debt Service Reductions and Deficient
Valuations and (b) Relief Act Reductions during the preceding calendar month and
(iv) after the Fraud Coverage Termination Date, with respect to each Mortgage
Loan that became a Fraud Loan during the preceding calendar month, the related
Class' pro rata share (based on the amount of interest such Class would
otherwise be entitled to receive in respect of such Mortgage Loan) of one
month's interest at the related Net Mortgage Interest Rate on the Scheduled
Principal Balance of such Mortgage Loan.

      (c) For any Distribution Date following the Special Hazard Coverage
Termination Date, Fraud Loss Coverage Termination Date and Bankruptcy Coverage
Termination Date, as the case may be, the amount the Regular Certificates in the
aggregate are entitled to receive shall be reduced in the aggregate by the
related Splinter Loss with respect to any such Special Hazard Mortgage Loan,
Fraud Loan and Mortgage Loan that was subject to a Bankruptcy Loss. Any such
reduction shall be allocated pro rata based on Class Certificate Balances.

      [(d) Notwithstanding the priority and allocation contained in Section
5.02(a)(iii), if with respect to any Class of Subordinate Certificates on any
Distribution Date the sum of the related Class Subordination Percentages of all
Classes of Subordinate Certificates which have a lower relative priority in
right of distribution pursuant to Section 5.02(a)(iii) than such Class (the
"Applicable Credit Support Percentage") is less than the Original Applicable
Credit Support Percentage for such Class, no distribution of Principal
Prepayments will be made to any such Classes (the "Restricted Classes") having
lower relative priority in right of distribution pursuant to Section
5.02(a)(iii) than such Class and the amount of such Principal Prepayments
otherwise distributable to the Restricted Classes shall be allocated to such
Class and any Classes of Subordinate Certificates having a higher relative
priority in right of distribution pursuant to Section 5.02(a)(iii) than such
Class, pro rata, based on their respective Class Certificate Balances
immediately prior to such Distribution Date and shall be distributed in the
order provided in Section 5.02(a)(iii).]

                                       57
<PAGE>

      Section 5.03. Allocation of Net Realized Losses.

      (a) On or prior to each Determination Date, the Master Servicer shall
determine the total amount of Net Realized Losses, if any, that occurred during
the preceding calendar month.

      (b) Net Realized Losses shall be allocated as follows:

            (i) Net Realized Losses (other than Splinter Losses), first,
      sequentially, to the Class B-2, Class B-1 and Class M-1 Certificates in
      that order, until the Class Certificate Balance of each such Class is
      reduced to zero, and second, to the Class A-1 Certificates.

            (ii) Net Realized Losses that are Splinter Losses, (a) prior to the
      Special Hazard Coverage Termination Date, the Bankruptcy Loss Coverage
      Termination Date or the Fraud Loss Coverage Termination Date, as
      applicable, first, sequentially, to the Class B-2, Class B-1 and Class M-1
      Certificates, in that order, until the Class Certificate Balance of such
      Class is reduced to zero and second, to the Class A-1 Certificates, until
      Class Certificate Balance is reduced to zero and (b) after the Special
      Hazard Coverage Termination Date, the Bankruptcy Loss Coverage Termination
      Date or Fraud Loss Coverage Termination Date, as applicable, to the Senior
      Certificates and the Subordinate Certificates then outstanding, pro rata
      on the basis of their respective Class Certificate Balances.

      Any Net Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class in proportion to the respective
portion of the Initial Class Certificate Balance represented by a Certificate.

      (b) Any allocation of Net Realized Losses to a Certificate shall be
accomplished by reducing the Class Certificate Balance thereof immediately
following the related Distribution Date in accordance with the definition of
"Class Certificate Balance."

      Section 5.04. Statements to Certificateholders.

      (a) Prior to the Distribution Date in each month, based upon the
information provided to the Trustee on the Master Servicer's Certificate
delivered to the Trustee pursuant to Section 4.01, the Trustee shall determine
the following information with respect to the following Distribution Date:

            (i) the amount received or deemed to have been received by the
      Master Servicer as of the close of business on the preceding Determination
      Date in respect of the Mortgage Loans, reduced by the sum of the amounts
      specified in clauses (x)-(z), inclusive, of the definition of Available
      Funds;

            (ii) the aggregate Purchase Prices for any Defective Mortgage Loans
      or Converted Mortgage Loans to be purchased on the immediately succeeding
      Certificate Account Deposit Date pursuant to Section 2.02, 2.03 or 2.08
      and (b) the amount to be deposited in the Certificate Account prior to the
      related Certificate Account Deposit Date pursuant to Section 2.04 in
      respect of Substitute Mortgage Loans;

                                       58
<PAGE>

            (iii) the amount, if any, required to be deposited in the
      Certificate Account pursuant to Section 3.08(a);

            (iv) the Available Funds for the following Distribution Date;

            (v) the Class Optimum Interest Distribution Amount for each Class of
      Regular Certificates for the following Distribution Date and the amount to
      be distributed on account of interest on each Class of Regular
      Certificates for the following Distribution Date;

            (vi) the amount to be distributed and allocable to principal for
      each Class of Regular Certificates (other than the Notional Certificates)
      for the following Distribution Date;

            (vii) the aggregate amount of Net Realized Losses indicating
      separately the amount of Net Special Hazard Losses, Fraud Losses and
      Bankruptcy Losses during the preceding calendar month;

            (viii) the amount of Bankruptcy Coverage Amount, Special Hazard Loss
      Coverage and the Fraud Loss Coverage Amount for the related Distribution
      Date;

            (ix) the Senior Percentage for the following Distribution Date;

            (x) the Senior Prepayment Percentage for the following Distribution
      Date;

            (xi) the Subordinate Percentage and the Subordinate Percentage
      Allocation on a Class by Class basis for the following Distribution Date;

            (xii) the Subordinate Prepayment Percentage and the Subordinate
      Prepayment Percentage Allocation on a Class by Class basis for the
      following Distribution Date;

            (xiii) the Pool Scheduled Principal Balance for the second following
      Distribution Date; and

            (xiv) the Class Certificate Balance for each Class of Regular
      Certificates after giving effect to the distribution to be made on the
      following Distribution Date and any adjustments to the Class Certificate
      Balances of such Certificates on such following Distribution Date as a
      result of Net Realized Losses; and

      (b) No later than each Distribution Date, the Trustee, based upon
information supplied to it on the Master Servicer's Certificate, shall prepare
and mail to each Holder of a Certificate, each Rating Agency and the Master
Servicer a statement setting forth:

            (i) (a) the amount of such distribution to Holders of each Class of
      Regular Certificates allocable to interest, any Class Unpaid Interest
      Shortfall for such Class included in such distribution and any remaining
      Class Unpaid Interest Shortfall for such Class after giving effect to such
      distribution and (b) the amounts of (v) Net Prepayment

                                       59
<PAGE>

      Interest Shortfall; (w) the amount of Prepayment Interest Shortfalls
      offset by the Master Servicing Fee; (x) the interest portion of Net
      Special Hazard Losses and Fraud Losses; (y) the interest portion of Debt
      Service Reductions and Deficient Valuations; and (z) Relief Act
      Reductions, in each case allocated to each Class on such Distribution
      Date;

            (ii) the amount of such distribution to Holders of each Class of
      Regular Certificates allocable to principal, separately identifying the
      aggregate amount of any Principal Prepayments included therein;

            (iii) the amount of any Monthly Advance pursuant to Section 4.02;

            (iv) the Class Certificate Balance of each Class of Regular
      Certificates on such Distribution Date after giving effect to the
      distribution of principal and any adjustments to the Class Certificate
      Balances of such Certificates as a result of Net Realized Losses resulting
      from (a) Special Hazard Losses, (b) Deficient Valuations or Debt Service
      Reductions, (c) Fraud Losses and (d) Net Realized Losses not included in
      clauses (a) - (c) above, separately listing the amounts of adjustments
      resulting from each such category;

            (v) the Pool Scheduled Principal Balance of the Mortgage Loans for
      the following Distribution Date;

            (vi) the aggregate amount of Net Special Hazard Losses, Bankruptcy
      Losses and Fraud Losses during the preceding calendar month (separately
      stating the amount of principal reduction and interest reduction pursuant
      to Sections 5.02(b) and 5.02(c)) and the Special Hazard Loss Coverage
      Amount, Bankruptcy Coverage Amount and the Fraud Loss Coverage Amount for
      the following Distribution Date;

            (vii) the number and aggregate principal balances of Mortgage Loans
      delinquent as of the end of the previous month (a) one month, (b) two
      months and (c) three or more months and loans in foreclosure;

            (viii) the book value (within the meaning of 12 C.F.R. ss. 571.13 or
      comparable provision) of any real estate acquired through foreclosure or
      grant of a deed in lieu of foreclosure;

            (ix) the amount of Net Realized Losses allocated to each such Class;

            (x) the Senior Percentage for the following Distribution Date;

            (xi) the Senior Prepayment Percentage for the following Distribution
      Date; and

            (xii) the Subordinate Percentage and the Subordinate Percentage
      Allocation on a Class by Class basis for the following Distribution Date;
      and

            (xiii) the Subordinate Prepayment Percentage and the Subordinate
      Prepayment Percentage Allocation on a Class by Class basis for the
      following Distribution Date.

                                       60
<PAGE>

      In the case of information furnished pursuant to subclauses (i), (ii) and
(ix) above, the amounts shall be expressed as a dollar amount or Notional
Amount, as the case may be, per Certificate with a $1,000 denomination.

      [Within a reasonable period of time after the end of each calendar year,
the [Master Servicer] shall forward to the Trustee for mailing to each Person
who at any time during the calendar year was the Holder of a Regular
Certificate, or Residual Certificate a statement containing the information set
forth in subclauses (i) and (ii) above in the case of a Regular
Certificateholder, in each case aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the [Master Servicer] shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
[Master Servicer] pursuant to any requirements of the Code as from time to time
in force.]

      [The Master Servicer shall provide on an aggregate basis with respect to
each Class of Certificates to enable the Trustee to deliver to the Holders of
Certificates any reports or information the Trustee is required by this
Agreement or the Code, Treasury Regulations or REMIC Provisions to deliver to
the Holders of Certificates, and Master Servicer shall prepare and provide to
the Trustee, and the Trustee shall forward to Certificateholders in the form so
provided (by mail, telephone, or publication as may be permitted by applicable
Treasury Regulations) as directed by the Master Servicer, such other reasonable
information as the Master Servicer deems necessary or appropriate or is required
by the Code, Treasury Regulations, and the REMIC Provisions including, but not
limited to, (i) information to be reported to the Holders of the Residual
Certificates for quarterly notices on Schedule Q (Form 1066) (which information
shall be forwarded to the Holders of the Certificates by the Master Servicer),
(ii) information to be provided to the Holders of Certificates with respect to
amounts which should be included as interest and original issue discount in such
Holders' gross income and (iii) information to be provided to all Holders of
Certificates setting forth the percentage of the REMIC's assets, determined in
accordance with Treasury Regulations using a convention, not inconsistent with
Treasury Regulations, selected by the Master Servicer in its absolute
discretion, that constitute qualifying real property loans under Section 593 of
the Code, real estate assets under Section 856 of the Code, and assets described
in Section 7701(a)(19)(C) of the Code; provided, however, that in setting forth
the percentage of such assets of the REMIC, nothing contained in this Agreement,
including without limitation Section 7.03 hereof, shall be interpreted to
require the Master Servicer periodically to appraise the fair market values of
the assets of the Pool or to indemnify the Pool or any Certificateholders from
any adverse federal, state or local tax consequences associated with a change
subsequently required to be made in the Master Servicer's initial good faith
determinations of such fair market values (if subsequent determinations are
required pursuant to the REMIC Provisions) made from time to time.]

      Section 5.05. Tax Returns and Reports to Certificateholders.

      (a) For federal income tax purposes, the Trust Fund shall have a calendar
year taxable year and shall maintain its books on the accrual method of
accounting.

      [(b) The Master Servicer shall prepare or cause to be prepared and shall
deliver to the Trustee for signature, and the Trustee shall file or cause to be
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax information returns for each

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<PAGE>

taxable year with respect to the Trust Fund containing such information at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and shall furnish or cause to be furnished to the
Trust Fund and the Certificateholders the schedules, statements or information
at such times and in such manner as may be required thereby. Within thirty (30)
days of the Closing Date, the Trustee shall furnish or cause to be furnished to
the Internal Revenue Service, on Form 8811 or as otherwise required by the Code,
the name, title, address and telephone number of the person that Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information at the time or times and in the manner required by
the Code. Such 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 tax laws, regulations, or rules.]

      [(c) In the first federal income tax return of the Trust Fund for its
short taxable year ending December 31, 200 , REMIC status shall be elected for
such taxable year and all succeeding taxable years.]

      [(d) The Trustee will maintain or cause to be maintained such records
relating to the Trust Fund, including but not limited to the income, expenses,
assets and liabilities of the Pool, and the fair market value and adjusted basis
of the Pool property and 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.]

      [Section 5.06. Tax Matters Person. The Tax Matters Person shall have the
same duties with respect to the Trust Fund as those of a "tax matters partner"
under Subchapter C of Chapter 63 of Subtitle F of the Code.

      [Section 5.07. Rights of the Tax Matters Person in Respect of the Trustee.
The Trustee shall afford the Tax Matters Person, upon reasonable notice during
normal business hours, access to all records maintained by the Trustee in
respect of its duties hereunder and access to officers of the Trustee
responsible for performing such duties. Upon request, the Trustee shall furnish
the Tax Matters Person with its most recent statement of condition publicly
available. The Trustee shall make available to the Tax Matters Person such
books, documents or records relating to the Trustee's services hereunder as the
Tax Matters Person shall reasonably request. The Tax Matters Person shall not
have any responsibility or liability for any action or failure to act by the
Trustee and is not obligated to supervise the performance of the Trustee under
this Agreement or otherwise.]

      [Section 5.08. REMIC Related Covenants. For as long as the Pool shall
exist, the Trustee shall act in accordance herewith to assure continuing
treatment of the Trust Fund as a REMIC and avoid the imposition of tax on the
Trust Fund. In particular:

      (a) The Trustee shall not create, or permit the creation of, any
"interests" in the Trust Fund within the meaning of Code Section 860D(a)(2)
other than the interests represented by the Trust Fund, Regular Certificates and
the Residual Certificates, respectively.

      (b) Except as otherwise provided in the Code, the Depositor and the Master
Servicer shall not grant and the Trustee shall not accept property unless (i)
substantially all of the property held in the Trust Fund constitutes either
"qualified mortgages" or "permitted investments" as

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<PAGE>

defined in Code Sections 860G(a)(3) and (5), respectively, and (ii) no property
shall be contributed to the Trust Fund after the start-up day unless such grant
would not subject the Pool to the 100% tax on contributions to a REMIC after the
start-up day of the REMIC imposed by Code Section 860G(d).

      (c) The Trustee shall not accept on behalf of the Trust Fund any fee or
other compensation for services and shall not accept on behalf of the Pool any
income from assets other than those permitted to be held by a REMIC.

      (d) The Trustee shall not sell or permit the sale of all or any portion of
the Mortgage Loans (other than in accordance with Sections 2.02 or 2.03), unless
such sale is pursuant to a "qualified liquidation" as defined in Code Section
860F(a)(4)(A) and in accordance with Article X.

      (e) The Trustee shall maintain books with respect to the Trust Fund on a
calendar year taxable year and on an accrual basis.

      Neither the Master Servicer nor the Trustee shall engage in a "prohibited
transaction" (as defined in Code Section 860F(a)(2)), except that, with the
prior written consent of the Master Servicer and the Depositor, the Trustee may
engage in the activities otherwise prohibited by the foregoing clauses (b), (c)
and (d), provided that the Master Servicer shall have delivered to the Trustee
an Opinion of Counsel to the effect that such transaction will not result in the
imposition of a tax on the Trust Fund and will not disqualify the Trust Fund
from treatment as a REMIC; and provided, that the Master Servicer shall have
demonstrated to the satisfaction of the Trustee that such action will not
adversely affect the rights of the holders of the Certificates and the Trustee
and that such action will not adversely impact the rating of the Certificates.]

      [SECTION 5.09. Determination of Pass-Through Rates for COFI Certificates.
The Pass-Through Rate for each Class of COFI Certificates for each Interest
Accrual Period after the initial Interest Accrual Period shall be determined by
the Trustee as provided below on the basis of the Index and the applicable
formulae appearing in footnotes corresponding to the COFI Certificates in (1) to
the table relating to the Certificates in the Preliminary Statement.

      Except as provided below, with respect to each Interest Accrual Period
following the initial Interest Accrual Period, the Trustee shall not later than
two Business Days following the publication of the applicable Index determine
the Pass-Through Rate at which interest shall accrue in respect of the COFI
Certificates during the related Interest Accrual Period.

      Except as provided below, the Index to be used in determining the
respective Pass-Through Rates for the COFI Certificates for a particular
Interest Accrual Period shall be COFI for the second calendar month preceding
such Interest Accrual Period. If at the Outside Reference Date for any Interest
Accrual Period, COFI for the second calendar month preceding such Interest
Accrual Period has not been published, the Trustee shall use COFI for the third
calendar month preceding such Interest Accrual Period. If COFI for neither the
second nor third calendar months preceding any Interest Accrual Period has been
published on or before the related Outside Reference Date, the Index for such
Interest Accrual Period and for all subsequent Interest Accrual Periods shall be
the National Cost of Funds Index for the third calendar month preceding such
Interest Accrual Period (or the fourth preceding calendar month if such National

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<PAGE>

Cost of Funds Index for the third preceding calendar month has not been
published by such Outside Reference Date). In the event that the National Cost
of Funds Index for neither the third nor fourth calendar months preceding an
Interest Accrual Period has been published on or before the related Outside
Reference Date, then for such Interest Accrual Period and for each succeeding
Interest Accrual Period, the Index shall be LIBOR, determined in the manner set
forth below.

      On each Interest Determination Date so long as the COFI Certificates are
outstanding and the applicable Index therefor is LIBOR, the Trustee shall either
(i) request each Reference Bank to inform the Trustee of the quotation offered
by its principal London office for making one-month United States dollar
deposits in leading banks in the London interbank market, as of 11:00 a.m.
(London time) on such Interest Determination Date or (ii) in lieu of making any
such request, rely on such Reference Bank quotations that appear at such time on
the Reuters Screen LIBO Page (as defined in the International Swap Dealers
Association Inc. Code of Standard Wording, Assumptions and Provisions for Swaps,
1986 Edition), to the extent available.

      With respect to any Interest Accrual Period for which the applicable Index
is LIBOR, LIBOR for such Interest Accrual Period will be established by the
Trustee on the related Interest Determination Date as follows:

      (a) If on any Interest Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the next Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounding such
arithmetic mean upwards if necessary to the nearest whole multiple of 1/32%).

      (b) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next Interest
Accrual Period shall be whichever is the higher of (i) LIBOR as determined on
the previous Interest Determination Date or (ii) the Reserve Interest Rate. The
"Reserve Interest Rate" shall be the rate per annum which the Trustee determines
to be either (i) the arithmetic mean (rounded upwards if necessary to the
nearest whole multiple of 1/32%) of the one-month United States dollar lending
rates that New York City banks selected by the Trustee are quoting, on the
relevant Interest Determination Date, to the principal London offices of at
least two of the Reference Banks to which such quotations are, in the opinion of
the Trustee, being so made, or (ii) in the event that the Trustee can determine
no such arithmetic mean, the lowest one-month United States dollar lending rate
which New York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.

      From such time as the applicable Index becomes LIBOR until all of the COFI
Certificates are paid in full, the Trustee will at all times retain at least
four Reference Banks for the purposes of determining LIBOR with respect to each
interest Determination Date. The Master Servicer initially shall designate the
Reference Banks. Each "Reference Bank" shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
shall not control, be controlled by, or be under common control with, the
Trustee and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the Master
Servicer should terminate its appointment as Reference Bank, the Trustee shall
promptly appoint or cause to be appointed another Reference Bank. The Trustee
shall have no liability or responsibility to any Person for (i) the selection of
any

                                       64
<PAGE>

Reference Bank for purposes of determining LIBOR or (ii) any inability to retain
at least four Reference Banks which is caused by circumstances beyond its
reasonable control.

      In determining LIBOR and any Pass-Through Rate for the COFI Certificates
or any Reserve Interest Rate, the Trustee may conclusively rely and shall be
protected in relying upon the offered quotations (whether written, oral or on
the Reuters Screen) from the Reference Banks or the New York City banks as to
LIBOR or the Reserve Interest Rate, as appropriate, in effect from time to time.
The Trustee shall not have any liability or responsibility to any Person for (i)
the Trustee's selection of New York City banks for purposes of determining any
Reserve Interest Rate or (ii) its inability, following a good-faith reasonable
effort, to obtain such quotations from the Reference Banks or the New York City
banks or to determine such arithmetic mean, all as provided for in this Section
4.05.

      The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a Certificate and the Trustee.]

      [SECTION 5.10. Determination of Pass-Through Rates for LIBOR Certificates.
On each Interest Determination Date so long as the LIBOR Certificates are
outstanding, the Trustee shall either (i) request each Reference Bank to inform
the Trustee of the quotation offered by its principal London office for making
one month United States dollar deposits in leading banks in the London interbank
market, as of 11:00 a.m. (London time) on such Interest Determination Date or
(ii) in lieu of making any such request, rely on such Reference Bank quotations
that appear at such time on the Reuters Screen LIBO Page (as defined in the
International Swap Dealers Association Inc. Code of Standard Wording,
Assumptions and provisions for Swaps, 1986 Edition), to the extent available.

      LIBOR for the next Interest Accrual Period will be established by the
Trustee on each interest Determination Date as follows:

      (a) If on any interest Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the next Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounding such
arithmetic mean upwards if necessary to the nearest whole multiple of 1/32%).

      (b) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next Interest
Accrual Period shall be whichever is the higher of (i) LIBOR as determined on
the previous Interest Determination Date or (ii) the Reserve Interest Rate. The
"Reserve Interest Rate" shall be the rate per annum which the Trustee determines
to be either (i) the arithmetic mean (rounded upwards if necessary to the
nearest whole multiple of 1/32) of the one-month United States dollar lending
rates that New York City banks selected by the Trustee are quoting, on the
relevant Interest Determination Date, to the principal London offices of at
least two of the Reference Banks to which such quotations are, in the opinion of
the Trustee, being so made, or (ii) in the event that the Trustee can determine
no such arithmetic mean, the lowest one-month United States dollar lending rate
which New York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.

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<PAGE>

      (c) If on any interest Determination Date the trustee is required but is
unable to determine the Reserve Interest Rate in the manner provided in
paragraph (b) above, LIBOR shall be LIBOR as determined on the preceding
Interest Determination Date, or, in the case of the first Interest Determination
Date, the Initial LIBOR Rate.

      Until all of the LIBOR Certificates are paid in full, the Trustee will at
all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each Interest Determination Date. The Master Servicer
initially shall designate the Reference Banks. Each "Reference Bank" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Trustee and shall have an established place of business in
London. If any such Reference Bank should be unwilling or unable to act as such
or if the Master Servicer should terminate its appointment as Reference Bank,
the Trustee shall promptly appoint or cause to be appointed another Reference
Bank. The Trustee shall have no liability or responsibility to any Person for
(i) the selection of any Reference Bank for purposes of determining LIBOR or
(ii) any inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.

      The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each Interest
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement.

      In determining LIBOR, any Pass-Through Rate for the LIBOR Certificates or
any Reserve Interest Rate, the Trustee may conclusively rely and shall be
protected in relying upon the offered quotations (whether written, oral or on
the Reuters Screen) from the Reference Banks or the New York City banks as to
LIBOR or the Reserve Interest Rate, as appropriate, in effect from time to time.
The Trustee shall not have any liability or responsibility to any Person for (i)
the Trustee's selection of New York City banks for purposes of determining any
Reserve Interest Rate or (ii) its inability, following a good-faith reasonable
effort, to obtain such quotations from the Reference Banks or the New York City
banks or to determine such arithmetic mean, all as provided for in this Section
5.10.

      The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a Certificate and the Trustee.]

                                   ARTICLE VI

                                THE CERTIFICATES

      Section 6.01. The Certificates. The Classes of Senior Certificates, the
Residual Certificates and the Subordinate Certificates shall be substantially in
the forms set forth in Exhibits A, B, D and E (reverse of all Certificates) and
shall, on original issue, be executed by the Depositor and shall be
countersigned and delivered by the Trustee to or upon the order of the Depositor
upon receipt by the Trustee of the documents specified in Section 2.01. The
Senior Certificates shall be available to investors in interests representing
minimum dollar Certificate

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<PAGE>

Balances of $[ ] and integral multiples of $[ ] in excess thereof. The
Subordinate Certificates shall be available to investors in fully registered
form in interests representing minimum dollar Certificate Balances of $[ ] and
integral dollar multiples of $[ ] in excess thereof (except one Certificate of
such Class may be issued with a Certificate Balance in any amount in excess of
the minimum denomination).

      The Residual Certificates shall be in fully registered form in minimum
Percentage Interests of 10% and integral multiples of 10% in excess thereof
(except one Residual Certificate may be available in a Percentage Interest which
is equal to 0.001%).

      The Certificates shall be executed by manual or facsimile signature on
behalf of the Depositor by an authorized officer or signatory. 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 Depositor
shall bind the Depositor, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the execution and delivery of such
Certificates or did not hold such offices or positions at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless such Certificate shall have been
manually countersigned by the Trustee substantially in the form provided for
herein, and such countersignature upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their countersignature.

      Section 6.02. Registration of Transfer and Exchange of Certificates. The
Trustee shall cause to be kept at an office or agency in the city in which the
Corporate Trust Office of the Trustee is located a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall initially serve
as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided.

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

      No transfer of a Private Certificate shall be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event of any such transfer, (i) unless such transfer
is made in reliance upon Rule 144A under the 1933 Act, the Trustee or the
Depositor may require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to the
Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable

                                       67
<PAGE>

exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee or the Depositor and (ii) the Trustee shall require the
transferee to execute an investment letter (in substantially the form attached
hereto as Exhibit J) acceptable to and in form and substance reasonably
satisfactory to the Depositor and the Trustee certifying to the Depositor and
the Trustee the facts surrounding such transfer, which investment letter shall
not be an expense of the Trustee or the Depositor. The Holder of a Private
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor 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.

      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 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 may conclusively
rely on, and shall be protected in relying on, such

                                       68
<PAGE>

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.

      No transfer of a ERISA Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee and the Master Servicer, to the effect that such
transferee is not an employee benefit plan subject to Section 406 of ERISA, nor
a person acting on behalf of any such plan, which representation letter shall
not be an expense of the Trustee or the Master Servicer, or (ii) in the case of
any ERISA Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, and Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan, an Opinion of Counsel satisfactory to the Trustee and the Master Servicer
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 or the Master Servicer to any obligation in
addition to those undertaken in this Agreement, which opinion of counsel shall
not be an expense of the Trustee or the Master Servicer.

      Each Person who has or who acquires any Ownership Interest in a Residual
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions and to have
irrevocably appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, 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 and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee.

      (ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata undivided interest.

      (iii) No Ownership Interest in a Residual Certificate may be transferred
without the express written consent of the Trustee. In connection with any
proposed transfer of any Ownership Interest in a Residual Certificate, the
Trustee shall as a condition to such consent, require delivery to it, in form
and substance satisfactory to it, of each of the following:

            A. an affidavit in the form of Exhibit I hereto from the proposed
      transferee to the effect that such transferee is a Permitted Transferee
      and that it is not acquiring its Ownership Interest in the Residual
      Certificate that is the subject of the proposed transfer as a nominee,
      trustee or agent for any Person who is not a Permitted Transferee; and

                                       69
<PAGE>

            B. a covenant of the proposed transferee to the effect that the
      proposed transferee agrees to be bound by and to abide by the transfer
      restrictions applicable to the Residual Certificates.

      (iv) Any attempted or purported transfer of any Ownership Interest in a
Residual Certificate in violation of the provisions of this Section 6.02 shall
be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall, in violation of the provisions of
this Section 6.02, become a Holder of a Residual Certificate, then the prior
Holder of such Residual Certificate that is a Permitted Transferee shall, upon
discovery that the registration of transfer of such Residual Certificate was not
in fact permitted by this Section 6.02, 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 this Section 6.02 or for making any distributions due on such Residual
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of the Agreement so long as the transfer was
not registered upon the express written consent of the Trustee. The Trustee
shall be entitled to recover from any Holder of a Residual Certificate that was
in fact not a Permitted Transferee at the time such distributions were made all
distributions made on such Residual Certificate. Any such distributions so
recovered by the Trustee shall be distributed and delivered by the Trustee to
the prior Holder of such Residual Certificate that is a Permitted Transferee.

      (v) If any Person other than a Permitted Transferee acquires any Ownership
Interest in a Residual Certificate in violation of the restrictions in this
Section 6.02, then the Trustee shall have the right but not the obligation,
without notice to the Holder of such Residual Certificate or any other Person
having an Ownership Interest therein, to notify the Underwriter to arrange for
the sale of such Residual Certificate. The proceeds of such sale, net of
commissions (which may include commissions payable to the Trustee or its
affiliates), expenses and taxes due, if any, will be remitted by the Trustee to
the previous Holder of such Residual Certificate that is a Permitted Transferee,
except that in the event that the Trustee determines that the Holder of such
Residual Certificate may be liable for any amount due under this Section 6.02 or
any other provisions of this Agreement, the Trustee may withhold a corresponding
amount from such remittance as security for such claim. The terms and conditions
of any sale under this clause (v) shall be determined in the sole discretion of
the Trustee, and it shall not be liable to any Person having an Ownership
Interest in a Residual Certificate as a result of its exercise of such
discretion.

      (vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the restrictions in
this Section 6.02, then the Trustee, based on information provided to the
Trustee by the Master Servicer will provide to the Internal Revenue Service, and
to the persons specified in Section 860E(e)(3) and (6) of the Code, information
needed to compute the tax imposed under Section 860E(e)(5) of the Code on
transfers of residual interests to disqualified organizations.

      The foregoing provisions of Section 6.02 shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, in form and substance satisfactory to the Trustee, (i) written
notification from each Rating Agency that the removal of the restrictions on
Transfer set forth in this Section 6.02 will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause the Trust Fund to fail to qualify as a
REMIC.

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<PAGE>

      No service charge shall be imposed for any transfer or exchange of
Certificates of any Class, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

      All Certificates surrendered for transfer and exchange shall be destroyed
by the Certificate Registrar.

      Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate is surrendered to the Certificate Registrar or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (ii) there is delivered to the Trustee,
the Depositor and the Certificate Registrar such security or indemnity
reasonably satisfactory to each, to save each of them harmless, then, in the
absence of actual notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
countersign and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor, Class
and Percentage Interest but bearing a number not contemporaneously outstanding.
Upon the issuance of any new Certificate under this Section, the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Pool, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

      Section 6.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Master Servicer,
the Trustee, the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Trustee or the Certificate Registrar may treat the Person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.01 and for all
other purposes whatsoever, and neither the Depositor, the Master Servicer, the
Trustee, the Certificate Registrar nor any agent of the Master Servicer, the
Trustee or the Certificate Registrar shall be affected by notice to the
contrary.

                                   ARTICLE VII

                      THE DEPOSITOR AND THE MASTER SERVICER

      Section 7.01. Respective Liabilities of the Depositor and the Master
Servicer. The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by the Depositor and the Master
Servicer herein. By way of illustration and not limitation, the Depositor is not
liable for the servicing and administration of the Mortgage Loans, nor is it
obligated by Section 3.16 or Section 8.01 to assume any obligations of the
Master Servicer or to appoint a designee to assume such obligations, nor is it
liable for any other obligation hereunder that it may, but is not obligated to,
assume unless it elects to assume such obligation in accordance herewith.

      Section 7.02. Merger or Consolidation of the Depositor or the Master
Servicer. The Depositor and the Master Servicer will each keep in full effect
its existence, rights and franchises

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as a corporation under the laws of the state of its incorporation, 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, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.

      Any Person into which the Depositor or the Master Servicer may be merged
or consolidated, or any corporation resulting from any merger or consolidation
to which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor 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 Master Servicer shall be qualified to service mortgage loans on behalf of
FNMA or FHLMC.

      Section 7.03. Limitation on Liability of the Depositor, the Master
Servicer and Others. Neither the Depositor, the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor or of the Master
Servicer shall be under any liability to the Pool or the Certificateholders for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Master Servicer or any such
person against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor 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 Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
by the Pool and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its respective duties under this Agreement and which
in its opinion may involve it in any expense or liability; provided, however,
that the Depositor or the Master Servicer may in its discretion undertake any
such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Pool, and the Depositor and the Master Servicer shall be
entitled to be reimbursed therefor out of amounts attributable to the Mortgage
Loans on deposit in the Certificate Account as provided by Section 3.06.

      Section 7.04. Depositor and Master Servicer Not to Resign. Subject to the
provisions of Section 7.02, neither the Depositor nor the Master Servicer shall
resign from its respective obligations and duties hereby imposed on it except
upon determination that its duties hereunder

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are no longer permissible under applicable law. Any such determination
permitting the resignation of the Depositor or the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation by the Master Servicer shall become effective until the Trustee
or a successor servicer shall have assumed the Master Servicer's
responsibilities and obligations in accordance with Section 8.02 hereof.

                                  ARTICLE VIII

                                     DEFAULT

      Section 8.01. Events of Default. If any one of the following events
("Events of Default") shall occur and be continuing:

            (i) any failure by the Master Servicer to deposit amounts in the
      Certificate Account in the amount and manner provided herein so as to
      enable the Trustee to distribute to Holders of Certificates any payment
      required to be made under the terms of such Certificates and this
      Agreement which continues unremedied for a period of five (5) days; or

            (ii) failure on the part of the Master Servicer duly to observe or
      perform in any material respect any other covenants or agreements of the
      Master Servicer set forth in the Certificates or in this Agreement, which
      covenants and agreements continue unremedied for a period of 60 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
      evidencing Voting Rights aggregating not less than 25% of all Voting
      Rights; or

            (iii) the entry of a decree or order by a court or agency or
      supervisory authority having jurisdiction in the premises for the
      appointment of a conservator, receiver or liquidator in any insolvency,
      readjustment of debt, marshalling of assets and liabilities or similar
      proceedings against the Master Servicer, or for the winding up or
      liquidation of the Master Servicer's affairs, and the continuance of any
      such decree or order unstayed and in effect for a period of 60 consecutive
      days; or

            (iv) the consent by the Master Servicer to the appointment of a
      conservator or receiver or liquidator in any insolvency, readjustment of
      debt, marshalling of assets and liabilities or similar proceedings of or
      relating to the Master Servicer or of or relating to substantially all of
      its property; or 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; or

            (v) the failure of the Master Servicer to remit the Monthly Advance
      required to be remitted pursuant to Section 4.02 which failure continues
      unremedied for a period of two Business Days after the date upon which
      notice of such failure shall have been given to the Master Servicer by the
      Trustee.

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then, and in each and every such case, so long as an Event of Default shall not
have been remedied by the Master Servicer, either the Trustee or the Holders of
Certificates evidencing not less than 51% of all Voting Rights may by notice
then given in writing to the Master Servicer, terminate all of the rights and
obligations of the Master Servicer as servicer under this Agreement. If an Event
of Default described in clause (v) hereof shall occur, the Trustee shall, by
notice to the Master Servicer, terminate all of the rights and obligations of
the Master Servicer under this Agreement and in and to the Mortgage Loans and
proceeds thereof and shall, as successor Master Servicer, shall make the Monthly
Advance which the Master Servicer failed to make. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section 8.01, and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Mortgage Loans and related
documents, or otherwise, including, without limitation, the recordation of the
assignments of the Mortgage Loans to it. The Master Servicer agrees to cooperate
with the Trustee in effecting the termination of the responsibilities and rights
of the Master Servicer hereunder, including, without limitation, the transfer to
the Trustee for the administration by it of all cash amounts that have been
deposited by the Master Servicer in the Certificate Account or thereafter
received by the Master Servicer with respect to the Mortgage Loans. Upon
obtaining notice or knowledge of the occurrence of any Event of Default, the
Person obtaining such notice or knowledge shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register and to the Rating Agency.

      Section 8.02. Remedies of Trustee. During the continuance of any Event of
Default, so long as such Event of Default shall not have been remedied, the
Trustee, in addition to the rights specified in Section 8.01, shall have the
right, in its own name as trustee of an express trust, to take all actions now
or hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect the interests, and enforce its rights and remedies, of
the Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filing of proofs of claim
and debt in connection therewith). Except as otherwise expressly provided in
this Agreement, no remedy provided for by this Agreement shall be exclusive of
any other remedy, and each and every remedy shall be cumulative and in addition
to any other remedy and no delay or omission to exercise any right or remedy
shall impair any such right or remedy or shall be deemed to be a waiver of any
Event of Default.

      Section 8.03. Directions by Certificateholders and Duties of Trustee
During Event of Default. During the continuance of any Event of Default, Holders
of Certificates evidencing Voting Rights aggregating not less than 25% of all
Voting Rights may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Agreement, provided, however, that the
Trustee shall be under no obligation to pursue any such remedy, or to exercise
any of the trusts or powers vested in it by this Agreement (including, without
limitation, (a) the conducting or defending of any administrative action or
litigation hereunder or in relation hereto, and (b) the terminating of the
Master Servicer or any successor servicer from its rights and duties as servicer
hereunder) at the request, order or direction of any of the Certificateholders,
unless such

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Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby and, provided further, that, subject to the provisions of
Section 9.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee, in accordance with an Opinion of Counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith determines that the action or proceeding so directed would
involve it in personal liability or be unjustly prejudicial to the non-assenting
Certificateholders.

      Section 8.04. Action upon Certain Failures of the Master Servicer and upon
Event of Default. In the event that the Trustee shall have knowledge of any
failure of the Master Servicer specified in Section 8.01(i) or (ii) which would
become an Event of Default upon the Master Servicer's failure to remedy the same
after notice, the Trustee may, but need not if the Trustee deems it not in the
Certificateholder's best interest, give notice thereof to the Master Servicer.
In the event that the Trustee shall have knowledge of an Event of Default, the
Trustee shall give prompt written notice thereof to the Certificateholders.

      Section 8.05. Trustee to Act; Appointment of Successor.

      (a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 8.01, the Trustee shall be the successor in all
respects to the Master Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof. Notwithstanding anything
provided herein to the contrary, under no circumstances shall any provision of
this Agreement, including but not limited to Section 4.02 herein, be construed
to require the Trustee, acting in its capacity as successor to the Master
Servicer in its obligation to make Monthly Advances, to advance, expend or risk
its own funds or otherwise incur any financial liability in the performance of
its duties hereunder if it shall have reasonable grounds for believing that such
funds are nonrecoverable. As compensation therefor, the Trustee shall be
entitled to such compensation as the Master Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, the Trustee may, if it shall be unwilling so to act, or shall, if it is
legally unable so to act, appoint, or petition a court of competent jurisdiction
to appoint, any established housing and home finance institution having a net
worth of not less than $10,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder; provided, however, that any
such institution appointed as successor Master Servicer shall not as evidenced
in writing by the Rating Agency adversely affect the then current rating of any
Class of Certificates immediately prior to the termination of the Master
Servicer. Pending appointment of a successor to the Master Servicer hereunder,
unless the Trustee is prohibited by law from so acting, the Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer hereunder. The Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.

      (b) Any successor, including the Trustee, to the Master Servicer as
servicer shall during the term of its service as servicer maintain in force (i)
a policy or policies of insurance

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covering errors and omissions in the performance of its obligations as servicer
hereunder and (ii) a fidelity bond in respect of its officers, employees and
agents to the same extent as the Master Servicer is so required pursuant to
Section 3.08.

      Section 8.06. Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer pursuant to this Article VIII,
the Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses appearing in the Certificate Register and to each
Rating Agency.

                                   ARTICLE IX

                                   THE TRUSTEE

      Section 9.01. Duties of Trustee.

      (a) The Trustee, except during the continuance of a default by (a) the
Seller or (b) the occurrence of one or more of the events specified in Section
8.01, undertakes to perform such duties and only such duties as are specifically
set forth in this Agreement. In case of default or the occurrence of any such
event as specified above, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs.

      The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they 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 certificate,
statement, opinion, report, or other order or instrument furnished by the Master
Servicer or the Depositor to the Trustee pursuant to this Agreement.

      (b) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own gross negligent action, its own gross
negligent failure to act or its own willful misconduct; provided, however, that:

            (i) This paragraph shall not be construed to limit the effect of
paragraph (a) of this Section 9.01;

            (ii) The Trustee and co-trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of Certificateholders as provided in Section
8.03 hereof;

            (iii) For all purposes under this Agreement, the Trustee shall not
be deemed to have notice, of any event described in Section 8.01(ii) through (v)
unless a Responsible Officer assigned to and working in the Trustee's corporate
trust division has actual knowledge thereof or unless written notice of any
event is received at the Corporate Trust Office, and such notice references the
Certificates and this Agreement; and

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<PAGE>

            (iv) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

      Section 9.02. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 9.01:

      (i) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of auditor
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties;

      (ii) The Trustee may consult with counsel and 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 and any co-trustee shall not be personally liable for
any action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;

      (iv) Unless a default in respect of the Mortgage Loans or an event
specified in Section 8.01 shall have occurred and be continuing and, in each
case is known to a Responsible Officer of the Trustee, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing not less
than 50% of all Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability or payment of such estimated expenses as a
condition to proceeding. The reasonable expense of every such examination shall
be an expense of the Pool; and

      (v) The Trustee and any co-trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee and any co-trustee shall not be responsible
for any willful misconduct or gross negligence on the part of any agent or
attorney appointed with due care by it hereunder.

      Section 9.03. Trustee Not Liable for Certificates. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates save that the Trustee represents that, assuming due execution and
delivery by the other parties hereto, this Agreement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting the rights of creditors generally, and to
general principles of equity and the discretion of

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<PAGE>

the court (regardless of whether enforcement of such remedies is considered in a
proceeding in equity or at law). The Trustee shall not be accountable for the
use or application by the Depositor of funds paid to the Depositor in
consideration of the assignment of the Mortgage Loans hereunder by the
Depositor, or for the use or application of any funds paid to Servicers or the
Master Servicer in respect of the Mortgage Loans or deposited into the
Certificate Account by the Master Servicer.

      Section 9.04. Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Certificates with the
same rights it would have if it were not Trustee and may otherwise deal with the
Master Servicer, any Servicer or any of their respective affiliates with the
same right it would have if it were not the Trustee.

      Section 9.05. Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be (i) an institution the deposits of which are fully insured
by the FDIC and (ii) a corporation or national banking association organized and
doing business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $30,000,000 and subject to supervision or
examination by Federal or State authority and, with respect to every successor
trustee hereunder except as pursuant to Section 9.08 (iii) either an institution
(a) the long-term unsecured debt obligations of which are rated at least "[ ]"
by [ ] or (b) whose serving as Trustee hereunder would not result in the
lowering of the ratings originally assigned to any Class of Certificates. The
Trustee shall not be an affiliate of the Depositor or the Master Servicer. If
such corporation or national banking association publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 9.05,
the combined capital and surplus of such corporation or national banking
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 provision of this
Section 9.05, the Trustee shall resign immediately in the manner and with the
effect specified in Section 9.06.

      Section 9.06. Resignation and Removal of Trustee. The Trustee may at any
time resign and be discharged from the trust hereby created by giving written
notice thereof to the Master Servicer and mailing a copy of such notice to all
Holders of record. The Trustee shall also mail a copy of such notice of
resignation to each Rating Agency. Upon receiving such notice of resignation,
the Master Servicer shall use its best efforts to promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.

      If at any time the Trustee shall cease to be eligible in accordance with
the provision of Section 9.05 and shall fail to resign after written request
therefor by the Master Servicer, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged a 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 any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Master Servicer may remove the Trustee and appoint a

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<PAGE>

successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor.

      The Holders of Certificates evidencing not less than 50% of all Voting
Rights may at any time remove the Trustee by written instrument or instruments
delivered to the Master Servicer and the Trustee; the Master Servicer shall
thereupon use its best efforts to appoint a successor trustee in accordance with
this Section.

      Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 9.06 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 9.07.

      Section 9.07. Successor Trustee. Any successor trustee appointed as
provided in Section 9.06 shall execute, acknowledge and deliver to the Master
Servicer and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee herein. The predecessor trustee shall duly assign, transfer,
deliver and pay over to the successor trustee the whole of the Mortgage Files
and related documents and statements held by it hereunder, together with all
necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the records or copies
thereof maintained by the predecessor trustee in the administration hereof as
may be requested by the successor trustee and shall thereupon be discharged from
all duties and responsibilities under this Agreement.

      No successor trustee shall accept appointment as provided in this Section
9.07 unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 9.05.

      Upon acceptance of appointment by a successor trustee as provided in this
Section 9.07, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register and to the Rating Agency. If the Master Servicer 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 Master Servicer.

      Section 9.08. Merger or Consolidation of Trustee. Any corporation or
national banking association into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or national banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 9.05, 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.

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      Section 9.09. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any of the provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any Mortgaged
Property may at the time be located or for any other reason, 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,
or separate trustee or separate trustees, of all or any part of the Pool, and to
vest in such Person or Persons, in such capacity, such title to the Pool, or any
part thereof, and, subject to the other provision of this Section 9.09, 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 10 days after the receipt by it of a
request to do so, 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 9.05
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.07
hereof.

      In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.09, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the 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 Pool or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.

      Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustee and co-trustee, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the 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.

      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 become incapable of acting, resign or be removed, or shall be adjudged a
bankrupt or insolvent, or a receiver of its property shall be appointed, or any
public officer shall take charge or control of such trustee or co-trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, 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 9.10. Authenticating Agents. The Trustee may appoint one or more
authenticating agents ("Authenticating Agents") which shall be authorized to act
on behalf of the Trustee in authenticating or countersigning Certificates.
Wherever reference is made in this

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<PAGE>

Agreement to the authentication or countersigning of Certificates by the Trustee
or the Trustee's certificate of authentication or countersigning, such reference
shall be deemed to include authentication or countersigning on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication or
countersignature executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Master Servicer and must be
a corporation or national banking association organized and doing business under
the laws of the United States of America or of any State, having a principal
office and place of business in [ ], having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by Federal or State authorities.

      Any corporation or national banking association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which any Authenticating Agent shall
be a party, or any corporation or national banking association succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

      Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Master Servicer. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Master Servicer. Upon
receiving a notice of resignation or upon such a termination, or in case, at any
time any Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 9.10, the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Master Servicer and shall mail notice of such appointment to all
Certificate-holders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent.

      Section 9.11. Trustee's Fees and Expenses. The Trustee, as compensation
for its activities hereunder, shall be entitled to receive on each Distribution
Date an amount equal to the Trustee Fee for such Distribution Date. The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(including reasonable attorney's fees) (i) incurred in connection with any claim
or legal action relating to (a) this Agreement, (b) the Certificates, or (c) the
performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Trustee's duties hereunder and (ii)
resulting from any error in any tax or information return prepared by the Master
Servicer. Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee hereunder. Without limiting the foregoing,
the Master Servicer covenants and agrees, except as otherwise agreed upon in
writing by the Depositor and the Trustee, and except for any such expense,
disbursement or advance as may arise from the Trustee's negligence, bad faith or
willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to (A) the
reasonable compensation and the expenses and disbursements of its counsel not
associated with the closing of the issuance

                                       81
<PAGE>

of the Certificates, (B) the reasonable compensation, expenses and disbursements
of any accountant, engineer or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage such persons to perform acts
or services hereunder and (C) printing and engraving expenses in connection with
preparing any Definitive Certificates). Except as otherwise provided herein, the
Trustee shall not be entitled to payment or reimbursement for any routine
ongoing expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Certificate Registrar, Tax Matter's Person or Paying Agent hereunder or
for any other expenses.

      Section 9.12. Tax Returns. The Trustee will prepare any federal, state and
local income tax or information returns of the Pool and shall file or cause to
be filed such returns.

                                    ARTICLE X

                                   TERMINATION

      Section 10.01. Termination upon Purchase by the Master Servicer or
Liquidation of All Mortgage Loans. Subject to Section 10.02, the respective
obligations and responsibilities of the Seller, the Depositor, the Master
Servicer and the Trustee created hereby (other than the obligation of Trustee to
make certain payments to Certificateholders after the Final Distribution Date,
the obligations of the Master Servicer to send certain notices as hereinafter
set forth and pursuant to Sections 9.11 and 9.12 hereof and the obligation of
the [ ] pursuant to Section 5.05(b)) shall terminate upon the last action
required to be taken by the Trustee on the Final Distribution Date pursuant to
this Article X following the earlier of (a) the purchase by the Master Servicer
of all Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the Pool at a price equal to the sum of (A) 100% of the Scheduled
Principal Balance of each Mortgage Loan (other than any Mortgage Loan as to
which title to the underlying Mortgaged Property has been acquired and whose
fair market value is included pursuant to clause (B) below) and (B) the fair
market value of such acquired property (as determined by the Master Servicer as
of the close of business on the third Business Day next preceding the date upon
which notice of any such termination is furnished to Certificateholders pursuant
to the third paragraph of this Article X), plus any Class Unpaid Interest
Shortfall for any Class of Certificates as well as one month's interest at the
related Mortgage Interest Rate (net of the related Master Servicing Fee Rate and
the related Servicing Fee Rate) on the Scheduled Principal Balance of each
Mortgage Loan (including any Mortgage Loan as to which title to the underlying
Mortgaged Property has been acquired) or (b) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Pool or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan; provided,
however, that in no event shall the trust created hereby continue beyond the
earlier of (a) the expiration of 21 years from the death of the last survivor of
the descendants of Joseph P. Kennedy, the late ambassador of the United States
to the Court of St. James, living on the date hereof and (b) the Distribution
Date in _____________.

      The right of the Master Servicer to repurchase all Mortgage Loans pursuant
to (a) above is conditioned upon the Pool Scheduled Principal Balance as of the
Final Distribution Date being less than __ percent of the Cut-Off Date Pool
Principal Balance. If such right is exercised, the Master Servicer shall provide
to the Trustee the certification required by Section 3.11 and the Trustee shall,
promptly following payment of the purchase price, release to the purchaser the
Mortgage Files pertaining to the Mortgage Loans being purchased.

                                       82
<PAGE>

      Notice of any termination, specifying the Final Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and for cancellation, shall be given promptly by the
Master Servicer (if exercising its right to purchase the assets of the Pool) or
by the Trustee (in any other case) by letter to Certificateholders mailed not
earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying (A) the Final
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of Certificates at the office or agency of the
Trustee therein designated, (B) the amount of any such final payment and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified. If the
Master Servicer is obligated to give notice to Certificateholders as aforesaid,
it shall give such notice to the Trustee and the Certificate Registrar at the
time such notice is given to Certificateholders. In the event such notice is
given by the Master Servicer, the Master Servicer shall deposit in the
Certificate Account on or before the Final Distribution Date in immediately
available funds an amount equal to the amount necessary to make the amount, if
any, on deposit in the Certificate Account on the Final Distribution Date equal
to the purchase price for the assets of the Pool computed as above provided
together with a statement as to the amount to be distributed on each Class of
Certificates pursuant to the next succeeding paragraph.

      Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class, in the order set
forth in Section 5.02 hereof, on the final Distribution Date and 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 all of the Certificateholders shall not surrender their
Certificates for final payment cancellation on or before the Final Distribution
Date, the Trustee shall on such date cause all funds in the Trustee Certificate
Account not distributed in final distribution to Certificateholders to continue
to be held by the Trustee in an Eligible Account for the benefit of such
Certificateholders and the Master Servicer (if it exercised its right to
purchase the assets of the Pool) or the Trustee (in any other case) shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the 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 Certificate-holders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds on deposit in such Eligible
Account.

      [Section 10.02. Additional Termination Requirements.

      (a) In the event the Master Servicer exercises its purchase option as
provided in Section 10.01 the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has received an
Opinion of Counsel to the effect that the failure

                                       83
<PAGE>

of the Trust Fund to comply with the requirements of this Section 10.02 will not
(i) result in the imposition of taxes on "prohibited transactions" of the Trust
Fund as defined in Section 860F of the Code, or (ii) cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding:

            (i) Within 90 days prior to the Final Distribution Date set forth in
the notice given by the Master Servicer under Section 10.01, the holders of 100%
of the aggregate Percentage Interests evidenced by the Residual Certificates
shall adopt a plan of complete liquidation of the Trust Fund; and

            (ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the Final Distribution Date, the Trustee shall
sell all of the assets of the Trust Fund to the Master Servicer for cash.

      (b) By their acceptance of the Residual Certificates, the Holders thereof
hereby agree to adopt such a plan of complete liquidation upon the written
request of the Master Servicer and to take such other action in connection
therewith as may be reasonably requested by the Master Servicer.]

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

      Section 11.01. Amendment. This Agreement may be amended from time to time
by the Depositor, the Seller, the Master Servicer and the Trustee, without the
consent of any of the Certificate-holders, (i) to cure any ambiguity, (ii) to
correct or supplement any provisions herein or therein which may be defective or
inconsistent with any other provisions herein or therein, as the case may be,
(iii) to modify, eliminate or add to any of its provisions to such extent as
shall be necessary to maintain the qualification of the Trust Fund as a REMIC or
(iv) to add any other provisions with respect to matters or questions arising
under this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that (x) as evidenced by an Opinion of Counsel in
each case such action shall not, adversely affect in any material respect the
interests of any Certificateholder, (y) in each case, such action is necessary
or desirable to maintain the qualification of the Trust Fund as a REMIC or shall
not adversely affect such qualification and (z) if the opinion called for in
clause (x) cannot be delivered with regard to an amendment pursuant to clause
(iii) above, such amendment is necessary to maintain the qualification of the
Trust Fund as a REMIC; and provided, further, that the amendment shall not be
deemed to adversely affect in any material respect the interests of the
Certificateholders and no Opinion of Counsel to that effect shall be required if
the Person requesting the amendment obtains a letter from the Rating Agency
stating that the amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates.

      This Agreement may also be amended from time to time by the Depositor, the
Seller, the Master Servicer and the Trustee, with the consent of the Holders of
Certificates of each Class of Certificates which is affected by such amendment,
evidencing not less than 66-2/3% of all Voting Rights, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
such Certificates; provided, however, that no such amendment shall (a) reduce in

                                       84
<PAGE>

any manner the amount of, or delay the timing of, collections of payments on
Mortgage Loans or distributions which are required to be made on any Certificate
without the consent of the Holder of such Certificate or (b) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of the Holders of all Certificates then Outstanding.

      Prior to the solicitation of consent of Certificateholders in connection
with any such amendment, the party seeking such amendment shall furnish the
Trustee with an Opinion of Counsel stating whether such amendment would
adversely affect the qualification of the Trust Fund as a REMIC and notice of
the conclusion expressed in such Opinion of Counsel shall be included with any
such solicitation. An amendment made with the consent of all Certificateholders
and executed in accordance with this Section 11.01 shall be permitted or
authorized by this Agreement notwithstanding that such Opinion of Counsel may
conclude that such amendment would adversely affect the qualification of the
Trust Fund as a REMIC.

      Promptly after the execution of any such amendment or consent the Trustee
shall furnish written notification of the substance of or a copy of such
amendment to each Certificateholder and to the Rating Agency.

      It shall not be necessary for the consent of Certificate-holders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.

      Section 11.02. Recordation of Agreement. 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 and at its expense on direction by the Trustee, who will act at
the direction of Holders of Certificates evidencing not less than 50% of all
Voting Rights but only upon direction of the Trustee accompanied by an Opinion
of Counsel to the effect that such recordation materially and beneficially
affects the interests of Certificateholders.

      For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

      Section 11.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Pool, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Pool,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

      No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Pool, 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

                                       85
<PAGE>

an association; nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.

      No Certificateholder shall have any right by virtue 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 default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates evidencing not less than 25% of all Voting Rights shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Certificate-holders. For the protection and enforcement of the provisions of
this Section 11.03, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

      Section 11.04. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.

      Section 11.05. Notices. All demands, notices and communications required
to be delivered hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered at or mailed by certified mail, return
receipt requested, (provided, however, that notices to the Trustee shall be
deemed effective upon receipt) to (a) in the case of the Depositor, Sequoia
Residential Funding, Inc., Attention: [ ], (b) in the case of the Seller, RWT
Holdings, Inc., Attention: [ ], (c) in the case of the Master Servicer, [ ]
Attention: [ ] (d) in the case of the Trustee, [ ] Attention: [ ], or, as to
each party, at such other address as shall be designated by such party in a
written notice to each other party, (e) in the case of Moody's, Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attn:
Residential Pass-Through Monitoring, (f) in the case of S&P, Standard & Poor's
Ratings Group, 26 Broadway, 15th Floor, New York, New York 10004, Attention:
Residential Mortgage Surveillance, (g) in the case of Duff & Phelps, Duff &
Phelps Credit Rating Co., 17 State Street, 12th Floor, New York, New York 10007,
Attention: MBS Monitoring, and (h) in the case of Fitch, Fitch, Inc., One State
Street Plaza, New York, New York 10004, Attn: Residential Mortgage Surveillance
Group. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.

      Section 11.06. 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

                                       86
<PAGE>

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 11.07. Certificates Nonassessable and Fully Paid. It is the
intention of the Trustee that Certificateholders shall not be personally liable
for obligations of the Pool, that the beneficial ownership interests represented
by the Certificates shall be nonassessable for any losses or expenses of the
Pool or for any reason whatsoever, and that Certificates upon execution,
countersignature and delivery thereof by the Trustee pursuant to Section 6.01
are and shall be deemed fully paid.

      Section 11.08. Access to List of Certificateholders. The Certificate
Registrar will furnish or cause to be furnished to the Trustee, within 15 days
after the receipt of a request by the Trustee in writing, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date for payment of
distributions to Certificateholders.

      If three or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application states that
the applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such applicants access during normal business hours to
the most recent list of Certificate-holders held by the Trustee. If such a list
is as of a date more than 90 days prior to the date of receipt of such
applicants' request, the Trustee shall promptly request from the Certificate
Registrar a current list as provided above, and shall afford such applicants
access to such list promptly upon receipt.

      Every Certificateholder, by receiving and holding such list, agrees with
the Certificate Registrar and the Trustee that neither the Certificate Registrar
nor the Trustee shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Certificateholders
hereunder, regardless of the source from which such information was derived.

                                       87
<PAGE>

      IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller and the
Trustee have caused this Agreement to be duly executed by their respective
officers thereunto duly authorized to be hereunto affixed, all as of the day and
year first above written.

SEQUOIA RESIDENTIAL FUNDING, INC.
AS DEPOSITOR

By
Title: Vice President

RWT HOLDINGS, INC.
AS SELLER

By
Title:

-----------------------------
AS MASTER SERVICER

By
Title: Vice President

-----------------------------
AS TRUSTEE

By
Title: Vice President

                                       88
<PAGE>

STATE OF ____________  )
                       ) ss.
COUNTY OF ___________  )

On the [ ] day of [ ], 20__ before me, a notary public in and for the State of [
], personally appeared ________________, known to me who, being by me duly
sworn, did depose and say that s/he is a [ ] of Sequoia Residential Funding,
Inc., a Delaware corporation, one of the parties that executed the foregoing
instrument; and that s/he signed their name thereto by order of the Board of
Directors of such corporation.

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

                                             My Commission Expires:
                                                                   -------------

[Notary Seal]

STATE OF ____________  )
                       ) ss.
COUNTY OF ___________  )

On the [ ] day of [ ], 20__ before me, a notary public in and for the State of [
], personally appeared ________________, known to me who, being by me duly
sworn, did depose and say that s/he is a [ ] of RWT Holdings, Inc., a Delaware
corporation, one of the parties that executed the foregoing instrument; and that
s/he signed their name thereto by order of the Board of Directors of such
corporation.

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

                                             My Commission Expires:
                                                                   -------------

[Notary Seal]

                                       89
<PAGE>

STATE OF ____________  )
                       ) ss.
COUNTY OF ___________  )

On the [ ] day of [ ], 20__ before me, a notary public in and for the State of [
], personally appeared ________________, known to me who, being by me duly
sworn, did depose and say that s/he is a [ ] of [ ], a [ ] corporation, one of
the parties that executed the foregoing instrument; and that s/he signed their
name thereto by order of the Board of Directors of such corporation.

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

                                             My Commission Expires:
                                                                   -------------

[Notary Seal]

STATE OF ____________  )
                       ) ss.
COUNTY OF ___________  )

On the [ ] day of [ ], 20__ before me, a notary public in and for the State of [
], personally appeared ________________, known to me who, being by me duly
sworn, did depose and say that s/he is a [ ] of [ ], a [ ]corporation, one of
the parties that executed the foregoing instrument; and that s/he signed their
name thereto by order of the Board of Directors of such corporation.

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

                                             My Commission Expires:
                                                                   -------------

[Notary Seal]

                                       90
<PAGE>

                                    EXHIBIT A

                          [FORM OF SENIOR CERTIFICATE]

      [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE , OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF AN ENTITY REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

<TABLE>
<S>                                          <C>
       Certificate No.                       CUSIP NO.:
       Class [X] [A-] Certificate

       Date of Pooling and Servicing         Initial Weighted Average Pass-
       Agreement and Cut-Off Date:           Through Rate: _______%
       ______________

       First Distribution Date:              Initial [Certificate Balance]
       ______________                        [Notional Amount] of all Class
                                             [A-] [X] Certificates:  $________

       Last Scheduled Distribution           Initial [Certificate Balance]
       Date: _______________                 [Notational Amount] of this
                                             Certificate:  $________
</TABLE>

                       MORTGAGE PASS-THROUGH CERTIFICATE,

                                 SERIES 200__-__

evidencing a percentage interest in the distributions allocable to the
Certificates specified above from payments on and proceeds of a pool (the
"Pool") of fixed rate, one- to four-family first mortgage loans formed and sold
by

                        SEQUOIA RESIDENTIAL FUNDING, INC.

      This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by Sequoia Residential Funding, Inc., RWT Holdings, Inc.,
the Master Servicer, or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.

      THIS CERTIFIES THAT _____________________ is the registered owner of the
pro rata share evidenced by this Certificate in certain monthly distributions on
the Certificates specified above from payments on and proceeds of the assets
contained in the Pool consisting of

                                      A-1
<PAGE>

a pool of fixed rate one- to four-family first mortgage loans (the "Mortgage
Loans"). The Pool was created pursuant to a Pooling and Servicing Agreement
dated as specified above (the "Agreement") among Sequoia Residential Funding,
Inc., as sponsor (the "Depositor"), ______________, as seller (the "Seller"),
[_____________________], as master servicer (the "Master Servicer"), and
[____________________], as Trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following such 25th day (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, of an
amount equal to the pro rata share evidenced by this Certificate of the
aggregate amount required to be distributed to Holders of Certificates specified
above pursuant to the Agreement.

      Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto at the address appearing in the
Certificate Register, or upon written request by the Certificateholder, by wire
transfer (in the case of any Holder of Certificates entitled to such form of
payment as provided in the Agreement) or by such other means of payment as such
Person and the Trustee shall agree. Except as otherwise provided in the
Agreement, the final distribution on this Certificate will be made in the
applicable manner described above, after due notice by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency of the Trustee specified in such notice.

      This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by any authorized
signatory of the Trustee.

      IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed.

      Dated:

                                        SEQUOIA RESIDENTIAL FUNDING,
                                        INC.

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

                                        COUNTERSIGNED:

                                        By
                                          -------------------------------------
                                        Authorized Signatory of the
                                        Trustee, as defined herein

                                      A-2
<PAGE>

                                    EXHIBIT B

                         [FORM OF RESIDUAL CERTIFICATE]

      THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE REGULAR
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

      SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE IS NOT TREATED AS INDEBTEDNESS OF THE ISSUER FOR
FEDERAL INCOME TAX PURPOSES.

      NO EMPLOYEE BENEFIT PLAN (A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (AN "ERISA PLAN"), NOR ANY INDIVIDUAL
RETIREMENT ACCOUNT (AN "ACCOUNT") OR ANY PLAN SUBJECT TO SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (A "SECTION 4975 PLAN"),
MAY PURCHASE OR INVEST IN THIS CERTIFICATE. THIS CERTIFICATE WILL NOT BE
ACCEPTED FOR REGISTRATION OF TRANSFER UNLESS IT IS ACCOMPANIED BY EITHER (I) A
REPRESENTATION LETTER FROM THE PROPOSED TRANSFEREE, ACCEPTABLE TO THE TRUSTEE,
TO THE EFFECT THAT SUCH PROPOSED TRANSFEREE IS NOT AN ERISA PLAN, ACCOUNT OR
SECTION 4975 PLAN OR (II) IN THE CASE OF ANY SUCH PROPOSED TRANSFEREE WHICH IS A
PLAN, AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE MASTER SERVICER
TO THE EFFECT SET FORTH IN THE AGREEMENT.

      THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

      [THIS CERTIFICATE REPRESENTS A "TAX MATTERS PERSON RESIDUAL INTEREST"
ISSUED UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN AND MAY NOT
BE TRANSFERRED TO ANY PERSON EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE
TRANSFEREE OF THE DUTIES OF THE MASTER SERVICER UNDER SUCH AGREEMENT.]

                                      B-1
<PAGE>

<TABLE>
<S>                                         <C>
       Certificate No.                      Percentage Interest of this
                                            Residual Certificate:  _______%
       Residual Certificate

       Date of Pooling and Servicing        First Distribution Date:
       Agreement and Cut-Off Date:          _______________
       ________________
</TABLE>

                       MORTGAGE PASS-THROUGH CERTIFICATE,
                                SERIES 200___-__

evidencing a percentage interest in the distributions allocable to the Class of
Certificates specified above from payments on and proceeds of a pool (the
"Pool") of fixed rate, one- to four-family first mortgage loans formed and sold
by

                        SEQUOIA RESIDENTIAL FUNDING, INC.

      This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by Sequoia Residential Funding, Inc., RWT Holdings, Inc.,
the Master Servicer, or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.

      THIS CERTIFIES THAT [_____________________] is the registered owner of the
pro rata share evidenced by this Certificate in certain monthly distributions on
the Certificates specified above from payments on and proceeds of the assets
contained in the Pool consisting of a pool of fixed rate one- to four-family
first mortgage loans (the "Mortgage Loans"). The Pool was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
Sequoia Residential Funding, Inc., as depositor (the "Depositor"), RWT Holdings,
Inc., as seller (the "Seller"), [______________________], as master servicer
(the "Master Servicer"), and [____________________], as Trustee (the "Trustee").
The Trust Fund will consist primarily of one asset pool, with respect to which
an election will be made to treat it as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes. The Residual Certificates
will constitute "residual interests" in the Pool. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

      Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following such 25th day (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day) of the month next preceding the month of such distribution (the "Record
Date"), in an amount equal to the pro rata share evidenced by this Certificate
of the aggregate amount required

                                      B-2
<PAGE>

to be distributed to Holders of Certificates of the Class specified above
pursuant to the Agreement.

      Distributions, if any, on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register received by the Trustee five
Business Days before a Record Date, by wire transfer (in the case of any Holder
of Certificates entitled to such form of payment as provided in the Agreement)
or by such other means of payment as such Person and the Trustee shall agree.
Except as otherwise provided in the Agreement, the final distribution on this
Certificate will be made in the applicable manner described above, after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Trustee specified in such notice.

      No transfer of a Residual Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event of such a transfer, (i) the Trustee or the
Depositor may require an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee and the Depositor that such transfer is
exempt (describing the applicable exemption and the basis therefor) from or is
being made pursuant to the registration requirements of the Securities Act of
1933, as amended, and of any applicable statute of any state and (ii) the
Trustee shall require the transferee to execute an investment letter acceptable
to and in form and substance satisfactory to the Trustee and the Depositor
certifying as to the fact surrounding such transfer. The Holder hereof desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee
and the Depositor 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 a Residual Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee and the Master Servicer, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, nor a person acting on
behalf of any such plan, or (ii) in the case of any such Residual Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, and Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan, an Opinion of Counsel satisfactory
to the Trustee and the Depositor to the effect that the purchase or holding of
such Residual Certificate will not result in the assets of the pool being deemed
to be "plan assets" and subject to the prohibited transaction provisions of
ERISA and the Code and will not subject the Trustee or the Master Servicer to
any obligation in addition to those undertaken in the Agreement.

      Neither this Certificate nor any Ownership Interest herein may be
transferred and any proposed transferee hereof shall not become the registered
Holder hereof, without the express written consent of the Trustee. In connection
with any proposed transfer of any Ownership Interest, the Trustee shall as a
condition to such consent require delivery to it, and the proposed transferee
shall deliver to the Trustee, (i) an affidavit (a "Transfer Affidavit") of the
proposed transferee (in the form of Exhibit I to the Agreement) representing and
warranting that such transferee is a Permitted Transferee (as defined in the
Agreement), that it is not acquiring its Ownership Interest that is the subject
of the proposed transfer as a nominee, trustee or agent for

                                      B-3
<PAGE>

any Person who is not a Permitted Transferee and (ii) a covenant of the proposed
transferee that it will abide by the transfer restrictions applicable to the
Residual Certificates set forth in the Agreement.

      A Permitted Transferee is any Person other than (i) the United States or
any State or any political subdivision of any of the foregoing, (ii) a foreign
government, international organization or any agency or instrumentality of
either of the foregoing, (iii) an organization which is exempt from tax imposed
by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code
on unrelated business taxable income) (except certain farmers' cooperatives
described in Code Section 521)), (iv) rural electric and telephone cooperatives
described in Code Section 1381(a)(2)(C) and (v) any other Person so designated
by the Master Servicer based on an Opinion of Counsel to the effect that any
Transfer to such Person may cause the Pool or any other Holder of a Residual
Certificate to incur tax liability that would not be imposed other than on
account of such Transfer. The terms "United States", "State" and "international
organization" shall have the meanings set forth in Code Section 7701 or
successor provisions.

      Any purported transfer of a Residual Certificate in violation of the
restriction on transfer will be null and void and vest no rights in the
purported transferee.

      This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by any authorized
signatory of the Trustee.

      IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed.

      Dated:

                                        SEQUOIA RESIDENTIAL FUNDING,
                                        INC.

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

                                        Title:

                                        COUNTERSIGNED:

                                        By
                                          -------------------------------------
                                        Authorized Signatory of
                                        the Trustee, as defined herein

                                      B-4
<PAGE>

                                    EXHIBIT D
                       [FORM OF SUBORDINATED CERTIFICATE]

      THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN OTHER
CLASSES OF REGULAR CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

      SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE.

      [THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

      NO EMPLOYEE BENEFIT PLAN (A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (AN "ERISA PLAN"), NOR ANY INDIVIDUAL
RETIREMENT ACCOUNT (AN "ACCOUNT") OR ANY PLAN SUBJECT TO SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (A "SECTION 4975 PLAN"),
MAY PURCHASE OR INVEST IN THIS CERTIFICATE. THIS CERTIFICATE WILL NOT BE
ACCEPTED FOR REGISTRATION OF TRANSFER UNLESS IT IS ACCOMPANIED BY EITHER (I) A
REPRESENTATION LETTER FROM THE PROPOSED TRANSFEREE, ACCEPTABLE TO THE TRUSTEE,
TO THE EFFECT THAT SUCH PROPOSED TRANSFEREE IS NOT AN ERISA PLAN, ACCOUNT OR
SECTION 4975 PLAN OR (II) IN THE CASE OF ANY SUCH PROPOSED TRANSFEREE WHICH IS A
PLAN, AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE MASTER SERVICER
TO THE EFFECT SET FORTH IN THE AGREEMENT.

<TABLE>
<S>                                              <C>
       Certificate No.                           CUSIP NO.:
       Class [M-] [B-] Certificate

       Date of Pooling and Servicing             Pass-Through Rate: _______%
       Agreement and Cut-Off Date:
       ______________

       First Distribution Date:                  Initial Certificate Balance of all
       ______________                            Class [M-][B-] Certificates:
                                                 $________

       Last Scheduled Distribution Date:         Initial Certificate Balance of this
       _______________                           Certificate: $________
</TABLE>

                                      D-1
<PAGE>

                       MORTGAGE PASS-THROUGH CERTIFICATE,
                                 SERIES 200__-__

evidencing a percentage interest in the distributions allocable to the
Certificates specified above from payments on and proceeds of a pool (the
"Pool") of fixed rate, one- to four-family first mortgage loans formed and sold
by

                        SEQUOIA RESIDENTIAL FUNDING, INC.

      This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by Sequoia Residential Funding, Inc., RWT Holdings, Inc.,
the Master Servicer, or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.

      THIS CERTIFIES THAT [_____________________] is the registered owner of the
pro rata share evidenced by this Certificate in certain monthly distributions on
the Certificates specified above from payments on and proceeds of the assets
contained in the Pool consisting of a pool of fixed rate one- to four-family
first mortgage loans (the "Mortgage Loans"). The Pool was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
Sequoia Residential Funding, Inc., as depositor (the "Depositor"),
[_______________], as seller (the "Seller"), [_______________________] as master
servicer (the "Master Servicer"), and [_____________________], as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following such 25th day (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, of an
amount equal to the pro rata share evidenced by this Certificate of the
aggregate amount required to be distributed to Holders of Certificates specified
above pursuant to the Agreement.

      Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto at the address appearing in the
Certificate Register, or upon written request by the Certificateholder, by wire
transfer (in the case of any Holder of Certificates entitled to such form of
payment as provided in the Agreement) or by such other means of payment as such
Person and the Trustee shall agree. Except as otherwise provided in the
Agreement, the final distribution on this Certificate will be made in the
applicable manner described above, after due notice by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for that purpose by the Trustee
in [ ].

      [No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state

                                      D-2
<PAGE>

securities laws or is exempt from the registration requirements under said Act
and such 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 the
event that such a transfer is to be made within three years from the date of the
initial issuance of Certificates pursuant hereto, there shall also be delivered
(except in the case of a transfer pursuant to Rule 144A of the Securities Act)
to the Trustee an Opinion of Counsel that such transfer may be made pursuant to
an exemption from the Securities Act and such state securities laws, which
Opinion of Counsel shall not be obtained at the expense of the Trustee, the
Seller, the Master Servicer or the Depositor. The Holder hereof desiring to
effect such transfer shall, and doe hereby agree to, indemnify the Trustee and
the Depositor against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

      No transfer of this Certificate shall be made unless the Trustee shall
have received either (i) a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the Trustee
and the Master Servicer, to the effect that such transferee is not an employee
benefit plan subject to Section 406 of ERISA, nor a person acting on behalf of
any such plan, or (ii) in the case of any such this Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, and
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan, an Opinion of Counsel satisfactory
to the Trustee and the Depositor to the effect that the purchase or holding of
such this Certificate will not result in the assets of the Pool being deemed to
be "plan assets" and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee or the Master Servicer to any
obligation in addition to those undertaken in the Agreement.

      This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by any authorized
signatory of the Trustee.

      IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly
executed.

      Dated:

                                        SEQUOIA RESIDENTIAL FUNDING,

                                        INC.

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

                                        COUNTERSIGNED:

                                        By
                                          --------------------------------------
                                        Authorized Signatory of the
                                        Trustee, as defined herein

                                      D-3
<PAGE>

                                    EXHIBIT E

                       MORTGAGE PASS-THROUGH CERTIFICATE,
                                SERIES 200___-__

      This Certificate is one of a duly authorized issue of Certificates
designated Mortgage Pass-Through Certificates (the "Certificates"), Series
200___-__, and representing a beneficial ownership interest in (i) the Mortgage
Loans, and the proceeds thereof, (ii) property acquired by the Pool by
foreclosure or deed in lieu of foreclosure or otherwise, and (iii) the interest
of the Certificateholders in any insurance policies in respect of the Mortgage
Loans.

      The Certificates are limited in right of payment to certain payments on,
and collections in respect of, the Mortgage Loans, all as more specifically set
forth in the Agreement. Each Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account for payment hereunder and that the Trustee is not personally
liable to the Certificateholders for any amount payable under this Certificate
or the Agreement or, except as expressly provided in the Agreement, subject to
any liability under the Agreement.

      This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced hereby, and the rights, duties and
immunities of the Trustee.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Seller,
the Master Servicer and the Trustee with the consent of the Holders of
Certificates evidencing interests aggregating not less than 66-2/3% of all
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 Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.

      As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency of the Trustee in [ ], accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Percentage Interest in the Pool will
be issued to the designated transferee or transferees.

      The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of authorized denominations evidencing the
same aggregate Percentage Interest, as requested by the Holder surrendering the
same.

                                      E-1
<PAGE>

      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 payable in connection therewith.

      The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by any notice to the contrary.

      The obligations and responsibilities created by the Agreement and the Pool
created thereby shall terminate upon payment to the Certificateholders, or
provision therefor, in accordance with the Agreement upon the earlier of (a) the
repurchase by the Master Servicer of all Mortgage Loans and all property
acquired in respect of any Mortgage Loan remaining in the Pool at a price
determined as provided in the Agreement, (b) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Pool or the disposition of all property acquired upon
foreclosure or by deed in lieu of foreclosure of any Mortgage Loan, or (c) the
Distribution Date in ____________________. The exercise of the right of the
Master Servicer to repurchase all the Mortgage Loans and property in respect of
Mortgage Loans will result in early retirement of the Certificates, the right of
the Master Servicer to repurchase being subject to the Pool Scheduled Principal
Balance of the Mortgage Loans at the time of repurchase being less than [ ]
percent of the aggregate of the Cut-Off Date Pool Scheduled Principal Balance of
such Mortgage Loans.

      This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.

                                      E-2
<PAGE>

                                   ASSIGNMENT

            FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________.
    (Please print or typewrite name and address including postal zip code of
                                    assignee)

the beneficial interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorizes the transfer of registration of such interest
to assignee on the Certificate Register of the Pool.

      I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
__________________________________________________________.

Dated: ___________________

Signature by or on behalf of assignor

-------------------------------------
SIGNATURE GUARANTEED

                            DISTRIBUTION INSTRUCTIONS

      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
_______________________________________________________________ for the account
of ______________________________________________ account number ______________,
or, if mailed by check, to ________________________________________________.
Applicable statements should be mailed to______________________________________.

      This information is provided by ____________________________, the assignee
named above, or __________________________________, as its agent.

                                      E-3
<PAGE>

                                    EXHIBIT F

                             MORTGAGE LOAN SCHEDULE

                                      F-1
<PAGE>

                                    EXHIBIT G

================================================================================

                      SELLER'S AGREEMENT FOR MORTGAGE LOANS

                        DATED AS OF _____________, 200__

                               RWT HOLDINGS, INC.,
                                    AS SELLER

                                       and

                        SEQUOIA RESIDENTIAL FUNDING, INC.
                                  AS PURCHASER

================================================================================

                                      G-1
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                             Page No.
                                                                                             --------
<S>                                                                                          <C>
STATEMENT OF THE TRANSACTION................................................................     1

                                           ARTICLE I

                                          DEFINITIONS

Section 1.01   Definitions..................................................................     1

                                          ARTICLE II

                               CONVEYANCE OF THE MORTGAGE LOANS

Section 2.01   Delivery and Examination of Mortgage File....................................     2
Section 2.02   Acceptance by Purchaser......................................................     3
Section 2.03   Closing......................................................................     3
Section 2.04   Survival of Representations and Warranties, Repurchase Obligation
                    of the Seller...........................................................     3

                                          ARTICLE III

                                REPRESENTATIONS AND WARRANTIES

Section 3.01   Representations and Warranties of the Seller.................................     4

                                          ARTICLE IV

                                        ACKNOWLEDGMENTS

Section 4.01   Acknowledgment of the Purchaser..............................................     5
Section 4.02   Acknowledgment of the Seller.................................................     5

                                           ARTICLE V

                                         MISCELLANEOUS

Section 5.01   Recordation of Agreement.....................................................     5
Section 5.02   Notices......................................................................     5
Section 5.03   Separability Clause..........................................................     6
Section 5.04   Counterparts.................................................................     6
Section 5.05   Place of Delivery and Governing Law..........................................     6
Section 5.06   Remedies Cumulative; No Waiver...............................................     6
Section 5.07   Miscellaneous................................................................     6
Section 5.08   Agreement of the Seller......................................................     6
Section 5.09   Successors and Assigns.......................................................     7

Schedule A     -    Mortgage Loan Schedule
</TABLE>

                                       G-i
<PAGE>

                          STATEMENT OF THE TRANSACTION

      Subject to the terms and conditions hereof, RWT Holdings, Inc. (the
"Seller") agrees to sell and transfer to Sequoia Residential Funding, Inc. (the
"Purchaser") and the Purchaser hereby agrees to purchase and accept from the
Seller, those mortgage loans listed in the Mortgage Loan Schedule attached
hereto as Schedule A, having been identified thereon as being sold by it (the
"Mortgage Loans"), having aggregate Principal Balances on the Cut-Off Date of
approximately $___________ at the respective Mortgage Loan Purchase Price.

      Each Mortgage Loan will be serviced by the Master Servicer for the related
Master Servicing Fee indicated on Schedule A. The Mortgage Loans will be
serviced in accordance with the terms of the Pooling Agreement.

      Simultaneously with the sale of the Mortgage Loans to the Purchaser on the
Closing Date, the Mortgage Loans will be sold to a trust in exchange for the
Mortgage Pass-Through Certificates, Series 200___-__ (the "Certificates").

      The Seller agrees to cooperate and use its best efforts to facilitate the
execution and delivery of the Pooling Agreement (as defined herein) pursuant to
which the Certificates will be issued.

      The following sets forth the terms and conditions of the contemplated
transaction, to which the parties have agreed, as evidenced by the execution of
this Agreement.

                                    ARTICLE I

                                   DEFINITIONS

      Section 1.01 Whenever used in the Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings (capitalized terms not otherwise defined herein are used herein with
the meanings assigned thereto in the Pooling Agreement):

      Agreement: This Seller's Agreement for Mortgage Loans including all
schedules, amendments and supplements hereto.

      Closing Date: _____________, 200__.

      Mortgage File: As to each Mortgage Loan: (a) the original Mortgage Note,
endorsed without recourse to the order of the Trustee and showing an unbroken
chain of endorsements from the original payee thereof to the Person endorsing it
to the Trustee, (b) the original Mortgage, which shall have been recorded, with
evidence of such recording indicated thereon, (c) the assignment (which may be
in the form of a blanket assignment if permitted in the jurisdiction in which
the Mortgaged Property is located) to the Trustee of the Mortgage, with evidence
or recording with respect to each Mortgage Loan in the name of the Trustee
thereon, (d) all intervening assignments of the Mortgage, if any, to the extent
available to the Depositor with evidence of recording thereon, (e) the original
or a copy of the policy or certificate of primary mortgage guaranty insurance,
to the extent available, if any, (f) the original policy of

                                      G-1
<PAGE>

title insurance or mortgagee's certificate of title insurance or commitment or
binder for title insurance and (g) originals of all assumption and modification
agreements, if any.

      Mortgage Loan Purchase Price: $________________ plus accrued interest from
____________, 200__ at the weighted average Mortgage Interest Rate to, but not
including, the Closing Date.

      Mortgage Loans: Each Mortgage Loan identified on the Mortgage Loan
Schedule attached as Schedule A hereto.

      Mortgage Loan Schedule: As of any date of determination, the schedule of
Mortgage Loans included in the Pool. The initial schedule of Mortgage Loans
attached hereto as Schedule A, which sets forth the following information as to
each Mortgage Loan: (i) the Mortgage Loan identifying number; (ii) the
Mortgagor's name; (iii) the street address of the Mortgaged Property, including
the state; (iv) the property type of the related Mortgaged Property; (v) the
original number of months to maturity; (vi) the Loan-to-Value Ratio as of the
Cut-Off Date; (vii) the Mortgage Interest Rate as of the date of origination;
(viii) the scheduled amount of the monthly installment of principal and
interest; (ix) the original principal amount; (x) the Cut-Off Date Principal
Balance; (xi) identifying number of related Servicer, and (xii) the related
Servicing Fee Rate and the Master Servicing Rate.

      Pooling Agreement: The Pooling and Servicing Agreement, dated as of
__________________, 200__ among the Purchaser, as Depositor, RWT Holdings, Inc.,
as Seller, [________________], as Master Servicer, and the Trustee, as Trustee.

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

      Master Servicer: [______________________].

      Trustee: [ ]

      Underwriting Agreement: The Underwriting Agreement, dated
_______________________, 200__, between Sequoia Residential Funding, Inc. and [
].

                                   ARTICLE II

                        CONVEYANCE OF THE MORTGAGE LOANS

      Section 2.01 Delivery and Examination of Mortgage File.

      Conveyance of Mortgage Loans. The Seller, concurrently with the execution
and delivery of this Agreement, does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser without recourse all the right, title and
interest of the Seller in and to the related Mortgage Loans and the related
Mortgage Notes, including all interest and principal received on or with respect
to such Mortgage Loans (other than payments of principal and interest due and
payable on the Mortgage Loans on or before the Cut-Off Date).

                                      G-2
<PAGE>

      In connection with such transfer and assignment, the Seller does hereby
deliver to the Purchaser or the Trustee as the Purchaser's designee the Mortgage
File pertaining to each Mortgage Loan so transferred and assigned; provided
however, that in any instances where the original recorded Mortgage or interim
recorded assignments of Mortgage cannot be delivered by the Seller to the
Trustee prior to or concurrently with the execution and delivery of this
Agreement, due to a delay in connection with recording, the Seller may in lieu
of delivering such original recorded Mortgage or interim assignment, deliver to
the Purchaser or the Trustee a copy thereof, provided that the Seller certifies
that the original Mortgage or interim assignment has been delivered to a title
insurance company for recordation after receipt of its policy of title insurance
or binder therefor or to the appropriate public recording office in the
applicable jurisdiction. In all such instances, the Seller will deliver or cause
to be delivered the original recorded Mortgage or interim assignment to the
Trustee promptly upon receipt thereof. The Seller shall exercise its best
reasonable efforts to deliver or cause to be delivered to the Trustee within 180
days of the execution and delivery of this Agreement the original title
insurance policy with respect to each Mortgage Loan assigned to the Purchaser
pursuant to this Section 2.01.

      In the case of Mortgage Loans which have been prepaid in full after the
Cut-Off Date and prior to the date of execution and delivery of this Agreement,
the Seller, in lieu of delivering the above documents to the Purchaser or the
Trustee, shall make the deposit required by Section 3.11 of the Pooling
Agreement and shall deliver to the Trustee a certification of a Servicing
Officer of the nature set forth in Section 3.11 of the Pooling Agreement.

      Section 2.02 Acceptance by Purchaser.

      The Purchaser acknowledges receipt of the documents referred to in Section
2.01.

      Section 2.03 Closing.

      On the Closing Date the Purchaser shall pay to the Seller the applicable
Mortgage Loan Purchase Price for the related Mortgage Loans by wire transfer of
immediately available funds or such other method of payment as the parties
hereto may agree.

      Section 2.04 Survival of Representations and Warranties, Repurchase
Obligation of the Seller.

      It is understood and agreed that the representations and warranties set
forth in Article III are continuing representations and warranties and shall
survive delivery and release of the Mortgage Files to the Purchaser or its
designee and shall inure to the benefit of the Purchaser, the Master Servicer,
any holder of Certificates representing an undivided interest in the Mortgage
Loans, or the Trustee (referred to herein collectively as "Interested Persons"),
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
any examination of the Mortgage File.

                                      G-3
<PAGE>

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      Section 3.01 Representations and Warranties of the Seller.

      (a) The Seller hereby repeats and affirms the representations and
warranties made to the Purchaser in the Pooling Agreement as if such
representations and warranties were set forth herein;

      (b) The Seller is a corporation, validly existing and in good standing
under the laws of California; the Seller has the power and authority to execute,
deliver and perform this Agreement; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Seller; and all
requisite corporate action has been taken by the Seller to make this Agreement
valid and binding upon the Seller in accordance with its terms.

      (c) No approval of the transactions contemplated by this Agreement from
any federal or state regulatory authority having jurisdiction over the Seller is
required or, if required, such approval has been or, prior to the Closing Date,
will be obtained. There are no actions or proceedings pending, or affecting the
Seller which would adversely affect its ability to perform hereunder.

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

      (e) Neither the Agreement nor any statement, report or other document
furnished or to be furnished pursuant to the Agreement or in connection with the
transaction contemplated hereby contains any untrue statement of fact or omits
to state a fact necessary to make the statements contained therein not
misleading.

      (f) The collection practices used by the Seller with respect to each
Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage servicing business. With respect to escrow deposits
and payments, there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made and no escrow
deposits or payments or other charges or payments due to the Seller have been
capitalized under any Mortgage or the related Mortgage Note.

      [(g) The Seller has fully complied, and will continue to maintain full
compliance with the provisions of Section 13(e) of the Federal Deposit Insurance
Act (12 U.S.C. ss. 1823(E)).]

                                      G-4
<PAGE>

      The Seller agrees to comply with the provisions of Section 2.03 of the
Pooling Agreement in respect of a breach of any of the representations and
warranties set forth in this Section 3.01.

                                   ARTICLE IV

                                ACKNOWLEDGEMENTS

      Section 4.01 Acknowledgement of the Purchaser.

      The Purchaser hereby acknowledges the receipt of the Mortgage Loans in
consideration for the payment of the Mortgage Loan Purchase Price.

      Section 4.02 Acknowledgement of the Seller.

      The Seller hereby acknowledges the receipt of the respective Mortgage Loan
Purchase Price in consideration for the sale of the Mortgage Loans.

                                    ARTICLE V

                                  MISCELLANEOUS

      Section 5.01 Recordation of Agreement.

      This Agreement or a memorandum hereof is subject to recordation in all
appropriate public offices for real property records in each state and county or
other comparable jurisdiction in which any of the Mortgaged Property is
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by either the Seller and at the Seller's
expense, on direction by Purchaser, but only upon direction preceded or
accompanied by the advice of counsel to Purchaser to the effect that such
recordation is necessary to protect the interests of Purchaser in the Mortgage
Loans.

      Section 5.02 Notices.

      All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed by registered or certified
mail, return receipt requested, or, if by other means, when received by the
other party or at the address, in the case of the Seller: RWT Holdings, Inc.,
591 Redwood Highway, Suite 3140, Mill Valley, California 94941 Attention: [ ];
in the case of the Purchaser: Sequoia Residential Funding, Inc., 591 Redwood
Highway, Suite 3160, Mill Valley, California, 94941 Attention: [ ], or such
other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice or communication hereunder shall be deemed to have been
given on the date delivered to the premises of the addressee (as evidenced, in
the case of registered or certified mail, by the date noted on the return
receipt).

                                      G-5
<PAGE>

      Section 5.03 Separability Clause.

      Any provision, representation or warranty of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders unenforceable any provision hereof.

      Section 5.04 Counterparts.

      For the purpose of facilitating the proving of this Agreement, as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.

      Section 5.05 Place of Delivery and Governing Law.

      The Agreement shall be deemed in effect when a fully executed counterpart
thereof is received by Purchaser in [New York]. The Agreement shall be construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.

      Section 5.06 Remedies Cumulative; No Waiver.

      All rights and remedies of the Purchaser or any assignee of the Purchaser
under the Agreement shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other rights and remedies available
to the Purchaser or such assignee to exercise any right or power accruing upon
any default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and every right and remedy arising under this Agreement or
by law to Purchaser or such assignee may be exercised from time to time, and as
often as shall be deemed expedient, by Purchaser or such assignee.

      Section 5.07 Miscellaneous.

      This Agreement may be amended or supplemented from time to time only with
the written consent of both the Seller and the Purchaser or any assignee of the
Purchaser and the Rating Agency. This Agreement contains the entire
understanding and agreement of the parties and supersedes and incorporates all
prior negotiations, understandings and agreements which are fully merged herein.

      Section 5.08 Agreement of the Seller.

      The Seller agrees to execute and deliver such instruments and take such
actions as Purchaser or any assignee of Purchaser may, from time to time,
reasonably request in order to effectuate the purpose and to carry out the terms
of this Agreement.

                                      G-6
<PAGE>

      Section 5.09 Successors and Assigns.

      This Agreement shall bind and inure to the benefit of and be enforceable
by the Seller, the Purchaser, and the respective successors and assigns of the
Seller, the Purchaser and any Purchaser's designee. The parties hereto
acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose
of contributing them to a trust that will issue Certificates representing
undivided interests in the Mortgage Loans. As an inducement to the Purchaser to
purchase the Mortgage Loans, the Seller acknowledges and consents to the
assignment to the Trustee by the Purchaser of all of the Purchaser's rights
against the Seller hereunder in respect of the Mortgage Loans sold by it to the
Purchaser and that the enforcement or exercise of any right or remedy against
the Seller hereunder by the Trustee or to the extent permitted under the Pooling
Agreement shall have the same force and effect as if enforced or exercised by
Purchaser directly.

      IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized and
their respective seals, duly attested, to be hereunto affixed, all as of the day
and year first above written.

      Dated as of _______________, 200__

                                        RWT HOLDINGS, INC.
                                        AS SELLER

                                        By
                                        Name:
                                        Title:

                                        SEQUOIA RESIDENTIAL FUNDING, INC.
                                        AS PURCHASER

                                        By
                                        Name:
                                        Title:

                                      G-7
<PAGE>

STATE OF ____________  )
                       ) ss.
COUNTY OF ___________  )

On the [ ] day of [ ], 20__ before me, a notary public in and for the State of [
], personally appeared ________________, known to me who, being by me duly
sworn, did depose and say that s/he is a [ ] of RWT Holdings, Inc., a Delaware
corporation, one of the parties that executed the foregoing instrument; and that
s/he signed their name thereto by order of the Board of Directors of such
corporation.

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

                                             My Commission Expires:
                                                                   -------------

[Notary Seal]

STATE OF ______________  )
                         ) ss.
COUNTY OF _____________  )

On the [ ] day of [ ], 20__ before me, a notary public in and for the State of [
], personally appeared ________________, known to me who, being by me duly
sworn, did depose and say that s/he is a [ ] of Sequoia Residential Funding,
Inc., a Delaware corporation, one of the parties that executed the foregoing
instrument; and that s/he signed their name thereto by order of the Board of
Directors of such corporation.

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

                                             My Commission Expires:
                                                                   -------------

[Notary Seal]

                                      G-8
<PAGE>

                               SELLER'S AGREEMENT

                                   SCHEDULE A

                             MORTGAGE LOAN SCHEDULE

      Cut-Off Date: _____________, 200__

      [The Mortgage Loan Schedule is attached as Exhibit F to the Pooling and
Servicing Agreement]

                                      G-9
<PAGE>

                                    EXHIBIT H

                        REQUEST FOR RELEASE OF DOCUMENTS

[ ]

[ ]

PARTICIPANT NAME AND ADDRESS DATE:

[ ]

IN CONNECTION WITH THE ADMINISTRATION OF THE POOL OF MORTGAGES HELD BY YOU IN
CUSTODY FOR [ ], THE UNDERSIGNED PARTICIPANT REQUESTS THE RELEASE OF MORTGAGE
DOCUMENTS DESCRIBED BELOW FOR THE REASON INDICATED.

MORTGAGOR'S NAME, ADDRESS AND ZIP CODE:

LOAN NO.:

POOL ID:

ORIGINAL MORTGAGE AMOUNT       $________
DATE OF ORIGINAL MORTGAGE      _________
INITIAL INTEREST RATE          _________
PAID THROUGH DATE              _________

REASON FOR REQUESTING DOCUMENTS AMOUNT SETTLEMENT DATE

[ ] MORTGAGE PAID IN FULL $____________
[ ] FORECLOSURE $___________
[ ] EXHIBITS ATTACHED FOR SUBSTITUTION $_____________
[ ] OTHER (explain) _______________________________  $____________

                                      H-1
<PAGE>

WE CERTIFY THAT ALL AMOUNTS RECEIVED OR TO BE RECEIVED IN CONNECTION WITH SUCH
PAYMENT WHICH ARE REQUIRED TO BE CREDITED TO THE PROTECTED ACCOUNT OR DEPOSITED
TO THE CERTIFICATE ACCOUNT HAVE BEEN OR, WITHIN TWO BUSINESS DAYS, RECEIPT OF
SUCH PAYMENT WILL BE CREDITED OR DEPOSITED./

------------------------------------                    ------------------------
SIGNATURE                                               DATE

------------------------------------                    ------------------------
PARTICIPANT'S AUTHORIZED SIGNATURE

------------------------------------                    ------------------------
CUSTODIAN'S RELEASE AUTHORIZATION                       DATE

NAME AND TITLE SIGNATURE DATE

TO CUSTODIAN: PLEASE ACKNOWLEDGE BELOW BY YOUR SIGNATURE THE EXECUTION OF THE
ABOVE REQUEST. YOU MUST RETAIN THIS FORM FOR YOUR FILES. A COPY OF THIS FORM,
SIGNED AND DATED BY YOU, SHALL BE FORWARDED TO: [ ]

DOCUMENT RETURNED TO CUSTODY:

------------------------------------                    ------------------------
SIGNATURE                                               DATE

                                      H-2
<PAGE>

                                    EXHIBIT I

                               TRANSFER AFFIDAVIT

STATE OF ______________  )
                         )  ss:
COUNTY OF _____________  )

      The undersigned, being first duly sworn, deposes and says as follows:

      1. The undersigned (the "Transferee") is acquiring a beneficial ownership
interest in Sequoia Residential Funding, Inc., Mortgage Pass-Through
Certificates, Series 200__-__, Residual Certificates, issued pursuant to the
Pooling and Servicing Agreement, dated as of ____________, 200__ (the
"Agreement"), by and among Sequoia Residential Funding, Inc., as Depositor, RWT
Holdings, Inc., as Seller, [______________], as Master Servicer, and
[_____________], as Trustee. Capitalized terms used, but not defined herein,
shall have the meanings ascribed to such terms in the Agreement. The Transferee
has authorized the undersigned to make this affidavit on behalf of the
Transferee.

      2. The Transferee is, as of the date hereof, and will be, as of the date
of any Transfer, a Permitted Transferee. The Transferee is acquiring the
Residual Certificates either (i) for its own account or (ii) as nominee, trustee
or agent for another Person and has attached hereto an affidavit from such
Person in substantially the same form as this affidavit. The Transferee has no
knowledge that any such affidavit is false.

      3. The Transferee has been advised of, and understands that (i) a tax
shall be imposed on Transfers of Residual Certificates to Persons that are not
Permitted Transferees; (ii) such tax is imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of the Transfer, such
Person does not have actual knowledge that the affidavit is false.

      4. The Transferee has been advised and understands that a tax shall be
imposed on a "pass-through entity" holding Residual Certificates if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that no tax will be imposed for any period for which the
record holder furnishes to the pass-through entity an affidavit stating that the
record holder is a Permitted Transferee and the pass-through entity does not
have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as nominees for other
Persons.)

                                      I-1
<PAGE>

      5. The Transferee has reviewed the provisions of Section 6.02 of the
Agreement, which is incorporated herein by reference, and understands the legal
consequences of the acquisition of the Residual Certificates including, without
limitations, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 6.02 of the
Agreement. The Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the Transferee
contemplated hereby null and void.

      6. The Transferee does not have the intention to impede the assessment or
collection of any federal, state or local income taxes legally required to be
paid with respect to the Residual Certificate.

      7. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to make a Transfer and in connection with any
Transfer by a Person for whom the Transferee is acting as nominee, trustee or
agent, and the Transferee will not make any Transfer or cause any Transfer to be
made to any Person that the Transferee knows is not a Permitted Transferee.

      8. The Transferee taxpayer identification number is - _________________.

      IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, by its duly authorized officer, this __th day of
_______, 200_.

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

                                      I-2
<PAGE>

                                    EXHIBIT 1

               CERTAIN DEFINITIONS FROM ARTICLE I OF THE AGREEMENT

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

      Permitted Transferee: Any Person other than (i) the United States, or any
State or any political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) (except
certain farmers' cooperatives described in Code section 521), (iv) rural
electric and telephone cooperatives described in Code section 1381(a)(2)(C), (v)
any Non-U.S. Person and (vi) any other Person so designated by the Master
Servicer based on an Opinion of Counsel to the effect that any transfer to such
Person may cause the Pool or any other Holder of a Residual Certificate to incur
tax liability that would not be imposed other than on account of such transfer.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Code section 7701 or successor provisions.

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

                                      I-3
<PAGE>

                                    EXHIBIT 2

                   EXCERPT FROM SECTION 6.02 OF THE AGREEMENT

      Each Person who has or who acquires any Ownership Interest in a Residual
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions and to have
irrevocably appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, 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 and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee.

      (ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata undivided interest.

      (iii) No Ownership Interest in a Residual Certificate may be transferred
without the express written consent of the Trustee. In connection with any
proposed transfer of any Ownership Interest in a Residual Certificate, the
Trustee shall as a condition to such consent, require delivery to it, in form
and substance satisfactory to it, each of the following:

            A. an affidavit in the form of Exhibit I hereto from the proposed
      transferee to the effect that such transferee is a Permitted Transferee
      and that it is not acquiring its Ownership Interest in the Residual
      Certificate that is the subject of the proposed transfer as a nominee,
      trustee or agent for any Person who is not a Permitted Transferee; and

            B. a covenant of the proposed transferee to the effect that the
      proposed transferee agrees to be bound by and to abide by the transfer
      restrictions applicable to the Residual Certificates.

      (iv) Any attempted or purported transfer of any Ownership Interest in a
Residual Certificate in violation of the provisions of this Section 6.02 shall
be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall, in violation of the pro visions
of this Section 6.02, become a Holder of a Residual Certificate, then the prior
Holder of such Certificate that is a Permitted Transferee shall, upon discovery
that the registration of transfer of such Residual Certificate was not in fact
permitted by this Section 6.02, 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 this Section 6.02 or for making any distributions due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder under
the provisions of the Agreement so long as the transfer was not registered upon
the express written consent of the Trustee. The Trustee shall be entitled to
recover from any Holder of a Residual Certificate that was in fact not a
Permitted Transferee at the time such distributions were made all distributions
made on such Residual Certificate. Any

                                      I-4
<PAGE>

such distributions so recovered by the Trustee shall be distributed and
delivered by the Trustee to the prior Holder of such Certificate that is a
Permitted Transferee.

      (v) If any Person other than a Permitted Transferee acquires any Ownership
Interest in a Residual Certificate in violation of the restrictions in this
Section 6.02, then the Trustee shall have the right, without notice to the
Holder of such Residual Certificate or any other Person having an Ownership
Interest therein, to notify the Underwriter to arrange for the sale of such
Residual Certificate to a purchaser selected by the Trustee on such terms as the
Trustee may choose. Such purchaser may be the Trustee itself or any affiliate of
the Trustee. The proceeds of such sale, net of commissions (which may include
commissions payable to the Trustee or its affiliates), expenses and taxes due,
if any, will be remitted by the Trustee to the previous Holder of such Residual
Certificate that is a Permitted Transferee, except that in the event that the
Trustee determines that the Holder of such Residual Certificate may be liable
for any amount due under this Section 6.02 or any other provisions of this
Agreement, the Trustee may withhold a corresponding amount from such remittance
as security for such claim. The terms and conditions of any sale under this
clause (v) shall be determined in the sole discretion of the Trustee, and it
shall not be liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.

                                      I-5
<PAGE>

                                    EXHIBIT J

                         [FOR CLASSES M-1, B-1 AND B-2]

                                INVESTMENT LETTER

                           _________________ __, 20__

[ ]
[Trustee]

Re:    Purchase of Sequoia Residential Funding, Inc.
       Mortgage Pass-Through Certificates, Series 20__-__ Class M-1, B-1 and B-2
       Certificates

Ladies and Gentlemen:

      In connection with our purchase of $_____________ of the Class ___
Certificates (the "Certificates"), we hereby represent to the Trustee that we
are not an employee benefit plan within the meaning of, and subject to, Section
406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), nor a person acting on behalf of any such plan.

Very truly yours,

[Transferee]

By:______________________ Authorized Officer

                                      J-1
<PAGE>

                             [FOR CLASS B-1 AND B-2]

                                INVESTMENT LETTER

                              ____________ __, 20__

[Trustee]

Re:    Purchase of Sequoia Residential Funding, Inc.
       Mortgage Pass-Through Certificates, Series 200___-__ Class B-1 and B-2
       Certificates

Ladies and Gentlemen:

      In connection with our purchase of $_____________ of the Class [ ]
Certificates (the "Certificates") we confirm that (a) we understand that the
Certificates are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws ("Blue Sky Laws") and are
being sold to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor",
as defined in Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments such as the Certificates, (c) we confirm that we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (f) below and otherwise in accordance with Section 6.02
of the Pooling and Servicing Agreement, dated as of ________________, 200__,
among Sequoia Residential Funding, Inc. (the "Depositor"), RWT Holdings, Inc.,
as seller (the "Seller"), [______________], as master servicer (the "Master
Servicer"), and you, as Trustee, (the "Pooling Agreement"), (d) we have
discussed with our advisors, counsel and accountants the legal, tax and
financial implications of investment in the Certificates and have undertaken our
own independent analysis of the investment in the Certificates, and our decision
to invest in the Certificates is not based on any representation (other than
those contained in the Pooling Agreement, (e) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the Act
or any applicable Blue Sky Law, (f) we will not sell, transfer or otherwise
dispose of any Certificates unless (1) such sale, transfer or other disposition
is made pursuant to an effective registration statement under the Act and any
applicable Blue Sky Law or is exempt from such registration requirements, and if
requested we will at our expense provide an opinion of counsel satisfactory to
Trustee that such sale, transfer or other disposition may be made pursuant to an
exemption from the Act and any applicable Blue Sky Laws and (2) the purchaser or
transferee of such Certificate has executed and delivered to you a letter to
substantially the same effect as this letter, (g) none of the Depositor, the
Seller or the Trustee shall be obligated to register the Certificates under the
Act or any Blue Sky Laws or to take any action not otherwise required under the
Pooling Agreement to permit the sale, transfer or other disposition of the
Certificates and (h) we have not relied upon the Depositor or the Master
Servicer or upon any information or materials prepared or furnished by [ ] or
their agents or counsel in determining whether our investment in the
Certificates is legal for us under applicable federal and/or state laws and
regulations.

                                      J-2
<PAGE>

      We hereby represent to, and covenant with, the Seller, the Master Servicer
and the Trustee that we are not an employee benefit plan within the meaning of,
and subject to, Section 406 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), nor a person acting on behalf of any such plan.

Very truly yours,

[Transferee]

By:______________________ Authorized Officer

                                      J-3
<PAGE>

                                    EXHIBIT K

                                       [ ]
                   PRINCIPAL AND INTEREST DISTRIBUTION SUMMARY

----------------------------------------               -------------------------
Trustee                                                Cut-Off Date

----------------------------------------               -------------------------
Address                                                Reporting Month

----------------------------------------               -------------------------
City, State, Zip Code

ATTENTION (___) ___-____

REMITTANCE:

Principal                                                  $

Principal Curtailments                                     $

Liquidation                                                $

Adjustments                                                $

Total Principal                                            $

Interest Distribution
       Class A-1                                           $
       Class M-1                                           $
       Class B-1                                           $
       Class B-2                                           $
Total Interest Distribution Amount                         $

Principal Distribution
       Class A-1                                           $
       Class M-1                                           $
       Class B-1                                           $
       Class B-2                                           $
Total Principal & Interest Distribution Amount             $

                                      K-1
<PAGE>

OUTSTANDING BALANCES:
Beginning Security Balance:                                     Security Balance
    Less:  Principal Payments, Curtailments & Adj.
           Liquidation & Repurchase                             ________________

Ending Security Balance                                         ________________

MORTGAGE LOANS: No. of Mortgage Loans P&I Constant

BEGINNING BALANCE

Less: Liquidation/Repurch
Rolls/Adjustments

ENDING BALANCE

DELINQUENCIES:               No. of Mortgage Loans              Principal Amount

30 Days (0 to 30)
60 Days (31 to 60)
90+ Days (61-90+)
Foreclosure
Real Estate Owned

[ ] - SERIES 200___-__
TRUSTEE'S CERTIFICATE ACCOUNT STATEMENT

I.     Status of Certificate Account

       As of the Determination Date                                     $
       Amount on deposit on Certificate Account Deposit Date            $

       Deposits:
           Required deposit to Certificate Account pursuant to
             Section 3.11(a)                                            $
           P&I                                                          $
           Curtailments                                                 $
           Liquidations (proceeds net of expenses)                      $
           Repurchases                                                  $
           Insurance Proceeds                                           $
           Monthly Advances                                             $

       Fraud Losses                                                     $

       Withdrawals:                                                     $

                                      K-2
<PAGE>

       Payment to Special Hazard Insurer                                $
       Payment to Trustee                                               $
       Payment to Pool Insurer                                          $
       Reimbursement for Advances (recoverable and nonrecoverable)      $
       Total Servicing Compensation                                     $
       Reimbursement (for expenses)                                     $
       Repurchases (reimbursement)                                      $

II.    Distribution:

       Principal                                                        $
       Interest                                                         $

III.   Total Service Compensation:                                      $

           Master Servicer Compensation                                 $
           Sub Service Compensation                                     $

IV.    Security Balance                                                 $

V.     Percentage of Amount Available                                   %
           Amount Available                                             $
           Security Balance                                             $

VI.    Percentage of Special Hazard Coverage                            %

       Special Hazard Loss Coverage                                     $

       Bankruptcy Coverage Amount                                       $

       Fraud Loss Coverage                                              $

       Security Balance                                                 $

VII.   Amount Held for Future Distribution P/I                          $

VIII.  Proceeds from Permitted Investments held in Investment Account   $

By ___________________________________

                                      K-3
<PAGE>

                                   SCHEDULE A

                    LISTINGS OF THE FOLLOWING MORTGAGE LOANS:

I.     Special Hazard Mortgage Loans

II.    Liquidated Deficient Valuation Mortgage Loans

III.   Debt Service Reduction Mortgage Loans

IV.    Total Fraud Loss - Liquidated Mortgage Loans

V.     Liquidated Mortgage Loans (except for those included in I or II)

                                      K-4
<PAGE>

                                   SCHEDULE B

(I)    Net Special Hazard Losses:                                $

(II)   Liquidated Deficient Valuation Losses:                    $

(III)  Net Realized Losses

       (other than those included in I and II above):            $

(IV)   Total Fraud Loss -- Liquidated Mortgage Loans:            $

                        NO. OF MORTGAGE PRINCIPAL AMOUNT

(V)    Deficient Valuation

(VI)   Debt Service Reduction

Net Prepayment Shortfalls $ Relief Act Reductions:               $

                                      K-5
<PAGE>

                                   SCHEDULE C

Amount to be deposited into Certificate Account                  $

       Fraud Loss Coverage remaining                             $
       Bankruptcy Loss Coverage Amount remaining                 $
       Special Hazard Loss Coverage Amount                       $

                                      K-6
<PAGE>

                                    EXHIBIT L

               FORM OF OPINION OF COUNSEL PURSUANT TO SECTION 6.02

      Such counsel is of the opinion that the transfer of the Certificates from
_____ to _____ [under the circumstances to be described in such opinion] is not
a transaction requiring registration of the Certificates under the Securities
Act of 1933, as amended, or under any applicable state securities laws.

or

      The Certificates have been registered under the Securities Act of 1933, as
amended, and no action is required to be taken under applicable state securities
laws or that such action has been taken.

                                      L-1<PAGE>
                                                                     Exhibit 4.1

                             WASTE CONNECTIONS, INC.
                           2002 RESTRICTED STOCK PLAN

1.    PURPOSE.

      The purpose of the Plan is to provide a means for the Company and any
subsidiary, through the grant of Restricted Stock to selected Employees, to
attract and retain persons of ability as Employees, and to motivate such persons
to exert their best efforts on behalf of the Company and any subsidiary.

2.    DEFINITIONS.

      (a) "AGREEMENT" means a written certificate or award agreement between the
Company and a Participant evidencing an Award. Each Agreement shall be subject
to the terms and conditions of the Plan.

      (b) "AWARD" means shares of Restricted Stock awarded pursuant to the terms
and conditions of the Plan.

      (c) "BOARD" means the Company's Board of Directors.

      (d) "CAUSE" means (i) insobriety; (ii) conviction of a misdemeanor
involving moral turpitude or a felony; (iii) illegal business practices in
connection with the Company's or a subsidiary's business; (iv) misappropriation
of the Company's or a subsidiary's assets; (v) excessive absence of the
Participant from his employment during usual working hours for reasons other
than vacation, disability or sickness; or (vi) any material breach by an
Employee of any term or provision of his or her employment agreement or failure
of the Employee to perform competently and efficiently his or her duties
hereunder as determined by the Company in its reasonable discretion.

      (e) "CHANGE IN CONTROL" means:

            (i) any reorganization, liquidation or consolidation of the Company,
or any merger or other business combination of the Company with any other
corporation, other than any such merger or other combination that would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such transaction;

            (ii) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company; or

            (iii) any "person" (as defined in Section 13(d) and 14(d) of the
Exchange Act) shall become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the Company's outstanding voting securities (except that for purposes of this
definition, "person" shall not include any person (or any person
<PAGE>
that controls, is controlled by or is under common control with such person) who
as of the date of an Agreement owns ten percent (10%) or more of the total
voting power represented by the outstanding voting securities of the Company, or
a trustee or other fiduciary holding securities under any employee benefit plan
of the Company, or a corporation that is owned directly or indirectly by the
stockholders of the Company in substantially the same percentage as their
ownership of the Company).

      A transaction shall not constitute a Change in Control if its sole purpose
is to change the state of the Company's incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons
who held the Company's securities immediately before such transaction.

      (f) "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, including the rules and regulations promulgated thereunder and
successor provisions and regulations and rules thereto.

      (g) "COMMITTEE" means a committee appointed by the Board in accordance
with section 4(b) of the Plan.

      (h) "COMPANY" means Waste Connections, Inc., a Delaware corporation.

      (i) "DIRECTOR" means a member of the Company's Board.

      (j) "EMPLOYEE" means any person, other than executive officers and
Directors, employed by the Company or any subsidiary of the Company. Service as
a consultant shall not be sufficient to constitute "employment" by the Company.

      (k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as it may be
amended from time to time, including the rules and regulations promulgated
thereunder and successor provisions and regulations and rules thereto.

      (l) "FAIR MARKET VALUE" means, as of any date, the value of Stock
determined as follows:

            (i) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for the Stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system on the market trading day of
the date of determination, or, if the date of determination is not a market
trading day, the last market trading day prior to the date of determination, in
each case as reported in The Wall Street Journal or such other sources as the
Board deems reliable;

            (ii) If the Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean between the high bid and low asked prices for the Stock on the market
trading day of the date of determination, or, if the date of determination is
not a market trading day, the last market trading day prior to the date of
determination; or

                                       2
<PAGE>
            (iii) In absence of an established market for the Stock, the Fair
Market Value thereof shall be determined in good faith by the Board.

      (m) "NON-EMPLOYEE DIRECTOR" means a Director who satisfies the
requirements established from time to time by the Securities and Exchange
Commission for non-employee directors under Rule 16b-3.

      (n) "PARTICIPANT" means an individual who has been selected, pursuant to
section 4(a), to participate in the Plan, and who holds an outstanding Award
pursuant to the Plan.

      (o) "PLAN" means this Waste Connections, Inc. 2002 Restricted Stock Plan.

      (p) "RESTRICTED STOCK" means Stock awarded under the Plan in accordance
with the terms and conditions set forth in section 5.

      (q) "RESTRICTION PERIOD" means a time period, which may or may not be
based on the achievement of particular performance goals and/or the satisfaction
of vesting provisions (which may be dependent on the continued service of the
applicable Participant) applicable to, and established or specified by the Board
at the time of, each Award.

      (r) "RULE 16B-3" means Rule 16b-3 under the Exchange Act or any successor
to Rule 16b-3, as amended from time to time.

      (s) "SECURITIES ACT" means the Securities Act of 1933, as it may be
amended from time to time, including the rules and regulations promulgated
thereunder and successor provisions and regulations and rules thereto.

      (t) "STOCK" means the Common Stock of the Company.

3.    SHARES SUBJECT TO THE PLAN.

      The securities subject to Awards granted under the Plan shall be shares of
Stock. Subject to adjustment as provided in section 7 for changes in Stock, such
shares of Stock subject to the Plan may be either authorized and unissued shares
(which will not be subject to preemptive rights) or previously issued shares
acquired by the Company or any subsidiary of the Company. The total number of
shares of Stock that may be delivered pursuant to Awards granted under the Plan
is 95,000. Any shares of Stock subject to an Award that are forfeited to the
Company may again be granted pursuant to an Award under the Plan.

4.    ADMINISTRATION.

      (a) Board's Powers and Responsibilities. The Plan shall be administered by
the Board or, at the election of the Board, by a Committee, as provided in
subsection (b), or, as to certain functions, by an officer of the Company, as
provided in subsection (c). Subject to the Plan, the Board shall:

            (i) determine and designate from time to time those Employees to
whom Awards are to be granted;

                                       3
<PAGE>
            (ii) authorize the granting of Awards;

            (iii) determine the number of shares of Stock to be included in any
Award and the periods for which Awards will be outstanding;

            (iv) construe and interpret the Plan and the Agreements, and
establish, amend, waive and revoke rules and regulations for the Plan's
administration, and correct any defect, omission or inconsistency in the Plan or
any Agreement or any other instrument relating to the Awards in a manner and to
the extent it deems necessary or expedient to make the Plan fully effective;

            (v) adopt such procedures and subplans and grant Awards on such
terms and conditions as the Board determines necessary or appropriate to permit
participation in the Plan by individuals otherwise eligible to so participate
who are foreign nationals or employed outside of the United States, or otherwise
to conform to applicable requirements or practices of jurisdictions outside of
the United States;

            (vi) prescribe and approve the form and content of agreements for
use under the Plan;

            (vii) establish and administer any terms, conditions, performance
criteria, restrictions, limitations, forfeiture, vesting schedule, and other
provisions, including, without limitation, the Restriction Period, of or
relating to any Award;

            (viii) grant waivers of terms, conditions, restrictions and
limitations under the Plan or applicable to any Award, or accelerate the vesting
of any Award;

            (ix) amend or adjust the terms and conditions of any outstanding
Award and/or adjust the number and/or class of shares of Stock subject to any
outstanding Award;

            (x) at any time and from time to time after the granting of an
Award, specify such additional terms, conditions and restrictions with respect
to any such Award as may be deemed necessary or appropriate to ensure compliance
with any and all applicable laws or rules, including, but not limited to, terms,
restrictions and conditions for compliance with applicable securities laws and
methods of withholding or providing for the payment of required taxes;

            (xi) offer to buy out an Award previously granted, based on such
terms and conditions as the Board shall establish with and communicate to the
Participant at the time such offer is made;

            (xii) to the extent permitted under the applicable Agreement, permit
the transfer of an Award by one other than the Participant who received the
grant of such Award; and

            (xiii) take any and all other actions it deems necessary for the
purposes of the Plan.

      The Board shall have full discretionary authority in all matters related
to the discharge of its responsibilities and the exercise of its authority under
the Plan. Decisions and actions by the

                                       4
<PAGE>
Board with respect to the Plan and any Agreement shall be final, conclusive and
binding on all persons having or claiming to have any right or interest in or
under the Plan and/or any Agreement.

      (b) Authority to Delegate to Committee. The Board may delegate
administration of the Plan to a Committee of the Board. The Committee shall
consist of not less than two members appointed by the Board. Subject to the
foregoing, the Board may from time to time increase the size of the Committee
and appoint additional members, remove members (with or without cause) and
appoint new members in substitution therefor, or fill vacancies, however caused.
If the Board delegates administration of the Plan to a Committee, the Committee
shall have the same powers theretofore possessed by the Board with respect to
the administration of the Plan (and references in this Plan to the Board shall
apply to the Committee), subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan.

      (c) Authority to Delegate to Officers. The Board may delegate
administration of sections 4(a)(i) through 4(a)(iii) above to the Chief
Executive Officer of the Company; provided, however, that such officer may not
grant Awards of more than 95,000 shares of Restricted Stock.

5.    AWARDS OF RESTRICTED STOCK.

      (a) Award Agreement. Each Award shall be evidenced by an Agreement, which
shall be executed by the Company and the Participant to whom such Award has been
granted, unless the Agreement provides otherwise; two or more Awards granted to
a single Participant may, however, be combined in a single Agreement. An
Agreement shall not be a precondition to the granting of an Award; no person
shall have any rights under any Award, however, unless and until the Participant
to whom the Award shall have been granted (i) shall have executed and delivered
to the Company an Agreement or other instrument evidencing the Award, unless
such Agreement provides otherwise, and (ii) has otherwise complied with the
applicable terms and conditions of the Award.

      (b) Awards Subject to Plan. All Awards under the Plan shall be subject to
all the applicable provisions of the Plan, including the following terms and
conditions, and to such other terms and conditions not inconsistent therewith,
as the Board shall determine and which are set forth in the applicable
Agreement. Subject to the terms and restrictions of this section 5 or the
applicable Agreement or determined by the Board, on delivery of Restricted Stock
to a Participant, or creation of a book entry evidencing a Participant's
ownership of shares of Restricted Stock, pursuant to section 5(f), the
Participant shall have all of the rights of a stockholder with respect to such
shares.

      (c) Discretionary Award. The Board may, in its discretion, authorize an
Award to a Participant. The Board may make any such Award without the
requirement of any cash payment from the Participant to whom such Award is made,
or may require a cash payment from such a Participant in an amount no greater
than the aggregate Fair Market Value of the Restricted Stock as of the date of
grant in exchange for, or as a condition precedent to, the completion of such
Award and the issuance of such shares of Restricted Stock.

                                       5
<PAGE>
      (d) Transferability. During the Restriction Period stated in the
Agreement, the Participant who receives an Award shall not be permitted to sell,
transfer, pledge, assign, encumber or otherwise dispose of such Restricted Stock
whether by operation of law or otherwise and shall not be made subject to
execution, attachment or similar process. Any attempt by such Participant to do
so shall constitute the immediate and automatic forfeiture of such Award.
Notwithstanding the foregoing, the Agreement may permit the payment or
distribution of a Participant's Award (or any portion thereof) after his or her
death to the beneficiary most recently named by such Participant in a written
designation thereof filed with the Company, or, in lieu of any such surviving
beneficiary, as designated by the Participant by will or by the laws of descent
and distribution. In the event any Award is to be paid or distributed to the
executors, administrators, heirs or distributees of the estate of a deceased
Participant, or such a Participant's beneficiary, in any such case pursuant to
the terms and conditions of the Plan and the applicable Agreement and in
accordance with such terms and conditions as may be specified from time to time
by the Board, the Company shall be under no obligation to issue Stock thereunder
unless and until the Board is satisfied that the person or persons to receive
such Stock is the duly appointed legal representative of the deceased
Participant's estate or the proper legatee or distributee thereof or the named
beneficiary of such Participant.

      (e) Forfeiture of Restricted Stock. Shares of Restricted Stock shall be
forfeited and revert to the Company if the Participant (i) resigns from the
Company and its subsidiaries, (ii) is terminated for Cause from the Company and
its subsidiaries or (iii) violates the terms of any noncompetition or
nonsolicitation agreement to which the Participant is bound, if the Participant
has been terminated without Cause (which includes termination on permanent and
total disability (as defined in Code Section 422(c)(6)) and death). The Board
shall make all determinations regarding compliance with any such noncompetition
or nonsolicitation provision. Notwithstanding the foregoing, on any such
resignation or termination of service during the Restriction Period, shares of
Restricted Stock shall become free of all or part of the restrictions applicable
thereto to the extent that the Agreement, as determined by the Board in its
discretion on the award date, provides for lapse of such restrictions on such
termination of service, or the Board, in its discretion, otherwise determines to
waive forfeiture of such shares of Restricted Stock for whatever reason the
Board considers to be in the interests of the Company. A Participant who is
terminated without Cause (including Participant's estate or other transferee on
Participant's death) shall continue to be subject to the Plan and the Agreement,
including the Restriction Period.

      (f) Receipt of Stock Certificates. Each Participant who receives an Award
shall be issued one or more stock certificates in respect of such shares of
Restricted Stock. Any such stock certificates for shares of Restricted Stock
shall be registered in the name of the Participant but shall be appropriately
legended and returned to the Company or its agent by the recipient, together
with a stock power or other appropriate instrument of transfer, endorsed in
blank by the recipient. Notwithstanding anything in the foregoing to the
contrary, in lieu of the issuance of certificates for any shares of Restricted
Stock during the applicable Restriction Period, a "book entry" (i.e., a
computerized or manual entry) may be made in the records of the Company, or its
designated agent, as the Board, in its discretion, may deem appropriate, to
evidence the ownership of such shares of Restricted Stock in the name of the
applicable Participant. Such records of the Company or such agent shall, absent
manifest error, be binding on all Participants

                                       6
<PAGE>
hereunder. The holding of shares of Restricted Stock by the Company or its
agent, or the use of book entries to evidence the ownership of shares of
Restricted Stock, in accordance with this section 5(f), shall not affect the
rights of Participants as owners of their shares of Restricted Stock, nor affect
the Restriction Period applicable to such shares under the Plan or the
Agreement.

      (g) Dividends. A Participant who holds outstanding shares of Restricted
Stock shall not be entitled to any dividends paid thereon.

      (h) Expiration of Restriction Period. A Participant's shares of Restricted
Stock shall become free of the foregoing restrictions on the earlier of a Change
in Control or the expiration of the applicable Restriction Period and the
Company shall, subject to sections 6(a) or 6(b), then deliver stock certificates
evidencing such Stock to such Participant.

      (i) Substitution of Awards. The Board may accept the surrender of
outstanding shares of Restricted Stock (to the extent that the Restriction
Period or other restrictions applicable to such shares have not yet lapsed) and
grant new Awards in substitution for such Restricted Stock.

6.    CONDITIONS ON ISSUANCE OF SHARES.

      (a) Securities Law Compliance. The Plan, the grant of Awards thereunder
and the obligation of the Company to deliver shares of stock on expiration of
the applicable Restriction Period shall be subject to all applicable Federal and
state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required, in the opinion of the Board. Awards may
not be granted and shares of stock may not be issued if either such action would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system on which the Stock may then be listed. In addition, no Stock may
be issued unless (i) a registration statement under the Securities Act shall at
the time of issuance of the Stock be in effect with respect to the shares of
Stock to be issued or (ii) in the opinion of legal counsel to the Company, the
shares of Stock to be issued on expiration of the applicable Restriction Period
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the issuance of any
Stock, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect
thereto as may be requested by the Company.

      (b) Investment Representation. The Company may require any Participant, or
any person to whom an Award is transferred, as a condition of receiving shares
of Stock pursuant to such Award, to (i) give written assurances satisfactory to
the Company as to the Participant's knowledge and experience in financial and
business matters or to employ a purchaser representative reasonably satisfactory
to the Company who is knowledgeable and experienced in

                                       7
<PAGE>
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
receiving such Stock, and (ii) to give written assurances satisfactory to the
Company stating that such person is acquiring the Stock for such person's own
account and not with any present intention of selling or otherwise distributing
the Stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall not apply if (A) the issuance of the Stock has been
registered under a then currently effective registration statement under the
Securities Act, or (B) counsel for the Company determines as to any particular
requirement that such requirement need not be met in the circumstances under the
then applicable securities laws. Restricted Stock and any Stock received on the
expiration of the Restriction Period shall be subject to such other transfer
restrictions and/or legending requirements that are imposed by the Board, in its
discretion, and may be specified in the Agreement.

7.    ADJUSTMENTS ON CERTAIN EVENTS.

      (a) No Effect on Powers of Board or Shareholders. The existence of the
Plan and any Awards granted hereunder shall not affect in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's or
its subsidiaries' capital structure or its business, any merger or consolidation
of the Company or a subsidiary of the Company, any issue of debt, preferred or
prior preference stock ahead of or affecting Stock, the authorization or
issuance of additional shares of Stock, the dissolution or liquidation of the
Company or its subsidiaries, any sale or transfer of all or part of its assets
or business or any other corporate act or proceeding.

      (b) Changes in Control. Each Agreement shall provide that, immediately
prior to a Change in Control, all restrictions imposed by the Board on any
outstanding Award shall be immediately automatically canceled, the Restriction
Period applicable to all outstanding Awards shall immediately terminate and such
Awards shall be fully vested, and any applicable performance goals shall be
deemed achieved at not less than the target level, notwithstanding anything to
the contrary in the Plan or the Agreement.

      (c) Adjustment of Shares. The aggregate number, class and kind of shares
of stock available under the Plan as to which Awards may be granted, the
limitation set forth in section 4(c) on the number of shares of Stock that may
be issued by a single officer under the Plan and the number, class and kind of
shares under each outstanding Award shall be appropriately adjusted by the Board
in its discretion to preserve the benefits or potential benefits intended to be
made available under the Plan or with respect to any outstanding Awards or
otherwise necessary to reflect any such change, if the Company shall (i) pay a
dividend in, or make a distribution of, shares of Stock (or securities
convertible into, exchangeable for or otherwise entitling a holder thereof to
receive Stock), or evidences of indebtedness or other property or assets, on
outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater
number of shares, (iii) combine the outstanding shares of Stock into a smaller
number of shares or (iv) issue any shares of its capital stock in a
reclassification of the Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the resulting
corporation). An adjustment made pursuant to this section 7(c) shall, in the
case of a dividend or distribution, be made as of the record date therefor and,
in the case of a subdivision, combination or

                                       8
<PAGE>
reclassification, be made as of the effective date thereof. Any new or
additional shares or securities received by a Participant shall be subject to
the same terms and conditions, including the Restriction Period, as relate to
the original Award.

      (d) Receipt of Assets other than Stock. If at any time, as a result of an
adjustment made pursuant to this section 7, the Participant shall become
entitled to receive any shares of capital stock or shares or other units of
other securities or property or assets other than Stock, the number of such
other shares or units so receivable on expiration of the Restriction Period
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares of
Stock in this section 7, and the provisions of this Plan with respect to the
shares of Stock shall apply, with necessary changes in points of detail, on like
terms to any such other shares or units.

      (e) Fractional Shares. All calculations under this section 7 shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case may
be, but in no event shall the Company be obligated to issue any fractional
share.

      (f) Inability to Prevent Acts Described in Section 7; Uniformity of
Actions Not Required. No Participant shall have or be deemed to have any right
to prevent the consummation of the acts described in this section 7 affecting
the number of shares of Stock subject to any Award held by the Participant. Any
actions or determinations by the Board under this section 7 need not be uniform
as to all outstanding Awards, and need not treat all Participants identically.

8.    TAX WITHHOLDING OBLIGATIONS.

      (a) General Authorization. The Company is authorized to take whatever
actions are necessary and proper to satisfy all obligations of Participants
(including, for purposes of this section 8, any other person entitled to
exercise an Award pursuant to the Plan or an Agreement) for the payment of all
Federal, state, local and foreign taxes in connection with any Awards
(including, but not limited to, actions pursuant to the following section 8(b)).

      (b) Withholding Requirement and Procedure. Each Participant shall, no
later than the date as of which the value of the Award first becomes includible
in the gross income of the Participant for income tax purposes, pay to the
Company in cash, or make arrangements satisfactory to the Company regarding
payment to the Company of, any taxes of any kind required by law to be withheld
with respect to the Stock or other property subject to such Award. No Stock
shall be delivered to a Participant with respect to an Award until such payment
or arrangement has been made. The Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to such Participant. Notwithstanding the above, the Board may, in its
discretion and pursuant to procedures approved by the Board, permit the
Participant to elect withholding by the Company of Stock or other property
otherwise deliverable to such Participant pursuant to his or her Award,
provided, however, that the amount of any Stock so withheld shall not exceed the
amount necessary to satisfy the Company's required tax withholding obligations
using the minimum statutory withholding rates for Federal, state and/or local
tax purposes, including payroll taxes, that are

                                       9
<PAGE>
applicable to supplemental taxable income in full or partial satisfaction of
such tax obligations, based on the Fair Market Value of the Stock on the payment
date.

      (c) Section 83(b) Election. If a Participant makes an election under Code
Section 83(b), or any successor section thereto, to be taxed with respect to an
Award as of the date of transfer of the Restricted Stock rather than as of the
date or dates on which the Participant would otherwise be taxable under Code
Section 83(a), such Participant shall deliver a copy of such election to the
Company immediately after filing such election with the Internal Revenue
Service. Neither the Company nor any of its affiliates shall have any liability
or responsibility relating to or arising out of the filing or not filing of any
such election or any defects in its construction.

9.    RIGHTS OF EMPLOYEES AND OTHER PERSONS.

      This Plan and the Awards shall not confer on any Participant or other
person:

      (a) Any rights or claims under the Plan except in accordance with the
provisions of the Plan and the applicable agreement;

      (b) Any right with respect to continuation of employment by the Company or
any subsidiary, nor shall they interfere in any way with the right of the
Company or any subsidiary that employs a Participant to terminate the
Participant's employment at any time with or without Cause;

      (c) Any right to be selected to participate in the Plan or to be granted
an Award; or

      (d) Any right to receive any bonus, whether payable in cash or in Stock,
or in any combination thereof, from the Company or its subsidiaries, nor be
construed as limiting in any way the right of the Company or its subsidiaries to
determine, in its sole discretion, whether or not it shall pay any employee
bonus, and, if so paid, the amount thereof and the manner of such payment.

10.   LIMITATION OF LIABILITY AND INDEMNIFICATION.

      (a) Contractual Liability Limitation. Any liability of the Company or its
subsidiaries to any Participant with respect to any Award shall be based solely
on contractual obligations created by the Plan and the Agreement.

      (b) Indemnification. In addition to such other rights of indemnification
as they may have as Directors or officers, Directors and officers to whom
authority to act for the Board or the Company is delegated shall be indemnified
by the Company against all reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such

                                       10
<PAGE>
person is liable for gross negligence, bad faith or intentional misconduct in
duties; provided, however, that within sixty (60) days after the institution of
such action, suit or proceeding, such person shall offer to the Company, in
writing, the opportunity at its own expense to handle and defend the same.

11.   MISCELLANEOUS

      (a) Acceptance of Terms and Conditions of Plan. By accepting any benefit
under the Plan, each Participant and each person claiming under or through such
Participant shall be conclusively deemed to have indicated their acceptance and
ratification of, and consent to, all of the terms and conditions of the Plan and
any action taken under the Plan by the Company, the Board or the Board, in any
case in accordance with the terms and conditions of the Plan.

      (b) No Effect on Other Arrangements. Neither the adoption of the Plan nor
anything contained herein shall affect any other compensation or incentive plans
or arrangements of the Company or its subsidiaries, or prevent or limit the
right of the Company or any subsidiary to establish any other forms of
incentives or compensation for their Employees or grant or assume restricted
stock or other rights otherwise than under the Plan.

      (c) Choice of Law. The Plan shall be governed by and construed in
accordance with the laws of the State of California, without regard to such
state's conflict of law provisions, and, in any event, except as superseded by
applicable Federal law.

      (d) Compliance with Section 16 of the Exchange Act. So long as a class of
the Company's equity securities is registered under Section 12 of the Exchange
Act, the Company intends that the Plan shall comply in all respects with Rule
16b-3. If during such time any provision of this Plan is found not to be in
compliance with Rule 16b-3, that provision shall be deemed to have been amended
or deleted as and to the extent necessary to comply with Rule 16b-3, and the
remaining provisions of the Plan shall continue in full force and effect without
change. All transactions under the Plan during such time shall be executed in
accordance with the requirements of Section 16 of the Exchange Act and the
applicable regulations promulgated thereunder.

12.   AMENDMENT AND TERMINATION OF THE PLAN.

      (a) Amendment of Plan. The Board may, at any time and with or without
prior notice, amend, alter, suspend, or terminate the Plan, retroactively or
otherwise; provided, however, that unless otherwise required by law or
specifically provided herein, no such amendment, alteration, suspension, or
termination shall be made that would materially impair the previously accrued
rights of any Participant with respect to his or her Award without his or her
written consent.

      (b) Amendment of Awards. The Board may amend the terms of any Award
previously granted, including any Agreement, retroactively or prospectively, but
no such amendment shall materially impair the previously accrued rights of any
Participant with respect to any such Award without his or her written consent.

                                       11
<PAGE>
      (c) Automatic Termination of Plan. The Plan shall terminate on the date
all shares of Stock subject to the Plan have been delivered pursuant to the
Plan's provisions, and no such shares are any longer subject to any Restriction
Period.

13.   EFFECTIVE DATE OF THE PLAN.

      The effective date of the Plan shall be determined by the Board.

                                       12

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