Document:

NEW CENTURY MORTGAGE SECURITIES, INC.

                                    Depositor

                        NEW CENTURY MORTGAGE CORPORATION

                                 Master Servicer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                           Dated as of October 1, 2003

                New Century Home Equity Loan Trust, Series 2003-5
                     Asset Backed Pass-Through Certificates

                                  Series 2003-5

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                     ARTICLE I

                                                    DEFINITIONS
<S>                                                                                                            <C>
         SECTION 1.01.     Defined Terms........................................................................-2-
         SECTION 1.02.     Allocation of Certain Interest Shortfalls...........................................-47-

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES
         SECTION 2.01.     Conveyance of the Mortgage Loans....................................................-49-
         SECTION 2.02.     Acceptance of REMIC I by Trustee....................................................-51-
         SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Seller..........................-52-
         SECTION 2.04.     Reserved............................................................................-55-
         SECTION 2.05.     Representations, Warranties and Covenants of the....................................-55-
         SECTION 2.06.     Issuance of the REMIC I Regular Interests and the Class R-I
                           Interest............................................................................-57-
         SECTION 2.07.     Conveyance of the REMIC I Regular Interests; Acceptance of
                           REMIC II by the Trustee.............................................................-57-
         SECTION 2.08.     [Reserved]..........................................................................-58-
         SECTION 2.09.     Issuance of Class R Certificates....................................................-58-
         SECTION 2.10.     Conveyance of Delayed Delivery Group I Mortgage Loans...............................-58-

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS
         SECTION 3.01.     Master Servicer to Act as ..........................................................-59-
         SECTION 3.02.     Sub-Servicing Agreements Between Master Servicer and Sub-
                           Servicers...........................................................................-61-
         SECTION 3.03.     Successor Sub-Servicers.............................................................-62-
         SECTION 3.04.     Liability of the Master Servicer....................................................-62-
         SECTION 3.05.     No Contractual Relationship Between Sub-Servicers, the Trustee
                           or the Certificateholders...........................................................-63-
         SECTION 3.06.     Assumption or Termination of Sub-Servicing Agreements by the
                           Trustee.............................................................................-63-
         SECTION 3.07.     Collection of Certain Mortgage Loan Payments........................................-64-
         SECTION 3.08.     Sub-Servicing Accounts..............................................................-64-
         SECTION 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing
                           Accounts............................................................................-64-
         SECTION 3.10.     Collection Account and Distribution Account.........................................-65-
         SECTION 3.11.     Withdrawals from the Collection Account and Distribution
                           Account.............................................................................-68-
         SECTION 3.12.     Investment of Funds in the Collection Account and the

                                                        -i-

<PAGE>

                           Distribution Account................................................................-69-
         SECTION 3.13.     [Reserved]..........................................................................-70-
         SECTION 3.14.     Maintenance of Hazard Insurance and Errors and Omissions and
                           Fidelity Coverage...................................................................-71-
         SECTION 3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements
                            ...................................................................................-72-
         SECTION 3.16.     Realization Upon Defaulted Mortgage Loans...........................................-73-
         SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files.....................................-76-
         SECTION 3.18.     Servicing Compensation..............................................................-77-
         SECTION 3.19.     Reports to the Trustee and Others; Collection Account Statements
                            ...................................................................................-77-
         SECTION 3.20.     Statement as to Compliance..........................................................-77-
         SECTION 3.21.     Independent Public Accountants' Servicing Report....................................-78-
         SECTION 3.22.     Access to Certain Documentation.....................................................-78-
         SECTION 3.23.     Title, Management and Disposition of REO Property...................................-79-
         SECTION 3.24.     Obligations of the Master Servicer in Respect of Prepayment
                           Interest Shortfalls.................................................................-82-
         SECTION 3.25.     Obligations of the Master Servicer in Respect of Mortgage Rates
                           and Monthly Payments................................................................-82-
         SECTION 3.26.     Advance Facility....................................................................-82-
         SECTION 3.28      Net WAC Rate Carryover Reserve Account..............................................-83-
         SECTION 3.29      Reserved............................................................................-85-

                                                    ARTICLE IV

                                          PAYMENTS TO CERTIFICATEHOLDERS
         SECTION 4.01.     Distributions.......................................................................-86-
         SECTION 4.02.     Statements to Certificateholders....................................................-96-
         SECTION 4.03.     Remittance Reports; P&I Advances....................................................-99-
         SECTION 4.04.     Allocation of Realized Losses......................................................-101-
         SECTION 4.05.     Compliance with Withholding Requirements...........................................-103-
         SECTION 4.06.     Derivative Contracts...............................................................-105-

                                                     ARTICLE V

                                                 THE CERTIFICATES
         SECTION 5.01.     The Certificate....................................................................-106-
         SECTION 5.02.     Registration of Transfer and Exchange of Certificates..............................-108-
         SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates..................................-112-
         SECTION 5.04.     Persons Deemed Owners..............................................................-112-
         SECTION 5.05.     Certain Available Information......................................................-113-

                                                    ARTICLE VI

                                       THE DEPOSITOR AND THE MASTER SERVICER

                                                       -ii-

<PAGE>

         SECTION 6.01.     Liability of the Depositor and the ................................................-114-
         SECTION 6.02.     Merger or Consolidation of the Depositor or the ...................................-114-
         SECTION 6.03.     Limitation on Liability of the Depositor, the Master Servicer and
                           Others.............................................................................-114-
         SECTION 6.04.     Limitation on Resignation of the Master Servicer...................................-115-
         SECTION 6.05.     Rights of the Depositor in Respect of the Master Servicer..........................-116-

                                                    ARTICLE VII

                                                      DEFAULT
         SECTION 7.01.     Master Servicer Events of Default..................................................-117-
         SECTION 7.02.     Trustee to Act; Appointment of Successor...........................................-119-
         SECTION 7.03.     Notification to Certificateholders.................................................-120-
         SECTION 7.04.     Waiver of Master Servicer Events of Default........................................-120-

                                                   ARTICLE VIII

                                              CONCERNING THE TRUSTEE
         SECTION 8.01.     Duties of Trustee..................................................................-121-
         SECTION 8.02.     Certain Matters Affecting the Trustee..............................................-122-
         SECTION 8.03.     Trustee Not Liable for Certificates or Mortgage Loans..............................-123-
         SECTION 8.04.     Trustee May Own Certificates.......................................................-123-
         SECTION 8.05.     Trustee's Fees and Expenses........................................................-124-
         SECTION 8.06.     Eligibility Requirements for Trustee...............................................-124-
         SECTION 8.07.     Resignation and Removal of the Trustee.............................................-125-
         SECTION 8.08.     Successor Trustee..................................................................-125-
         SECTION 8.09.     Merger or Consolidation of Trustee.................................................-126-
         SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee......................................-126-
         SECTION 8.11.     [Reserved].........................................................................-127-
         SECTION 8.12.     Appointment of Office or Agency....................................................-127-
         SECTION 8.13.     Representations and Warranties of the Trustee......................................-127-

                                                    ARTICLE IX

                                                    TERMINATION
         SECTION 9.01      Termination Upon Repurchase or Liquidation of All Mortgage
                           Loans..............................................................................-129-
         SECTION 9.02      Additional Termination Requirements................................................-130-

                                                     ARTICLE X

                                                 REMIC PROVISIONS
         SECTION 10.01.    REMIC Administration.............................................................. -132-
         SECTION 10.02.    Prohibited Transactions and Activities.............................................-134-
         SECTION 10.03.    Master Servicer and Trustee Indemnification........................................-135-

                                                       -iii-

<PAGE>

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS
         SECTION 11.01.             Amendment.................................................................-136-
         SECTION 11.02.             Recordation of Agreement; Counterparts....................................-137-
         SECTION 11.03.             Limitation on Rights of Certificateholders................................-138-
         SECTION 11.04.             Governing Law.............................................................-138-
         SECTION 11.05.             Notices...................................................................-138-
         SECTION 11.06.             Severability of Provisions................................................-139-
         SECTION 11.07.             Notice to Rating Agencies.................................................-139-
         SECTION 11.08.             Article and Section References............................................-140-
         SECTION 11.09.             Grant of Security Interest................................................-140-
         SECTION 11.10.             Waiver of Jury Trial......................................................-141-
</TABLE>

                                                       -iv-

<PAGE>

Exhibits
--------

Exhibit A-1       Form of Class A-I-1 Certificate
Exhibit A-2       Form of Class A-I-2 Certificate
Exhibit A-3       Form of Class A-I-2A Certificate
Exhibit A-4       Form of Class A-I-3 Certificate
Exhibit A-5       Form of Class A-I-4 Certificate
Exhibit A-6       Form of Class A-I-5 Certificate
Exhibit A-7       Form of Class A-I-6 Certificate
Exhibit A-8       Form of Class A-I-6A Certificate
Exhibit A-9       Form of Class A-I-7 Certificate
Exhibit A-10      Form of Class A-II Certificate
Exhibit A-11      Form of Class M-1 Certificate
Exhibit A-12      Form of Class M-2 Certificate
Exhibit A-13      Form of Class M-3 Certificate
Exhibit A-14      Form of Class M-4 Certificate
Exhibit A-15      Form of Class M-5 Certificate
Exhibit A-16      Form of Class B Certificate
Exhibit A-17      Form of Class CE Certificate
Exhibit A-18      Form of Class P Certificate
Exhibit A-19      Form of Class R Certificate
Exhibit B         Copy of Certificate Guaranty Insurance Policy with respect to
                  the Insured Certificates
Exhibit C-1       Form of Trustee's Initial Certification
Exhibit C-2       Form of Trustee's Final Certification
Exhibit D         Form of Mortgage Loan Purchase Agreement
Exhibit E         Request for Release
Exhibit F-1       Form of Transferor Representation Letter and Form of
                  Transferee Representation Letter in Connection with Transfer
                  of the Class B Certificates, Class CE Certificates, Class P
                  Certificates or Residual Certificates Pursuant to Rule 144A
                  Under the 1933 Act
Exhibit F-2       Form of Transfer Affidavit and Agreement and Form of
                  Transferor Affidavit in Connection with Transfer of Residual
                  Certificates
Exhibit G         Form of Certification with respect to ERISA and the Code
                  Exhibit H Form of Report Pursuant to Section 4.06 Exhibit I
                  Form of Lost Note Affidavit
Exhibit J-1      Form of Certification to Be Provided by the Depositor with
                  Form 10-K
Exhibit J-2      Form of Certification to Be Provided to the Depositor by the
                 Trustee
Exhibit K        [Reserved]
Exhibit L        Form of Officer's Certificate Regarding Annual Statement of
                 Compliance

Schedule 1       Mortgage Loan Schedule
Schedule 2       Prepayment Charge Schedule

                                       -v-

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of October 1, 2003, among NEW CENTURY MORTGAGE SECURITIES, INC. as Depositor,
NEW CENTURY MORTGAGE CORPORATION, as Master Servicer and DEUTSCHE BANK NATIONAL
TRUST COMPANY as Trustee.

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest in each REMIC (as defined herein) created
hereunder. The Trust Fund will consist of a segregated pool of assets comprised
of the Mortgage Loans and certain other related assets subject to this
Agreement.

                                     REMIC I
                                     -------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (other than the Master Servicer Prepayment Charge Payment Amount,
the Net WAC Rate Carryover Reserve Account and the Cap Contracts) subject to
this Agreement as a REMIC for federal income tax purposes, and such segregated
pool of assets will be designated as "REMIC I." The Class R-I Interest will be
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the REMIC I Remittance Rate, the initial Uncertificated Balance
and, solely for purposes of satisfying Treasury regulation section 1.860G-
1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC I
Regular Interests (as defined herein). None of the REMIC I Regular Interests
will be certificated.

                                      -vi-

<PAGE>

<TABLE>
<CAPTION>
                                         REMIC I                       Initial                   Latest Possible
         Designation                 Remittance Rate           Uncertificated Balance           Maturity Date(1)
         -----------                 ---------------           ----------------------           ----------------
<S>                                  <C>                       <C>                              <C>
           I-LTAA                      Variable(2)                 $538,999,951.00              November 25, 2033
           I-LTA1                      Variable(2)                 $  2,597,460.00              November 25, 2033
           I-LTA2                      Variable(2)                 $    834,200.00              November 25, 2033
           I-LTA2A                     Variable(2)                 $    250,000.00              November 25, 2033
           I-LTA3                      Variable(2)                 $  1,803,500.00              November 25, 2033
           I-LTA4                      Variable(2)                 $  1,199,800.00              November 25, 2033
           I-LTA5                      Variable(2)                 $    249,040.00              November 25, 2033
           I-LTA6                      Variable(2)                 $    511,750.00              November 25, 2033
           I-LTA6A                     Variable(2)                 $    400,000.00              November 25, 2033
           I-LTA7                      Variable(2)                 $    871,750.00              November 25, 2033
           I-LTM1                      Variable(2)                 $    533,500.00              November 25, 2033
           I-LTM2                      Variable(2)                 $    401,500.00              November 25, 2033
           I-LTM3                      Variable(2)                 $    165,000.00              November 25, 2033
           I-LTM4                      Variable(2)                 $     82,500.00              November 25, 2033
           I-LTM5                      Variable(2)                 $     82,500.00              November 25, 2033
            I-LTB                      Variable(2)                 $    165,000.00              November 25, 2033
           I-LTZZ                      Variable(2)                 $  5,554,999.00              November 25, 2033
          I-LT1SUB                     Variable(2)                 $      1,524.49              November 25, 2033
          I-LT1GRP                     Variable(2)                 $     10,241.99              November 25, 2033
          I-LT2SUB                     Variable(2)                 $         12.80              November 25, 2033
          I-LT2GRP                     Variable(2)                 $        755.30              November 25, 2033
           I-LTXX                      Variable(2)                 $549,987,415.43              November 25, 2033
            I-LTP                      Variable(2)                 $        100.00              November 25, 2033
</TABLE>
_______________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest maturity date has been designated as
     the "latest possible maturity date" for each REMIC I Regular Interest.
(2)  Calculated in accordance with the definition of "REMIC I Remittance Rate"
     herein.

                                      -vii-

<PAGE>

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated
Classes of Certificates.

<TABLE>
<CAPTION>
                                                                  Initial Aggregate
                                                                Certificate Principal            Latest Possible
         Designation                Pass-Through Rate                  Balance                  Maturity Date(1)
         -----------                -----------------                  -------                  ----------------
<S>                                <C>                          <C>                             <C>
         Class A-I-1                   Variable(2)                 $259,746,000.00              November 25, 2033
         Class A-I-2               2.940% per annum(3)             $ 83,420,000.00              November 25, 2033
        Class A-I-2A               2.860% per annum(3)             $ 25,000,000.00              November 25, 2033
         Class A-I-3               3.560% per annum(3)             $180,350,000.00              November 25, 2033
         Class A-I-4               4.760% per annum(3)             $119,980,000.00              November 25, 2033
         Class A-I-5               5.500% per annum(3)             $ 24,904,000.00              November 25, 2033
         Class A-I-6               5.500% per annum(3)             $ 51,175,000.00              November 25, 2033
        Class A-I-6A               5.500% per annum(3)             $ 40,000,000.00              November 25, 2033
         Class A-I-7               5.150% per annum(3)             $ 87,175,000.00              November 25, 2033
         Class A-II                    Variable(2)                 $ 74,250,000.00              November 25, 2033
          Class M-1                5.410% per annum(3)             $ 53,350,000.00              November 25, 2033
          Class M-2                5.500% per annum(3)             $ 40,150,000.00              November 25, 2033
          Class M-3                5.500% per annum(3)             $ 16,500,000.00              November 25, 2033
          Class M-4                5.500% per annum(3)             $  8,250,000.00              November 25, 2033
          Class M-5                5.500% per annum(3)             $  8,250,000.00              November 25, 2033
           Class B                 5.500% per annum(3)             $ 16,500,000.00              November 25, 2033
          Class CE                     Variable(2)                 $ 10,999,900.00(4)           November 25, 2033
           Class P                       N/A(5)                    $        100.00              November 25, 2033
</TABLE>
_______________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates.
(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3)  Subject to the related Net WAC Pass-Through Rate and, in the case of the
     Class A-I-6 Certificates, the Class A-I-6A Certificates, the Mezzanine
     Certificates and the Class B Certificates, subject to increase of 0.50% per
     annum as set forth herein.
(4)  The Class CE Certificates will accrue interest at their variable
     Pass-Through Rates on the Notional Amount of the Class CE Certificates
     outstanding from time to time. The Class CE Certificates will not accrue
     interest on their Certificate Principal Balance.
(5)  The Class P Certificates will not accrue interest.

                  As of the Cut-off Date, the Group I Mortgage Loans had an
aggregate Stated Principal Balance equal to $1,024,198,601.09 and the Group II
Mortgage Loans had an aggregate Stated Principal Balance equal to
$75,530,060.18.

                                     -viii-

<PAGE>

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

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

                  Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.

                  "Accepted Servicing Practices": The servicing standards set
forth in Section 3.01.

                  "Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class CE Certificate
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, or on the Notional
Amount, in the case of the Class CE Certificates, of such Certificate
immediately prior to such Distribution Date. The Class P Certificates are not
entitled to distributions in respect of interest and, accordingly, will not
accrue interest. All distributions of interest on the Floating Rate Certificates
will be calculated on the basis of a 360-day year and the actual number of days
in the applicable Interest Accrual Period. All distributions of interest on the
Fixed Rate Certificates and the Class CE Certificates will be based on a 360-day
year consisting of twelve 30-day months. Accrued Certificate Interest with
respect to each Distribution Date, as to any Class A Certificate, Mezzanine
Certificate, Class B Certificate or Class CE Certificate, shall be reduced by an
amount equal to the portion allocable to such Certificate pursuant to Section
1.02 hereof of the sum of (a) the aggregate Prepayment Interest Shortfall, if
any, for such Distribution Date to the extent not covered by payments pursuant
to Section 3.24 and (b) the aggregate amount of any Relief Act Interest
Shortfall, if any, for such Distribution Date. In addition, Accrued Certificate
Interest with respect to each Distribution Date, as to any Class CE Certificate,
shall be reduced by an amount equal to the portion allocable to such Class CE
Certificate of Realized Losses, if any, pursuant to Section 4.04 hereof.

                  "Adjustment Date": With respect to each Group II Mortgage
Loan, the first day of the month in which the Mortgage Rate of such Mortgage
Loan changes pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-off Date as to each Group II Mortgage Loan is set forth in the
Mortgage Loan Schedule.

                  "Advancing Person": As defined in Section 3.26(a) hereof.

                  "Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the

<PAGE>

management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

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

                  "Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates or the Class B
Certificates, the sum of (i) any Realized Losses allocated to such Class of
Certificates on such Distribution Date and (ii) the amount of any Allocated
Realized Loss Amount for such Class of Certificates remaining unpaid from the
previous Distribution Date.

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law.

                  "Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Determination Date, (b) the aggregate of any
amounts received in respect of an REO Property withdrawn from any REO Account
and deposited in the Distribution Account for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any amounts deposited in the Distribution
Account by the Master Servicer in respect of Prepayment Interest Shortfalls for
such Distribution Date pursuant to Section 3.24, (d) the aggregate of any P&I
Advances made by the Master Servicer for such Distribution Date pursuant to
Section 4.03 and (e) the aggregate of any advances made by the Trustee as
successor Master Servicer or any other successor Master Servicer for such
Distribution Date pursuant to Section 7.02, reduced (to not less than zero), by
(2) the portion of the amount described in clause (1)(a) above that represents
(i) Monthly Payments on the Mortgage Loans received from a Mortgagor on or prior
to the Determination Date but due during any Due Period subsequent to the
related Due Period, (ii) Principal Prepayments on the Mortgage Loans received
after the related Prepayment Period (together with any interest payments
received with such Principal Prepayments to the extent they represent the
payment of interest accrued on the Mortgage Loans during a period subsequent to
the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Seller or any Sub-Servicer pursuant to Section 3.11
or Section 3.12 or otherwise payable in respect of Extraordinary Trust Fund
Expenses, (v) the Trustee Fee payable from the Distribution Account pursuant to
Section 8.05, (vi) amounts deposited in the Collection Account or the
Distribution Account in error and (vii) the amount of any Prepayment Charges
collected by the Master Servicer in connection with the Principal Prepayment of
any of the Mortgage Loans or any Master Servicer Prepayment Charge Payment
Amount.

                                       -2-

<PAGE>

                  "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.

                  "Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.

                  "Book-Entry Certificate": The Class A Certificates and the
Mezzanine Certificates for so long as the Certificates of such Class shall be
registered in the name of the Depository or its nominee.

                  "Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.

                  "Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of
California, the State of New York or in the city in which the Corporate Trust
Office of the Trustee is located, are authorized or obligated by law or
executive order to be closed.

                  "Cap Contracts": Together, the Class A-I-1 Cap Contract and
the Class A-II Cap Contract.

                  "Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal amount in excess of the principal
balance of any existing first mortgage or subordinate mortgage on the related
Mortgaged Property and related closing costs.

                  "Certificate": Any one of the Asset Backed Pass-Through
Certificates, Series 2003-5, Class A-I-1, Class A-I-2, Class A-I-2A, Class
A-I-3, Class A-I-4, Class A-I-5, Class A-I-6, Class A- I-6A, Class A-I-7, Class
A-II, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B, Class CE,
Class P or Class R issued under this Agreement.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners as they
may indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.

                  "Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which

                                       -3-

<PAGE>

is the aggregate Certificate Principal Balance (or the Notional Amount, in the
case of the Class CE Certificates) of such Class of Certificates on such
Distribution Date (after giving effect to any distributions of principal and
allocations of Realized Losses in reduction of the Certificate Principal Balance
(or the Notional Amount, in the case of the Class CE Certificates) of such Class
of Certificates to be made on such Distribution Date), and the denominator of
which is the initial aggregate Certificate Principal Balance (or the Notional
Amount, in the case of the Class CE Certificates) of such Class of Certificates
as of the Closing Date.

                  "Certificate Insurer": Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance corporation or its successors in interest.

                  "Certificate Insurer Account": An account of the Certificate
Insurer maintained at Citibank, N.A. (ABA No. 021-000089), Account No. 40609486,
Attention: Pamela Dottin, (212) 208-3308, or such other account as may be
designated by the Certificate Insurer to the Trustee in writing not less than
five Business Days prior to the related Distribution Date. Any wire transfers to
the Certificate Insurer Account shall reference the Policy No. of the Policy.

                  "Certificate Insurer Default": The existence and continuance
of any of the following: (a) a failure by the Certificate Insurer to make a
payment required under the Policy in accordance with its terms; or (b)(i) the
Certificate Insurer (A) files any petition or commences any case or proceeding
under any provision or chapter of the Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, (B) makes a general assignment for the benefit of
its creditors, or (C) has an order for relief entered against it under the
Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is
final and nonappealable; or (ii) a court of competent jurisdiction, the
Wisconsin insurance department or other competent regulatory authority enters a
final and nonappealable order, judgment or decree (A) appointing a custodian,
trustee, agent or receiver for the Certificate Insurer or for all or any
material portion of its property or (B) authorizing the taking of possession by
a custodian, trustee, agent or receiver of the Certificate Insurer (or the
taking of possession of all or any material portion of the property of the
Certificate Insurer).

                  "Certificate Margin": With respect to the Class A-I-1
Certificates and REMIC I Regular Interest I-LTA1 for purposes of the definition
of Marker Rate, 0.170% in the case of each Distribution Date.

                  With respect to the Class A-II Certificates and REMIC I
Regular Interest I-LTA8 for purposes of the definition of Marker Rate, 0.400% in
the case of each Distribution Date through and including the Distribution Date
on which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.800% in the case of each Distribution Date
thereafter.

                  "Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a

                                       -4-

<PAGE>

Depository Participant acts as agent.

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate, Class B Certificate or Class P Certificate
as of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination, minus all distributions allocable to principal made thereon and
in the case of a Mezzanine Certificate or Class B Certificate, Realized Losses
allocated thereto on such immediately prior Distribution Date (or, in the case
of any date of determination up to and including the first Distribution Date,
the initial Certificate Principal Balance of such Certificate, as stated on the
face thereof). With respect to each Class CE Certificate as of any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times the excess, if any, of (A) the then aggregate Uncertificated
Balances of the REMIC I Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A Certificates, the Mezzanine
Certificates, the Class B Certificates and the Class P Certificates then
outstanding.

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

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

                  "Class A Certificate": Any one of the Class A-I-1
Certificates, the Class A-I-2 Certificates, the Class A-I-2A Certificates, the
Class A-I-3 Certificates, the Class A-I-4 Certificates, the Class A-I-5
Certificates, the Class A-I-6 Certificates, the Class A-I-6A Certificates, the
Class A- I-7 Certificates or the Class A-II Certificates.

                  "Class A Overcollateralization Deficiency Amount": With
respect to any Distribution Date, the excess of (i) the aggregate Certificate
Principal Balance of the Class A Certificates after giving effect to
distributions of principal to be made on such Distribution Date (without regard
to any payments of principal under the Policy) over (ii) the aggregate Stated
Principal Balance of the Mortgage Loans on the last day of the immediately
preceding Due Period, multiplied by a fraction, the numerator of which is the
aggregate Certificate Principal Balance of the Insured Certificates after giving
effect to distributions of principal to be made on such Distribution Date
(without regard to any payments of principal under the Policy) and the
denominator of which is the aggregate Certificate Principal Balance of all of
the Class A Certificates after giving effect to distributions of principal to be
made on such Distribution Date.

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the aggregate Certificate Principal Balance
of the Class A Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 72.00% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $5,500,000.

                  "Class A-I-1 Cap Contract": The cap contract between the
Trustee and the counterparty thereunder for the benefit of the Holders of the
Class A-I-1 Certificates.

                  "Class A-I-1 Certificate": Any one of the Class A-I-1
Certificates executed,

                                       -5-

<PAGE>

authenticated and delivered by the Trustee, substantially in the form annexed
hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC II for purposes
of the REMIC Provisions.

                  "Class A-I-2 Certificate": Any one of the Class A-I-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-2 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-I-2A Certificate": Any one of the Class A-I-2A
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-3 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-I-3 Certificate": Any one of the Class A-I-3
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-4 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-I-4 Certificate": Any one of the Class A-I-4
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-5 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-I-5 Certificate": Any one of the Class A-I-5
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-6 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-I-6 Certificate": Any one of the Class A-I-6
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-7 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-I-6A Certificate": Any one of the Class A-I-6A
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-8 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-I-7 Certificate": Any one of the Class A-I-7
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-9 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class A-II Cap Contract": The cap contract between the
Trustee and the counterparty thereunder for the benefit of the Holders of the
Class A-II Certificates.

                  "Class A-II Certificate": Any one of the Class A-II
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-10 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class B Certificate": Any one of the Class B Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-16 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                                       -6-

<PAGE>

                  "Class B Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (vii) the Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 98.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $5,500,000.

                  "Class CE Certificate": Any one of the Class CE Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-17 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-11 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date) and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 81.70% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,500,000.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-12 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 89.00% and (ii)
the aggregate

                                       -7-

<PAGE>

Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $5,500,000.

                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-13 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date) and (iv) the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 92.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,500,000.

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-14 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date) and (v) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 93.50% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $5,500,000.

                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-15 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such

                                       -8-

<PAGE>

Distribution Date), (ii) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date) and (vi) the Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 95.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,500,000.

                  "Class P Certificate": Any one of the Class P Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-18 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class R Certificate": Any one of the Class R Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-19 and evidencing the ownership of the Class R-I
Interest and the Class R-II Interest.

                  "Class R-I Interest": The uncertificated Residual Interest in
REMIC I.

                  "Class R-II Interest": The uncertificated Residual Interest in
REMIC II.

                  "Closing Date": October 17, 2003.

                  "Code": The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained, or caused to be created and maintained, by the Master Servicer
pursuant to Section 3.10(a), which shall be entitled "New Century Mortgage
Corporation, as Master Servicer for Deutsche Bank National Trust Company, as
Trustee, in trust for the registered holders of New Century Mortgage Securities,
Inc., New Century Home Equity Loan Trust, Series 2003-5, Asset Backed
Pass-Through Certificates." The Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 1761 East St. Andrew Place,
Santa Ana, CA 92705-4934, Attn: NC0305, or at such other address as the Trustee
may designate from time to time by notice to the Certificateholders, the
Depositor, the Master Servicer and the Certificate Insurer.

                  "Corresponding Certificate": With respect to each REMIC I
Regular Interest set forth

                                       -9-

<PAGE>

below, the Regular Certificate set forth in the table below:

   REMIC I REGULAR INTEREST            Certificate
   ------------------------            -----------
            I-LTA1                     Class A-I-1
            I-LTA2                     Class A-I-2
           I-LTA2A                    Class A-I-2A
            I-LTA3                     Class A-I-3
            I-LTA4                     Class A-I-4
            I-LTA5                     Class A-I-5
            I-LTA6                     Class A-I-6
           I-LTA6A                    Class A-I-6A
            I-LTA7                     Class A-I-7
            I-LTA8                     Class A-II
            I-LTM1                      Class M-1
            I-LTM2                      Class M-2
            I-LTM3                      Class M-3
            I-LTM4                      Class M-4
            I-LTM5                      Class M-5
            I-LTB                        Class B
            I-LTP                        Class P

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates, the
Class B Certificates and the Class CE Certificates calculated after taking into
account payments of principal on the Mortgage Loans and distribution of the
Group I Principal Distribution Amount and the Group II Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans.

                  "Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  "Cut-off Date": With respect to each Original Mortgage Loan,
October 1, 2003. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

                  "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.

                  "Deficiency Amount": The sum of (x) for any Distribution Date
(including the Distribution Date occurring on the Final Stated Maturity Date)
the excess, if any, of the Senior Interest Distribution Amount allocable to the
Insured Certificates on such Distribution Date, over the Available Distribution
Amount on such Distribution Date available to pay the Insured Certificates in
accordance with Section 4.01, (y) for any Distribution Date prior to the Final
Stated

                                      -10-

<PAGE>

Maturity Date, the Class A Overcollateralization Deficiency Amount, if any, for
such Distribution Date and (z) for the Distribution Date occurring on the Final
Stated Maturity Date, the aggregate Certificate Principal Balance of the Insured
Certificates outstanding on such Distribution Date (after giving effect to all
distributions to be made thereon on such Distribution Date other than pursuant
to the Policy).

                  "Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.

                  "Definitive Certificates": As defined in Section 5.01(b).

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

                  "Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month; provided, however, that any Mortgage Loan purchased
by the Master Servicer pursuant to Section 3.16(c) shall not be included in
either the numerator or the denominator for purposes of calculating the
Delinquency Percentage.

                  "Depositor": New Century Mortgage Securities, Inc., a Delaware
corporation, or its successor in interest.

                  "Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.

                  "Depository Institution": Any depository institution or trust
company, including the Trustee that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least P-1 by Moody's
and A-1+ by S&P.

                  "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

                                      -11-

<PAGE>

securities deposited with the Depository.

                  "Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b), which shall be
entitled "Deutsche Bank National Trust Company, as Trustee, in trust for the
registered holders of New Century Mortgage Securities, Inc., New Century Home
Equity Loan Trust, Series 2003-5, Asset Backed Pass-Through Certificates." The
Distribution Account must be an Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in November 2003.

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

                                      -12-

<PAGE>

                  "Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month immediately preceding the month
in which such Distribution Date occurs and ending on the related Due Date.

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a segregated,
non-interest bearing trust account or accounts maintained with the corporate
trust department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity. Eligible Accounts may bear interest.

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

                  "Estate in Real Property": A fee simple estate in a parcel of
land.

                  "Excess Overcollateralized Amount": With respect to the Class
A Certificates, the Mezzanine Certificates and the Class B Certificates and any
Distribution Date, the excess, if any, of (i) the Overcollateralized Amount for
such Distribution Date (calculated for this purpose only after assuming that
100% of the Principal Remittance Amount on such Distribution Date has been
distributed) over (ii) the Overcollateralization Target Amount for such
Distribution Date.

                  "Expense Adjusted Maximum Mortgage Rate": With respect to any
Group II Mortgage Loan (or the related REO Property), as of any date of
determination, a per annum rate of interest equal to the applicable Maximum
Mortgage Rate thereon as of the close of business on the first day of the
calendar month preceding the month in which the Distribution Date occurs minus
the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee Rate.

                  "Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Mortgage Rate thereon as of the close
of business on the first day of the calendar month preceding the month in which
the Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii)
the Servicing Fee Rate.

                  "Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee or any director, officer, employee or agent of the Trustee from
the Trust Fund pursuant to Section 8.05 or Section 10.01(c), any amounts payable
from the Distribution Account in respect of taxes pursuant to Section
10.01(g)(iii) and any costs incurred by the Trustee endorsing any Mortgage Notes
delivered in blank under Section 2.01 or recording the Assignments pursuant to
Section 2.01 (to the extent the Seller is unable to pay such costs).

                  "Fannie Mae": Fannie Mae, formally known as the Federal
National Mortgage Association, or any successor thereto.

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

                  "Final Stated Maturity Date": The Distribution Date in
November 2033.

                                      -13-

<PAGE>

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller, the Depositor or the Master Servicer pursuant to or as
contemplated by Section 2.03, Section 3.16(c) or Section 9.01), a determination
made by the Master Servicer that all Insurance Proceeds, Liquidation Proceeds
and other payments or recoveries which the Master Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Master Servicer shall maintain records, prepared by a
Servicing Officer, of each Final Recovery Determination made thereby.

                  "Fixed Rate Certificates": The Class A-I-2 Certificates, the
Class A-I-2A Certificates, the Class A-I-3 Certificates, the Class A-I-4
Certificates, the Class A-I-5 Certificates, the Class A-I-6 Certificates, the
Class A-I-6A Certificates, the Class A-I-7 Certificates, the Mezzanine
Certificates and the Class B Certificates.

                  "Floating Rate Certificates": The Class A-I-1 Certificates and
the Class A-II Certificates.

                  "Formula Rate": For any Distribution Date and the Class A-I-1
Certificates, One- Month LIBOR plus the related Certificate Margin. For any
Distribution Date and the Class A-II Certificates, the lesser of (i) One-Month
LIBOR plus the related Certificate Margin and (ii) the Maximum Cap Rate.

                  "Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.

                  "Gross Margin": With respect to each Group II Mortgage Loan,
the fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Group II Mortgage
Loan.

                  "Group I Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the Group I Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

                  "Group I Certificates": The Class A-I-1 Certificates, the
Class A-I-2 Certificates, the Class A-I-2A Certificates, the Class A-I-3
Certificates, the Class A-I-4 Certificates, the Class A-I-5 Certificates, the
Class A-I-6 Certificates, the Class A-I-6A Certificates and the Class A-I-7
Certificates.

                  "Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Distribution Amount for such
Distribution Date allocable to interest on the Group I Mortgage Loans. With
respect to the first Distribution Date, the Group I Interest Remittance Amount
will include $1,287.31 deposited on the Closing Date pursuant to Section
3.10(g).

                                       14
<PAGE>

                  "Group I Mortgage Loan": Each of the Mortgage Loans identified
in the Mortgage Loan Schedule as having a Mortgage Rate that is fixed for the
life of the Mortgage Loan.

                  "Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
on the Group I Mortgage Loans due during the related Due Period, whether or not
received on or prior to the related Determination Date; (ii) the Stated
Principal Balance of any Group I Mortgage Loan that was purchased during the
related Prepayment Period pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 9.01 and the amount of any shortfall deposited in the
Collection Account in connection with the substitution of a Deleted Mortgage
Loan in Loan Group I pursuant to Section 2.03 during the related Prepayment
Period; (iii) the principal portion of all other unscheduled collections
(including, without limitation, Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds and REO Principal Amortization) received during the related
Prepayment Period on the Group I Mortgage Loans, net of any portion thereof that
represents a recovery of principal for which an advance was made by the Master
Servicer pursuant to Section 4.03 in respect of a preceding Distribution Date;
and (iv) the Group I Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date MINUS (v) the
Group I Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date. With respect to the first
Distribution Date, the Group I Principal Distribution Amount will include
$252,703.01 deposited on the Closing Date pursuant to Section 3.10(g).

                  "Group I Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts set forth in clauses (i) through (iii)
of the definition of Group I Principal Distribution Amount.

                  "Group II Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the Group II Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.

                  "Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Distribution Amount for such
Distribution Date allocable to interest on the Group II Mortgage Loans. With
respect to the first Distribution Date, the Group II Interest Remittance Amount
will include $87.65 deposited on the Closing Date pursuant to Section 3.10(g).

                  "Group II Mortgage Loan": Each of the Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to adjustment.

                  "Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
on the Group II Mortgage Loans due during the related Due Period, whether or not
received on or prior to the related Determination Date; (ii) the Stated
Principal Balance of any Group II Mortgage Loan that was purchased during the
related Prepayment Period pursuant to or as contemplated by Section 2.03,
Section 3.16(c) or Section 9.01 and the amount of any shortfall deposited in the
Collection Account in connection with the substitution of a Deleted Mortgage
Loan in Loan Group II pursuant to Section 2.03 during the related Prepayment
Period; (iii) the principal portion of all other unscheduled collections
(including, without limitation, Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds and REO Principal

                                      -15-

<PAGE>

Amortization) received during the related Prepayment Period on the Group II
Mortgage Loans, net of any portion thereof that represents a recovery of
principal for which an advance was made by the Master Servicer pursuant to
Section 4.03 in respect of a preceding Distribution Date; and (iv) the Group II
Allocation Percentage of the amount of any Overcollateralization Increase Amount
for such Distribution Date MINUS (v) the Group II Allocation Percentage of the
amount of any Overcollateralization Reduction Amount for such Distribution Date.
With respect to the first Distribution Date, the Group II Principal Distribution
Amount will include $18,635.72 deposited on the Closing Date pursuant to Section
3.10(g).

                  "Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts set forth in clauses (i) through (iii)
of the definition of Group II Principal Distribution Amount.

                  "Indemnification Agreement": The Indemnification Agreement,
dated October 17, 2003, between the Certificate Insurer and Bear, Stearns & Co.
Inc.

                  "Indenture": An indenture relating to the issuance of notes
backed by all or a portion of the Class CE Certificates, the Class P
Certificates and/or the Residual Certificates.

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer and their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the Depositor, the
Master Servicer or any Affiliate thereof, and (c) is not connected with the
Depositor, the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Master Servicer or any Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any class of securities issued
by the Depositor, the Master Servicer or any Affiliate thereof, as the case may
be.

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I were a
real estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm's length, all within the
meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person
(including the Master Servicer) if the Trustee and the Certificate Insurer has
received an Opinion of Counsel to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code (determined
without regard to the exception applicable for purposes of Section 860D(a) of
the Code), or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.

                  "Index": With respect to each Group II Mortgage Loan and each
related Adjustment Date, the average of the interbank offered rates for
six-month or one-month United States dollar

                                      -16-

<PAGE>

deposits in the London market as published in THE WALL STREET JOURNAL and as
most recently available either (i) as of the first business day 45 days prior to
such Adjustment Date or (ii) as of the first business day of the month preceding
the month of such Adjustment Date, as specified in the related Mortgage Note.

                  "Insurance Account": The account or accounts created and
maintained pursuant to Section 4.08, which shall be entitled "Deutsche Bank
National Trust Company, as Trustee, in trust for the registered holders of New
Century Mortgage Securities, Inc., New Century Home Equity Loan Trust, Series
2003-5, Asset Backed Pass-Through Certificates." The Insurance Account must be
an Eligible Account.

                  "Insurance Agreement": The Insurance and Indemnity Agreement,
dated as of October 17, 2003, among the Certificate Insurer, the Trustee, the
Master Servicer and the Originator, the Seller and the Depositor.

                  "Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, subject to the terms and conditions of the related Mortgage Note and
Mortgage.

                  "Insured Amount": With respect to any Distribution Date, the
Deficiency Amount for such Distribution Date.

                  "Insured Certificates": The Class A-I-2A Certificates and the
Class A-I-6A Certificates.

                  "Interest Accrual Period": With respect to any Distribution
Date and the Floating Rate Certificates, the period commencing on the
Distribution Date of the month immediately preceding the month in which such
Distribution Date occurs (or, in the case of the first Distribution Date,
commencing on the Closing Date) and ending on the day preceding such
Distribution Date. With respect to any Distribution Date and the Fixed Rate
Certificates, the Class CE Certificates and the REMIC I Regular Interests, the
one-month period ending on the last day of the calendar month preceding the
month in which such Distribution Date occurs.

                  "Interest Carry Forward Amount": With respect to any
Distribution Date and the Class A Certificates, the Mezzanine Certificates or
the Class B Certificates, the sum of (i) the amount, if any, by which (a) the
Interest Distribution Amount for such Class of Certificates as of the
immediately preceding Distribution Date exceeded (b) the actual amount
distributed on such Class of Certificates in respect of interest on such
immediately preceding Distribution Date, (ii) the amount of any Interest Carry
Forward Amount for such Class of Certificates remaining unpaid from the previous
Distribution Date and (iii) accrued interest on the sum of (i) and (ii) above
calculated at the related Pass-Through Rate for the most recently ended Interest
Accrual Period.

                  "Interest Determination Date": With respect to the Floating
Rate Certificates, REMIC I Regular Interest I-LTA1 and REMIC I Regular Interest
I-LTA8, and any Interest Accrual Period

                                      -17-

<PAGE>

therefor, the second London Business Day preceding the commencement of such
Interest Accrual Period.

                  "Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificates, any Mezzanine Certificates, any
Class B Certificates and any Class CE Certificates, the aggregate Accrued
Certificate Interest on the Certificates of such Class for such Distribution
Date.

                  "Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.

                  "Late Payment Rate": As defined in the Insurance Agreement.

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 9.01.

                  "Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Master Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.

                  "Loan Group": Loan Group I or Loan Group II, as the context
requires.

                  "Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.

                  "Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.

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

                  "Lockout Certificate Percentage": With respect to the Class
A-I-7 Certificates and

                                      -18-

<PAGE>

any Distribution Date, the percentage equal to the Certificate Principal Balance
of the Class A-I-7 Certificates immediately prior to such Distribution Date
divided by the aggregate Certificate Principal Balance of the Group I
Certificates immediately prior to such Distribution Date.

                  "Lockout Distribution Percentage": With respect to the Class
A-I-7 Certificates and any Distribution Date, the indicated percentage of the
Lockout Certificate Percentage for such Distribution Date:

      DISTRIBUTION DATE OCCURRING IN               PERCENTAGE
      ------------------------------               ----------
November 2003 through October 2006                     0%
November 2006 through October 2008                     45%
November 2008 through October 2009                     80%
November 2009 through October 2010                    100%
November 2010 and thereafter                          300%

                  "London Business Day": Any day on which banks in the City of
London and New York are open and conducting transactions in United States
dollars.

                  "Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I- LTA2A, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular
Interest I-LTA5, REMIC I Regular Interest I-LTA6, REMIC I Regular Interest
I-LTA6A, REMIC I Regular Interest I-LTA7, REMIC I Regular Interest I-LTA8, REMIC
I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTB and REMIC I Regular Interest I-LTZZ, with
the rate on each such REMIC I Regular Interest subject to a cap equal to the
related Pass-Through Rate, as applicable, for the purpose of this calculation
for such Distribution Date and with the rate on REMIC I Regular Interest I-LTZZ
subject to a cap of zero for the purpose of this calculation; provided, however,
with respect to REMIC I Regular Interest I-LTA1 and REMIC I Regular Interest
I-LTA8, the cap shall be multiplied by a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed in the related
Interest Accrual Period.

                  "Master Servicer": New Century Mortgage Corporation, or any
successor master servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.

                  "Master Servicer Event of Default": One or more of the events
described in Section 7.01.

                  "Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer in respect of any waived Prepayment
Charges pursuant to Section 2.05 or Section 3.01.

                  "Master Servicer Remittance Date": With respect to any
Distribution Date, by 1:00 p.m. New York time on the Business Day preceding the
related Distribution Date.

                                      -19-

<PAGE>

                  "Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds exceeds the applicable percentages set forth
below with respect to such Distribution Date:

       DISTRIBUTION DATE OCCURRING IN              PERCENTAGE
       ------------------------------              ----------
November 2006 through October 2007                    2.00%
November 2007 through October 2008                    3.35%
November 2008 through October 2009                    4.75%
November 2009 through October 2010                    5.25%
November 2010 and thereafter                          5.50%

                  "Maximum Cap Rate": For any Distribution Date with respect to
the Class A-II Certificates, a per annum rate equal to the product of (x) the
weighted average of the Expense Adjusted Maximum Mortgage Rates of the Group II
Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs and (y) a fraction, the numerator of which is 30 and the denominator
of which is the actual number of days elapsed in the related Interest Accrual
Period.

                  "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralized Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA2A, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest
I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I Regular Interest I-LTA6, REMIC
I Regular Interest I-LTA6A, REMIC I Regular Interest I-LTA7, REMIC I Regular
Interest I-LTA8, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5 and REMIC I Regular Interest I-LTB for such
Distribution Date, with the rate on each of REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTA2A, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular
Interest I-LTA5, REMIC I Regular Interest I-LTA6, REMIC I Regular Interest
I-LTA6A, REMIC I Regular Interest I-LTA7, REMIC I Regular Interest I-LTA8, REMIC
I Regular Interest I- LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5 and REMIC I Regular Interest I-LTB, subject to a cap equal to the related
Pass-Through Rate, as applicable; provided, however, the cap for REMIC I Regular
Interest I-LTA1 and REMIC I Regular Interest I-LTA8 shall be multiplied by a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period.

                  "Maximum Mortgage Rate": With respect to each Group II
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.

                                      -20-
<PAGE>

                  "Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M- 3 Certificate, Class M-4 Certificate or Class M-5
Certificate.

                  "Minimum Mortgage Rate": With respect to each Group II
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07 and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

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

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

                  "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 Loan": Each mortgage loan transferred and assigned
to the Trustee and delivered to the Trustee pursuant to Section 2.01 or Section
2.03(b) of this Agreement, as held from time to time as a part of the Trust
Fund, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.

                  "Mortgage Loan Purchase Agreement": The agreement between the
Seller and the Depositor, regarding the sale of the Mortgage Loans by the Seller
to the Depositor, substantially in the form of Exhibit D annexed hereto.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Schedule 1.
The Mortgage Loan Schedule shall set forth the following information with
respect to each Mortgage Loan:

                  (i) the Mortgage Loan identifying number;

                  (ii) [reserved];

                  (iii) the state and zip code of the Mortgaged Property;

                  (iv) a code indicating whether the Mortgaged Property is
owner-occupied;

                  (v) the type of Residential Dwelling constituting the
Mortgaged Property;

                                      -21-
<PAGE>

                  (vi) the original months to maturity;

                  (vii) the stated remaining months to maturity from the Cut-off
         Date based on the original amortization schedule;

                  (viii) the Loan-to-Value Ratio at origination;

                  (ix) the Mortgage Rate in effect immediately following the
         Cut-off Date;

                  (x) (A) the date on which the first Monthly Payment was due on
         the Mortgage Loan and (B) if such date is not consistent with the Due
         Date currently in effect, such Due Date;

                  (xi) the stated maturity date;

                  (xii) the amount of the Monthly Payment at origination;

                  (xiii) the amount of the Monthly Payment due on the first Due
         Date after the Cut- off Date;

                  (xiv) the last Due Date on which a Monthly Payment was
         actually applied to the unpaid Stated Principal Balance;

                  (xv) the original principal amount of the Mortgage Loan;

                  (xvi) the Stated Principal Balance of the Mortgage Loan as of
         the close of business on the Cut-off Date;

                  (xvii) with respect to each Group II Mortgage Loan, the
         Adjustment Dates;

                  (xviii) with respect to each Group II Mortgage Loan, the Gross
         Margin;

                  (xix) a code indicating the purpose of the Mortgage Loan
         (i.e., purchase financing, Rate/Term Refinancing, Cash-Out
         Refinancing);

                  (xx) with respect to each Group II Mortgage Loan, the Maximum
         Mortgage Rate;

                  (xxi) with respect to each Group II Mortgage Loan, the Minimum
         Mortgage Rate;

                  (xxii) the Mortgage Rate at origination;

                  (xxiii) with respect to each Group II Mortgage Loan, the
         Periodic Rate Cap and the maximum first Adjustment Date Mortgage Rate
         adjustment;

                  (xxiv) a code indicating the documentation program (i.e., Full
         Documentation,

                                      -22-
<PAGE>

         Limited Documentation, Stated Income Documentation);

                  (xxv) the first Adjustment Date immediately following the
         origination date;

                  (xxvi) the risk grade;

                  (xxvii) the Value of the Mortgaged Property;

                  (xxviii) the sale price of the Mortgaged Property, if
         applicable;

                  (xxix) the actual unpaid principal balance of the Mortgage
         Loan as of the Cut-off Date;

                  (xxx) the type and term of the related Prepayment Charge;

                  (xxxi) the rounding code (i.e., nearest 0.125%, next highest
         0.125%);

                  (xxxii) the program code; and

                  (xxxiii) the total amount of points and fees charged such
         Mortgage Loan.

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current Stated Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut- off Date shall refer to the related Cut-off
Date for such Mortgage Loan, determined in accordance with the definition of
Cut-off Date herein.

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

                  "Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 and existing from time to time thereafter, and any REO Properties
acquired in respect thereof.

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) with
respect to each Group I Mortgage Loan shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately
following the Cut-off Date and (ii) with respect to the Group II Mortgage Loans,
(A) as of any date of determination until the first Adjustment Date following
the Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as
the Mortgage Rate in effect immediately following the Cut-off Date and (B) as of
any date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded as provided in the Mortgage
Note, of the Index, as most recently available as of a date prior to the
Adjustment Date as set forth

                                      -23-
<PAGE>

in the related Mortgage Note, plus the related Gross Margin; provided that the
Mortgage Rate on such Group II Mortgage Loan on any Adjustment Date shall never
be more than the lesser of (i) the sum of the Mortgage Rate in effect
immediately prior to the Adjustment Date plus the related Periodic Rate Cap, if
any, and (ii) the related Maximum Mortgage Rate, and shall never be less than
the greater of (i) the Mortgage Rate in effect immediately prior to the
Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related Minimum
Mortgage Rate. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance with
the immediately preceding sentence as of the date such Mortgage Loan became an
REO Property.

                  "Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.

                  "Mortgagor": The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Senior Interest Distribution Amount payable to the holders of the Class
A Certificates and the Interest Distribution Amount payable to the holders of
the Mezzanine Certificates and the Class B Certificates, (B) any amounts paid to
the Certificate Insurer from the Group I Interest Remittance Amount and/or the
Group II Interest Remittance Amount and (C) the Principal Remittance Amount.

                  "Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.

                  "Net WAC Pass-Through Rate": For any Distribution Date with
respect to the Class A-I-1 Certificates, a per annum rate equal to the product
of (x) the weighted average of the Expense Adjusted Mortgage Rates of the Group
I Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs less the rate at which the premium payable to the Certificate
Insurer is calculated multiplied by a fraction the numerator of which is the
aggregate Certificate Principal Balance of the Insured Certificates immediately
prior to such Distribution Date and the denominator of which is the outstanding
Stated Principal Balance of the Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date and (y) a fraction, the numerator
of which is 30 and the denominator of which is the actual number of days elapsed
in the related Interest Accrual Period.

                  For any Distribution Date with respect to the Group I
Certificates (other than the Class A-I-1 Certificates), a per annum rate equal
to the weighted average of the Expense Adjusted Mortgage Rates of the Group I
Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs less the rate at which the premium payable to the Certificate
Insurer is calculated multiplied by a fraction the numerator of which is the
aggregate Certificate Principal Balance of the Insured Certificates immediately
prior to such Distribution Date and the denominator of which is the

                                      -24-
<PAGE>

outstanding Stated Principal Balance of the Mortgage Loans as of the first day
of the month preceding the month of such Distribution Date.

                  For federal income tax purposes, the equivalent of the
foregoing shall be expressed as a per annum rate equal to the weighted average
of the REMIC I Remittance Rate on REMIC I Regular Interest I-LT1GRP, weighted on
the basis of the Uncertificated Balance of such REMIC I Regular Interest.

                  For any Distribution Date with respect to the Class A-II
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Mortgage Rates of the Group II Mortgage Loans, weighted
based on their Stated Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period.

                  For federal income tax purposes, the equivalent of the
foregoing shall be expressed as a per annum rate equal to the weighted average
of the REMIC I Remittance Rate on REMIC I Regular Interest I-LT2GRP, weighted on
the basis of the Uncertificated Balance of such REMIC I Regular Interest.

                  For any Distribution Date with respect to the Mezzanine
Certificates and the Class B Certificates, a per annum rate equal to the
weighted average of the Expense Adjusted Mortgage Rates of the Mortgage Loans,
weighted based on their Stated Principal Balances as of the first day of the
calendar month preceding the month in which the Distribution Date occurs,
weighted in proportion to the results of subtracting from the aggregate Stated
Principal Balance of each Loan Group the Certificate Principal Balance of the
related Class A Certificates, less the rate at which the premium payable to the
Certificate Insurer is calculated multiplied by a fraction the numerator of
which is the aggregate Certificate Principal Balance of the Insured Certificates
immediately prior to such Distribution Date and the denominator of which is the
outstanding Stated Principal Balance of the Mortgage Loans as of the first day
of the month preceding the month of such Distribution Date. For federal income
tax purposes, the equivalent of the foregoing shall be expressed as a per annum
rate equal to the weighted average of the REMIC I Remittance Rates on the REMIC
I Regular Interests (other than REMIC I Regular Interest I-LT1GRP and REMIC I
Regular Interest I-LT2GRP), weighted on the basis of the Uncertificated Balance
of each such REMIC I Regular Interest.

                  "Net WAC Rate Carryover Reserve Account": The account
established and maintained pursuant to Section 3.28.

                  "Net WAC Rate Carryover Amount": With respect to any Class of
Class A Certificates, any Class of Mezzanine Certificates and the Class B
Certificates and any Distribution Date, the sum of (A) the positive excess of
(i) the amount of interest accrued on such Class of Certificates for such
Distribution Date at the related fixed rate or Formula Rate, as applicable, for
such Distribution Date over (ii) the amount of interest accrued on such Class of
Certificates at the related Net WAC Pass-Through Rate for such Distribution Date
and (B) the related Net WAC Rate Carryover Amount for the previous Distribution
Date not previously distributed, together with interest thereon at a rate equal
to the related fixed rate or Formula Rate, as applicable, for such Class

                                      -25-
<PAGE>

of Certificates for such Distribution Date.

                  "New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.

                  "Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage
Loan or REO Property as provided herein.

                  "Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, will
not or, in the case of a proposed Servicing Advance, would not be ultimately
recoverable from related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

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

                  "Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC I Regular
Interests for such Distribution Date.

                  "Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer, the
Originator, the Seller or the Depositor, as applicable.

                  "One-Month LIBOR": With respect to the Floating Rate
Certificates and for purposes of the Formula Rate, REMIC I Regular Interest
I-LTA1 and REMIC I Regular Interest I-LTA8, and any Interest Accrual Period
therefor, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such Interest Determination Date; provided that if such rate does not
appear on Telerate Page 3750, the rate for such date will be determined on the
basis of the offered rates of the Reference Banks for one-month U.S. dollar
deposits, as of 11:00 a.m. (London time) on such Interest Determination Date. In
such event, the Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If on such Interest
Determination Date, two or more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic
mean of such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Trustee, after consultation with the

                                      -26-
<PAGE>

Depositor, shall select an alternative comparable index (over which the Trustee
has no control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.

                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master
Servicer, acceptable to the Trustee and the Certificate Insurer, except that any
opinion of counsel relating to (a) the qualification of any Trust REMIC as a
REMIC or (b) compliance with the REMIC Provisions, must be an opinion of
Independent counsel.

                  "Original Mortgage Loan": Any of the Mortgage Loans included
in REMIC I as of the Closing Date.

                  "Originator": New Century Mortgage Corporation, or its
successor in interest.

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Target
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date (calculated for this purpose only
after assuming that 100% of the Principal Remittance Amount on such distribution
date has been distributed).

                  "Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date (calculated for this purpose only after assuming
that 100% of the Principal Remittance Amount on such distribution date has been
distributed) and (b) the amount of Accrued Certificate Interest distributable on
the Class CE Certificates on such Distribution Date as reduced by Realized
Losses allocated thereto with respect to such Distribution Date pursuant to
Section 4.04.

                  "Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Principal Remittance Amount.

                  "Overcollateralization Target Amount": With respect to any
Distribution Date (a) prior to the Stepdown Date, an amount equal to 1.00% of
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date; (b) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (i) 2.00% of the then current aggregate outstanding
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period and (ii) $5,500,000; and (c) on or after the Stepdown Date and if a
Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date.

                  "Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties as of the last day of the related Due Period
over (b) the sum of the aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
P Certificates after giving effect to distributions to be made on such
Distribution Date.

                                      -27-
<PAGE>

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

                  "Pass-Through Rate": With respect to the Floating Rate
Certificates and any Distribution Date, a rate per annum equal to the lesser of
(i) the related Formula Rate for such Distribution Date and (ii) the related Net
WAC Pass-Through Rate for such Distribution Date.

                  With respect to the Fixed Rate Certificates, the lesser of (i)
the fixed rate per annum set forth below and (ii) the related Net WAC
Pass-Through Rate for such Distribution Date:

      Class                    (1)                            (2)
      -----                    ---                            ---
      A-I-2             2.940% per annum               2.940% per annum
     A-I-2A             2.860% per annum               2.860% per annum
      A-I-3             3.560% per annum               3.560% per annum
      A-I-4             4.760% per annum               4.760% per annum
      A-I-5             5.500% per annum               5.500% per annum
      A-I-6             5.500% per annum               6.000% per annum
     A-I-6A             5.500% per annum               6.000% per annum
      A-I-7             5.150% per annum               5.150% per annum
       M-1              5.410% per annum               5.910% per annum
       M-2              5.500% per annum               6.000% per annum
       M-3              5.500% per annum               6.000% per annum
       M-4              5.500% per annum               6.000% per annum
       M-5              5.500% per annum               6.000% per annum
        B               5.500% per annum               6.000% per annum
_______________
(1)  With respect to each Distribution Date through and including the
     Distribution Date on which the aggregate Stated Principal Balance of the
     Mortgage Loans (and properties acquired in respect thereof) remaining in
     the Trust Fund is reduced to less than 10% of the aggregate Stated
     Principal Balance of the Mortgage Loans as of the Cut-off Date.
(2)  With respect to each Distribution Date thereafter.

                  With respect to the Class CE Certificates and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (S) below, and the denominator of which is the Uncertificated Balance of
the REMIC I Regular Interests. For purposes of calculating the Pass- Through
Rate for the Class CE Certificates, the numerator is equal to the sum of the
following components:

                  (A) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAA minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAA;

                  (B) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA1;

                                      -28-
<PAGE>

                  (C) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA2;

                  (D) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA2A minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA2A;

                  (E) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA3;

                  (F) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA4 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA4;

                  (G) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA5 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA5;

                  (H) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA6 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA6;

                  (I) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA6A minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA6A;

                  (J) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA7 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA7;

                  (K) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA8 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA8;

                  (L) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM1;

                  (M) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM2;

                  (N) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I

                                      -29-
<PAGE>

         Regular Interest I-LTM3;

                  (O) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM4 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM4;

                  (P) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM5 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM5;

                  (Q) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTB minus the Rate, applied to an amount equal to the Uncertificated
         Balance of REMIC I Regular Interest I-LTB;

                  (R) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTZZ minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTZZ; and

                  (S) 100% of the interest on REMIC I Regular Interest I-LTP.

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
or Notional Amount represented by such Certificate and the denominator of which
is the aggregate initial Certificate Principal Balance or Notional Amount of all
of the Certificates of such Class. The Class A Certificates, the Mezzanine
Certificates and the Class B Certificates are issuable only in minimum
Percentage Interests corresponding to minimum initial Certificate Principal
Balances of $25,000 and integral multiples of $1.00 in excess thereof. The Class
P Certificates are issuable only in Percentage Interests corresponding to
initial Certificate Principal Balances of $20 and integral multiples thereof.
The Class CE Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $25,000 and
integral multiples of $1.00 in excess thereof; provided, however, that a single
Certificate of each such Class of Certificates may be issued having a Percentage
Interest corresponding to the remainder of the aggregate initial Certificate
Principal Balance or Notional Amount of such Class or to an otherwise authorized
denomination for such Class plus such remainder. With respect to any Residual
Certificate, the undivided percentage ownership in such Class evidenced by such
Certificate, as set forth on the face of such Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and multiples thereof.

                  "Periodic Rate Cap": With respect to each Group II Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the Mortgage Rate
for such Mortgage Loan may increase or decrease (without regard to the Maximum
Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from the
Mortgage Rate in effect immediately prior to such Adjustment Date.

                  "Permitted Investments": Any one or more of the following
obligations or securities

                                      -30-
<PAGE>

acquired at a purchase price of not greater than par, regardless of whether
issued by the Depositor, the Master Servicer, the Trustee or any of their
respective Affiliates:

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

                  (ii) demand and time deposits in, certificates of deposit of,
         or bankers' acceptances issued by, any Depository Institution;

                  (iii) repurchase obligations with respect to any security
         described in clause (i) above entered into with a Depository
         Institution (acting as principal);

                  (iv) securities bearing interest or sold at a discount that
         are issued by any corporation incorporated under the laws of the United
         States of America or any state thereof and that are rated by each
         Rating Agency that rates such securities in its highest long-term
         unsecured rating categories at the time of such investment or
         contractual commitment providing for such investment;

                  (v) commercial paper (including both non-interest-bearing
         discount obligations and interest-bearing obligations payable on demand
         or on a specified date not more than 30 days after the date of
         acquisition thereof) that is rated by each Rating Agency that rates
         such securities in its highest short-term unsecured debt rating
         available at the time of such investment;

                  (vi) units of money market funds that have been rated "AAAm"
         or "AAAm-G" by S&P; and

                  (viii) if previously confirmed in writing to the Trustee, any
         other demand, money market or time deposit, or any other obligation,
         security or investment, as may be acceptable to the Rating Agencies as
         a permitted investment of funds backing securities having ratings
         equivalent to its highest initial rating of the Class A Certificates;

provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.

                  "Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.

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

                                      -31-
<PAGE>

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date pursuant
to Section 4.03.

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.

                  "Policy": The Certificate Guaranty Insurance Policy No.
AB0703BE issued by the Certificate Insurer in respect of the Insured
Certificates, a copy of which is attached hereto as Exhibit B.

                  "Prepayment Assumption": As set forth in the Prospectus
Supplement.

                  "Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, penalty or charge payable by a Mortgagor in connection
with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the
related Mortgage Note (other than any Master Servicer Prepayment Charge Payment
Amount).

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges on the Mortgage Loans included in REMIC I on such date,
attached hereto as Schedule 2 (including the Prepayment Charge Summary attached
thereto). The Prepayment Charge Schedule shall set forth the following
information with respect to each related Mortgage Loan:

                  (i)      the Mortgage Loan identifying number;

                  (ii)     a code indicating the type of Prepayment Charge;

                  (iii)    the state of origination of the related Mortgage
                           Loan;

                  (iv)     the date on which the first monthly payment was due
                           on the related Mortgage Loan;

                  (v)      the term of the related Mortgage Loan; and

                  (vi)     the principal balance of the related Mortgage Loan as
                           of the Cut-off Date.

                  The Prepayment Charge Schedule shall be amended from time to
time by the Depositor in accordance with the provisions of this Agreement.

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in full or in part that was applied
by the Master Servicer to reduce the outstanding principal balance of such loan
on a date preceding the Due Date in the succeeding Prepayment Period, an amount
equal to one month's interest at the applicable Net Mortgage Rate less any
payments made by the Mortgagor. The obligations of the Master Servicer in
respect of any Prepayment Interest Shortfall

                                      -32-
<PAGE>

are set forth in Section 3.24.

                  "Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the calendar month in which such Distribution Date
occurs.

                  "Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.

                  "Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) the Group I Principal Remittance Amount and
(ii) the Group II Principal Remittance Amount.

                  "Prospectus Supplement": That certain Prospectus Supplement
dated October 16, 2003 relating to the public offering of the Class A
Certificates and the Mezzanine Certificates.

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c), Section 3.16(e) or Section 9.01, and as confirmed by an Officers'
Certificate from the Master Servicer to the Trustee, an amount equal to the sum
of (i) 100% of the Stated Principal Balance thereof as of the date of purchase
(or such other price as provided in Section 9.01), (ii) in the case of (x) a
Mortgage Loan, accrued interest on such Stated Principal Balance at the
applicable Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Master Servicer, which payment or advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected and (y) an REO Property, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor or an advance by the Master Servicer
through the end of the calendar month immediately preceding the calendar month
in which such REO Property was acquired, plus (2) REO Imputed Interest for such
REO Property for each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month in which such
purchase is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing Advances and P&I Advances (including
Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances) and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Section 3.11(a)(ix) and Section
3.16(b), and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the
Master Servicer, the Certificate Insurer or the Trustee in respect of the breach
or defect giving rise to the purchase obligation including any costs and damages
incurred by the Trust in connection with any violation by such loan of any
predatory or abusive lending law.

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution,

                                      -33-
<PAGE>

(i) have an outstanding principal balance, after application of all scheduled
payments of principal and interest due during or prior to the month of
substitution, not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Rate not less than (and not more than
one percentage point in excess of) the Mortgage Rate of the Deleted Mortgage
Loan, (iii) with respect to any Group II Mortgage Loan, have a Maximum Mortgage
Rate not less than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv)
with respect to any Group II Mortgage Loan, have a Minimum Mortgage Rate not
less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) with
respect to any Group II Mortgage Loan, have a Gross Margin equal to the Gross
Margin of the Deleted Mortgage Loan, (vi) with respect to any Group II Mortgage
Loan, have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan and (xi) conform to each representation and warranty set forth in Section 6
of the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan.
In the event that one or more mortgage loans are substituted for one or more
Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Rates
described in clause (ii) hereof shall be determined on the basis of weighted
average Mortgage Rates, the terms described in clause (vii) hereof shall be
determined on the basis of weighted average remaining term to maturity, the
Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to
each such mortgage loan, the risk gradings described in clause (x) hereof shall
be satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (xi) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be.

                  "Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a nominal amount in excess of the existing
first mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and
to pay related closing costs.

                  "Rating Agency or Rating Agencies": Moody's and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor (and if
rating the Insured Certificates, consented to in writing by the Certificate
Insurer), notice of which designation shall be given to the Trustee and the
Master Servicer.

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery

                                      -34-
<PAGE>

Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the calendar
month in which such Final Recovery Determination was made, net of amounts that
are payable therefrom to the Master Servicer with respect to such Mortgage Loan
pursuant to Section 3.11(a)(iii).

                  With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(v) the aggregate of all P&I Advances and Servicing Advances (in the case of
Servicing Advances, without duplication of amounts netted out of the rental
income, Insurance Proceeds and Liquidation Proceeds described in clause (vi)
below) made by the Master Servicer in respect of such REO Property or the
related Mortgage Loan for which the Master Servicer has been or, in connection
with such Final Recovery Determination, will be reimbursed pursuant to Section
3.23 out of rental income, Insurance Proceeds and Liquidation Proceeds received
in respect of such REO Property, minus (vi) the total of all net rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of such REO
Property that has been, or in connection with such Final Recovery Determination,
will be transferred to the Distribution Account pursuant to Section 3.23.

                  With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.

                  With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected Monthly Payment.

                  "Record Date": With respect to each Distribution Date and any
Floating Rate Certificate, the Business Day immediately preceding such
Distribution Date. With respect to each

                                      -35-
<PAGE>

Distribution Date and any Fixed Rate Certificate, or any other Certificates,
including any Definitive Certificates, the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.

                  "Reference Banks": Deutsche Bank AG, Barclay's Bank PLC, The
Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Trustee,
after consultation with the Depositor, which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London and (ii) not controlling, under the
control of or under common control with the Depositor or any Affiliate thereof.

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

                  "Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class B Certificate, Class CE Certificate or Class P Certificate.

                  "Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.

                  "Reimbursement Amount": As to any Distribution Date, the sum
of (x) (i) all Insured Payments paid by the Certificate Insurer, but for which
the Certificate Insurer has not been reimbursed prior to such Distribution Date
pursuant to Section 4.01, plus (ii) interest accrued on such Insured Payments
not previously repaid, calculated at the Late Payment Rate from the date the
Trustee received the related Insured Payments or the date such Insured Payments
were made, and (y) without duplication (i) any amounts then due and owing to the
Certificate Insurer under the Insurance Agreement, as certified to the Trustee
by the Certificate Insurer plus (ii) interest on such amounts at the Late
Payment Rate.

                  "Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended or similar state laws.

                  "Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all

                                      -36-
<PAGE>

insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof; (iv) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby); and (v) the
Collection Account (other than any amounts representing any Master Servicer
Prepayment Charge Payment Amount), the Distribution Account (other than any
amounts representing any Master Servicer Prepayment Charge Payment Amount) and
any REO Account, and such assets that are deposited therein from time to time
and any investments thereof, together with any and all income, proceeds and
payments with respect thereto. Notwithstanding the foregoing, however, REMIC I
specifically excludes the Net WAC Rate Carryover Reserve Account, the Cap
Contracts, all payments and other collections of principal and interest due on
the Mortgage Loans on or before the Cut-off Date and all Prepayment Charges
payable in connection with Principal Prepayments made before the Cut-off Date.

                  "REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Interest Accrual Periods for the indicated
Regular Interests for such Distribution Date) equal to (a) the product of (i)
the aggregate Stated Principal Balance of the Group I Mortgage Loans and REO
Properties in Loan Group I then outstanding and (ii) the REMIC I Remittance Rate
for REMIC I Regular Interest I-LTAA minus the Marker Rate, divided by (b) 12.

                  "REMIC I Marker Allocation Percentage": 50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular Interest I- LTA2A, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest
I-LTA5, REMIC I Regular Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC
I Regular Interest I-LTA7, REMIC I Regular Interest I-LTA8, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTB and REMIC I Regular Interest I-LTZZ.

                  "REMIC I Overcollateralized Amount": With respect to any date
of determination, (i) 0.50% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2,
REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA3, REMIC I
Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I Regular
Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC I Regular Interest
I-LTA7, REMIC I Regular Interest I-LTA8, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTB
and REMIC I Regular Interest I-LTP, in each case as of such date of
determination.

                  "REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) the aggregate
Stated Principal Balance of the Group I Mortgage Loans and REO Properties in
Loan Group I then outstanding and (ii) 1 minus a fraction, the numerator of
which is two times the aggregate of the Uncertificated Balances of REMIC I
Regular Interest I-LTA1,REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA2A, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest
I-LTA4, REMIC I Regular Interest I-LTA5,

                                      -37-
<PAGE>

REMIC I Regular Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC I
Regular Interest I-LTA7, REMIC I Regular Interest I-LTA8, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5 and
REMIC I Regular Interest I-LTB and the denominator of which is the aggregate of
the Uncertificated Balances of REMIC I Regular Interest I-LTA1,REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest
I-LTA3, REMIC I Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC
I Regular Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC I Regular
Interest I-LTA7, REMIC I Regular Interest I-LTA8, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTB and REMIC I Regular Interest I-LTIZZ.

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

                  "REMIC I Regular Interest I-LTAA": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTAA
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA2A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in

                                      -38-
<PAGE>

the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA6": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA6
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA6A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA6A
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA7": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA7
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA8": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I.

                                      -39-
<PAGE>

REMIC I Regular Interest I-LTA8 shall accrue interest at the related REMIC I
Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTB": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTB
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                                      -40-
<PAGE>

                  "REMIC I Regular Interest I-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP
shall be entitled to any Prepayment Charges collected by the Master Servicer and
to a distribution of principal, subject to the terms and conditions hereof, in
an aggregate amount equal to its initial Uncertificated Balance as set forth in
the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTXX": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTXX
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTZZ": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTZZ
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT1SUB": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1SUB
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT1GRP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1GRP
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT2SUB": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2SUB
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LT2GRP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2GRP
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance

                                      -41-
<PAGE>

as set forth in the Preliminary Statement hereto.

                  "REMIC I Remittance Rate": With respect to REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I- LTA2A, REMIC I Regular Interest I-LTA3,
REMIC I Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I
Regular Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC I Regular
Interest I-LTA7, REMIC I Regular Interest I-LTA8, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTB, REMIC I Regular Interest I-LTZZ, REMIC I Regular Interest I-LTP,
REMIC I Regular Interest I-LT1SUB, REMIC I Regular Interest I-LT2SUB and REMIC I
Regular Interest I-LTXX, the weighted average of the Expense Adjusted Mortgage
Rates of the Mortgage Loans. With respect to REMIC I Regular Interest I-LT1GRP,
the weighted average of the Expense Adjusted Mortgage Rates of the Group I
Mortgage Loans. With respect to REMIC I Regular Interest I-LT2GRP, the weighted
average of the Expense Adjusted Mortgage Rates of the Group II Mortgage Loans.

                  "REMIC I Required Overcollateralized Amount": 0.50% of the
Overcollateralization Target Amount.

                  "REMIC I Sub WAC Allocation Percentage": 50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I- LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC
I Regular Interest I-LT2SUB, REMIC I Regular Interest I-LT2GRP and REMIC I
Regular Interest I-LTXX.

                  "REMIC I Subordinated Balance Ratio": The ratio among the
Uncertificated Balances of each REMIC I Regular Interest ending with the
designation "SUB,", equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the current Certificate
Principal Balance of the Class A Certificates in the related Loan Group.

                  "REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee for the benefit
of the Class R-II Interest pursuant to Section 2.08, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.

                  "REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.

                  "Remittance Report": A report in form and substance acceptable
to the Trustee on a magnetic disk or tape prepared by the Master Servicer
pursuant to Section 4.03 with such additions, deletions and modifications as
agreed to by the Trustee and the Master Servicer.

                  "Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real

                                      -42-
<PAGE>

property."

                  "REO Account": The account or accounts maintained, or caused
to be maintained, by the Master Servicer in respect of an REO Property pursuant
to Section 3.23.

                  "REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.

                  "REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.23(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and P&I Advances in respect of such REO Property or the
related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO
Property for such calendar month.

                  "REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.

                  "Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.

                  "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee, after consultation with the Depositor, are
quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (ii) in the event
that the Trustee can determine no such arithmetic mean, the lowest one- month
U.S. dollar lending rate which New York City banks selected by the Trustee,
after consultation with the Depositor, are quoting on such Interest
Determination Date to leading European banks.

                  "Residential Dwelling": Any one of the following: (i) an
attached, detached or semi- detached one-family dwelling, (ii) an attached,
detached or semi-detached two-to four-family dwelling, (iii) a one-family
dwelling unit in a Fannie Mae eligible condominium project, or (iv) an attached,
detached or semi-detached one-family dwelling in a planned unit development,
none of

                                      -43-
<PAGE>

which is a co-operative or mobile home (as defined in 42 United States Code,
Section 5402(6)).

                  "Residual Certificate": The Class R Certificates.

                  "Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.

                  "Responsible Officer": When used with respect to the Trustee,
any vice president, managing director, director, any assistant vice president,
the Secretary, any assistant secretary, the Treasurer, any assistant treasurer,
any associate, any trust officer or assistant trust officer or any other officer
of the Trustee having direct responsibility over this Agreement or otherwise
engaged in performing functions similar to those performed by any of the above
designated officers and, with respect to a particular matter, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.

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

                  "Seller": NC Capital Corporation, or its successor in
interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.

                  "Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date for the Class
A Certificates.

                  "Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.

                  "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including but not
limited to foreclosures, in respect of a particular Mortgage Loan, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its obligations under Section
3.01, Section 3.09, Section 3.14, Section 3.16 and Section 3.23. The Master
Servicer shall not be required to make any Nonrecoverable Servicing Advances.

                  "Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to the Servicing Fee Rate accrued for one
month (or in the event of any payment of interest which accompanies a Principal
Prepayment in full or in part made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month, calculated on the basis of a 360-day year consisting of twelve
30-day months. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

                                      -44-
<PAGE>

                  "Servicing Fee Rate": 0.35% per annum.

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

                  "Single Certificate": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual
Certificates), a hypothetical Certificate of such Class evidencing a Percentage
Interest for such Class corresponding to an initial Certificate Principal
Balance or Notional Amount of $1,000. With respect to the Class P Certificates
and the Residual Certificates, a hypothetical Certificate of such Class
evidencing a 100% Percentage Interest in such Class.

                  "Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 10.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the principal balance of such Mortgage Loan
as of the Cut-off Date, as shown in the Mortgage Loan Schedule, minus the sum of
(i) the principal portion of each Monthly Payment due on a Due Date subsequent
to the Cut- off Date, to the extent received from the Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01 on or before such
date of determination, (ii) all Principal Prepayments received after the Cut-off
Date, to the extent distributed pursuant to Section 4.01 on or before such date
of determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied
by the Master Servicer as recoveries of principal in accordance with the
provisions of Section 3.16, to the extent distributed pursuant to Section 4.01
on or before such date of determination, and (iv) any Realized Loss incurred
with respect thereto as a result of a Deficient Valuation made during or prior
to the Prepayment Period for the most recent Distribution Date coinciding with
or preceding such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds, if
any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 on or before such date of determination; and (b) as of any date of
determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such REO Property
would be distributed, zero.

                  "Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the

                                      -45-
<PAGE>

aggregate Certificate Principal Balance of the Class A Certificates has been
reduced to zero and (ii) the later to occur of (a) the Distribution Date
occurring in November 2006 and (b) the first Distribution Date on which the
Credit Enhancement Percentage (calculated for this purpose only after taking
into account distributions of principal on the Mortgage Loans but prior to any
distribution of the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount on the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 28.00%.

                  "Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.

                  "Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.

                  "Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.

                  "Substitution Shortfall Amount": As defined in Section
2.03(b).

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

                  "Telerate Page 3750": The display designated as page "3750" on
the Dow Jones Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).

                  "Termination Price": As defined in Section 9.01.

                  "Terminator": As defined in Section 9.01.

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

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

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

                                      -46-
<PAGE>

                  "Trigger Event": A Trigger Event is in effect with respect to
any Distribution Date on or after the Stepdown Date if:

                  (a) the Delinquency Percentage exceeds 57.00% of the then
current Credit Enhancement Percentage; or

                  (b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Due Period divided by aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds
the applicable percentages set forth below with respect to such Distribution
Date:

       DISTRIBUTION DATE OCCURRING IN              PERCENTAGE
       ------------------------------              ----------
November 2006 through October 2007                    1.00%
November 2007 through October 2008                    1.75%
November 2008 through October 2009                    2.50%
November 2009 through October 2010                    2.75%
November 2010 and thereafter                          3.00%

                  "Trust Fund": Collectively, all of the assets of the Trust
REMICs, and the other assets conveyed by the Depositor to the Trustee pursuant
to Section 2.01.

                  "Trust REMIC": Any of REMIC I or REMIC II.

                  "Trustee": Deutsche Bank National Trust Company, a national
banking association, or its successor in interest, or any successor trustee
appointed as herein.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal the Trustee Fee Rate accrued for one month on the aggregate
Stated Principal Balance of the Mortgage Loans and any REO Properties as of the
first day of the related Due Period (or, in the case of the initial Distribution
Date, as of the Cut-off Date), calculated on the basis of a 360-day year
consisting of twelve 30-day months.

                  "Trustee Fee Rate": 0.0021% per annum.

                  "Uncertificated Balance": The amount of any REMIC I Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be reduced by all distributions of principal
made on such REMIC I Regular Interest on such Distribution Date pursuant to
Section 4.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 4.04. The Uncertificated Balance of REMIC I Regular Interest I-LTZZ
shall be increased by interest deferrals as provided in Section 4.01(a)(1)(i).
The Uncertificated Balance of each REMIC I Regular Interest shall never be less
than zero.

                                      -47-
<PAGE>

                  "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of any REMIC
I Regular Interest shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest, shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.24
and (b) the aggregate amount of any Relief Act Interest Shortfall, if any
allocated, in each case, to such REMIC I Regular Interest pursuant to Section
1.02. In addition, Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest shall be reduced by Realized Losses, if
any, allocated to such REMIC I Regular Interest pursuant to Section 1.02 and
Section 4.04.

                  "Underwriter's Exemption": An individual exemption issued by
the United States Department of Labor, as Prohibited Transaction Exemption
("PTE"), 90-30, as amended, to Bear, Stearns & Co. Inc., for specific offerings
in which Bear, Stearns & Co. Inc. or any person directly or indirectly, through
one or more intermediaries, controlling, controlled by or under common control
with Bear, Stearns & Co. Inc. is an underwriter, placement agent or a manager or
co-manager of the underwriting syndicate or selling group where the trust and
the offered certificates meet specified conditions.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership (or other entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations) provided that, for purposes solely of the restrictions on
the transfer of Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate the income of
which from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trust. The term "United States"
shall have the meaning set forth in Section 7701 of the Code or successor
provisions.

                  "Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the Originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of Fannie Mae and Freddie
Mac and (b) the value thereof as determined by a review appraisal conducted by
the Originator in accordance with the Originator's underwriting guidelines, and
(ii) the

                                      -48-
<PAGE>

purchase price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan; provided, however, (A) in the case of a
Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the lesser of (1) the value determined by an appraisal made for the
Originator of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
Fannie Mae and Freddie Mac and (2) the value thereof as determined by a review
appraisal conducted by the Originator in accordance with the Originator's
underwriting guidelines, and (B) in the case of a Mortgage Loan originated in
connection with a "lease-option purchase," such value of the Mortgaged Property
is based on the lower of the value determined by an appraisal made for the
Originator of such Mortgage Loan at the time of origination or the sale price of
such Mortgaged Property if the "lease option purchase price" was set less than
12 months prior to origination, and is based on the value determined by an
appraisal made for the Originator of such Mortgage Loan at the time of
origination if the "lease option purchase price" was set 12 months or more prior
to origination.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. With respect to any date
of determination, 98% of all Voting Rights will be allocated among the Holders
of the Class A Certificates, the Mezzanine Certificates, the Class B
Certificates and the Class CE Certificates in proportion to the then outstanding
Certificate Principal Balances of their respective Certificates, 1% of all
Voting Rights will be allocated to the Holders of the Class P Certificates and
1% of all Voting Rights will be allocated among the Holders of the Residual
Certificates. The Voting Rights allocated to each Class of Certificates shall be
allocated among Holders of each such Class in accordance with their respective
Percentage Interests as of the most recent Record Date.

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

                  For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
CE Certificates for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls (to the extent not covered by payments by the
Master Servicer pursuant to Section 3.24) and any Relief Act Interest Shortfall
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, among the Class CE Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Notional Amount of each such Certificate
and, thereafter, among the Class A Certificates and the Mezzanine Certificates
on a PRO RATA basis based on, and to the extent of, one month's interest at the
then applicable respective Pass-Through Rate on the respective Certificate
Principal Balance or Notional Amount of each such Certificate and (2) the
aggregate amount of any Realized Losses and Net WAC Rate Carryover Amounts
incurred for any Distribution Date shall be allocated among the Class CE
Certificates on a PRO RATA basis based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the respective
Notional Amount of each such Certificate.

                  For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date:

                  (A) the REMIC I Marker Allocation Percentage of the aggregate
amount of any

                                      -49-
<PAGE>

Prepayment Interest Shortfalls (to the extent not covered by payments by the
Master Servicer pursuant to Section 3.24) and the REMIC I Marker Allocation
Percentage of the aggregate amount of any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, to Uncertificated Interest payable to REMIC I Regular Interest
I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate amount equal to
the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC I Regular Interest I- LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA3, REMIC
I Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I Regular
Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC I Regular Interest
I-LTA7, REMIC I Regular Interest I-LTA8, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTB
and REMIC I Regular Interest I-LTZZ PRO RATA based on, and to the extent of, one
month's interest at the then applicable respective REMIC I Remittance Rate on
the respective Uncertificated Balance of each such REMIC I Regular Interest; and

                  (B) the REMIC I Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24) and the REMIC I Sub
WAC Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to Uncertificated Interest payable to REMIC I Regular
Interest I-LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest
I-LT2SUB, REMIC I Regular Interest I-LT2GRP and REMIC I Regular Interest I-LTXX,
PRO RATA based on, and to the extent of, one month's interest at the then
applicable respective REMIC I Remittance Rate on the respective Uncertificated
Balance of each such REMIC I Regular Interest.

                                      -50-
<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of the Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse, for the benefit of the Certificateholders and the
Certificate Insurer, all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in and
to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreement, and all other assets
included or to be included in REMIC I. Such assignment includes all interest and
principal received by the Depositor or the Master Servicer on or with respect to
the Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee an executed copy of the Mortgage Loan Purchase Agreement. The
Depositor hereby directs the Trustee to enter into the Cap Contracts and the
Insurance Agreement.

                  In connection with such transfer and assignment, the
Depositor, does hereby deliver to, and deposit with the Trustee the following
documents or instruments with respect to each Mortgage Loan so transferred and
assigned (in each case, a "Mortgage File") :

                  (i) the original Mortgage Note, endorsed in blank or in the
         following form "Pay to the order of Deutsche Bank National Trust
         Company, as Trustee under the applicable agreement, without recourse,"
         with all prior and intervening endorsements showing a complete chain of
         endorsement from the originator to the Person so endorsing to the
         Trustee;

                  (ii) the original Mortgage with evidence of recording thereon,
         and the original recorded power of attorney, if the Mortgage was
         executed pursuant to a power of attorney, with evidence of recording
         thereon;

                  (iii) an original Assignment in blank;

                  (iv) the original recorded Assignment or Assignments showing a
         complete chain of assignment from the originator to the Person
         assigning the Mortgage to the Trustee as contemplated by the
         immediately preceding clause (iii);

                  (v) the original or copies of each assumption, modification or
         substitution agreement, if any; and

                  (vi) the original lender's title insurance policy or, if the
         original title policy has not been issued, the irrevocable commitment
         to issue the same.

                  With respect to a maximum of approximately 2.0% of the
Original Mortgage Loans, by outstanding principal balance of the Original
Mortgage Loans as of the Cut-off Date, if any

                                      -51-
<PAGE>

original Mortgage Note referred to in Section 2.01(i) above cannot be located,
the obligations of the Depositor to deliver such documents shall be deemed to be
satisfied upon delivery to the Trustee of a photocopy of such Mortgage Note, if
available, with a lost note affidavit substantially in the form of Exhibit I
attached hereto. If any of the original Mortgage Notes for which a lost note
affidavit was delivered to the Trustee is subsequently located, such original
Mortgage Note shall be delivered to the Trustee within three Business Days.

                  If any of the documents referred to in Sections 2.01(ii),
(iii) or (iv) above has, as of the Closing Date, been submitted for recording
but either (x) has not been returned from the applicable public recording office
or (y) has been lost or such public recording office has retained the original
of such document, the obligations of the Depositor to deliver such documents
shall be deemed to be satisfied upon (1) delivery to the Trustee of a copy of
each such document certified by the Originator in the case of (x) above or the
applicable public recording office in the case of (y) above to be a true and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Originator, delivery to the Trustee promptly upon
receipt thereof of either the original or a copy of such document certified by
the applicable public recording office to be a true and complete copy of the
original. Notice shall be provided to the Trustee and the Rating Agencies by the
Depositor if delivery pursuant to clause (2) above will be made more than 180
days after the Closing Date. If the original lender's title insurance policy was
not delivered pursuant to Section 2.01(vi) above, the Depositor shall deliver or
cause to be delivered to the Trustee, promptly after receipt thereof, the
original lender's title insurance policy. The Depositor shall deliver or cause
to be delivered to the Trustee promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.

                  The Trustee shall enforce the obligations of the Seller under
the Mortgage Loan Purchase Agreement to promptly (within sixty Business Days
following the later of the Closing Date and the date of receipt by the Seller of
the recording information for a Mortgage, but in no event later than ninety days
following the Closing Date) submit or cause to be submitted for recording, at no
expense to the Trust Fund, the Trustee or the Depositor, in the appropriate
public office for real property records, each Assignment referred to in Sections
2.01(iii) and (iv) above and the Depositor shall execute each original
Assignment or cause each original Assignment to be executed in the following
form: "Deutsche Bank National Trust Company, as Trustee under the applicable
agreement." In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Seller shall promptly prepare or cause to be
prepared a substitute Assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
If the Seller is unable to pay the cost of recording the Assignments, such
expense will be paid by the Trustee and shall be reimbursable to the Trustee as
an Extraordinary Trust Fund Expense. Notwithstanding the foregoing, the Trustee
shall not be responsible for determining whether any Assignment delivered by the
Depositor hereunder is in recordable form.

                  Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless the Trustee or the
Depositor receives notice that such failure to record would result in a
withdrawal or a downgrading by any Rating Agency of the rating on any Class of
Certificates (which, in the case

                                      -52-
<PAGE>

of the Insured Certificates, shall be without regard to the Policy); provided,
however, the Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to submit or cause to be submitted each
Assignment for recording (at the expense of the Seller) in the manner described
above, at no expense to the Trust Fund or the Trustee, upon the earliest to
occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event
of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Master Servicer, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof, (v) with respect to any one Assignment, the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage and (vi) any Mortgage Loan that is 90 days or more
Delinquent. Upon receipt of written notice by the Trustee from the Master
Servicer that recording of the Assignments is required pursuant to one or more
of the conditions set forth in the preceding sentence, the Depositor shall be
required to deliver such Assignments or shall cause such Assignments to be
delivered within 30 days following receipt of such notice.

                  All original documents relating to the Mortgage Loans that are
not delivered to the Trustee are and shall be held by or on behalf of the
Seller, the Depositor or the Master Servicer, as the case may be, in trust for
the benefit of the Trustee on behalf of the Certificateholders and the
Certificate Insurer. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Trustee. Any such original document
delivered to or held by the Depositor that is not required pursuant to the terms
of this Section to be a part of a Mortgage File, shall be delivered promptly to
the Master Servicer.

                  SECTION 2.02. Acceptance of REMIC I by Trustee.

                  The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 and subject to any exceptions noted on the exception report
described in the next paragraph below, of the documents referred to in Section
2.01 (other than such documents described in Section 2.01(v)) above and all
other assets included in the definition of "REMIC I" under clauses (i), (iii),
(iv) and (v) (to the extent of amounts deposited into the Distribution Account)
and declares that it holds and will hold such documents and the other documents
delivered to it constituting a Mortgage File, and that it holds or will hold all
such assets and such other assets included in the definition of "REMIC I" in
trust for the exclusive use and benefit of all present and future
Certificateholders.

                  The Trustee agrees, for the benefit of the Certificateholders
and the Certificate Insurer, to review each Mortgage File on or before the
Closing Date and to certify in substantially the form attached hereto as Exhibit
C-1 that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Mortgage Loan specifically identified in the exception report annexed
thereto as not being covered by such certification), (i) all documents
constituting part of such Mortgage File (other than such documents described in
Section 2.01(v)) required to be delivered to it pursuant to this Agreement are
in its possession, (ii) such documents have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan and (iii) based on its
examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i) through (iii), (vi),(xi),
(xii), (xv), (xvii), (xviii), (xx) through (xxiii) and (xxv) of the definition
of "Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage

                                      -53-
<PAGE>

File. It is herein acknowledged that, in conducting such review, the Trustee was
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face or (ii) to determine whether any Mortgage File should
include any of the documents specified in clause (v) of Section 2.01.

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the Master Servicer and the Certificate
Insurer a final certification in the form annexed hereto as Exhibit C-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon, and the Master Servicer shall forward a copy thereof
to any Sub-Servicer.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Trustee shall so notify the Depositor, the Master Servicer and the
Certificate Insurer. In addition, upon the discovery by the Depositor, the
Master Servicer or the Trustee of a breach of any of the representations and
warranties made by the Seller in the Mortgage Loan Purchase Agreement in respect
of any Mortgage Loan which materially adversely affects such Mortgage Loan or
the interests of the related Certificateholders or the Certificate Insurer in
such Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties and the Certificate Insurer.

                  The Trustee shall, at the written request and expense of any
Certificateholder or the Certificate Insurer, provide a written report to such
Certificateholder or the Certificate Insurer of all Mortgage Files released to
the Master Servicer for servicing purposes.

                  SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
                                the Seller.

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan that materially
adversely affects the value of such Mortgage Loan or the interest therein of the
Certificateholders or the Certificate Insurer, the Trustee shall promptly notify
the Seller, the Master Servicer and the Certificate Insurer of such defect,
missing document or breach and request that the Seller deliver such missing
document or cure such defect or breach within 60 days from the date the Seller
was notified of such missing document, defect or breach, and if the Seller does
not deliver such missing document or cure such defect or breach in all material
respects during such period, the Master Servicer, to the extent it is not the
Seller or an Affiliate of the Seller, and otherwise the Trustee shall enforce
the obligations of the Seller under the Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90 days
after the date on which the Seller was notified (subject to Section 2.03(c)) of
such missing document, defect or breach, if and to the extent that the Seller is
obligated to do so under the Mortgage Loan Purchase Agreement. The Purchase
Price for the repurchased Mortgage Loan shall be remitted to the Master Servicer
for deposit in the Collection Account and the Trustee, upon

                                      -54-
<PAGE>

receipt of written certification from the Master Servicer of such deposit, shall
release to the Seller the related Mortgage File and the Trustee shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall furnish to it and as shall be necessary to vest in
the Seller any Mortgage Loan released pursuant hereto. The Trustee shall not
have any further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to be
removed from REMIC I (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(b). It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee and the Certificateholders.
The Trustee will be reimbursed for expenses reasonably incurred in connection
with any breach or defect giving rise to the purchase obligation under this
Section 2.03 pursuant to Section 3.11(a)(viii).

                  With respect to the representations and warranties made by the
Seller in the Mortgage Loan Purchase Agreement, the Trustee shall not be charged
with knowledge of any breach of any such representation or warranty by the
Seller unless a Responsible Officer of the Trustee at the Corporate Trust Office
obtains actual knowledge of such breach or the Trustee receives written notice
of such breach from the Depositor, the Master Servicer or the
Certificateholders.

                  (b) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the date which is two years after the Startup Day for REMIC I.

                  As to any Deleted Mortgage Loan for which the Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Trustee, for such Qualified
Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the
Assignment to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Trustee shall acknowledge receipt for such Qualified Substitute Mortgage Loan or
Loans and, within ten Business Days thereafter, shall review such documents as
specified in Section 2.02 and deliver to the Depositor, the Master Servicer and
the Certificate Insurer, with respect to such Qualified Substitute Mortgage Loan
or Loans, a certification substantially in the form attached hereto as Exhibit
C-1, with any applicable exceptions noted thereon. Within one year of the date
of substitution, the Trustee shall deliver to the Depositor, the Master Servicer
and the Certificate Insurer a certification substantially in the form of Exhibit
C-2 hereto with respect to such Qualified Substitute Mortgage Loan or Loans,
with any applicable exceptions noted thereon. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution are not part
of REMIC I and will be retained by the Seller. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due Date in the month of substitution,
and the Seller shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan.

                                      -55-
<PAGE>

The Depositor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and the Mortgage Loan
Purchase Agreement, including, all applicable representations and warranties
thereof included in the Mortgage Loan Purchase Agreement.

                  For any month in which the Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Master Servicer will determine the amount (the "Substitution Shortfall Amount"),
if any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Stated Principal Balance thereof as of the date of substitution, together
with one month's interest on such Stated Principal Balance at the applicable Net
Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Shortfall Amount, if any, and the
Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or Loans
and certification by the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and the Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, the Seller shall deliver to it and as shall be necessary to vest
therein any Deleted Mortgage Loan released pursuant hereto.

                  In addition, the Seller shall obtain at its own expense and
deliver to the Trustee and the Certificate Insurer an Opinion of Counsel to the
effect that such substitution will not cause (a) any federal tax to be imposed
on any Trust REMIC, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding.

                  (c) Upon discovery by the Depositor, the Seller, the Master
Servicer, the Trustee or the Certificate Insurer that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the Seller
shall repurchase or, subject to the limitations set forth in Section 2.03(b),
substitute one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt of such
notice with respect to such affected Mortgage Loan. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a).
The Trustee shall reconvey to the Seller the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty.

                  SECTION 2.04. Reserved

                                      -56-
<PAGE>

                  SECTION 2.05. Representations, Warranties and Covenants of the
                                Master Servicer.

                  The Master Servicer hereby represents, warrants and covenants
to the Trustee, for the benefit of the Certificateholders, to the Depositor and
to the Certificate Insurer that as of the Closing Date or as of such date
specifically provided herein:

                  (i) The Master Servicer is a corporation duly organized and
         validly existing under the laws of the State of California and is duly
         authorized and qualified to transact any and all business contemplated
         by this Agreement to be conducted by the Master Servicer in any state
         in which a Mortgaged Property is located or is otherwise not required
         under applicable law to effect such qualification and, in any event, is
         in compliance with the doing business laws of any such State, to the
         extent necessary to ensure its ability to enforce each Mortgage Loan
         and to service the Mortgage Loans in accordance with the terms of this
         Agreement;

                  (ii) The Master Servicer has the full power and authority to
         conduct its business as presently conducted by it and to execute,
         deliver and perform, and to enter into and consummate, all transactions
         contemplated by this Agreement. The Master Servicer has duly authorized
         the execution, delivery and performance of this Agreement, has duly
         executed and delivered this Agreement, and this Agreement, assuming due
         authorization, execution and delivery by the Depositor and the Trustee,
         constitutes a legal, valid and binding obligation of the Master
         Servicer, enforceable against it in accordance with its terms except as
         the enforceability thereof may be limited by bankruptcy, insolvency,
         reorganization or similar laws affecting the enforcement of creditors'
         rights generally and by general principles of equity;

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer hereunder, the consummation by the Master Servicer of any
         other of the transactions herein contemplated, and the fulfillment of
         or compliance with the terms hereof are in the ordinary course of
         business of the Master Servicer and will not (A) result in a breach of
         any term or provision of the charter or by-laws of the Master Servicer
         or (B) conflict with, result in a breach, violation or acceleration of,
         or result in a default under, the terms of any other material agreement
         or instrument to which the Master Servicer is a party or by which it
         may be bound, or any statute, order or regulation applicable to the
         Master Servicer of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over the Master Servicer; and the
         Master Servicer is not a party to, bound by, or in breach or violation
         of any indenture or other agreement or instrument, or subject to or in
         violation of any statute, order or regulation of any court, regulatory
         body, administrative agency or governmental body having jurisdiction
         over it, which materially and adversely affects or, to the Master
         Servicer's knowledge, would in the future materially and adversely
         affect, (x) the ability of the Master Servicer to perform its
         obligations under this Agreement or (y) the business, operations,
         financial condition, properties or assets of the Master Servicer taken
         as a whole;

                  (iv) The Master Servicer is a HUD approved servicer. No event
         has occurred,

                                      -57-
<PAGE>

         including but not limited to a change in insurance coverage, that would
         make the Master Servicer unable to comply with HUD eligibility
         requirements or that would require notification to HUD;

                  (v) The Master Servicer does not believe, nor does it have any
         reason or cause to believe, that it cannot perform each and every
         covenant made by it and contained in this Agreement;

                  (vi) [Reserved];

                  (vii) No litigation is pending against the Master Servicer
         that would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Master Servicer
         to service the Mortgage Loans or to perform any of its other
         obligations hereunder in accordance with the terms hereof;

                  (viii) There are no actions or proceedings against, or
         investigations known to it of, the Master Servicer before any court,
         administrative or other tribunal (A) that might prohibit its entering
         into this Agreement, (B) seeking to prevent the consummation of the
         transactions contemplated by this Agreement or (C) that might prohibit
         or materially and adversely affect the performance by the Master
         Servicer of its obligations under, or validity or enforceability of,
         this Agreement;

                  (ix) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Master Servicer of, or compliance by the Master
         Servicer with, this Agreement or the consummation by it of the
         transactions contemplated by this Agreement, except for such consents,
         approvals, authorizations or orders, if any, that have been obtained
         prior to the Closing Date;

                  (x) [reserved];

                  (xi) The Master Servicer will not waive any Prepayment Charge
         unless it is waived in accordance with the standard set forth in
         Section 3.01; and

                  (xii) The Master Servicer has fully furnished and will
         continue to fully furnish, in accordance with the Fair Credit Reporting
         Act and its implementing regulations, accurate and complete information
         (e.g., favorable and unfavorable) on its borrower credit files to
         Equifax, Experian and Trans Union Credit Information Company or their
         successors on a monthly basis.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor, the Certificateholders and the Certificate Insurer. Upon
discovery by any of the Depositor, the Master Servicer, the Trustee or the
Certificate Insurer of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value of any
Mortgage Loan or the interests therein of the Certificateholders or the
Certificate Insurer, the party discovering such breach shall give prompt written
notice (but in

                                      -58-
<PAGE>

no event later than two Business Days following such discovery) to the Trustee
and the Certificate Insurer. Subject to Section 7.01, unless such breach shall
not be susceptible of cure within 90 days, the obligation of the Master Servicer
set forth in this Section 2.05 to cure breaches shall constitute the sole remedy
against the Master Servicer available to the Certificateholders, the Depositor
and the Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05.
Notwithstanding the foregoing, (a) within 90 days of the earlier of discovery by
the Master Servicer or receipt of notice by the Master Servicer of the breach of
the representation of the Master Servicer set forth in Section 2.05(x) above
which materially and adversely affects the interests of the Holders of the Class
P Certificates in any Prepayment Charge, the Master Servicer shall remedy such
breach as follows: the Seller must pay the amount of the scheduled Prepayment
Charge, for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the Collection Account, net of any amount previously
collected by the Master Servicer or paid by the Master Servicer, for the benefit
of the Holders of the Class P Certificates, in respect of such Prepayment Charge
and (b) within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of the representation or
covenant of the Master Servicer set forth in Section 2.05(xi) above, which
breach materially and adversely affects the interests of the Holders of the
Class P Certificates in any Prepayment Charge, the Master Servicer must pay the
amount of such waived Prepayment Charge, for the benefit of the holders of the
Class P Certificates, by depositing such amount into the Collection Account.

                  SECTION 2.06. Issuance of the REMIC I Regular Interests and
                                the Class R-I Interest.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Section 2.01 and Section 2.02, together with the assignment to it of all other
assets included in REMIC I, the receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Class R Certificates (in respect of the Class R-I
Interest) in authorized denominations. The interests evidenced by the Class R-I
Interest, together with the REMIC I Regular Interests, constitute the entire
beneficial ownership interest in REMIC I. The rights of the Class R-I Interest
and REMIC II (as holder of the REMIC I Regular Interest) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, and all ownership interests evidenced or
constituted by the Class R-I Interest and the REMIC I Regular Interests, shall
be as set forth in this Agreement.

                  SECTION 2.07. Conveyance of the REMIC I Regular Interests;
                                Acceptance of REMIC II by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby 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 REMIC I Regular Interests for the benefit of the Class R-
Certificateholders and REMIC II (as holder of the REMIC I Regular Interests).
The Trustee acknowledges receipt of the REMIC I Regular Interests and declares
that it holds and will hold the

                                      -59-
<PAGE>

same in trust for the exclusive use and benefit of all present and future Class
R Certificateholders and REMIC II (as holder of the REMIC I Regular Interests).
The rights of the Class R Certificateholders and REMIC II (as holder of the
REMIC I Regular Interests) to receive distributions from the proceeds of REMIC
II in respect of the Class R Certificates and REMIC II Certificates,
respectively, and all ownership interests evidenced or constituted by the Class
R Certificates and the REMIC II Certificates, shall be as set forth in this
Agreement.

                  SECTION 2.08. [Reserved].

                  SECTION 2.09. Issuance of Class R Certificates.

                  The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the Class R Certificates in authorized denominations.

                                      -60-
<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trust Fund and in the best interests of and for the
benefit of the Certificateholders and the Certificate Insurer (as determined by
the Master Servicer in its reasonable judgment) in accordance with the terms of
this Agreement and the respective Mortgage Loans and, to the extent consistent
with such terms, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of mortgage lenders and loan servicers administering
similar mortgage loans but without regard to:

                  (i) any relationship that the Master Servicer, any
         Sub-Servicer or any Affiliate of the Master Servicer or any
         Sub-Servicer may have with the related Mortgagor;

                  (ii) the ownership or non-ownership of any Certificate by the
         Master Servicer or any Affiliate of the Master Servicer;

                  (iii) the Master Servicer's obligation to make P&I Advances or
         Servicing Advances; or

                  (iv) the Master Servicer's or any Sub-Servicer's right to
         receive compensation for its services hereunder or with respect to any
         particular transaction.

                  To the extent consistent with the foregoing, the Master
Servicer (a) shall seek to maximize the timely and complete recovery of
principal and interest on the Mortgage Notes and (b) shall waive (or permit a
Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and (ii) either (A) such waiver would, in the reasonable
judgement of the Master Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan
and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is related to a default or a reasonably
foreseeable default or (B) such waiver is made in connection with a refinancing
of the related Mortgage Loan unrelated to a default or a reasonably foreseeable
default where (x) the related mortgagor has stated to the Master Servicer or an
applicable Sub-Servicer an intention to refinance the related Mortgage Loan and
(y) the Master Servicer has concluded in its reasonable judgement that the
waiver of such Prepayment Charge would induce such mortgagor to refinance with
the Master Servicer or (iii) collection of the related Prepayment Charge would
violate applicable law. If a Prepayment Charge is waived as permitted by meeting
both of the standards described in clauses (i) and (ii)(B) or (iii) above, then
the Master Servicer is required to pay the amount of such waived Prepayment
Charge, for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the Collection Account together with and at the time
that the amount prepaid on the related Mortgage Loan is required to be deposited
into the Collection Account. Notwithstanding any other provisions of this
Agreement, any payments

                                      -61-
<PAGE>

made by the Master Servicer in respect of any waived Prepayment Charges pursuant
to clauses (i) and (ii)(B) shall be deemed to be paid outside of the Trust Fund.

                  Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Trust Fund, the
Certificateholders and the Trustee or any of them, and upon written notice to
the Trustee, 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 the Mortgaged Properties and to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert
the ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Master Servicer
shall service and administer the Mortgage Loans in accordance with applicable
state and federal law and shall provide to the Mortgagors any reports required
to be provided to them thereby. The Master Servicer shall also comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any standard hazard insurance policy. Subject to Section 3.17, the
Trustee shall execute, at the written request of the Master Servicer, and
furnish to the Master Servicer and any Sub-Servicer any special or limited
powers of attorney and other documents necessary or appropriate to enable the
Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder and the Trustee shall not be liable for the
actions of the Master Servicer or any Sub-Servicers under such powers of
attorney.

                  Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the Master Servicer shall advance or cause
to be advanced funds as necessary for the purpose of effecting the timely
payment of taxes and assessments on the Mortgaged Properties, which advances
shall be Servicing Advances reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Master Servicer or by
Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or Treasury

                                      -62-
<PAGE>

regulations promulgated thereunder) and (B) cause any Trust REMIC to fail to
qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.

                  SECTION 3.02. Sub-Servicing Agreements Between Master Servicer
                                and Sub- Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements with Sub- Servicers for the servicing and administration of the
Mortgage Loans; provided, however, that such agreements would not result in a
withdrawal or a downgrading by any Rating Agency of the rating on any Class of
Certificates (without regard to the Policy). The Trustee is hereby authorized to
acknowledge, at the request of the Master Servicer, any Sub-Servicing Agreement
that, based on an Officers' Certificate of the Master Servicer delivered to the
Trustee (upon which the Trustee can conclusively rely), meets the requirements
applicable to Sub-Servicing Agreements set forth in this Agreement and that is
otherwise permitted under this Agreement.

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each
Sub- Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Master Servicer
will examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. The Master Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub- Servicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders or the
Certificate Insurer without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights or the Certificate Insurer; provided,
further, that the consent of the Holders of Certificates entitled to at least
66% of the Voting Rights or the Certificate Insurer shall not be required (i) to
cure any ambiguity or defect in a Sub- Servicing Agreement, (ii) to correct,
modify or supplement any provisions of a Sub-Servicing Agreement, or (iii) to
make any other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Agreement. Any variation without the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights or the Certificate
Insurer from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Sub-Servicing Accounts, or credits and charges to the
Sub- Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Master Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Master Servicer shall deliver
to the Trustee copies of all Sub-Servicing Agreements, and any

                                      -63-
<PAGE>

amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee, the Certificateholders and the
Certificate Insurer, shall enforce the obligations of each Sub-Servicer under
the related Sub-Servicing Agreement, including, without limitation, any
obligation of a Sub-Servicer to make advances in respect of delinquent payments
as required by a Sub-Servicing Agreement. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Sub-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 enforcing the
obligations of a Sub-Servicer at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, 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.

                  SECTION 3.03. Successor Sub-Servicers.

                  The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.

                  Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee (if the Trustee is
acting as Master Servicer) without fee, in accordance with the terms of this
Agreement, in the event that the Master Servicer (or the Trustee, if it is then
acting as Master Servicer) shall, for any reason, no longer be the Master
Servicer (including termination due to a Master Servicer Event of Default).

                  SECTION 3.04. Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement or the provisions
of this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee, the Certificateholders and the Certificate Insurer 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 Sub-Servicing Agreements or arrangements or by virtue of
indemnification from the Sub-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. The Master Servicer shall be entitled to enter
into any agreement with a Sub- Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in

                                      -64-
<PAGE>

this Agreement shall be deemed to limit or modify such indemnification.

                  SECTION 3.05. No Contractual Relationship Between
                                Sub-Servicers, the Trustee or the
                                Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.

                  SECTION 3.06. Assumption or Termination of Sub-Servicing
                                Agreements by the Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Default), the Trustee, its designee or other successor master
servicer shall thereupon assume all of the rights and obligations of the Master
Servicer under each Sub-Servicing Agreement that the Master Servicer may have
entered into, unless the Trustee, such designee or other successor master
servicer elects to terminate any Sub-Servicing Agreement in accordance with its
terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor master servicer for the Trustee appointed pursuant to
Section 7.02 shall be deemed, subject to Section 3.03, to have assumed all of
the Master Servicer's interest therein and to have replaced the Master Servicer
as a party to each Sub-Servicing Agreement to the same extent as if each
Sub-Servicing Agreement had been assigned to the assuming party, except that (i)
the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement that arose before it ceased to be
the Master Servicer and (ii) none of the Trustee, its designee or any successor
Master Servicer shall be deemed to have assumed any liability or obligation of
the Master Servicer that arose before it ceased to be the Master Servicer.

                  The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.

                  The Servicing Fee payable to the Trustee or other successor
master servicer shall be payable from payments received on the Mortgage Loans in
the amount and in the manner set forth in this Agreement.

                                      -65-
<PAGE>

                  SECTION 3.07. Collection of Certain Mortgage Loan Payments.

                  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 and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii) extend the due
dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided, however, that any extension pursuant to clause
(ii) above shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder, except as provided below. In the event of
any such arrangement pursuant to clause (ii) above, the Master Servicer shall
make timely advances on such Mortgage Loan during such extension pursuant to
Section 4.03 and in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangement. Notwithstanding
the foregoing, in the event that any Mortgage Loan is in default or, in the
judgment of the Master Servicer, such default is reasonably foreseeable, the
Master Servicer, consistent with the standards set forth in Section 3.01, may
also waive, modify or vary any term of such Mortgage Loan (including
modifications that would change the Mortgage Rate, forgive the payment of
principal or interest or extend the final maturity date of such Mortgage Loan),
accept payment from the related Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of such Mortgage Loan (such payment, a
"Short Pay- off"), or consent to the postponement of strict compliance with any
such term or otherwise grant indulgence to any Mortgagor.

                  SECTION 3.08. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.

                  SECTION 3.09. Collection of Taxes, Assessments and Similar
                                Items; Servicing Accounts.

                  The Master Servicer shall establish and maintain, or cause to
be established and

                                      -66-
<PAGE>

maintained, one or more accounts (the "Servicing Accounts"), into which all
collections from the Mortgagors (or related advances from Sub-Servicers) for the
payment of taxes, assessments, hazard insurance premiums and comparable items
for the account of the Mortgagors ("Escrow Payments") shall be deposited and
retained. Servicing Accounts shall be Eligible Accounts. The Master Servicer
shall deposit in the clearing account in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Master Servicer's receipt thereof, all Escrow Payments collected on account
of the Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the receipt of
such Escrow Payments, all Escrow Payments collected on account of the Mortgage
Loans for the purpose of effecting the timely payment of any such items as
required under the terms of this Agreement. Withdrawals of amounts from a
Servicing Account may be made only to (i) effect payment of taxes, assessments,
hazard insurance premiums, and comparable items in a manner and at a time that
assures that the lien priority of the Mortgage is not jeopardized (or, with
respect to the payment of taxes, in a manner and at a time that avoids the loss
of the Mortgaged Property due to a tax sale or the foreclosure as a result of a
tax lien); (ii) reimburse the Master Servicer (or a Sub- Servicer to the extent
provided in the related Sub-Servicing Agreement) out of related collections for
any advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.14 (with respect to hazard insurance); (iii) refund
to Mortgagors any sums as may be determined to be overages; (iv) pay interest,
if required and as described below, to Mortgagors on balances in the Servicing
Account; or (v) clear and terminate the Servicing Account at the termination of
the Master Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement in accordance with Article IX. As part of
its servicing duties, the Master Servicer or Sub- Servicers shall pay to the
Mortgagors interest on funds in the Servicing Accounts, to the extent required
by law and, to the extent that interest earned on funds in the Servicing
Accounts is insufficient, to pay such interest from its or their own funds,
without any reimbursement therefor.

                  SECTION 3.10. Collection Account and Distribution Account.

                  (a) On behalf of the Trust Fund, the Master Servicer shall
         establish and maintain, or cause to be established and maintained, one
         or more accounts (such account or accounts, the "Collection Account"),
         held in trust for the benefit of the Trustee, the Certificateholders
         and the Certificate Insurer. On behalf of the Trust Fund, the Master
         Servicer shall deposit or cause to be deposited in the clearing account
         in which it customarily deposits payments and collections on mortgage
         loans in connection with its mortgage loan servicing activities on a
         daily basis, and in no event more than one Business Day after the
         Master Servicer's receipt thereof, and shall thereafter deposit in the
         Collection Account, in no event more than two Business Days after the
         Master Servicer's receipt thereof, as and when received or as otherwise
         required hereunder, the following payments and collections received or
         made by it subsequent to the Cut-off Date (other than in respect of
         principal or interest on the related Mortgage Loans due on or before
         the Cut-off Date), or payments (other than Principal Prepayments)
         received by it on or prior to the Cut-off Date but allocable to a Due
         Period subsequent thereto:

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

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<PAGE>

                  (ii) all payments on account of interest (net of the related
         Servicing Fee) on each Mortgage Loan;

                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
         than proceeds collected in respect of any particular REO Property and
         amounts paid in connection with a purchase of Mortgage Loans and REO
         Properties pursuant to Section 9.01);

                  (iv) any amounts required to be deposited pursuant to Section
         3.12 in connection with any losses realized on Permitted Investments
         with respect to funds held in the Collection Account;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to the second paragraph of Section 3.14(a) in respect
         of any blanket policy deductibles;

                  (vi) all proceeds of any Mortgage Loan repurchased or
         purchased in accordance with Section 2.03, Section 3.16 or Section
         9.01;

                  (vii) all amounts required to be deposited in connection with
         shortfalls in principal amount of Qualified Substitute Mortgage Loans
         pursuant to Section 2.03; and

                  (viii) all Prepayment Charges collected by the Master Servicer
         in connection with the Principal Prepayment of any of the Mortgage
         Loans.

                  The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, modification or assumption fees, or insufficient funds charges need not
be deposited by the Master Servicer in the Collection Account and may be
retained by the Master Servicer as additional compensation. In the event the
Master Servicer shall deposit in the Collection Account any amount not required
to be deposited therein, it may at any time withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee, the Trust Fund, the
Certificateholders and the Certificate Insurer. On behalf of the Trust Fund, the
Master Servicer shall deliver to the Trustee in immediately available funds for
deposit in the Distribution Account by 1:00 p.m. New York time (i) on the Master
Servicer Remittance Date, that portion of the Available Distribution Amount
(calculated without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the Collection Account and the
amount of all Prepayment Charges collected by the Master Servicer in connection
with the Principal Prepayment of any of the Mortgage Loans then on deposit in
the Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.26 and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
$75,000 following any withdrawals pursuant to the next succeeding sentence, the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the

                                      -68-
<PAGE>

Collection Account exceeds $75,000 as of the commencement of business on any
Business Day and the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account," the Master
Servicer shall, by 1:00 p.m. New York time on such Business Day, withdraw from
the Collection Account any and all amounts payable or reimbursable to the
Depositor, the Master Servicer, the Trustee, the Originator, the Seller or any
Sub-Servicer pursuant to Section 3.11 and shall pay such amounts to the Persons
entitled thereto.

                  (c) Funds in the Collection Account and the Distribution
         Account may be invested in Permitted Investments in accordance with the
         provisions set forth in Section 3.12. The Master Servicer shall give
         notice to the Trustee and the Certificate Insurer of the location of
         the Collection Account maintained by it when established and prior to
         any change thereof. The Trustee shall give notice to the Master
         Servicer, the Depositor and the Certificate Insurer of the location of
         the Distribution Account when established and prior to any change
         thereof.

                  (d) Funds held in the Collection Account at any time may be
         delivered by the Master Servicer to the Trustee for deposit in an
         account (which may be the Distribution Account and must satisfy the
         standards for the Distribution Account as set forth in the definition
         thereof) and for all purposes of this Agreement shall be deemed to be a
         part of the Collection Account; provided, however, that the Trustee
         shall have the sole authority to withdraw any funds held pursuant to
         this subsection (d). In the event the Master Servicer shall deliver to
         the Trustee for deposit in the Distribution Account any amount not
         required to be deposited therein, it may at any time request in writing
         that the Trustee withdraw such amount from the Distribution Account and
         remit to it any such amount, any provision herein to the contrary
         notwithstanding. In addition, the Master Servicer shall deliver to the
         Trustee from time to time for deposit, and the Trustee shall so
         deposit, in the Distribution Account:

                  (i) any P&I Advances, as required pursuant to Section 4.03;

                  (ii) any amounts required to be deposited pursuant to Section
         3.23(d) or (f) in connection with any REO Property;

                  (iii) any amounts to be paid in connection with a purchase of
         Mortgage Loans and REO Properties pursuant to Section 9.01; and

                  (iv) any amounts required to be deposited pursuant to Section
         3.24 in connection with any Prepayment Interest Shortfall.

                  (e) [Reserved].

                  (f) The Master Servicer shall deposit in the Collection
         Account or Distribution Account, as the case may be, any amounts
         required to be deposited pursuant to Section 3.12(b) in connection with
         losses realized on Permitted Investments with respect to funds held in
         the Collection Account or Distribution Account, respectively.

                  (g) On the Closing Date, the Depositor shall deposit into the
         Distribution Account an amount equal to $272,713.69. The Trustee shall
         allocate $252,703.01 to the Group I Principal

                                      -69-
<PAGE>

Distribution Amount, $1,287.31 to the Group I Interest Remittance Amount,
$18,635.72 to the Group II Principal Distribution Amount and $87.65 to the Group
II Interest Remittance Amount and shall distribute such amount to the
Certificates on the first Distribution Date pursuant to Section 4.01(a).

                  SECTION 3.11. Withdrawals from the Collection Account and
                                Distribution Account.

                  (a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.03:

                  (i) to remit to the Trustee for deposit in the Distribution
         Account the amounts required to be so remitted pursuant to Section
         3.10(b) or permitted to be so remitted pursuant to the first sentence
         of Section 3.10(d);

                  (ii) subject to Section 3.16(d), to reimburse the Master
         Servicer for P&I Advances, but only to the extent of amounts received
         which represent Late Collections (net of the related Servicing Fees) of
         Monthly Payments on Mortgage Loans with respect to which such P&I
         Advances were made in accordance with the provisions of Section 4.03;

                  (iii) subject to Section 3.16(d), to pay the Master Servicer
         or any Sub-Servicer, as applicable, (a) any unpaid Servicing Fees, (b)
         any unreimbursed Servicing Advances with respect to each Mortgage Loan,
         but only to the extent of any Late Collections, Liquidation Proceeds
         and Insurance Proceeds received with respect to such Mortgage Loan and
         (c) any Nonrecoverable Servicing Advances with respect to the final
         liquidation of a Mortgage Loan, but only to the extent that Late
         Collections, Liquidation Proceeds and Insurance Proceeds received with
         respect to such Mortgage Loan are insufficient to reimburse the Master
         Servicer or any Sub-Servicer for Servicing Advances;

                  (iv) to pay to the Master Servicer as servicing compensation
         (in addition to the Servicing Fee) on the Master Servicer Remittance
         Date any interest or investment income earned on funds deposited in the
         Collection Account;

                  (v) to pay to the Master Servicer, the Depositor, the
         Originator or the Seller, as the case may be, with respect to each
         Mortgage Loan that has previously been purchased or replaced pursuant
         to Section 2.03 or Section 3.16(c) all amounts received thereon
         subsequent to the date of purchase or substitution, as the case may be;

                  (vi) to reimburse the Master Servicer for any P&I Advance
         previously made which the Master Servicer has determined to be a
         Nonrecoverable P&I Advance in accordance with the provisions of Section
         4.03;

                  (vii) to reimburse the Master Servicer or the Depositor for
         expenses incurred by or reimbursable to the Master Servicer or the
         Depositor, as the case may be, pursuant to Section 3.02(b) and Section
         6.03;

                                      -70-
<PAGE>

                  (viii) to reimburse the Master Servicer or Trustee for
         expenses reasonably incurred in connection with any breach or defect
         giving rise to the purchase obligation under Section 2.03 of this
         Agreement, including any expenses arising out of the enforcement of the
         purchase obligation;

                  (ix) to pay, or to reimburse the Master Servicer for Servicing
         Advances in respect of, expenses incurred in connection with any
         Mortgage Loan pursuant to Section 3.16(b); and

                  (x) to clear and terminate the Collection Account pursuant to
         Section 9.01.

                  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 Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee, on or prior to the next succeeding Master Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclauses
(vi) and (vii) above; provided that an Officers' Certificate in the form
described under Section 4.03(d) shall suffice for such written notification to
the Trustee in respect of clause (vi) hereof.

                  (b) The Trustee shall, from time to time, make withdrawals
         from the Distribution Account, for any of the following purposes,
         without priority:

                  (i) to make distributions to Certificateholders in accordance
         with Section 4.01;

                  (ii) to pay to itself amounts to which it is entitled pursuant
         to Section 8.05 or for Extraordinary Trust Fund Expenses;

                  (iii) to reimburse itself pursuant to Section 7.02;

                  (iv) to pay any amounts in respect of taxes pursuant to
         Section 10.01(g)(iii);

                  (v) to pay to an Advancing Person reimbursements for P&I
         Advances and/or Servicing Advances pursuant to Section 3.26; and

                  (vi) to clear and terminate the Distribution Account pursuant
         to Section 9.01.

                  SECTION 3.12. Investment of Funds in the Collection Account
                                and the Distribution Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account") to invest the funds in such Investment Account in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee is the
obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this

                                      -71-
<PAGE>

Agreement, if the Trustee is the obligor thereon. Amounts in the Distribution
Account may be held uninvested. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Trustee for the benefit of the
Certificateholders and the Certificate Insurer. The Trustee shall be entitled to
sole possession (except with respect to investment direction of funds held in
the Collection Account and any income and gain realized thereon) over each such
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment to
the Trustee or its nominee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the party with investment discretion over such Investment Account shall:

                  (x) consistent with any notice required to be given
         thereunder, demand that payment thereon be made on the last day such
         Permitted Investment may otherwise mature hereunder in an amount equal
         to the lesser of (1) all amounts then payable thereunder and (2) the
         amount required to be withdrawn on such date; and

                  (y) demand payment of all amounts due thereunder promptly upon
         determination by a Responsible Officer of the Trustee that such
         Permitted Investment would not constitute a Permitted Investment in
         respect of funds thereafter on deposit in the Investment Account.

                  (b) All income and gain realized from the investment of funds
         deposited in the Collection Account and any REO Account held by or on
         behalf of the Master Servicer, shall be for the benefit of the Master
         Servicer and shall be subject to its withdrawal in accordance with
         Section 3.11 or Section 3.23, as applicable. The Master Servicer shall
         deposit in the Collection Account or any REO Account, as applicable,
         the amount of any loss of principal incurred in respect of any such
         Permitted Investment made with funds in such accounts immediately upon
         realization of such loss. All income in the nature of interest from the
         investment of funds in the Distribution Account shall be for the
         benefit of the Trustee. The Trustee shall remit from its own funds for
         deposit into the Distribution Account the amount of any loss incurred
         on Permitted Investments in the Distribution Account, if amounts on
         deposit in the Distribution Account are invested in Permitted
         Investments by the Trustee in the absence of direction from another
         party.

                  (c) Except as otherwise expressly provided in this Agreement,
         if any default occurs in the making of a payment due under any
         Permitted Investment, or if a default occurs in any other performance
         required under any Permitted Investment, the Trustee may and, subject
         to Section 8.01 and Section 8.02(v), upon the request of the Holders of
         Certificates representing more than 50% of the Voting Rights allocated
         to any Class of Certificates, shall take such action as may be
         appropriate to enforce such payment or performance, including the
         institution and prosecution of appropriate proceedings.

                  (d) The Trustee or its Affiliates are permitted to receive
         additional compensation that could be deemed to be in the Trustee's
         economic self-interest for (i) serving as investment adviser,
         administrator, shareholder servicing agent, custodian or sub-custodian
         with respect to certain of the Permitted Investments, (ii) using
         Affiliates to effect transactions in certain Permitted Investments and
         (iii) effecting transactions in certain Permitted Investments. Such
         compensation

                                      -72-
<PAGE>

shall not be considered an amount that is reimbursable or payable to the Trustee
pursuant to Section 3.11 or 3.12 or otherwise payable in respect of
Extraordinary Trust Fund Expenses.

                  SECTION 3.13. [Reserved].

                  SECTION 3.14. Maintenance of Hazard Insurance and Errors and
                                Omissions and Fidelity Coverage.

                  (a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the lesser of the current
principal balance of such Mortgage Loan and the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis, in each case in an amount not less than
such amount as is necessary to avoid the application of any coinsurance clause
contained in the related hazard insurance policy. The Master Servicer shall also
cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Master Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Master Servicer under
any such policies (other than amounts to be applied to the restoration or repair
of the property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Master Servicer will
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid principal
balance of the related Mortgage Loan and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of A:X
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating) insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first two sentences of this Section 3.14, it being understood and agreed
that such policy may contain a deductible clause,

                                      -73-
<PAGE>

in which case the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property or REO Property a policy
complying with the first two sentences of this Section 3.14, and there shall
have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.

                  (b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall
be deemed to have complied with this provision if an Affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancelable without thirty days prior
written notice to the Trustee. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.

                  SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
                                Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not be required to take such action if
in its sole business judgment the Master Servicer believes it is not in the best
interests of the Trust Fund and shall not exercise any such rights if prohibited
by law from doing so. If the Master Servicer reasonably believes it is unable
under applicable law to enforce such "due-on-sale" clause, or if any of the
other conditions set forth in the proviso to the preceding sentence apply, the
Master Servicer will enter into an assumption and modification agreement from or
with the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Originator and has a credit risk rating at least equal to that
of the original Mortgagor. In connection with any assumption or

                                      -74-
<PAGE>

substitution, the Master Servicer shall apply the Originator's underwriting
standards and follow such practices and procedures as shall be normal and usual
in its general mortgage servicing activities and as it applies to other mortgage
loans owned solely by it. The Master Servicer shall not take or enter into any
assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Master Servicer in respect of an assumption,
modification or substitution of liability agreement shall be retained by the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the related Mortgage Rate and the amount of the Monthly Payment) may
be amended or modified, except as otherwise required pursuant to the terms
thereof. The Master Servicer shall notify the Trustee that any such
substitution, modification or assumption agreement has been completed by
forwarding to the Trustee the executed original of such substitution,
modification or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

                  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 by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

                  SECTION 3.16. Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall exercise its discretion,
consistent with customary servicing procedures and the terms of this Agreement,
with respect to the enforcement and servicing of defaulted Mortgage Loans in
such manner as will maximize the receipt of principal and interest with respect
thereto, including but not limited to the sale of such Mortgage Loan to a third
party, the modification of such Mortgage Loan, or foreclosure upon the related
Mortgaged Property and disposition thereof.

                  In furtherance of the foregoing, the Master Servicer shall use
its best efforts, consistent with Accepted Servicing Practices, to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Master Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that
such costs and expenses will be recoverable as Servicing Advances by the Master
Servicer as contemplated in Section 3.11 and Section 3.23. The foregoing is
subject to the provision that, in any case in which Mortgaged Property shall
have suffered damage from an Uninsured Cause, the Master Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.

                                      -75-
<PAGE>

                  (b) Notwithstanding the foregoing provisions of this Section
         3.16 or any other provision of this Agreement, with respect to any
         Mortgage Loan as to which the Master Servicer has received actual
         notice of, or has actual knowledge of, the presence of any toxic or
         hazardous substance on the related Mortgaged Property, the Master
         Servicer shall not, on behalf of the Trust Fund either (i) obtain title
         to such Mortgaged Property as a result of or in lieu of foreclosure or
         otherwise, or (ii) otherwise acquire possession of, or take any other
         action with respect to, such Mortgaged Property, if, as a result of any
         such action, the Trustee, the Trust Fund or the Certificateholders
         would be considered to hold title to, to be a "mortgagee-in-possession"
         of, or to be an "owner" or "operator" of such Mortgaged Property within
         the meaning of the Comprehensive Environmental Response, Compensation
         and Liability Act of 1980, as amended from time to time, or any
         comparable law, unless the Master Servicer has also previously
         determined, based on its reasonable judgment and a report prepared by
         an Independent Person who regularly conducts environmental audits using
         customary industry standards, that:

                  (1) such Mortgaged Property is in compliance with applicable
         environmental laws or, if not, that it would be in the best economic
         interest of the Trust Fund to take such actions as are necessary to
         bring the Mortgaged Property into compliance therewith; and

                  (2) there are no circumstances present at such Mortgaged
         Property relating to the use, management or disposal of any hazardous
         substances, hazardous materials, hazardous wastes, or petroleum-based
         materials for which investigation, testing, monitoring, containment,
         clean-up or remediation could be required under any federal, state or
         local law or regulation, or that if any such materials are present for
         which such action could be required, that it would be in the best
         economic interest of the Trust Fund to take such actions with respect
         to the affected Mortgaged Property.

                  The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund; provided that any amounts disbursed by the
Master Servicer pursuant to this Section 3.16(b) shall constitute Servicing
Advances, subject to Section 4.03(d). The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(iii) and (a)(ix), such right
of reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

                                      -76-
<PAGE>

                  (c) The Master Servicer may at its option purchase from REMIC
I any Mortgage Loan or related REO Property that is 90 days or more delinquent,
which the Master Servicer determines in good faith will otherwise become subject
to foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee, in form and substance satisfactory to the Trustee prior
to purchase), at a price equal to the Purchase Price; provided, however, that
the Master Servicer shall purchase any such Mortgage Loans or related REO
Properties on the basis of delinquency, purchasing the most delinquent Mortgage
Loans or related REO Properties first. The Purchase Price for any Mortgage Loan
or related REO Property purchased hereunder shall be deposited in the Collection
Account, and the Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release or cause to be released to the Master
Servicer the related Mortgage File and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
the Master Servicer shall furnish and as shall be necessary to vest in the
Master Servicer title to any Mortgage Loan or related REO Property released
pursuant hereto.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second,
to accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Master Servicer as follows: first, to
unpaid Servicing Fees; and second, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid Servicing Fees shall
be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).

                  (e) Furthermore, the Holder of the Class R Certificates will
have the option to purchase, at any one time, 1.00% (and in any case, at least 5
Mortgage Loans) of the Mortgage Loans, by aggregate Stated Principal Balance of
the Mortgage Loans as of such date, at a purchase price equal to the greater of
(A) the aggregate Purchase Price of such Mortgage Loans and (B) the aggregate
fair market value of such Mortgage Loans. The Mortgage Loans that may be
purchased by the Holder of the Class R Certificates pursuant to this paragraph
will be selected by the Master Servicer in its sole discretion. If at any time
the Holder of the Class R Certificates exercises such option, it shall
immediately notify or cause to be notified the Trustee by a certification in the
form of Exhibit E (which certification shall include a statement to the effect
that all amounts required to be deposited in the Collection Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File. Upon receipt of such certification
and request, the Trustee shall promptly release the related Mortgage Files to
the Holder of the Class R Certificates. Any tax on "prohibited transactions" (as
defined in Section 860F(a)(2) of the Code) imposed on any REMIC created
hereunder related to the exercise of the option provided by this paragraph (e)
shall in no event be payable by the Trustee or the Trust Fund.

                                      -77-
<PAGE>

                  SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify or cause to be notified the Trustee by a certification in the
form of Exhibit E (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer at no cost to the Trustee or the Trust Fund. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Master Servicer and delivery to the Trustee
of a Request for Release in the form of Exhibit E, release the related Mortgage
File to the Master Servicer, and the Trustee shall, at the direction of the
Master Servicer, execute such documents as shall be necessary to the prosecution
of any such proceedings. Such Request for Release shall obligate the Master
Servicer to return each and every document previously requested from the
Mortgage File to the Trustee when the need therefor by the Master Servicer no
longer exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered, or caused to be delivered, to the Trustee an additional
Request for Release certifying as to such liquidation or action or proceedings.
Upon the request of the Trustee, the Master Servicer shall provide notice to the
Trustee of 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. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage Loan
was liquidated and that all amounts received or to be received in connection
with such liquidation that are required to be deposited into the Collection
Account have been so deposited, or that such Mortgage Loan has become an REO
Property, any outstanding Requests for Release with respect to such Mortgage
Loan shall be released by the Trustee to the Master Servicer or its designee.

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer or the Sub-Servicer, as
the case may be, any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the

                                      -78-
<PAGE>

Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.

                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. Except as provided in Sections 3.26, the right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement; provided, however, that the Master
Servicer may pay from the Servicing Fee any amounts due to a Sub-Servicer
pursuant to a Sub-Servicing Agreement entered into under Section 3.02.

                  Additional servicing compensation in the form of assumption or
modification fees, late payment charges, insufficient funds charges or otherwise
(subject to Section 3.24 and other than Prepayment Charges) shall be retained by
the Master Servicer only to the extent such fees or charges are received by the
Master Servicer. The Master Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the Collection Account and pursuant to Section
3.23(b) to withdraw from any REO Account, as additional servicing compensation,
interest or other income earned on deposits therein, subject to Section 3.12 and
Section 3.24. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.14, to the extent such premiums are not
paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of
each Sub-Servicer, and to the extent provided herein in Section 8.05, the
expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.

                  SECTION 3.19. Reports to the Trustee and Others; Collection
                                Account Statements.

                  Not later than twenty days after each Distribution Date, the
Master Servicer shall forward to the Trustee (upon the Trustee's request), the
Certificate Insurer and the Depositor the most current available bank statement
for the Collection Account. Copies of such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.

                  In addition, on each Distribution Date, the Master Servicer
shall forward to the Rating Agencies, the Certificate Insurer and the Trustee a
report setting forth the percentage of Mortgage Loans that are 30 or more days
delinquent, in foreclosure, have been converted to REO Properties or have been
discharged by reason of bankruptcy.

                  SECTION 3.20. Statement as to Compliance.

                                      -79-
<PAGE>

                  Not later than March 15th of each calendar year commencing in
2004, the Master Servicer will deliver to the Trustee, the Depositor and the
Certificate Insurer an Officers' Certificate (upon which the Trustee can
conclusively rely in connection with its obligations under Section 4.06)
substantially in the form of Exhibit L attached hereto stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, the Master Servicer has fulfilled all
of its obligations under this Agreement throughout such calendar 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 any such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Trustee.

                  SECTION 3.21. Independent Public Accountants' Servicing
                                Report.

                  Not later than March 15th of each calendar year commencing in
2004, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall, at its own expense, furnish a copy of such report to
the Trustee, the Certificate Insurer and each Rating Agency. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request, provided that such statement is delivered by the Master Servicer to the
Trustee.

                  SECTION 3.22. Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder or
Certificate Owner, access to the documentation in the Master Servicer's
possession regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it. In addition, access to the documentation in the
Master Servicer's possession regarding the Mortgage Loans will be provided to
any Certificateholder or Certificate Owner, the Trustee, the Certificate Insurer
and to any Person identified to the Master

                                      -80-
<PAGE>

Servicer as a prospective transferee of a Certificate; provided, however, that
providing access to such Person will not violate any applicable laws, upon
reasonable request during normal business hours at the offices of the Master
Servicer designated by it at the expense of the Person requesting such access.

                  SECTION 3.23. Title, Management and Disposition of REO
                                Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of REMIC I, shall either
sell any REO Property prior to the end of the third taxable year after REMIC I
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire, an
extension of the three-year grace period, unless the Master Servicer shall have
delivered to the Trustee an Opinion of Counsel, addressed to the Trustee, the
Depositor and the Certificate Insurer, to the effect that the holding by REMIC I
of such REO Property subsequent to three years after its acquisition will not
result in the imposition on any Trust REMIC of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any
Trust REMIC to fail to qualify as a REMIC under Federal law at any time that any
Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by any Trust REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions.

                  (b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain, or cause to be established and maintained, with respect to REO
Properties, an account held in trust for the Trustee for the benefit of the
Certificateholders (the "REO Account"), which shall be an Eligible Account. The
Master Servicer shall be permitted to allow the Collection Account to serve as
the REO Account, subject to separate ledgers for each REO Property. The Master
Servicer shall be entitled to retain or withdraw any interest income paid on
funds deposited in the REO Account.

                  (c) The Master Servicer shall have the sole discretion to
determine whether an immediate sale of an REO Property or continued management
of such REO Property is in the best interests of the Certificateholders and the
Certificate Insurer. In furtherance of the foregoing, the Master Servicer shall
have full power and authority, subject only to the specific requirements and
prohibitions of this Agreement, to do any and all things in connection with any
REO Property as are consistent with the manner in which the Master Servicer
manages and operates similar property owned by the Master Servicer or any of its
Affiliates, all on such terms and for such period as the Master Servicer deems
to be in the best interests of Certificateholders. In connection therewith, the
Master Servicer shall deposit, or cause to be deposited in the clearing account
in which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's

                                      -81-
<PAGE>

receipt thereof, and shall thereafter deposit in the REO Account, in no event
more than two Business Days after the Master Servicer's receipt thereof, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:

                  (i) all insurance premiums due and payable in respect of such
         REO Property;

                  (ii) all real estate taxes and assessments in respect of such
         REO Property that may result in the imposition of a lien thereon; and

                  (iii) all costs and expenses necessary to maintain such REO
         Property.

                  To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if in the Master Servicer's judgment,
the payment of such amounts will be recoverable from the rental or sale of the
REO Property.

                  Notwithstanding the foregoing, neither the Master Servicer nor
the Trustee shall:

                  (i) authorize the Trust Fund to enter into, renew or extend
         any New Lease with respect to any REO Property, if the New Lease by its
         terms will give rise to any income that does not constitute Rents from
         Real Property;

                  (ii) authorize any amount to be received or accrued under any
         New Lease other than amounts that will constitute Rents from Real
         Property;

                  (iii) authorize any construction on any REO Property, other
         than the completion of a building or other improvement thereon, and
         then only if more than ten percent of the construction of such building
         or other improvement was completed before default on the related
         Mortgage Loan became imminent, all within the meaning of Section
         856(e)(4)(B) of the Code; or

                  (iv) authorize any Person to Directly Operate any REO Property
         on any date more than 90 days after its date of acquisition by the
         Trust Fund;

unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the Certificate Insurer, to the effect that
such action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by REMIC I, in which case the Master Servicer may take such actions
as are specified in such Opinion of Counsel.

                  The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:

                                      -82-
<PAGE>

                  (i) the terms and conditions of any such contract shall not be
         inconsistent herewith;

                  (ii) any such contract shall require, or shall be administered
         to require, that the Independent Contractor pay all costs and expenses
         incurred in connection with the operation and management of such REO
         Property, including those listed above and remit all related revenues
         (net of such costs and expenses) to the Master Servicer as soon as
         practicable, but in no event later than thirty days following the
         receipt thereof by such Independent Contractor;

                  (iii) none of the provisions of this Section 3.23(c) relating
         to any such contract or to actions taken through any such Independent
         Contractor shall be deemed to relieve the Master Servicer of any of its
         duties and obligations to the Trustee on behalf of the
         Certificateholders with respect to the operation and management of any
         such REO Property; and

                  (iv) the Master Servicer shall be obligated with respect
         thereto to the same extent as if it alone were performing all duties
         and obligations in connection with the operation and management of such
         REO Property.

                  The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees; provided, however, that to the extent that any
payments made by such Independent Contractor would constitute Servicing Advances
if made by the Master Servicer, such amounts shall be reimbursable as Servicing
Advances made by the Master Servicer.

                  (d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).

                  (e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer shall deem
necessary or advisable, as shall be normal and usual in its Accepted Servicing
Practices.

                                      -83-
<PAGE>

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

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

                  SECTION 3.24. Obligations of the Master Servicer in Respect of
                                Prepayment Interest Shortfalls.

                  The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account by 1:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from full or partial Principal Prepayments during the related
Prepayment Period and (ii) the aggregate Servicing Fee for the related
Prepayment Period. Any amounts paid by the Master Servicer pursuant to this
Section 3.24 shall not be reimbursed by any Trust REMIC or the Trust Fund.

                  SECTION 3.25. Obligations of the Master Servicer in Respect of
                                Mortgage Rates and Monthly Payments.

                  In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the
Trustee, the Certificate Insurer, the Depositor and any successor master
servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement. Notwithstanding the foregoing, this
Section 3.25 shall not limit the ability of the Master Servicer to seek recovery
of any such amounts from the related Mortgagor under the terms of the related
Mortgage Note, as permitted by law.

                  SECTION 3.26. Advance Facility.

                  (a) Either (i) the Master Servicer or (ii) the Trustee, on
behalf of the Trust Fund, with the consent of the Master Servicer, is hereby
authorized to enter into a facility with any Person which provides that such
Person (an "Advancing Person") may fund P&I Advances and/or Servicing

                                      -84-
<PAGE>

Advances to the Trust Fund under this Agreement, although no such facility shall
reduce or otherwise affect the Master Servicer's obligation to fund such P&I
Advances and/or Servicing Advances. If the Master Servicer enters into such an
Advance Facility pursuant to this Section 3.26, upon reasonable request of the
Advancing Person, the Trustee shall execute a letter of acknowledgment,
confirming its receipt of notice of the existence of such Advance Facility. If
the Trustee enters into such an Advance Facility pursuant to this Section 3.26,
the Master Servicer shall also be a party to such Advance Facility. To the
extent that an Advancing Person funds any P&I Advance or any Servicing Advance
and the Master Servicer provides the Trustee with an Officers' Certificate that
such Advancing Person is entitled to reimbursement, such Advancing Person shall
be entitled to receive reimbursement pursuant to this Agreement for such amount
to the extent provided in Section 3.26(b). Such Officers' Certificate must
specify the amount of the reimbursement, the Section of this Agreement that
permits the applicable P&I Advance or Servicing Advance to be reimbursed and the
section(s) of the Advance Facility that entitle the Advancing Person to request
reimbursement from the Trustee, rather than the Master Servicer or proof of an
Event of Default under the Advance Facility. The Trustee shall have no duty or
liability with respect to any calculation of any reimbursement to be paid to an
Advancing Person and shall be entitled to rely without independent investigation
on the Advancing Person's notice provided pursuant to this Section 3.26. An
Advancing Person whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the
qualifications of the Master Servicer or a Sub-Servicer pursuant to Section 3.02
hereof and will not be deemed to be a Sub- Servicer under this Agreement.

                  (b) If an advancing facility is entered into, then the Master
Servicer shall not be permitted to reimburse itself therefor under Section
3.11(a)(ii), Section 3.11(a)(iii) and Section 3.11(a)(vi) prior to the
remittance to the Trust Fund, but instead the Master Servicer shall remit such
amounts in accordance with the documentation establishing the Advance Facility
to such Advancing Person or to a trustee, agent or custodian (an "Advance
Facility Trustee") designated by such Advancing Person. The Trustee is hereby
authorized to pay to the Advancing Person, reimbursements for P&I Advances and
Servicing Advances from the Distribution Account to the same extent the Master
Servicer would have been permitted to reimburse itself for such P&I Advances
and/or Servicing Advances in accordance with 3.11(a)(ii), Section 3.11(a)(iii)
and Section 3.11(a)(vi), as the case may be, had the Master Servicer itself
funded such P&I Advance or Servicing Advance. The Trustee is hereby authorized
to pay directly to the Advancing Person such portion of the Servicing Fee as the
parties to any advancing facility agree in writing.

                  (c) All P&I Advances and Servicing Advances made pursuant to
the terms of this Agreement shall be deemed made and shall be reimbursed on a
"first in-first out" (FIFO) basis.

                  (d) Any amendment to this Section 3.26 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.26,
including amendments to add provisions relating to a successor Master Servicer,
may be entered into by the Trustee and the Master Servicer without the consent
of any Certificateholder, notwithstanding anything to the contrary in this
Agreement.

                  SECTION 3.27. [Reserved].

                                      -85-
<PAGE>

                  SECTION 3.28 Net WAC Rate Carryover Reserve Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain with itself, as agent for the Trustee, a separate,
segregated trust account titled, "Net WAC Rate Carryover Reserve Account,
Deutsche Bank National Trust Company, as Trustee, in trust for the registered
holders of New Century Mortgage Securities, Inc., New Century Home Equity Loan
Trust, Series 2003-5, Asset Backed Pass-Through Certificates." On the Closing
Date, the Depositor will deposit, or cause to be deposited, into the Net WAC
Rate Carryover Reserve Account $1,000. In addition the amount deposited in the
Net WAC Rate Carryover Reserve Account will be increased by any payments
received by the Trustee under the Cap Contracts and deposited into the Net WAC
Rate Carryover Reserve Account. All amounts deposited in the Net WAC Rate
Carryover Reserve Account shall be distributed to the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates in the
manner set forth in Section 4.01(a)(4).

                  (b) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class A Certificates, the Mezzanine
Certificates or the Class B Certificates, the Trustee has been directed by the
Class CE Certificateholders to, and therefore will, deposit into the Net WAC
Rate Carryover Reserve Account the amounts described in Section 4.01(a)(4),
rather than distributing such amounts to the Class CE Certificateholders. On
each such Distribution Date, the Trustee shall hold all such amounts for the
benefit of the Holders of the Class A Certificates, the Mezzanine Certificates
and the Class B Certificates, and will distribute such amounts to the Holders of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates in the amounts and priorities set forth in Section 4.01(a). If no
Net WAC Rate Carryover Amounts are payable on a Distribution Date, the Trustee
shall deposit into the Net WAC Rate Carryover Reserve Account on behalf of the
Class CE Certificateholders, from amounts otherwise distributable to the Class
CE Certificateholders, an amount such that when added to other amounts already
on deposit in the Net WAC Rate Carryover Reserve Account, the aggregate amount
on deposit therein is equal to $1,000.

                  (c) For federal and state income tax purposes, the Class CE
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts deposited into the Net WAC Rate Carryover
Reserve Account (other than the initial deposit therein of $1,000) shall be
treated as amounts distributed by REMIC II to the Holders of the Class CE
Certificates. Upon the termination of the Trust Fund, or the payment in full of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, all amounts remaining on deposit in the Net WAC Rate Carryover
Reserve Account will be released by the Trust Fund and distributed to the Class
CE Certificateholders or their designees. The Net WAC Rate Carryover Reserve
Account will be part of the Trust Fund but not part of any REMIC and any
payments to the Holders of the Class A Certificates or the Mezzanine
Certificates of Net WAC Rate Carryover Amounts will not be payments with respect
to a "regular interest" in a REMIC within the meaning of Code Section
860(G)(a)(1).

                  (d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts
described above on each Distribution Date as to which there is any Net WAC Rate
Carryover Amount rather than distributing such amounts to the Class CE
Certificateholders. By accepting a Class CE Certificate, each Class CE
Certificateholder further

                                      -86-
<PAGE>

agrees that such direction is given for good and valuable consideration, the
receipt and sufficiency of which is acknowledged by such acceptance.

                  (e) At the direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the Net WAC Rate Carryover Reserve Account to
invest the funds in such account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment. If no investment direction of the
Holders of a majority in Percentage Interest in the Class CE Certificates with
respect to the Net WAC Rate Carryover Reserve Account is received by the
Trustee, the Trustee shall invest the funds in Deutsche Cash Management Fund 541
so long as it is a Permitted Investment or as otherwise directed in writing by
the Depositor on behalf of the Holders of a majority Percentage Interest in the
Class CE Certificates. All income and gain earned upon such investment shall be
deposited into the Net WAC Rate Carryover Reserve Account.

                  (f) For federal tax return and information reporting, the
right of the Holders of the Class A Certificates, the Mezzanine Certificates and
the Class B Certificates to receive payments from the Net WAC Rate Carryover
Reserve Account in respect of any Net Wac Rate Carryover Amount shall be
assigned a value of zero.

                                      -87-
<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01. Distributions.

                  (1) On each Distribution Date, the following amounts, in the
         following order of priority, shall be distributed by REMIC I to REMIC
         II on account of the REMIC I Regular Interests or withdrawn from the
         Distribution Account and distributed to the holders of the Class R
         Certificates (in respect of the Class R-I Interest), as the case may
         be:

                  (i) to the Holders of REMIC I Regular Interest I-LTAA, REMIC I
         Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
         Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA3, REMIC I
         Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5, REMIC I
         Regular Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC I
         Regular Interest I-LTA7, REMIC I Regular Interest I-LTA8, REMIC I
         Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
         Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
         Regular Interest I-LTM5, REMIC I Regular Interest I-LTB and REMIC I
         Regular Interest I-LTZZ, in an amount equal to (A) the Uncertificated
         Interest for such Distribution Date, plus (B) any amounts in respect
         thereof remaining unpaid from previous Distribution Dates. Amounts
         payable as Uncertificated Interest in respect of REMIC I Regular
         Interest I-LTZZ shall be reduced when the sum of the REMIC I
         Overcollateralized Amount is less than the REMIC I Required
         Overcollateralized Amount, by the lesser of (x) the amount of such
         difference and (y) the Maximum I-LTZZ Uncertificated Interest Deferral
         Amount and such amounts will be payable to the Holders of REMIC I REMIC
         I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
         Regular Interest I-LTA2A, REMIC I Regular Interest I-LTA3, REMIC I
         Regular Interest I- LTA4, REMIC I Regular Interest I-LTA5, REMIC I
         Regular Interest I-LTA6, REMIC I Regular Interest I-LTA6A, REMIC I
         Regular Interest I-LTA7, REMIC I Regular Interest I- LTA8, REMIC I
         Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
         Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
         Regular Interest I- LTM5 and REMIC I Regular Interest I-LTB in the same
         proportion as the Overcollateralization Increase Amount is allocated to
         the Corresponding Certificates and the Uncertificated Balance of REMIC
         I Regular Interest I-LTZZ shall be increased by such amount; and

                  (ii) to the Holders of REMIC I Regular Interest I-LT1SUB,
         REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB,
         REMIC I Regular Interest I- LT2GRP and REMIC I Regular Interest I-LTXX,
         on a PRO RATA basis, in an amount equal to (A) the Uncertificated
         Interest for such Distribution Date, plus (B) any amounts in respect
         thereof remaining unpaid from previous Distribution Dates;

                  (iii) to the Holders of REMIC I Regular Interests, in an
         amount equal to the remainder of the REMIC I Marker Allocation
         Percentage of the Available Distribution Amount for such Distribution
         Date after the distributions made pursuant to clause (i) above,
         allocated as follows:

                                      -88-
<PAGE>

                           (a) to the Holders of REMIC I Regular Interest
                  I-LTAA, 98.00% of such remainder (less the amount payable in
                  clause (d) below), until the Uncertificated Balance of such
                  REMIC I Regular Interest is reduced to zero;

                           (b) to the Holders of REMIC I Regular Interest
                  I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
                  Interest I-LTA2A, REMIC I Regular Interest I- LTA3, REMIC I
                  Regular Interest I-LTA4, REMIC I Regular Interest I-LTA5,
                  REMIC I Regular Interest I-LTA6, REMIC I Regular Interest
                  I-LTA6A, REMIC I Regular Interest I-LTA7, REMIC I Regular
                  Interest I-LTA8, REMIC I Regular Interest I-LTM1, REMIC I
                  Regular Interest I-LTM2, REMIC I Regular Interest I- LTM3,
                  REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
                  I-LTM5 and REMIC I Regular Interest I-LTB, 1.00% of such
                  remainder (less the amount payable in clause (d) below), in
                  the same proportion as principal payments are allocated to the
                  Corresponding Certificates, until the Uncertificated Balances
                  of such REMIC I Regular Interests are reduced to zero;

                           (c) to the Holders of REMIC I Regular Interest
                  I-LTZZ, 1.00% of such remainder (less the amount payable in
                  clause (d) below), until the Uncertificated Balance of such
                  REMIC I Regular Interest is reduced to zero; then

                           (d) to the Holders of REMIC I Regular Interest I-LTP,
                  on the Distribution Date immediately following the expiration
                  of the latest Prepayment Charge as identified on the
                  Prepayment Charge Schedule or any Distribution Date thereafter
                  until $100 has been distributed pursuant to this clause; and

                           (e) any remaining amount to the Holders of the Class
                  R Certificates (as Holder of the Class R-I Interest);

provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated to
Holders of REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ,
respectively; and

                  (iv) to the Holders of REMIC I Regular Interests, in an amount
         equal to the remainder of the REMIC I Sub WAC Allocation Percentage of
         the Available Distribution Amount for such Distribution Date after the
         distributions made pursuant to clause (i) above, such that
         distributions of principal shall be deemed to be made to the REMIC I
         Regular Interests first, so as to keep the Uncertificated Balance of
         each REMIC I Regular Interest ending with the designation "GRP" equal
         to 0.01% of the aggregate Stated Principal Balance of the Mortgage
         Loans in the related Loan Group; second, to each REMIC I Regular
         Interest ending with the designation "SUB," so that the Uncertificated
         Balance of each such REMIC I Regular Interest is equal to 0.01% of the
         excess of (x) the aggregate Stated Principal Balance of the Mortgage
         Loans in the related Loan Group over (y) the current Certificate
         Principal Balance of the Class A Certificates in the related Loan Group
         (except that if any such excess is a larger number than in the
         preceding distribution period, the least amount of principal shall be
         distributed to such REMIC I Regular Interests such that the REMIC I

                                      -89-
<PAGE>

         Subordinated Balance Ratio is maintained); and third, any remaining
         principal to REMIC I Regular Interest I-LTXX.

                  Notwithstanding the distributions pursuant to this Section
4.01(1), distribution of funds shall conform to the distributions made pursuant
to Section 4.01(2), (3) and (4).

                  (2)(I) On each Distribution Date, the Trustee shall withdraw
         from the Distribution Account an amount equal to the Group I Interest
         Remittance Amount and distribute to the Certificateholders the
         following amounts, in the following order of priority:

                  (i) to the Certificate Insurer, the amount owing to the
         Certificate Insurer under the Insurance Agreement for the premium
         payable in respect of the Insured Certificates;

                  (ii) concurrently, to the Holders of the Group I Certificates,
         on a PRO RATA basis based on the entitlement of each such Class, an
         amount equal to the Senior Interest Distribution Amount allocable to
         such Certificates;

                  (iii) to the Certificate Insurer, the Reimbursement Amount for
         such Distribution Date; and

                  (iv) to the Holders of the Class A-II Certificates, an amount
         equal to the Senior Interest Distribution Amount allocable to such
         Certificates, to the extent remaining undistributed after the
         distribution of the Group II Interest Remittance Amount as set forth in
         Section 4.01(a)(2)(II)(i).

                  (II) On each Distribution Date, the Trustee shall withdraw
         from the Distribution Account an amount equal to the Group II Interest
         Remittance Amount and distribute to the Certificateholders the
         following amounts, in the following order of priority:

                  (i) to the Holders of the Class A-II Certificates, an amount
         equal to the Senior Interest Distribution Amount allocable to such
         Certificates;

                  (ii) to the Certificate Insurer, the amount owing to the
         Certificate Insurer under the Insurance Agreement for the premium
         payable in respect of the Insured Certificates, to the extent remaining
         unpaid after the distribution of the Group I Interest Remittance Amount
         set forth in Section 4.01(a)(2)(I)(i);

                  (iii) concurrently, to the Holders of the Group I
         Certificates, on a PRO RATA basis based on the entitlement of each such
         Class, an amount equal to the Senior Interest Distribution Amount
         allocable to such Certificates, to the extent remaining undistributed
         after the distribution of the Group I Interest Remittance Amount set
         forth in Section 4.01(a)(2)(I)(ii); and

                  (iv) to the Certificate Insurer, the Reimbursement Amount for
         such Distribution Date, to the extent not paid pursuant to Section
         4.01(a)(2)(I)(iii).

                                      -90-
<PAGE>

                  (III) On each Distribution Date, following the distributions
         made pursuant to Section 4.01(a)(2)(I) above, the Trustee shall
         withdraw from the Distribution Account an amount equal to any remaining
         Group I Interest Remittance Amount and Group II Interest Remittance
         Amount and distribute to the Certificateholders the following amounts,
         in the following order of priority:

                  (i) to the Holders of the Class M-1 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-1
         Certificates;

                  (ii) to the Holders of the Class M-2 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-2
         Certificates;

                  (iii) to the Holders of the Class M-3 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-3
         Certificates;

                  (iv) to the Holders of the Class M-4 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-4
         Certificates;

                  (v) to the Holders of the Class M-5 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-5
         Certificates; and

                  (vi) to the Holders of the Class B Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class B
         Certificates.

                  (3)(I) On each Distribution Date (a) prior to the Stepdown
         Date or (b) on which a Trigger Event is in effect, the Group I
         Principal Distribution Amount shall be distributed in the following
         order of priority:

                  (i) to the Holders of the Group I Certificates (allocated
         among the Classes of Group I Certificates in the priority described
         below), until the Certificate Principal Balances thereof have been
         reduced to zero;

                  (ii) to the Certificate Insurer, the Reimbursement Amount for
         such Distribution Date, to the extent not paid pursuant to Section
         4.01(a)(2)(I)(iii) and Section 4.01(a)(2)(II)(iv); and

                  (iii) after taking into account the amount distributed to the
         Holders of the Class A-II Certificates pursuant to
         Section4.01(a)(3)(II)(i) on such Distribution Date, to the Holders of
         the Class A-II Certificates, until the Certificate Principal Balance
         thereof has been reduced to zero.

                  (II) On each Distribution Date (a) prior to the Stepdown Date
         or (b) on which a Trigger Event is in effect, the Group II Principal
         Distribution Amount shall be distributed in the following order of
         priority:

                                      -91-
<PAGE>

                  (i) to the Holders of the Class A-II Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero;

                  (ii) after taking into account the amount distributed to the
         Holders of the Group II Certificates pursuant to Section
         4.01(a)(3)(I)(i) on such Distribution Date, to the Holders of the Group
         I Certificates (allocated among the Classes of Group I Certificates in
         the priority described below), until the Certificate Principal Balances
         thereof have been reduced to zero; and

                  (iii) after taking into account the amount distributed to the
         Certificate Insurer pursuant to Section 4.01(a)(3)(I)(ii), to the
         Certificate Insurer, the Reimbursement Amount for such Distribution
         Date, to the extent not paid pursuant to Section 4.01(a)(2)(I)(iii),
         Section 4.01(a)(2)(II)(iv) and Section 4.01(a)(3)(I)(ii).

                  (III) On each Distribution Date (a) prior to the Stepdown Date
         or (b) on which a Trigger Event is in effect, the Group I Principal
         Distribution Amount and the Group II Principal Distribution Amount
         remaining undistributed for such Distribution Date shall be distributed
         in the following order of priority:

                  (i) to the Holders of the Class M-1 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;

                  (ii) to the Holders of the Class M-2 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;

                  (iii) to the Holders of the Class M-3 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;

                  (iv) to the Holders of the Class M-4 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;

                  (v) to the Holders of the Class M-5 Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero;
         and

                  (vi) to the Holders of the Class B Certificates, until the
         Certificate Principal Balance of such Class has been reduced to zero.

                  (IV) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, the Group I
         Principal Distribution Amount shall be distributed in the following
         order of priority:

                  (i) to the Holders of the Group I Certificates (allocated
         among the Classes of Group I Certificates in the priority described
         below), the Group I Allocation Percentage of the Class A Principal
         Distribution Amount, until the Certificate Principal Balances thereof
         have been reduced to zero;

                                      -92-
<PAGE>

                  (ii) to the Certificate Insurer, the Reimbursement Amount for
         such Distribution Date, to the extent not paid pursuant to Section
         4.01(a)(2)(I)(iii) and Section 4.01(a)(2)(II)(iv); and

                  (iii) to the Holders of the Class A-II Certificates, an amount
         equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(a)(3)(V)(i) for such Distribution
         Date over (y) the amount actually distributed pursuant to Section
         4.01(a)(3)(V)(i) from the Group II Principal Distribution Amount on
         such Distribution Date.

                  (V) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, the Group II
         Principal Distribution Amount shall be distributed in the following
         order of priority:

                  (i) to the Holders of the Class A-II Certificates, the Group
         II Allocation Percentage of the Class A Principal Distribution Amount,
         until the Certificate Principal Balance thereof has been reduced to
         zero;

                  (ii) to the Holders of the Group I Certificates (allocated
         among the Classes of Group I Certificates in the priority described
         below), an amount equal to the excess, if any, of (x) the amount
         required to be distributed pursuant to Section 4.01(a)(3)(IV)(i) for
         such Distribution Date over (y) the amount actually distributed
         pursuant to Section 4.01(a)(3)(IV)(i) from the Group I Principal
         Distribution Amount on such Distribution Date; and

                  (iii) after taking into account the amount distributed to the
         Certificate Insurer pursuant to Section 4.01(a)(3)(IV)(ii), to the
         Certificate Insurer, the Reimbursement Amount for such Distribution
         Date, to the extent not paid pursuant to Section 4.01(a)(3)(I)(iii),
         Section 4.01(a)(2)(II)(iv) and Section 4.01(a)(3)(IV)(iii).

                  (VI) On each Distribution Date (a) on or after the Stepdown
         Date and (b) on which a Trigger Event is not in effect, the Group I
         Principal Distribution Amount and the Group II Principal Distribution
         Amount remaining undistributed for such Distribution Date shall be
         distributed in the following order of priority:

                  (i) to the holders of the Class M-1 Certificates, the Class
         M-1 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (ii) to the holders of the Class M-2 Certificates, the Class
         M-2 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iii) to the holders of the Class M-3 Certificates, the Class
         M-3 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iv) to the holders of the Class M-4 Certificates, the Class
         M-4 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                                      -93-
<PAGE>

                  (v) to the holders of the Class M-5 Certificates, the Class
         M-5 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero; and

                  (iv) to the holders of the Class B Certificates, the Class B
         Principal Distribution Amount until the Certificate Principal Balance
         thereof has been reduced to zero.

                  With respect to the Group I Certificates, all principal
distributions of the Group I Principal Distribution Amount and the Class A
Principal Distribution Amount will be distributed first, to the Holders of the
Class A-I-7 Certificates, the Lockout Distribution Percentage of the Group I
Principal Distribution Amount or Class A Principal Distribution Amount, as
applicable, until the Certificate Principal Balance of the Class A-I-7
Certificates has been reduced to zero; second, to the Holders of the Class A-I-1
Certificates, until the Certificate Principal Balance of the Class A-I-1
Certificates has been reduced to zero; third, concurrently, to the Holders of
the Class A-I-2 Certificates and the Class A-I-2A Certificates, on a PRO RATA
basis based on the Certificate Principal Balance of each such Class, until the
Certificate Principal Balances of the Class A-I-2 Certificates and the Class
A-I-2A Certificates have been reduced to zero; fourth, to the Holders of the
Class A-I- 3 Certificates, until the Certificate Principal Balance of the Class
A-I-3 Certificates has been reduced to zero; fifth, to the Holders of the Class
A-I-4 Certificates, until the Certificate Principal Balance of the Class A-I-4
Certificates has been reduced to zero, sixth, to the Holders of the Class A-I-5
Certificates, until the Certificate Principal Balance of the Class A-I-5
Certificates has been reduced to zero, seventh, concurrently, to the Holders of
the Class A-I-6 Certificates and the Class A-I-6A Certificates, on a PRO RATA
basis based on the Certificate Principal Balance of each such Class, until the
Certificate Principal Balances of the Class A-I-6 Certificates and the Class
A-I-6A Certificates have been reduced to zero and eighth, to the Holders of the
Class A-I-7 Certificates, until the Certificate Principal Balance of the Class
A-I-7 Certificates has been reduced to zero.

                  (4) On each Distribution Date, the Net Monthly Excess Cashflow
         shall be distributed by the Trustee as follows:

                  (i) to the Holders of the Class or Classes of Certificates
         then entitled to receive distributions in respect of principal, as part
         of the Group I Principal Distribution Amount and the Group II Principal
         Distribution Amount in an amount equal to the Overcollateralization
         Increase Amount for the Certificates, applied to reduce the Certificate
         Principal Balance of such Certificates until the aggregate Certificate
         Principal Balance of such Certificates is reduced to zero;

                  (ii) to the Holders of the Class M-1 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (iii) to the Holders of the Class M-1 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (iv) to the Holders of the Class M-2 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                                      -94-
<PAGE>

                  (v) to the Holders of the Class M-2 Certificates, in an amount
         equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (vi) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (vii) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (viii) to the Holders of the Class M-4 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (ix) to the Holders of the Class M-4 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (x) to the Holders of the Class M-5 Certificates, in an amount
         equal to the Interest Carry Forward Amount allocable to such Class of
         Certificates;

                  (xi) to the Holders of the Class M-5 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (xii) to the Holders of the Class B Certificates, in an amount
         equal to the Interest Carry Forward Amount allocable to such Class of
         Certificates;

                  (xiii) to the Holders of the Class B Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (xiv) concurrently, to the Holders of each Class of Class A
         Certificates, on a PRO RATA basis based on the entitlement of each such
         Class, in an amount equal to the aggregate of any Prepayment Interest
         Shortfalls and any Relief Act Interest Shortfall on the Mortgage Loans
         allocated to such Certificates, PRO RATA based on the entitlement of
         each such Class, in each case, without interest accrued thereon;

                  (xv) to the Holders of the Class M-1 Certificates, in an
         amount equal to the aggregate of any Prepayment Interest Shortfalls and
         any Relief Act Interest Shortfall on the Mortgage Loans allocated to
         such Certificates, in each case, without interest accrued thereon;

                  (xvi) to the Holders of the Class M-2 Certificates, in an
         amount equal to the aggregate of any Prepayment Interest Shortfalls and
         any Relief Act Interest Shortfall on the Mortgage Loans allocated to
         such Certificates, in each case, without interest accrued thereon;

                  (xvii) to the Holders of the Class M-3 Certificates, in an
         amount equal to the aggregate of any Prepayment Interest Shortfalls and
         any Relief Act Interest Shortfall on the Mortgage Loans allocated to
         such Certificates, in each case, without interest accrued thereon;

                                      -95-
<PAGE>

                  (xviii) to the Holders of the Class M-4 Certificates, in an
         amount equal to the aggregate of any Prepayment Interest Shortfalls and
         any Relief Act Interest Shortfall on the Mortgage Loans allocated to
         such Certificates, in each case, without interest accrued thereon;

                  (xix) to the Holders of the Class M-5 Certificates, in an
         amount equal to the aggregate of any Prepayment Interest Shortfalls and
         any Relief Act Interest Shortfall on the Mortgage Loans allocated to
         such Certificates, in each case, without interest accrued thereon;

                  (xx) to the Holders of the Class B Certificates, in an amount
         equal to the aggregate of any Prepayment Interest Shortfalls and any
         Relief Act Interest Shortfall on the Mortgage Loans allocated to such
         Certificates, in each case, without interest accrued thereon;

                  (xxi) to the Net WAC Rate Carryover Reserve Account, the
         amount by which the aggregate Net WAC Rate Carryover Amount for such
         Distribution Date exceeds the amounts received by the Trustee under the
         Cap Contracts;

                  (xxii) to the Holders of the Class CE Certificates (in respect
         of the Class CE-I Component and the Class CE-II Component) the Interest
         Distribution Amount and any remaining Overcollateralization Reduction
         Amount for such Distribution Date; and

                  (xxiii) to the Holders of the Class R Certificates, any
         remaining amounts; provided that if such Distribution Date is the
         Distribution Date immediately following the expiration of the latest
         Prepayment Charge term on a Mortgage Loan as identified on the Mortgage
         Loan Schedule or any Distribution Date thereafter, then any such
         remaining amounts will be distributed first, to the Holders of the
         Class P Certificates, until the Certificate Principal Balance thereof
         has been reduced to zero; and second, to the Holders of the Class R
         Certificates.

                  (b) On each Distribution Date, after making the distributions
         of the Available Distribution Amount as set forth above, the Trustee
         will FIRST, withdraw from the Net WAC Rate Carryover Reserve Account
         all income from the investment of funds in the Net WAC Rate Carryover
         Reserve Account and distribute such amount to the Holders of the Class
         CE Certificates, and SECOND, withdraw from the Net WAC Rate Carryover
         Reserve Account, to the extent of amounts remaining on deposit therein,
         the amount of any Net WAC Rate Carryover Amount with respect to the
         Class A Certificates, the Mezzanine Certificates and the Class B
         Certificates for such Distribution Date and distribute such amount in
         the following order of priority:

                  (i) (a) any amounts received by the Trustee in respect of the
         Class A-I-1 Cap Contract will be distributed to the Holders of the
         Class A-I-1 Certificates, to the extent of the Net WAC Rate Carryover
         Amount for such Distribution Date;

                           (b) any amounts received by the Trustee in respect of
the Class A-II Cap Contract will be distributed to the Holders of the Class A-II
Certificates, to the extent of the Net WAC Rate Carryover Amount for such
Distribution Date; and

                                      -96-
<PAGE>

                  (ii) any amounts deposited in the Net WAC Carryover Reserve
Account from the Net Monthly Excess Cashflow will be distributed as follows, in
each case to the extent of the applicable Net WAC Rate Carryover Amount:

                           (a) concurrently to each Class of Class A
Certificates, to the extent of the related Net WAC Rate Carryover Amount for
such Distribution Date, on a PRO RATA basis based on the Net WAC Rate Carryover
Amount due on each such Class on such Distribution Date;

                           (b) to the Class M-1 Certificates;

                           (c) to the Class M-2 Certificates;

                           (d) to the Class M-3 Certificates;

                           (e) to the Class M-4 Certificates;

                           (f) to the Class M-5 Certificates; and

                           (g) to the Class B Certificates.

                  On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans or any Master Servicer Prepayment Charge
Payment Amount and shall distribute such amounts to the Holders of the Class P
Certificates. Such distributions shall not be applied to reduce the Certificate
Principal Balance of the Class P Certificates.

                  (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date shall be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date, or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate at the office of the Trustee
maintained for such purpose pursuant to Section 8.12 or such other location
specified in the notice to Certificateholders of such final distribution.

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

                                      -97-
<PAGE>

Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.

                  (d) The rights of the Certificateholders to receive
         distributions in respect of the Certificates, and all interests of the
         Certificateholders in such distributions, shall be as set forth in this
         Agreement. None of the Holders of any Class of Certificates, the
         Trustee or the Master Servicer shall in any way be responsible or
         liable to the Holders of any other Class of Certificates in respect of
         amounts properly previously distributed on the Certificates.

                  (e) On each Distribution Date, following the distributions
         made pursuant to Section 4.01(a)(2), Section 4.01(a)(3) and Section
         4.01(a)(4), the Trustee shall withdraw from the Distribution Account
         the amount of any Insured Amount for such Distribution Date and shall
         distribute such Insured Amount to the Holders of the Insured
         Certificates.

                  (f) Except as otherwise provided in Section 9.01, whenever the
         Trustee expects that the final distribution with respect to any Class
         of Certificates will be made on the next Distribution Date, the Trustee
         shall, no later than one (1) day before the related Distribution Date
         (to the extent that an accurate Remittance Report is received in a
         timely manner by the Trustee), mail to each Holder on such date of such
         Class of Certificates and the Certificate Insurer a notice to the
         effect that:

                  (i) the Trustee expects that the final distribution with
         respect to such Class of Certificates will be made on such Distribution
         Date but only upon presentation and surrender of such Certificates at
         the office of the Trustee therein specified, and

                  (ii) no interest shall accrue on such Certificates from and
         after the end of the related Interest Accrual Period.

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Trustee and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to the remaining non-tendering Certificateholders concerning surrender of
their Certificates but shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the Trust Fund. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to Bear, Stearns & Co. Inc., in accordance
with its wiring instructions, all such amounts,

                                      -98-
<PAGE>

and all rights of non-tendering Certificateholders in or to such amounts shall
thereupon cease. No interest shall accrue or be payable to any Certificateholder
on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e). Any such amounts held in trust
by the Trustee shall be held in an Eligible Account and shall be held
uninvested.

                  (g) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate, a
Mezzanine Certificate or a Class B Certificate be reduced more than once in
respect of any particular amount both (a) allocated to such Certificate in
respect of Realized Losses pursuant to Section 4.04 and (b) distributed to the
Holder of such Certificate in reduction of the Certificate Principal Balance
thereof pursuant to this Section 4.01 from Net Monthly Excess Cashflow and (ii)
in no event shall the Uncertificated Balance of a REMIC I Regular Interest be
reduced more than once in respect of any particular amount both (a) allocated to
such REMIC I Regular Interest in respect of Realized Losses pursuant to Section
4.04 and (b) distributed on such REMIC I Regular Interest in reduction of the
Uncertificated Balance thereof pursuant to this Section 4.01.

                  SECTION 4.02. Statements to Certificateholders.

         On each Distribution Date, the Trustee shall prepare and make available
via its website to each Holder of the Regular Certificates and the Certificate
Insurer, a statement as to the distributions made on such Distribution Date
setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Certificates of each Class allocable to
         principal, and the amount of the distribution made on such Distribution
         Date to the Holders of the Class P Certificates allocable to Prepayment
         Charges;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of the Certificates of each Class allocable to
         interest;

                  (iii) the aggregate Servicing Fee received by the Master
         Servicer during the related Due Period and such other customary
         information as the Trustee deems necessary or desirable, or which a
         Certificateholder reasonably requests, to enable Certificateholders to
         prepare their tax returns;

                  (iv) the aggregate amount of P&I Advances for such
         Distribution Date;

                  (v) the aggregate Stated Principal Balance of the Mortgage
         Loans and any REO Properties as of the close of business on such
         Distribution Date;

                  (vi) the number, aggregate principal balance, weighted average
         remaining term to maturity and weighted average Mortgage Rate of the
         Mortgage Loans as of the related Due Date;

                                      -99-
<PAGE>

                  (vii) the number and aggregate unpaid principal balance of
         Mortgage Loans (a) delinquent 30 to 59 days, (b) delinquent 60 to 89
         days, (c) delinquent 90 or more days, in each case, as of the last day
         of the preceding calendar month, (d) as to which foreclosure
         proceedings have been commenced and (e) with respect to which the
         related Mortgagor has filed for protection under applicable bankruptcy
         laws, with respect to whom bankruptcy proceedings are pending or with
         respect to whom bankruptcy protection is in force;

                  (viii) with respect to any Mortgage Loan that became an REO
         Property during the preceding calendar month, the loan number of such
         Mortgage Loan, the unpaid principal balance and the Stated Principal
         Balance of such Mortgage Loan as of the date it became an REO Property;

                  (ix) the book value of any REO Property as of the close of
         business on the last Business Day of the calendar month preceding the
         Distribution Date;

                  (x) the aggregate amount of Principal Prepayments made during
         the related Prepayment Period;

                  (xi) the aggregate amount of Realized Losses incurred during
         the related Prepayment Period (or, in the case of Bankruptcy Losses
         allocable to interest, during the related Due Period), separately
         identifying whether such Realized Losses constituted Bankruptcy Losses
         and the aggregate amount of Realized Losses incurred since the Closing
         Date;

                  (xii) the aggregate amount of Extraordinary Trust Fund
         Expenses withdrawn from the Collection Account or the Distribution
         Account for such Distribution Date;

                  (xiii) the aggregate Certificate Principal Balance and
         Notional Amount, as applicable, of each Class of Certificates, after
         giving effect to the distributions, and allocations of Realized Losses,
         made on such Distribution Date, separately identifying any reduction
         thereof due to (a) the receipt of an Insured Amount in respect of
         principal (in the case of the Insured Certificates) or (b) allocations
         of Realized Losses;

                  (xiv) the Certificate Factor for each such Class of
         Certificates applicable to such Distribution Date;

                  (xv) the Interest Distribution Amount in respect of the Class
         A Certificates, the Mezzanine Certificates, the Class B Certificates
         and the Class CE Certificates for such Distribution Date and the
         Interest Carry Forward Amount, if any, with respect to the Class A
         Certificates, the Mezzanine Certificates and the Class B Certificates
         on such Distribution Date, and in the case of the Class A Certificates,
         the Mezzanine Certificates, the Class B Certificates and the Class CE
         Certificates, separately identifying any reduction thereof due to
         allocations of Realized Losses, Prepayment Interest Shortfalls and
         Relief Act Interest Shortfalls;

                                     -100-
<PAGE>

                  (xvi) the aggregate amount of any Prepayment Interest
         Shortfall for such Distribution Date, to the extent not covered by
         payments by the Master Servicer pursuant to Section 3.24;

                  (xvii) the aggregate amount of Relief Act Interest Shortfalls
         for such Distribution Date;

                  (xviii) the Overcollateralization Target Amount and the Credit
         Enhancement Percentage for such Distribution Date;

                  (xix) the Overcollateralization Increase Amount, if any, for
         such Distribution Date;

                  (xx) the Overcollateralization Reduction Amount, if any, for
         such Distribution Date;

                  (xxi) the respective Pass-Through Rates applicable to the
         Class A Certificates, the Mezzanine Certificates, the Class B
         Certificates and the Class CE Certificates for such Distribution Date
         and the Pass-Through Rate applicable to the Class A Certificates, the
         Mezzanine Certificates and the Class B Certificates for the immediately
         succeeding Distribution Date;

                  (xxii) the Net WAC Rate Carryover Amount for the Class A
         Certificates and the Mezzanine Certificates, if any, for such
         Distribution Date and the amount remaining unpaid after reimbursements
         therefor on such Distribution Date; and

                  (xxiii) the amount of any Insured Amount for such Distribution
         Date, separately identifying the portion of such payment allocable to
         interest and principal; and

                  (xxiv) the amount of the Reimbursement Amount for such
         Distribution Date and the amount received by the Certificate Insurer in
         respect thereof on such Distribution Date.

                  The Trustee shall make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the Master Servicer, the Certificate
Insurer and the Rating Agencies via the Trustee's internet website. The
Trustee's internet website shall initially be located at
https://www.corporatetrust.db.com/invr and assistance in using the website can
be obtained by calling the Trustee's customer service desk at 1-800-735-7777.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way such statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes.

                  In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.

                                     -101-
<PAGE>

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

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.

                  The Trustee shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trustee's duties are limited to the extent
that the Trustee receives timely reports as required from the Master Servicer.

                  On each Distribution Date the Trustee shall provide Bloomberg
Financial Markets, L. P. (" Bloomberg") CUSIP level factors for each class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.

                  SECTION 4.03. Remittance Reports; P&I Advances.

                  (a) On the Business Day following each Determination Date, the
Master Servicer shall deliver to the Trustee and the Certificate Insurer by
telecopy (or by such other means as the Master Servicer, the Trustee or the
Certificate Insurer, as the case may be, may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Master Servicer shall electronically transmit (in a format acceptable
to the Trustee), a data file containing the information set forth in such
Remittance Report with respect to the related Distribution Date or if electronic
transmission is not available, the Master Servicer shall forward to the Trustee
by overnight mail a computer readable magnetic tape. Such Remittance Report will
include (i) the amount of P&I Advances to be made by the Master Servicer in
respect of the related Distribution Date, the aggregate amount of P&I Advances
outstanding after giving effect to such P&I Advances, and the aggregate amount
of Nonrecoverable P&I Advances in respect of such Distribution Date and (ii)
such other information with respect to the Mortgage Loans as the Trustee may
reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.02. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.

                                     -102-
<PAGE>

                  (b) The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of, (i) the aggregate amount of Monthly Payments (with each interest portion
thereof net of the related Servicing Fee), due on the related Due Date in
respect of the Mortgage Loans, which Monthly Payments were delinquent as of the
close of business on the related Determination Date and (ii) with respect to
each REO Property, which REO Property was acquired during or prior to the
related Prepayment Period and as to which REO Property an REO Disposition did
not occur during the related Prepayment Period, an amount equal to the excess,
if any, of the REO Imputed Interest on such REO Property for the most recently
ended calendar month, over the net income from such REO Property transferred to
the Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date; provided, however, that the Master Servicer shall not be
required to make P&I Advances with respect to Relief Act Interest Shortfalls or
Prepayment Interest Shortfalls in excess of their respective obligations under
Section 3.24.

                  By 1:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Distribution Date either (i) from its own funds
or (ii) from the Collection Account, to the extent of funds held therein for
future distribution (in which case it will cause to be made an appropriate entry
in the records of the Collection Account that amounts held for future
distribution have been, as permitted by this Section 4.03, used by the Master
Servicer in discharge of any such P&I Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of P&I Advances to be
made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Distribution
Amount for the related Distribution Date (determined without regard to P&I
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make P&I Advances. The Trustee will
provide notice to the Master Servicer by telecopy by the close of business on
the Business Day prior to the Distribution Date (so long as the Trustee receives
the required remittance from the Master Servicer) in the event that the amount
remitted by the Master Servicer to the Trustee on such date is less than the
amount required to be remitted by the Master Servicer as set forth in the
Remittance Report for the related Distribution Date.

                  (c) The obligation of the Master Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from the Trust Fund pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section.

                  (d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such P&I Advance or Servicing Advance would, if made,
constitute a Nonrecoverable P&I Advance or Nonrecoverable

                                     -103-
<PAGE>

Servicing Advance, respectively. The determination by the Master Servicer that
it has made a Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance
or that any proposed P&I Advance or Servicing Advance, if made, would constitute
a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, respectively,
shall be evidenced by an Officers' Certificate of the Master Servicer delivered
to the Depositor, the Certificate Insurer and the Trustee.

                  SECTION 4.04. Allocation of Realized Losses.

                  (a) Prior to each Determination Date, the Master Servicer
shall determine as to each Mortgage Loan and REO Property: (i) the total amount
of Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses; and (iii)
the respective portions of such Realized Losses allocable to interest and
allocable to principal. Prior to each Determination Date, the Master Servicer
shall also determine as to each Mortgage Loan: (i) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period; and (ii) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Master Servicer shall be
evidenced by an Officers' Certificate delivered to the Trustee by the Master
Servicer prior to the Determination Date immediately following the end of (i) in
the case of Bankruptcy Losses allocable to interest, the Due Period during which
any such Realized Loss was incurred, and (ii) in the case of all other Realized
Losses, the Prepayment Period during which any such Realized Loss was incurred.

                  (b) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows: first, to the
Accrued Certificate Interest for the Class CE Certificates for the related
Interest Accrual Period; second, to the Class CE Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class B Certificates until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-4
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; sixth, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; seventh, to the Class M-2
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; and eighth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.

                  All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.

                  Any allocation of Realized Losses to a Class B Certificate or
a Mezzanine Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated and any
allocation of Realized Losses to a Class CE Certificate shall be made

                                     -104-
<PAGE>

by reducing the amount otherwise payable in respect thereof pursuant to Section
4.01(a)(4)(xxii). No allocations of any Realized Losses shall be made to the
Certificate Principal Balances of the Class A Certificates or the Class P
Certificates.

                  As used herein, an allocation of a Realized Loss on a "PRO
RATA basis" among two or more specified Classes of Certificates means an
allocation on a pro rata basis, among the various Classes so specified, to each
such Class of Certificates on the basis of their then outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution Date. All Realized Losses and all other losses allocated to a Class
of Certificates hereunder will be allocated among the Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.

                  (c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows:

                  (i) The REMIC I Marker Allocation Percentage of all Realized
Losses on the Mortgage Loans shall be allocated by the Trustee on each
Distribution Date to the following REMIC I Regular Interests in the specified
percentages, as follows: first, to Uncertificated Interest payable to the REMIC
I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate
amount equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Balances of the REMIC I Regular
Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate amount
equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively;
third, to the Uncertificated Balances of REMIC I Regular Interest I- LTAA, REMIC
I Regular Interest I-LTB and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balances of REMIC I Regular Interest
I-LTB has been reduced to zero; fourth to the Uncertificated Balances of REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTZZ, 98%, 1%, and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM5 has been reduced to zero; fifth to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I- LTM4 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM4 has been reduced to zero; sixth to the Uncertificated Balances of REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular
Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM3 has been reduced to zero; seventh to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero and eighth to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM1 has been reduced to zero.

                  (ii) The REMIC I Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Balance of each REMIC
I Regular Interest ending with the designation "GRP" equal to 0.01% of the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group; second, to each REMIC I Regular Interest ending with the designation
"SUB," so that the

                                     -105-
<PAGE>

Uncertificated Balance of each such REMIC I Regular Interest is equal to 0.01%
of the excess of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group over (y) the current Certificate Principal
Balance of the Class A Certificate in the related Loan Group (except that if any
such excess is a larger number than in the preceding distribution period, the
least amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is maintained); and
third, any remaining Realized Losses shall be allocated to REMIC I Regular
Interest I-LTXX.

                  SECTION 4.05. Compliance with Withholding Requirements

                  Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.

                  SECTION 4.06. Exchange Commission; Additional Information.

                  (a) The Trustee shall reasonably cooperate with the Depositor
in connection with the Trust's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Trustee
shall prepare on behalf of the Trust any Forms 8-K and 10-K customary for
similar securities as required by the Exchange Act and the Rules and Regulations
of the Securities and Exchange Commission thereunder, and the Depositor shall
sign (or shall cause another entity acceptable to the Securities and Exchange
Commission to sign) and the Trustee shall file (via the Securities and Exchange
Commission's Electronic Data Gathering and Retrieval System) such forms on
behalf of the Depositor (or such other entity). The Depositor hereby grants to
the Trustee a limited power of attorney to execute any Form 8-K and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until the earlier of (i) receipt by the Trustee from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust.
Notwithstanding anything herein to the contrary, the Depositor, and not the
Trustee, shall be responsible for executing each Form 10-K filed on behalf of
the Trust.

                  (b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits the Master Servicer's annual statement of
compliance described under Section 3.20 and the accountant's report described
under Section 3.21, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting

                                     -106-
<PAGE>

from its own negligence or willful misconduct. The Form 10-K shall also include
a certification in the form attached hereto as Exhibit J-1 (the
"Certification"), which shall be signed by the senior officer of the Depositor
in charge of securitization.

                  (c) In addition, the Trustee shall sign a certification (in
the form attached hereto as Exhibit J-2) for the benefit of the Depositor and
its officers, directors and Affiliates regarding certain aspects of the
Certification (provided, however, that the Trustee shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K).
The Trustee's certification shall be delivered to the Depositor by no later than
March 19th of each year (or if such day is not a Business Day, the immediately
preceding Business Day) and the Depositor shall deliver the Certification to the
Trustee for filing no later than March 20th of each year (or if such day is not
a Business Day, the immediately preceding Business Day).

                  In addition, the Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 4.06(c) or
the Trustee's negligence, bad faith or willful misconduct in connection
therewith. The Depositor shall indemnify and hold harmless the Trustee and its
officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Depositor's obligations under this Section 4.06 or the Depositor's
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor or the Trustee, as applicable, then the other party, in
connection with a breach of its respective obligations under this Section 4.06
with respect to the Depositor or Section 4.06(c) with respect to the Trustee or
its respective negligence, bad faith or willful misconduct in connection
therewith, agrees that it shall contribute to the amount paid or payable by the
other party as a result of the losses, claims, damages or liabilities of the
other party in such proportion as is appropriate to reflect the relative fault
and the relative benefit of the Depositor on the one hand and the Trustee on the
other.

                  (d) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy of any
executed report, statement or information.

                  (e) Prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust.

                  (f) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.06 comply with the reporting requirements under
the Exchange Act, the Trustee hereby agrees that it will reasonably cooperate to
amend the provisions of this Section 4.06 (in accordance with Section 11.01) in
order to comply with such amended reporting requirements and such amendment of
this Section 4.06. Any such amendment may result in the reduction of the reports
filed by the Depositor under the Exchange Act. Notwithstanding the foregoing,
the Trustee shall not be obligated to enter into any amendment pursuant to this
Section that adversely affects its obligations and immunities under this
Agreement.

                                     -107-
<PAGE>

                  SECTION 4.07. Derivative Contracts for Benefit of Class CE
                                Certificates.

                  At any time on or after the Closing Date, the Depositor shall
have the right to deposit into the Trust Fund, solely for the benefit of the
Holder of the Class CE Certificates, a derivative contract or comparable
instrument. Any such instrument shall constitute a fully prepaid agreement. All
collections, proceeds and other amounts in respect of such an instrument shall
be distributed to the Class CE Certificates on the Distribution Date following
receipt thereof by the Trustee. In no event shall such an instrument constitute
a part of any REMIC created hereunder. In addition, in the event any such
instrument is deposited, the Trust Fund shall be deemed to be divided into two
separate and discrete sub-Trust Funds. The assets of one such sub-Trust Fund
shall consist of all the assets of the Trust Fund other than the instrument and
the assets of the other sub-Trust Fund shall consist solely of such instrument.

                  SECTION 4.08. The Policy.

                  (a) If, based on the information provided by the Master
Servicer pursuant to Section 4.03, the Trustee determines that an Insured Amount
to be covered by the Policy will exist for the related Distribution Date, the
Trustee shall complete the notice in the form of Exhibit A to the Policy (the
"Notice") and submit such Notice in accordance with the Policy to the
Certificate Insurer no later than 12:00 P.M., New York City time, on the second
Business Day immediately preceding such Distribution Date, as a claim for the
amount of such Insured Amount.

                  (b) The Trustee shall establish and maintain the Insurance
Account on behalf of the Holders of the Insured Certificates over which the
Trustee shall have the exclusive control and sole right of withdrawal. Upon
receipt of an Insured Amount from the Certificate Insurer on behalf of the
Holders of the Insured Certificates, the Trustee shall deposit such Insured
Amount in the Insurance Account and distribute such amount only for purposes of
payment to the Insured Certificates of the Insured Amount for which a claim was
made and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Master Servicer, the Seller, the Depositor, the Trustee or
the Trust Fund or to pay any other Class of Certificates. Amounts paid under the
Policy, to the extent needed to pay the Insured Amount, shall be transferred to
the Distribution Account on the related Distribution Date and disbursed by the
Trustee to the holders of the Insured Certificates in accordance with Section
4.01. It shall not be necessary for such payments to be made by checks or wire
transfers separate from the checks or wire transfers used to pay other
distributions to the holders of the Insured Certificates with other funds
available to make such payment. However, the amount of any payment of principal
or of interest on the Insured Certificates to be paid from funds transferred
from the Insurance Account shall be noted as provided in paragraph (d) below and
in the statement to be furnished to holders of the Insured Certificates pursuant
to Section 4.02. Funds held in the Insurance Account shall not be invested. Any
funds remaining in the Insurance Account on the first Business Day following a
Distribution Date shall be returned to the Certificate Insurer pursuant to the
written instructions of the Certificate Insurer by the end of such Business Day.

                  (c) The Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Insured Certificate
from moneys received under the Policy. The Certificate Insurer shall have the
right to inspect such records at reasonable times during normal business hours
upon one Business Day's prior notice to the Trustee.

                                     -108-
<PAGE>

                  (d) In the event that the Trustee has received a certified
copy of an order of the appropriate court that any Insured Amount has been
voided in whole or in part as a preference payment under applicable bankruptcy
law, the Trustee shall so notify the Certificate Insurer, shall comply with the
provisions of the Policy to obtain payment by the Certificate Insurer of such
Preference Amount in the amount of such voided Insured Amount, and shall, at the
time it provides notice to the Certificate Insurer, notify, by mail the holders
of the affected Insured Certificates that, in the event any holder's Insured
Amount is so recovered, such holder of an Insured Certificate will be entitled
to payment pursuant to the Policy, a copy of which shall be made available
through the Trustee, the Certificate Insurer or the Certificate Insurer's fiscal
agent, if any, and the Trustee shall furnish to the Certificate Insurer or its
fiscal agent, if any, its records evidencing the payments which have been made
by the Trustee and subsequently recovered from the holders of the Insured
Certificates, and dates on which such payments were made.

                  (e) The Trustee shall promptly notify the Certificate Insurer
and its fiscal agent of any proceeding or the institution of any action, of
which a Responsible Officer of the Trustee has actual knowledge, seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any distribution made with
respect to the Insured Certificates. Each holder of an Insured Certificate, by
its purchase of such Insured Certificate, the Master Servicer, the Depositor and
the Trustee agree that, the Certificate Insurer (so long as no Certificate
Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (i) the direction of any appeal
of any order relating to such Preference Claim and (ii) the posting of any
surety, supersedes or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Certificate Insurer shall be subrogated
to, and each holder of an Insured Certificate and the Trustee hereby delegates
and assigns to the Certificate Insurer, to the fullest extent permitted by law,
the rights of the Trustee and each holder of an Insured Certificate in the
conduct of any such Preference Claim, including, without limitation, all rights
of any party to any adversary proceeding or action with respect to any court
order issued in connection with any such Preference Claim.

                  (f) The Trustee shall, upon retirement of the Insured
Certificates, furnish to the Certificate Insurer a notice of such retirement,
and, upon retirement of the Insured Certificates and the expiration of the term
of the Policy, surrender the Policy to the Certificate Insurer for cancellation.

                  (g) The Trustee will hold the Policy in trust as agent for the
holders of the Insured Certificates for the purpose of making claims thereon and
distributing the proceeds thereof. Neither the Policy nor the amounts paid on
the Policy will constitute part of the Trust Fund created by this Agreement.
Each Holder of the Insured Certificates, by accepting its Insured Certificates,
appoints the Trustee as attorney in fact for the purpose of making claims on the
Policy.

                  (h) Anything herein to the contrary notwithstanding, any
payment with respect to principal of or interest on the Insured Certificates
which is made with moneys received pursuant to the terms of the Policy shall not
be considered payment of the Insured Certificates from the Trust Fund. The
Depositor, the Master Servicer and the Trustee acknowledge, and each holder by
its acceptance of an Insured Certificate agrees, that without the need for any
further action on the part

                                     -109-
<PAGE>

of the Certificate Insurer, the Depositor, the Master Servicer or the Trustee
(a) to the extent the Certificate Insurer makes payments, directly or
indirectly, on account of principal of or interest on the Insured Certificates
to the holders of such Insured Certificates, the Certificate Insurer will be
fully subrogated to, and each holder of an Insured Certificate, the Master
Servicer and the Trustee hereby delegate and assign to the Certificate Insurer,
to the fullest extent permitted by law, the rights of such holders to receive
such principal and interest from the Trust Fund, including, without limitation,
any amounts due to the holders of the Insured Certificates in respect of
securities law violations arising from the offer and sale of the Insured
Certificates, and (b) the Certificate Insurer shall be paid such amounts from
the sources and in the manner provided herein for the payment of such amounts
and as provided in this Agreement. The Trustee and the Master Servicer shall
cooperate in all respects with any reasonable request by the Certificate Insurer
for action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the holders as otherwise set forth herein.

                  (i) By accepting its Insured Certificate, each holder of an
Insured Certificate agrees that, unless a Certificate Insurer Default exists,
the Certificate Insurer shall be deemed to be the holder of the Insured
Certificate for all purposes (other than with respect to the receipt of payment
on the Insured Certificates) and shall have the right to exercise all rights
(including, without limitation, voting rights) of the holders of the Insured
Certificates under this Agreement and under the Insured Certificates without any
further consent of the holders of the Insured Certificates. All notices,
statement reports, certificates or opinions required by this Agreement to be
sent to any holders of Insured Certificates shall also be sent to the
Certificate Insurer.
..

                                     -110-
<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01. The Certificates.

                  (a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in the Trust Fund.

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-13. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

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

                  (b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. All transfers by Certificate Owners of their respective Ownership
Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trustee is hereby
initially appointed as the Book-Entry Custodian and hereby agrees to act as such
in accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no longer qualified to act as such, the Book- Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and, if the Trustee is not the Book-Entry Custodian, the Trustee, any other
transfer agent

                                     -111-
<PAGE>

(including the Depository or any successor Depository) to act as Book-Entry
Custodian under such conditions as the predecessor Book-Entry Custodian and the
Depository or any successor Depository may prescribe, provided that the
predecessor Book-Entry Custodian shall not be relieved of any of its duties or
responsibilities by reason of any such appointment of other than the Depository.
If the Trustee resigns or is removed in accordance with the terms hereof, the
Trustee, the successor Trustee or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.

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

                  If (i)(A) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing, qualified or able to
properly discharge its responsibilities as Depository, and (B) the Depositor is
unable to locate a qualified successor, (ii) the Depositor at its option, and
with the consent of the Trustee (such consent not to be unreasonably withheld),
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Master Servicer Event
of Default, Certificate Owners representing in the aggregate not less than 51%
of the Ownership Interests of the Book-Entry Certificates advise the Trustee
through the Depository, 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
Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee of the Book-Entry Certificates by the Book-Entry Custodian or the
Depository, as applicable, accompanied by registration instructions from the
Depository for registration of transfer, the Trustee shall cause the Definitive
Certificates to be issued. Such Definitive Certificates will be issued in
minimum denominations of $25,000, except that any beneficial ownership that was
represented by a Book-Entry Certificate in an amount less than $25,000
immediately prior to the issuance of a Definitive Certificate shall be issued in
a minimum denomination equal to the amount represented by such Book-Entry
Certificate. None of the Depositor, the Master Servicer or the Trustee shall be
liable for any delay in the delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the 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.

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<PAGE>

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

                  (a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.11, a Certificate Register for the Certificates 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.

                  (b) No transfer of any Class B Certificate, Class CE
Certificate, Class P Certificate or Residual Certificate (the "Private
Certificates") shall be made unless that transfer is made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "1933 Act"), and effective registration or qualification under applicable
state securities laws, or is made in a transaction that does not require such
registration or qualification. In the event that such a transfer of a Private
Certificate is to be made without registration or qualification (other than in
connection with the initial transfer of any such Certificate by the Depositor to
an Affiliate of the Depositor), the Trustee shall require receipt of: (i) if
such transfer is purportedly being made in reliance upon Rule 144A under the
1933 Act, written certifications from the Certificateholder desiring to effect
the transfer and from such Certificateholder's prospective transferee,
substantially in the forms attached hereto as Exhibit F-1; and (ii) in all other
cases, an Opinion of Counsel satisfactory to it that such transfer may be made
without such registration (which Opinion of Counsel shall not be an expense of
the Trust Fund or of the Depositor, the Trustee, the Master Servicer in its
capacity as such or any Sub-Servicer), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither the Depositor nor the Trustee is obligated to
register or qualify any such Certificates under the 1933 Act or any other
securities laws or to take any action not otherwise required under this
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of any such
Certificate shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  (c) No transfer of a Private Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C. F. R. ss.
2510.3-101 ("Plan Assets"), as certified by such transferee in the form of
Exhibit G, unless the Trustee is provided with an Opinion of Counsel addressed
to the Trustee, for the benefit of the Trustee, the Master Servicer and the
Depositor and on which they may rely, which establishes to the satisfaction of
the Trustee that the purchase of such Certificates is permissible under ERISA
and the Code, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Master Servicer, the Trustee or the Trust Fund to any obligation
or liability (including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Depositor, the Master Servicer, the
Trustee or the Trust Fund. Neither an Opinion of Counsel nor any certification
will be required in connection with the initial transfer of any such Certificate
by the Depositor to an Affiliate of the Depositor (in which case, the Depositor
or any Affiliate thereof shall

                                     -113-
<PAGE>

have deemed to have represented that such Affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.

                  Each beneficial owner of a Mezzanine Certificate or any
interest therein shall be deemed to have represented, by virtue of its
acquisition or holding of that certificate or interest therein, that either (i)
it is not a Plan investor, (ii) it has acquired and is holding such Mezzanine
Certificates in reliance on the Underwriter's Exemption, and that it understands
that there are certain conditions to the availability of the Underwriter's
Exemption, including that the Mezzanine Certificates must be rated, at the time
of purchase, not lower than "BBB-" (or its equivalent) by Fitch, Moody's or S&P
and the Certificates are so rated or (iii) (1) it is an insurance company, (2)
the source of funds used to acquire or hold the certificate or interest therein
is an "insurance company general account," as such term is defined in PTCE
95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have been
satisfied.

                  If any Private Certificate or any interest therein is acquired
or held in violation of the provisions of the preceding paragraph, the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate retroactive to the date of transfer to the purported beneficial
owner. Any purported beneficial owner whose acquisition or holding of any such
Certificate or interest therein was effected in violation of the provisions of
the preceding paragraph shall indemnify and hold harmless the Depositor, the
Master Servicer, the Trustee and the Trust Fund from and against any and all
liabilities, claims, costs or expenses incurred by those parties as a result of
that acquisition or holding.

                  (d) (i) 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 authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Residual Certificate are expressly subject
to the following provisions:

                           (A) 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.

                           (B) In connection with any proposed Transfer of any
                  Ownership Interest in a Residual Certificate, the Trustee
                  shall require delivery to it, and shall not register the
                  Transfer of any Residual Certificate until its receipt of, an
                  affidavit and agreement (a "Transfer Affidavit and Agreement,"
                  in the form attached hereto as Exhibit F-2) from the proposed
                  Transferee, in form and substance satisfactory to the Trustee,
                  representing and warranting, among other things, that such
                  Transferee is a Permitted Transferee, 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

                                     -114-
<PAGE>

                  Person that is not a Permitted Transferee, that for so long as
                  it retains its Ownership Interest in a Residual Certificate,
                  it will endeavor to remain a Permitted Transferee, and that it
                  has reviewed the provisions of this Section 5.02(d) and agrees
                  to be bound by them.

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

                           (D) Each Person holding or acquiring any Ownership
                  Interest in a Residual Certificate shall agree (x) to require
                  a Transfer Affidavit and Agreement in the form attached hereto
                  as Exhibit F-2 from any other Person to whom such Person
                  attempts to transfer its Ownership Interest in a Residual
                  Certificate and (y) not to transfer its Ownership Interest
                  unless it provides a Transferor Affidavit (in the form
                  attached hereto as Exhibit F-2) to the Trustee stating that,
                  among other things, it has no actual knowledge that such other
                  Person is not a Permitted Transferee.

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

                  (ii) The Trustee will register the Transfer of any Residual
         Certificate only if it shall have received the Transfer Affidavit and
         Agreement and all of such other documents as shall have been reasonably
         required by the Trustee as a condition to such registration. In
         addition, no Transfer of a Residual Certificate shall be made unless
         the Trustee shall have received a representation letter from the
         Transferee of such Certificate to the effect that such Transferee is a
         Permitted Transferee.

                  (iii) (A) If any purported Transferee shall become a Holder of
         a Residual Certificate in violation of the provisions of this Section
         5.02(d), then the last preceding Permitted Transferee shall be
         restored, to the extent permitted by law, to all rights as holder
         thereof retroactive to the date of registration of such 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 5.02(d) or for making any
         payments due on such Certificate to the holder thereof or for taking
         any other action with respect to such holder under the provisions of
         this Agreement.

                           (B) If any purported Transferee shall become a holder
                  of a Residual Certificate in violation of the restrictions in
                  this Section 5.02(d) and to the extent that the retroactive
                  restoration of the rights of the holder of such Residual
                  Certificate as

                                     -115-
<PAGE>

                  described in clause (iii)(A) above shall be invalid, illegal
                  or unenforceable, then the Trustee shall have the right, but
                  not the obligation, without notice to the holder or any prior
                  holder of such Residual Certificate, to sell such Residual
                  Certificate to a purchaser selected by the Trustee on such
                  terms as the Trustee may choose. Such purported Transferee
                  shall promptly endorse and deliver each Residual Certificate
                  in accordance with the instructions of the Trustee. Such
                  purchaser may be the Trustee itself or any Affiliate of the
                  Trustee. The proceeds of such sale, net of the 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 such purported Transferee. The terms and
                  conditions of any sale under this clause (iii)(B) shall be
                  determined in the sole discretion of the Trustee, and the
                  Trustee shall not be liable to any Person having an Ownership
                  Interest in a Residual Certificate as a result of its exercise
                  of such discretion.

                  (iv) The Trustee shall make available to the Internal Revenue
         Service and those Persons specified by the REMIC Provisions all
         information necessary to compute any tax imposed (A) as a result of the
         Transfer of an Ownership Interest in a Residual Certificate to any
         Person who is a Disqualified Organization, including the information
         described in Treasury regulations sections 1.860D-1(b)(5) and
         1.860E-2(a)(5) with respect to the "excess inclusions" of such Residual
         Certificate and (B) as a result of any regulated investment company,
         real estate investment trust, common trust fund, partnership, trust,
         estate or organization described in Section 1381 of the Code that holds
         an Ownership Interest in a Residual Certificate having as among its
         record holders at any time any Person which is a Disqualified
         Organization. Reasonable compensation for providing such information
         may be accepted by the Trustee.

                  (v) The provisions of this Section 5.02(d) set forth prior to
         this subsection (v) may be modified, added to or eliminated, provided
         that there shall have been delivered to the Trustee at the expense of
         the party seeking to modify, add to or eliminate any such provision the
         following:

                           (A) written notification from each Rating Agency to
                  the effect that the modification, addition to or elimination
                  of such provisions will not cause such Rating Agency to
                  downgrade its then-current ratings of any Class of
                  Certificates; and

                           (B) an Opinion of Counsel, in form and substance
                  satisfactory to the Trustee, to the effect that such
                  modification of, addition to or elimination of such provisions
                  will not cause any Trust REMIC to cease to qualify as a REMIC
                  and will not cause any Trust REMIC to be subject to an
                  entity-level tax caused by the Transfer of any Residual
                  Certificate to a Person that is not a Permitted Transferee or
                  a Person other than the prospective transferee to be subject
                  to a REMIC-tax caused by the Transfer of a Residual
                  Certificate to a Person that is not a Permitted Transferee.

                  (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute, authenticate and deliver, in the name of the

                                     -116-
<PAGE>

designated Transferee or Transferees, one or more new Certificates of the same
Class of a like aggregate Percentage Interest.

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute, authenticate and deliver,
the Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing. In
addition, with respect to each Class R Certificate, the Holder thereof may
exchange, in the manner described above, such Class R Certificate for two
separate Certificates, each representing such Holder's respective Percentage
Interest in the Class R-1 Interest and the Class R-2 Interest, respectively, in
each case that was evidenced by the Class R Certificate being exchanged.

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

                  (h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Trustee in accordance with its customary
procedures.

                  SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
                                Certificates.

                  If (i) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Trustee such security or indemnity as may be required by it to save it
harmless, then, in the absence of actual knowledge by the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same
Class and of like denomination and Percentage Interest. 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) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the applicable REMIC created hereunder, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.

                  SECTION 5.04. Persons Deemed Owners.

                  The Depositor, the Master Servicer, the Trustee and any agent
of any of them may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever,

                                     -117-
<PAGE>

and none of the Depositor, the Master Servicer, the Trustee or any agent of any
of them shall be affected by notice to the contrary.

                  SECTION 5.05. Certain Available Information.

                  On or prior to the date of the first sale of any Private
Certificate to an Independent third party, the Depositor shall provide to the
Trustee ten copies of any private placement memorandum or other disclosure
document used by the Depositor in connection with the offer and sale of such
Certificates. In addition, if any such private placement memorandum or
disclosure document is revised, amended or supplemented at any time following
the delivery thereof to the Trustee, the Depositor promptly shall inform the
Trustee of such event and shall deliver to the Trustee ten copies of the private
placement memorandum or disclosure document, as revised, amended or
supplemented. The Trustee shall maintain at its Corporate Trust Office and shall
make available free of charge during normal business hours for review by any
Holder of a Certificate, a Certificate Owner or any Person identified to the
Trustee as a prospective transferee of a Certificate, originals or copies of the
following items: (i) in the case of a Holder, a Certificate Owner or prospective
transferee of a Private Certificate, the related private placement memorandum or
other disclosure document relating to such Class of Certificates, in the form
most recently provided to the Trustee; and (ii) in all cases, (A) this Agreement
and any amendments hereof entered into pursuant to Section 11.01, (B) all
monthly statements required to be delivered to Certificateholders of the
relevant Class pursuant to Section 4.02 since the Closing Date, and all other
notices, reports, statements and written communications delivered to the
Certificateholders of the relevant Class pursuant to this Agreement since the
Closing Date, (C) all certifications delivered by a Responsible Officer of the
Trustee since the Closing Date pursuant to Section 10.01(h), (D) any and all
Officers' Certificates delivered to the Trustee by the Master Servicer since the
Closing Date to evidence the Master Servicer's determination that any P&I
Advance or Servicing Advance was, or if made, would be, a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, respectively, and (E) any and all
Officers' Certificates delivered to the Trustee by the Master Servicer since the
Closing Date pursuant to Section 4.04(a). Copies and mailing of any and all of
the foregoing items will be available from the Trustee upon request at the
expense of the Person requesting the same.

                                     -118-
<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

                  SECTION 6.01. Liability of the Depositor and the Master
                                Servicer.

                  The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor and
Master Servicer and undertaken hereunder by the Depositor and the Master
Servicer herein.

                  SECTION 6.02. Merger or Consolidation of the Depositor or the
                                Master Servicer.

                  Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation. The Depositor and the Master Servicer each will 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.

                  The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person 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
Fannie Mae or Freddie Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates and the Mezzanine Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
the Rating Agencies).

                  SECTION 6.03. Limitation on Liability of the Depositor, the
                                Master Servicer and Others.

                  None of the Depositor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Master Servicer or any such
person against any breach of warranties, representations or covenants made
herein, or against any specific liability imposed on the Master Servicer
pursuant hereto, or against any liability which would otherwise be imposed by
reason of

                                     -119-
<PAGE>

willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the 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 which, PRIMA FACIE, is 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 and held harmless by the Trust Fund 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
relating to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor nor the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement; provided, however, that each of the
Depositor and the Master Servicer may in its discretion undertake any such
action which it may deem necessary or desirable with 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 (except any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor and the Master Servicer shall be entitled to
be reimbursed therefor from the Collection Account as and to the extent provided
in Section 3.11, any such right of reimbursement being prior to the rights of
the Certificateholders to receive any amount in the Collection Account.

                  SECTION 6.04. Limitation on Resignation of the Master
                                Servicer.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination pursuant
to the preceding sentence permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel to such effect obtained at the
expense of the Master Servicer and delivered to the Trustee and the Certificate
Insurer. No resignation of the Master Servicer shall become effective until the
Trustee or a successor servicer acceptable to the Certificate Insurer shall have
assumed the Master Servicer's responsibilities, duties, liabilities (other than
those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.

                  Except as expressly provided herein, the Master Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. The foregoing prohibition on
assignment shall not prohibit the Master Servicer from designating a
Sub-Servicer as payee of any indemnification amount payable to the Master
Servicer hereunder; provided, however, that as provided in Section 3.06 hereof,
no Sub-Servicer shall be a third-party beneficiary hereunder and the parties
hereto shall not be required to recognize any Sub-Servicer as an indemnitee
under this Agreement. If, pursuant to any provision hereof, the duties of the
Master Servicer are transferred to a successor master

                                     -120-
<PAGE>

servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.

                  SECTION 6.05. Rights of the Depositor in Respect of the Master
                                Servicer.

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the
Certificate Insurer and the Trustee, upon reasonable notice, during normal
business hours, access to all records maintained by the Master Servicer (and any
such Sub-Servicer) in respect of the Master Servicer's rights and obligations
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor, the Certificate Insurer and the Trustee
its (and any such Sub-Servicer's) most recent financial statements and such
other information relating to the Master Servicer's capacity to perform its
obligations under this Agreement as it possesses (and that any such Sub-Servicer
possesses). To the extent such information is not otherwise available to the
public, the Depositor and the Trustee shall not disseminate any information
obtained pursuant to the preceding two sentences without the Master Servicer's
written consent, except as required pursuant to this Agreement or to the extent
that it is appropriate to do so (i) in working with legal counsel, auditors,
taxing authorities or other governmental agencies or (ii) pursuant to any law,
rule, regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Depositor, the Certificate
Insurer, the Trustee or the Trust Fund, and in any case, the Depositor, the
Certificate Insurer or the Trustee as the case may be, (iii) disclosure of any
and all information that is or becomes publicly known, or information obtained
by the Trustee from sources other than the Depositor or the Master Servicer,
(iv) disclosure as required pursuant to this Agreement or (v) disclosure of any
and all information(A) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated by the Agreement approved in advance by the Depositor
or the Master Servicer or (B) to any affiliate, independent or internal auditor,
agent, employee or attorney of the Trustee having a need to know the same,
provided that the Trustee advises such recipient of the confidential nature of
the information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement 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.

                                     -121-
<PAGE>

                                                    ARTICLE VII

                                                      DEFAULT

                  SECTION 7.01. Master Servicer Events of Default.

         (a) "Master Servicer Event of Default," wherever used herein, means any
one of the following events:

                  (i) any failure by the Master Servicer to remit to the Trustee
         for distribution to the Certificateholders any payment (other than a
         P&I Advance required to be made from its own funds on any Master
         Servicer Remittance Date pursuant to Section 4.03) required to be made
         under the terms of the Certificates and this Agreement which continues
         unremedied for a period of one Business Day after the date upon which
         written notice of such failure, requiring the same to be remedied,
         shall have been given to the Master Servicer by the Depositor or the
         Trustee (in which case notice shall be provided by telecopy), or to the
         Master Servicer, the Depositor and the Trustee by the Holders of
         Certificates entitled to at least 25% of the Voting Rights; or

                  (ii) any failure on the part of the Master Servicer duly to
         observe or perform in any material respect any other of the covenants
         or agreements on the part of the Master Servicer contained in this
         Agreement, or the breach by the Master Servicer of any representation
         and warranty contained in Section 2.05, which continues unremedied for
         a period of 30 days (or if such failure or breach cannot be remedied
         within 30 days, then such remedy shall have been commenced within 30
         days and diligently pursued thereafter; provided, however, that in no
         event shall such failure or breach be allowed to exist for a period of
         greater than 90 days) after the earlier of (i) 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 Depositor, the
         Trustee or to the Master Servicer, the Depositor and the Trustee by the
         Holders of Certificates entitled to at least 25% of the Voting Rights
         and (ii) actual knowledge of such failure by a Servicing Officer of the
         Master Servicer; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and such decree or order shall have remained in force
         undischarged or unstayed for a period of 90 days; or

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

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<PAGE>

                  (v) 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

                  (vi) any failure by the Master Servicer of the Master Servicer
         Termination Test; or

                  (vii) any failure of the Master Servicer to make any P&I
         Advance on any Master Servicer Remittance Date required to be made from
         its own funds pursuant to Section 4.03 which continues unremedied until
         3:00 p.m. New York time on the Business Day immediately following the
         Master Servicer Remittance Date.

                  If a Master Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as a Master Servicer Event of Default shall not have been remedied, the
Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer, the Depositor and the Certificate Insurer,
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. If a Master
Servicer Event of Default described in clause (vii) hereof shall occur, the
Trustee shall, by notice in writing to the Master Servicer, the Depositor and
the Certificate Insurer, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof. 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
(other than as a Holder of any Certificate) or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section,
and, without limitation, the Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Master Servicer, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees promptly (and in any event no later than
ten Business Days subsequent to such notice) to provide the Trustee with all
documents and records requested by it to enable it to assume the Master
Servicer's functions under this Agreement, and to cooperate with the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
under this Agreement, including, without limitation, the transfer within one
Business Day to the Trustee for administration by it of all cash amounts which
at the time shall be or should have been credited by the Master Servicer to the
Collection Account held by or on behalf of the Master Servicer, the Distribution
Account or any REO Account or Servicing Account held by or on behalf of the
Master Servicer or thereafter be received with respect to the Mortgage Loans or
any REO Property serviced by the Master Servicer (provided, however, that the
Master Servicer shall continue to be entitled to receive all amounts accrued or
owing to it under this Agreement on or prior to the date of such termination,
whether in respect of P&I Advances, Servicing Advances or otherwise, and shall
continue to be entitled to the benefits of Section 6.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
For purposes of this Section 7.01, the Trustee shall not be deemed to have

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<PAGE>

knowledge of a Master Servicer Event of Default unless a Responsible Officer of
the Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Event of Default is received by the Trustee and such
notice references the Certificates, the Trust Fund or this Agreement.

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a)(1) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein, and all the responsibilities,
duties and liabilities relating thereto and arising thereafter shall be assumed
by the Trustee (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.05 and the obligation to deposit amounts in respect of
losses pursuant to Section 3.12) by the terms and provisions hereof including,
without limitation, the Master Servicer's obligations to make P&I Advances
pursuant to Section 4.03; provided, however, that if the Trustee is prohibited
by law or regulation from obligating itself to make advances regarding
delinquent mortgage loans, then the Trustee shall not be obligated to make P&I
Advances pursuant to Section 4.03; and provided further, that any failure to
perform such duties or responsibilities caused by the Master Servicer's failure
to provide information required by Section 7.01 shall not be considered a
default by the Trustee as successor to the Master Servicer hereunder. As
compensation therefor, the Trustee shall be entitled to the Servicing Fee and
all funds relating to the Mortgage Loans to which the Master Servicer would have
been entitled if it had continued to act hereunder. Notwithstanding the above
and subject to Section 7.02(a)(2) below, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent mortgage loans or if the
Holders of Certificates entitled to at least 51% of the Voting Rights so request
in writing to the Trustee, promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to each Rating Agency and having a net worth of not less than
$15,000,000, as the successor to the Master Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement. If no Certificate Insurer Default has
occurred and is continuing, the Certificate Insurer shall have the right to
consent to any successor Master Servicer which the Trustee may propose to
appoint.

                  The Trustee or other successor master servicer shall be
entitled to be reimbursed by the Master Servicer (or by the Trust Fund if the
Master Servicer is unable to fulfill its obligations hereunder) for all
reasonable out-of-pocket costs (such expenses of the Trustee to be documented by
the Trustee to the extent possible) associated with the transfer of servicing
from the predecessor master servicer, including without limitation, any such
costs or expenses associated with the complete transfer of all servicing data
and the completion, correction or manipulation of such servicing data as may be
required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee to service the Mortgage Loans
properly and effectively.

                  (2) No appointment of a successor to the Master Servicer under
this Agreement shall be effective until the assumption by the successor of all
of the Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and

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<PAGE>

assumption described herein, 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 as such hereunder. The Depositor,
the Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Pending
appointment of a successor to the Master Servicer under this Agreement, the
Trustee shall act in such capacity as hereinabove provided.

                  SECTION 7.03. Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to the Certificate Insurer and the Certificateholders at their
respective addresses appearing in the Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to the Certificate Insurer and all
Holders of Certificates notice of each such occurrence, unless such default or
Master Servicer Event of Default shall have been cured or waived.

                  SECTION 7.04. Waiver of Master Servicer Events of Default.

                  The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default or Master
Servicer Event of Default hereunder may waive such default or Master Servicer
Event of Default; provided, however, that a default or Master Servicer Event of
Default under clause (i) or (vii) of Section 7.01 may be waived only by all of
the Holders of the Regular Certificates. Upon any such waiver of a default or
Master Servicer Event of Default, such default or Master Servicer Event of
Default shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder. No such waiver shall extend to any subsequent or other
default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.

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<PAGE>

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement. If any such
instrument is found not to conform on its face to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to its satisfaction, will provide notice thereof to the
Certificateholders and the Certificate Insurer.

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

                  (i) Prior to the occurrence of a Master Servicer Event of
         Default, and after the curing of all such Master Servicer Events of
         Default which may have occurred, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this
         Agreement, the Trustee shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee and, in the absence of bad faith on the
         part of the Trustee, the Trustee may conclusively rely, as to the truth
         of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee
         that conform to the requirements of this Agreement;

                  (ii) The Trustee shall not be personally liable for an error
         of judgment made in good faith by a Responsible Officer or Responsible
         Officers of the Trustee unless it shall be proved that the Trustee was
         negligent in ascertaining the pertinent facts; and

                  (iii) The Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the Holders of Certificates
         entitled to at least 25% of the Voting Rights or the Certificate
         Insurer relating to the time, method and place of conducting any
         proceeding for any remedy available to the Trustee or exercising any
         trust or power conferred upon it, under this Agreement.

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<PAGE>

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  (a) Except as otherwise provided in Section 8.01:

                  (i) The Trustee may request and conclusively rely upon and
         shall be fully protected in acting or refraining from acting upon any
         resolution, Officers' Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         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 shall not be under any obligation to
         exercise any of the trusts or powers vested in it by this Agreement or
         to institute, conduct or defend any litigation hereunder or in relation
         hereto at the request, order or direction of any of the
         Certificateholders, pursuant to the provisions of this Agreement,
         unless such Certificateholders shall have offered to the Trustee
         security or indemnity reasonably satisfactory to it against the costs,
         expenses and liabilities which may be incurred therein or thereby;
         nothing contained herein shall, however, relieve the Trustee of the
         obligation, upon the occurrence of a Master Servicer Event of Default
         (which has not been cured or waived), to exercise such of the rights
         and powers vested in it by this Agreement, and to use the same degree
         of care and skill in their exercise as a prudent person would exercise
         or use under the circumstances in the conduct of such person's own
         affairs;

                  (iv) The Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing of all Master Servicer Events of
         Default which may have occurred, the Trustee shall not be bound to make
         any investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document, unless
         requested in writing to do so by the Holders of Certificates entitled
         to at least 25% of the 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 such Certificateholders, the Trustee may require
         reasonable indemnity against such expense or liability from such
         Certificateholders as a condition to taking any such action;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents, accountants or attorneys, and the Trustee shall not be
         responsible for any misconduct or negligence on the part of any agents,
         accountants or attorneys appointed with due care by it hereunder; and

                                     -127-
<PAGE>

                  (vii) The Trustee shall have no obligation to invest and
         reinvest any cash held in the absence of timely and specific written
         investment direction from the Master Servicer or the Depositor. In no
         event shall the Trustee be liable for the selection of investments or
         for investment losses incurred thereon. The Trustee shall have no
         liability in respect of losses incurred as a result of the liquidation
         of any investment incurred as a result of the liquidation of any
         investment prior to its stated maturity or the failure of the Master
         Servicer or the Depositor to provide timely written investment
         direction.

                  (b) All rights of action under this Agreement or under any of
         the Certificates, enforceable by the Trustee, may be enforced by it
         without the possession of any of the Certificates, or the production
         thereof at the trial or other proceeding relating thereto, and any such
         suit, action or proceeding instituted by the Trustee shall be brought
         in the name of the Trustee for the benefit of all the Holders of such
         Certificates, subject to the provisions of this Agreement.

                  (c) The Trustee is hereby directed by the Depositor to execute
         and deliver the Cap Contracts on behalf of the Trust Fund in the
         respective forms presented to it by the Depositor. Every provision of
         this Agreement relating to the conduct or affecting the liability of or
         affording protection to the Trustee shall apply to the Trustee's
         execution of the Cap Contracts, and the performance of its duties and
         satisfaction of its obligations thereunder.

                  SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
                                Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.13) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth with respect to such party in Section 8.13) or of the
Certificates (other than the signature of the Trustee and authentication of the
Certificate Registrar on the Certificates) or of any Mortgage Loan or related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Master Servicer, other than any funds held by or on
behalf of the Trustee and any amounts held by or on behalf of the Trustee in
accordance with Section 3.10.

                  SECTION 8.04. Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

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<PAGE>

                  SECTION 8.05. Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee. The Trustee, or any
director, officer, employee or agent of the Trustee shall be indemnified by
REMIC I and held harmless against any loss, liability or expense (not including
expenses, disbursements and advances incurred or made by the Trustee including
the compensation and the expenses and disbursements of its agents and counsel,
in the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee in connection with any
Master Servicer Event of Default (not including expenses, disbursements and
advances incurred or made by the Trustee in its capacity as successor master
servicer), default, claim or legal action or any pending or threatened claim or
legal action arising out of or in connection with the acceptance or
administration of its obligations and duties under this Agreement, other than
any loss, liability or expense (i) resulting from a breach of the Master
Servicer's obligations and duties under this Agreement and the Mortgage Loans
(for which the Master Servicer shall indemnify pursuant to Section 8.05(b)),
(ii) for the expenses of preparing and filing Tax Returns pursuant to Section
10.01(d) or (iii) any loss, liability or expense incurred by reason of its
willful misfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of reckless disregard of its respective obligations and
duties hereunder. Any amounts payable to the Trustee, or any director, officer,
employee or agent of the Trustee in respect of the indemnification provided by
this paragraph (a), or pursuant to any other right of reimbursement from the
Trust Fund that the Trustee, or any director, officer, employee or agent of the
Trustee, may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.

                  (b) The Master Servicer and the Trustee have entered into a
fee letter governing the terms of reimbursement of certain expenses of the
Trustee not otherwise reimbursable to the Trustee from the Trust Fund as set
forth above. Furthermore, the Master Servicer agrees to indemnify the Trustee
from, and hold it harmless against, any loss, liability or expense resulting
from the negligence or willful misconduct of the Master Servicer in the
performance of its duties hereunder or a breach of the Master Servicer's
obligations and duties under this Agreement. Such indemnity shall survive the
termination or discharge of this Agreement and the resignation or removal of the
Trustee. Any payment hereunder made by the Master Servicer to the Trustee shall
be from the Master Servicer's own funds, without reimbursement from the Trust
Fund therefor.

                  (c) The Master Servicer shall pay any annual rating agency
fees of the Rating Agencies for ongoing surveillance from its own funds without
right of reimbursement.

                  The provisions of this Section 8.05 shall survive the
termination of this Agreement or the earlier resignation or removal of the
Trustee.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Seller, the Master Servicer or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and

                                     -129-
<PAGE>

subject to supervision or examination by federal or state authority. If such
corporation or association publishes reports of conditions at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.

                  SECTION 8.07. Resignation and Removal of the Trustee.

                  The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer, the Certificate Insurer and the Certificateholders. Upon
receiving such notice of resignation of the Trustee, the Depositor shall
promptly appoint a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders,
the Certificate Insurer, the Trustee and the Master Servicer by the Depositor.
If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation or
removal, the Certificate Insurer may appoint a successor Trustee, and if the
Certificate Insurer fails to do so within 30 days, the Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee (with the
consent of the Certificate Insurer) by written instrument, in duplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
trustee. A copy of such instrument shall be delivered to the Certificateholders,
the Certificate Insurer and the Master Servicer by the Depositor. If no
successor Trustee shall have been so appointed and having accepted appointment
within 30 days after the giving of such notice of resignation, then the
Certificate Insurer may appoint a successor Trustee.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                                     -130-
<PAGE>

                  SECTION 8.08. Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the Certificate Insurer
and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements, as well as all
moneys, held by it hereunder (other than any Mortgage Files at the time held by
a custodian, which custodian shall become the agent of any successor trustee
hereunder), and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to the Certificate Insurer and all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.

                  Notwithstanding anything to the contrary contained herein, so
long as no Certificate Insurer Default exists, the appointment of any successor
Trustee pursuant to any provision of this Agreement will be subject to the prior
written consent of the Certificate Insurer.

                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the

                                     -131-
<PAGE>

Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of REMIC I, and to
vest in such Person or Persons, in such capacity, such title to REMIC I, or any
part thereof, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Master Servicer. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed by the Trustee (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 REMIC I 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 trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor and the Master Servicer.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

                  SECTION 8.11. [Reserved].

                  SECTION 8.12. Appointment of Office or Agency.

                  The Trustee will designate an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final

                                     -132-
<PAGE>

distribution, and where notices and demands to or upon the Trustee in respect of
the Certificates and this Agreement may be delivered. As of the Closing Date,
the Trustee designates the office of its agent located c/o DTC Transfer Agent
Services, 55 Water Street, Jeanette Park Entrance, New York, NY 10041 for such
purposes.

                  SECTION 8.13. Representations and Warranties of the Trustee.

                  The Trustee hereby represents and warrants, solely as to
itself, to the Master Servicer and the Depositor, as of the Closing Date, that:

                  (i) It is a national banking association duly organized,
         validly existing and in good standing under the laws of the United
         States.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its charter or bylaws.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

                                     -133-
<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01 Termination Upon Repurchase or Liquidation of All
                               Mortgage Loans.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to make remittances to the
Trustee and the Trustee to make payments in respect of the REMIC I Regular
Interests and the Classes of Certificates as hereinafter set forth) shall
terminate upon payment to the Certificateholders and the deposit of all amounts
held by or on behalf of the Trustee and required hereunder to be so paid or
deposited on the Distribution Date coinciding with or following the earlier to
occur of (i) the purchase by the Terminator (as defined below) of all Mortgage
Loans and each REO Property remaining in REMIC I and (ii) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in REMIC I; provided, however, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the Court of St. James, living on the date
hereof. Subject to Section 3.10 hereof, the purchase by the Terminator of all
Mortgage Loans and each REO Property remaining in REMIC I shall be at a price
equal to the greater of (i) the Stated Principal Balance of the Mortgage Loans
and the appraised value of any REO Properties, such appraisal to be conducted by
an Independent appraiser mutually agreed upon by the Terminator and the Trustee
in their reasonable discretion and (ii) the fair market value of the Mortgage
Loans and the REO Properties (as determined by the Terminator and, to the extent
that the Class A Certificates, a Class of Mezzanine Certificates or the Class B
Certificates will not receive all amounts owed to it as a result of the
termination, the Trustee (it being understood and agreed that any determination
by the Trustee shall be made solely in reliance on an appraisal by an
Independent appraiser as provided above), 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 the related Certificateholders pursuant to Section
9.01(c)), in each case plus accrued and unpaid interest thereon at the weighted
average of the Mortgage Rates through the end of the Due Period preceding the
final Distribution Date plus unreimbursed Servicing Advances, P&I Advances, any
unpaid Servicing Fees allocable to such Mortgage Loans and REO Properties and
any accrued and unpaid Net WAC Rate Carryover Amounts (the "Termination Price");
provided, however, such option may only be exercised if the Termination Price is
sufficient to pay (i) any amounts owed to the Certificate Insurer under the
Insurance Agreement and (ii) all interest accrued on, as well as amounts
necessary to retire the principal balance of, each class of notes issued
pursuant to the Indenture. If the determination of the fair market value of the
Mortgage Loans and REO Properties shall be required to be made by the Terminator
and an Independent appraiser as provided above, (A) such appraisal shall be
obtained at no expense to the Trustee and (B) the Trustee may conclusively rely
on, and shall be protected in relying on, such appraisal. If a termination
pursuant to this Section 9.01(a) will result in a draw on the Policy, the
consent of the Certificate Insurer shall be required prior to the Terminator
exercising such option.

                                     -134-
<PAGE>

                  (b) The Master Servicer shall have the right (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
of the preceding paragraph only if the aggregate Stated Principal Balance of the
Mortgage Loans and each REO Property remaining in the Trust Fund at the time of
such election is reduced to less than 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date. By acceptance of the
Residual Certificates, the Holder of the Residual Certificates agrees, in
connection with any termination hereunder, to assign and transfer any amounts in
excess of par, and to the extent received in respect of such termination, to pay
any such amounts to the Holders of the Class CE Certificates.

                  (c) Notice of the liquidation of the Certificates shall be
given promptly by the Trustee by letter to Certificateholders and the
Certificate Insurer mailed (a) in the event such notice is given in connection
with the purchase of the Mortgage Loans and each REO Property by the Terminator,
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of the final distribution on the Certificates or (b)
otherwise during the month of such final distribution on or before the
Determination Date in such month, in each case specifying (i) the Distribution
Date upon which the Trust Fund will terminate and the final payment in respect
of the REMIC I Regular Interests and the Certificates will be made upon
presentation and surrender of the related Certificates at the office of the
Trustee therein designated, (ii) the amount of any such final payment, (iii)
that no interest shall accrue in respect of the REMIC I Regular Interests or the
Certificates from and after the Interest Accrual Period relating to the final
Distribution Date therefor and (iv) 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 of the Trustee. In
the event such notice is given in connection with the purchase of all of the
Mortgage Loans and each REO Property remaining in REMIC I by the Terminator, the
Terminator shall deliver to the Trustee for deposit in the Distribution Account
not later than the last Business Day of the month next preceding the month of
the final distribution on the Certificates an amount in immediately available
funds equal to the above-described purchase price. The Trustee shall remit to
the Master Servicer from such funds deposited in the Distribution Account (i)
any amounts which the Master Servicer would be permitted to withdraw and retain
from the Collection Account pursuant to Section 3.11 and (ii) any other amounts
otherwise payable by the Trustee to the Master Servicer from amounts on deposit
in the Distribution Account pursuant to the terms of this Agreement, in each
case prior to making any final distributions pursuant to Section 10.01(d) below.
Upon certification to the Trustee by the Terminator of the making of such final
deposit, the Trustee shall promptly release to the Terminator the Mortgage Files
for the remaining Mortgage Loans, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.

                  SECTION 9.02 Additional Termination Requirements.

                                     -135-
<PAGE>

                  (a) In the event that the Terminator purchases all the
         Mortgage Loans and each REO Property or the final payment on or other
         liquidation of the last Mortgage Loan or REO Property remaining in
         REMIC I pursuant to Section 9.01, the Trust Fund shall be terminated in
         accordance with the following additional requirements:

                  (i) The Trustee shall specify the first day in the 90-day
         liquidation period in a statement attached to each Trust REMIC's final
         Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
         satisfy all requirements of a qualified liquidation under Section 860F
         of the Code and any regulations thereunder, as evidenced by an Opinion
         of Counsel obtained at the expense of the Terminator;

                  (ii) During such 90-day liquidation period and, at or prior to
         the time of making of the final payment on the Certificates, the
         Trustee shall sell all of the assets of REMIC I to the Terminator for
         cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the Residual Certificates
         all cash on hand in the Trust Fund (other than cash retained to meet
         claims), and the Trust Fund shall terminate at that time.

                  (b) At the expense of the requesting Terminator (or, if the
         Trust Fund is being terminated as a result of the occurrence of the
         event described in clause (ii) of the first paragraph of Section 9.01,
         at the expense of the Master Servicer without the right of
         reimbursement from the Trust Fund), the Trustee shall prepare or cause
         to be prepared documentation required, if any, in connection with the
         adoption of a plan of liquidation of each Trust REMIC pursuant to this
         Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
         hereby agree to authorize the Trustee to specify the 90-day liquidation
         period for each Trust REMIC, which authorization shall be binding upon
         all successor Certificateholders.

                                     -136-
<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01. REMIC Administration.

                  (a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will be made by the Trustee on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of REMIC I, the REMIC
I Regular Interests shall be designated as the Regular Interests in REMIC I and
the Class R-I Interest shall be designated as the Residual Interest in REMIC I.
The Class A Certificates, each of the Mezzanine Certificates, the Class CE
Certificates and the Class P Certificates (other than the right to receive
amounts from the Net WAC Rate Carryover Reserve Account, if any) shall be
designated as the Regular Interests in REMIC II and the Class R-II Interest
shall be designated as the Residual Interest in REMIC II. The Trustee shall not
permit the creation of any "interests" in any Trust REMIC (within the meaning of
Section 860G of the Code) other than the REMIC I Regular Interests and the
interests represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

                  (c) The Trustee shall be reimbursed for any and all expenses
relating to any tax audit of the Trust Fund (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect to
any Trust REMIC that involve the Internal Revenue Service or state tax
authorities), including the expense of obtaining any tax related Opinion of
Counsel required to be obtained hereunder. The Trustee, as agent for each Trust
REMIC's tax matters person shall (i) act on behalf of the Trust Fund in relation
to any tax matter or controversy involving any Trust REMIC and (ii) represent
the Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the Trust REMICs created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns (including Form 8811, which must be filed within 30 days following the
Closing Date) in respect of each REMIC created hereunder. The expenses of
preparing and filing such returns shall be borne by the Trustee without any
right of reimbursement therefor.

                  (e) The Trustee shall perform on behalf of each Trust REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local

                                     -137-
<PAGE>

taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The
Depositor shall provide or cause to be provided to the Trustee, within ten (10)
days after the Closing Date, all information or data that the Trustee reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

                  (f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions. The Trustee
shall not take any action or cause the Trust Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of any
Trust REMIC as a REMIC or (ii) result in the imposition of a tax upon the Trust
Fund (including but not limited to the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee has received an Opinion of Counsel, addressed to the
Trustee (at the expense of the party seeking to take such action but in no event
at the expense of the Trustee) to the effect that the contemplated action will
not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor shall the Master Servicer take or fail to take any
action (whether or not authorized hereunder) as to which the Trustee has advised
it in writing that it has received an Opinion of Counsel to the effect that an
Adverse REMIC Event could occur with respect to such action; provided that the
Master Servicer may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. In addition, prior to taking any action with respect to any Trust REMIC
or the respective assets of each, or causing any Trust REMIC to take any action,
which is not contemplated under the terms of this Agreement, the Master Servicer
will consult with the Trustee or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any Trust REMIC and the Master Servicer shall not take any such action or cause
any Trust REMIC to take any such action as to which the Trustee has advised it
in writing that an Adverse REMIC Event could occur; provided that the Master
Servicer may conclusively rely on such writing and shall incur no liability for
its action or failure to act in accordance with such writing. The Trustee may
consult with counsel to make such written advice, and the cost of same shall be
borne by the party seeking to take the action not permitted by this Agreement,
but in no event shall such cost be an expense of the Trustee. At all times as
may be required by the Code, the Trustee will ensure that substantially all of
the assets of REMIC I will consist of "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code, to the extent such obligations are within the Trustee's
control and not otherwise inconsistent with the terms of this Agreement.

                                     -138-
<PAGE>

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or (iii) against amounts on deposit in the Distribution Account and shall be
paid by withdrawal therefrom.

                  (h) On or before April 15th of each calendar year, commencing
April 15, 2004, the Master shall deliver to the Trustee and each Rating Agency
an Officers' Certificate of the Master Servicer stating the Master Servicer's
compliance with this Article X.

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each Trust REMIC on a calendar year
and on an accrual basis.

                  (j) Following the Startup Day, neither the Master Servicer nor
the Trustee shall accept any contributions of assets to any Trust REMIC other
than in connection with any Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03 unless it shall have received an Opinion of Counsel
to the effect that the inclusion of such assets in the Trust Fund will not cause
the related REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject such REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any Trust REMIC will receive a fee or other
compensation for services nor knowingly permit either REMIC to receive any
income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.

                  SECTION 10.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), acquire any assets for any Trust REMIC
(other than REO Property acquired in respect of a defaulted Mortgage Loan), sell
or dispose of any investments in the Collection Account or the Distribution
Account for gain, or accept any contributions to any Trust REMIC after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee)

                                     -139-
<PAGE>

that such sale, disposition, substitution, acquisition or contribution will not
(a) affect adversely the status of any Trust REMIC as a REMIC or (b) cause any
Trust REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.

                  SECTION 10.03. Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in this Article X.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article X.

                                     -140-
<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                  This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee without the consent of any of the
Certificateholders, but only with the prior written consent of the Certificate
Insurer, (i) to cure any ambiguity or defect, (ii) to correct, modify or
supplement any provisions herein (including to give effect to the expectations
of Certificateholders), or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement or the Policy which shall not
be inconsistent with the provisions of this Agreement, provided that such
actions shall not,adversely affect in any material respect the interests of any
Certificateholder, as evidenced by either (i) an Opinion of Counsel delivered to
the Master Servicer and the Trustee or (ii) confirmation from the Rating
Agencies that such amendment will not result in the reduction or withdrawal of
the rating of any outstanding Class of Certificates (without regard to the
Policy). No amendment shall be deemed to adversely affect in any material
respect the interests of any Certificateholder who shall have consented thereto,
and no Opinion of Counsel or confirmation from the Rating Agencies shall be
required to address the effect of any such amendment on any such consenting
Certificateholder.

                  This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights and the
Certificate Insurer for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates (as evidenced by either (i) an Opinion of
Counsel delivered to the Trustee and the Certificate Insurer or (ii) written
notice to the Depositor, the Master Servicer, the Certificate Insurer and the
Trustee from the Rating Agencies that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency) in a manner, other than as
described in (i), without the consent of the Holders of Certificates of such
Class evidencing at least 66% of the Voting Rights allocated to such Class, or
(iii) modify the consents required by the immediately preceding clauses (i) and
(ii) without the consent of the Holders of all Certificates then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 11.01, Certificates
registered in the name of the Depositor or the Master Servicer or any Affiliate
thereof shall be entitled to Voting Rights with respect to matters affecting
such Certificates.

                  No amendment shall be deemed to adversely affect in any
material respect the interests of any Certificateholder who shall have consented
thereto, and no Opinion of Counsel or Rating Agency confirmation shall be
required to address the effect of any such amendment on any such consenting
Certificateholder.

                                     -141-
<PAGE>

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment (i)
will not result in the imposition of any tax on any Trust REMIC pursuant to the
REMIC Provisions or cause any Trust REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding and (ii) is authorized or permitted
hereunder.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder and the
Certificate Insurer.

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

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.

                  Notwithstanding the foregoing, any modification of the
provisions of Section 5.02(d) shall be made in accordance with the provisions
thereof and without the consent of the Certificateholders.

                  The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION 11.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Certificate Insurer or Certificateholders accompanied
by an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificate Insurer or the
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.

                                     -142-
<PAGE>

                  SECTION 11.03. Limitation on Rights of Certificateholders.

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

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee and the Certificate Insurer a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates entitled to at least 25%
of the 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 15 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 is understood and intended, and 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 whatsoever by virtue of any provision of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of such
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
Certificateholders. For the protection and enforcement of the provisions of this
Section, 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, without the
conflicts of laws provisions thereof

                  SECTION 11.05. Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to

                                     -143-
<PAGE>

(a) in the case of the Depositor, 18400 Von Karman, Suite 1000, Irvine,
California 92612, Attention: Kevin Cloyd (telecopy number: (949) 440-7033), or
such other address or telecopy number as may hereafter be furnished to the
Master Servicer and the Trustee in writing by the Depositor, (b) in the case of
the Master Servicer, 18400 Von Karman, Suite 1000, Irvine, California 92612,
Attention: Kevin Cloyd (telecopy number: (949) 440-7033), or such other address
or telecopy number as may hereafter be furnished to the Trustee and the
Depositor in writing by the Master Servicer, (c) in the case of the Trustee,
Deutsche Bank National Trust Company, 1761 East St. Andrew Place, Santa Ana,
California 92705-4934, Attention: Trust Administration-NC0305 (telecopy number:
(714) 247- 6009), or such other address or telecopy number as may hereafter be
furnished to the Master Servicer and the Depositor in writing by the Trustee and
(d) in the case of the Certificate Insurer, Ambac Assurance Corporation, One
State Street Plaza, New York, New York 10004, Attention: Consumer Asset-Backed
Securities Group or such other address as may be furnished to the Servicer, the
Trustee and the Depositor in writing by the Certificate Insurer. Any notice
required or permitted to be given 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 when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder also shall be mailed to the appropriate
party in the manner set forth above.

                  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 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 or
the rights of the Certificate Insurer.

                  SECTION 11.07. Notice to Rating Agencies.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies and the Certificate Insurer with respect to each
of the following of which it has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Master Servicer Event of Default that
         has not been cured or waived;

                  3. The resignation or termination of the Master Servicer or
         the Trustee;

                  4. The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03;

                  5. The final payment to the Holders of any Class of
         Certificates;

                                     -144-
<PAGE>

                  6. Any change in the location of the Collection Account or the
         Distribution Account; and

                  7. Any event that would result in the inability of the
         Trustee, as a successor master servicer, to make advances regarding
         delinquent Mortgage Loans.

                  In addition, the Trustee shall promptly furnish to each Rating
Agency and the Certificate Insurer copies of each report to Certificateholders
described in Section 4.02 and the Master Servicer shall promptly furnish to each
Rating Agency and the Certificate Insurer copies of the following:

                  1. Each annual statement as to compliance described in Section
         3.20; and

                  2. Each annual independent public accountants' servicing
         report described in Section 3.21.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Moody's Investors Service, 99 Church Street, New York, New York 10007 and to
Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies,
Inc., 55 Water Street, New York, New York 10007 or such other addresses as the
Rating Agencies may designate in writing to the parties hereto.

                  SECTION 11.08. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the aforementioned intent of the
parties, the Mortgage Loans are held to be property of the Depositor, then, (a)
it is the express intent of the parties that such conveyance be deemed a pledge
of the Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor and (b)(1) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Depositor to the Trustee of a security interest in all of the Depositor's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such

                                     -145-
<PAGE>

security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Mortgage Loans
and the Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee a security interest in
the Mortgage Loans and all other property described in clause (2) of the
preceding sentence, for the purpose of securing to the Trustee the performance
by the Depositor of the obligations described in clause (3) of the preceding
sentence. Notwithstanding the foregoing, the parties hereto intend the
conveyance pursuant to Section 2.01 to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.

                  SECTION 11.10. Waiver of Jury Trial.

                  EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY,
WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND
AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.

                  SECTION 11.11. Rights of the Certificate Insurer.

                  (a) The Certificate Insurer is an express third-party
beneficiary of this Agreement.

                  (b) On each Distribution Date the Trustee shall make available
to the Certificate Insurer a copy of the reports furnished to the
Certificateholders on such Distribution Date.

                  (c) The Trustee or the Depositor, as applicable, shall provide
to the Certificate Insurer copies of any report, notice, Opinion of Counsel,
Officers' Certificate, request for consent or request for amendment to any
document related hereto promptly upon the Trustee's or the Depositor's
production or receipt thereof, but only to the extent that such item is required
to be delivered to the Certificate Insurer hereunder.

                  (d) Unless a Certificate Insurer Default exists, the Trustee,
the Master Servicer and the Depositor shall not agree to any amendment to this
Agreement without first having obtained the prior written consent of the
Certificate Insurer.

                  (e) So long as there does not exist a failure by the
Certificate Insurer to make a required payment under the Policy, the Certificate
Insurer shall have the right to exercise all rights of the Holders of the
Insured Certificates under this Agreement without any consent of such Holders,
and such Holders may exercise such rights only with the prior written consent of
the Certificate Insurer, except as provided herein.

                                     -146-
<PAGE>

                  (f) The Certificate Insurer shall not be entitled to exercise
any of its rights hereunder so long as there exists a failure by the Certificate
Insurer to make a required payment under the Policy.

                                     -147-
<PAGE>

                  IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.

                                           NEW CENTURY MORTGAGE SECURITIES INC.,
                                             as Depositor

                                           By: /s/ Kevin Cloyd
                                               ---------------------------------
                                           Name:   Kevin Cloyd
                                           Title:  EVP

                                           NEW CENTURY MORTGAGE CORPORATION,
                                             as Master Servicer

                                           By: /s/ Kevin Cloyd
                                               ---------------------------------
                                           Name:    Kevin Cloyd
                                           Title:   Senior Vice President

                                           DEUTSCHE BANK NATIONAL TRUST
                                           COMPANY,
                                             as Trustee

                                           By: /s/ Barbara Campell
                                               ---------------------------------
                                           Name:   Barbara Campell
                                           Title:  Assistant Vice President

                                           By: /s/ Ronaldo Reyes
                                               ---------------------------------
                                           Name:   Ronaldo Reyes
                                           Title:  Assistant Vice President

<PAGE>

STATE OF ______________)
                       ) ss.:
COUNTY OF ____________ )

                  On the th day of October 2003, before me, a notary public in
and for said State, personally appeared ________________, known to me to be a
___________________ of New Century Mortgage Securities Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        _____________________
                                                             Notary Public

[Notarial Seal]

<PAGE>

STATE OF ______________ )
                        ) ss.:
COUNTY OF ____________  )

                  On the ____ day of October 2003, before me, a notary public in
and for said State, personally appeared _____________________, known to me to be
__________________ of New Century Mortgage Corporation, one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        _____________________
                                                             Notary Public

[Notarial Seal]

<PAGE>

STATE OF ______________ )
                        ) ss.:
COUNTY OF ____________  )

                  On the ____ day of October 2003, before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
______________ of Deutsche Bank National Trust Company, one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        _____________________
                                                             Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1
                                   -----------

                         FORM OF CLASS A-I-1 CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-1 Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $259,746,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $259,746,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  DX  6
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-1-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-1 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-1 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus 0.170%,
in the case of each Distribution Date and (ii) the Net WAC Pass-Through Rate for
such Distribution Date.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the

                                      A-1-2

<PAGE>

denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of

                                      A-1-3

<PAGE>

purchase being less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut- off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-1-4

<PAGE>

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

Dated: October  __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                      Authorized Signatory

                                      A-1-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                        _______________
          tenants in common                                   (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-1-6

<PAGE>

                            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.

                                      A-1-7

<PAGE>

                                   EXHIBIT A-2
                                   -----------

                         FORM OF CLASS A-I-2 CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-2 Certificates as of the Issue Date:
Pass-Through Rate: 2.940%                                  $83,420,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $83,420,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No.1                                                       Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  DY  4
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-2-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-2 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-2 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-2-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-2-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-2-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                                      A-2-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                        _______________
          tenants in common                                   (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-2-6

<PAGE>

                            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.

                                      A-2-7

<PAGE>

                                   EXHIBIT A-3
                                   -----------

                        FORM OF CLASS A-I-2A CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-2A Certificates as of the Issue Date:
Pass-Through Rate: 2.860%                                  $25,000,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $25,000,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  DZ  1
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-3-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-3 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-3 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-3-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-3-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-3-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                                      A-3-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                        _______________
          tenants in common                                   (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-3-6

<PAGE>

                            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.

                                      A-3-7

<PAGE>

                                   EXHIBIT A-4
                                   -----------

                         FORM OF CLASS A-I-3 CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-3 Certificates as of the Issue Date:
Pass-Through Rate: 3.560%                                  $180,350,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $180,350,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EA  5
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-4-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-3 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-3 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-4-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-4-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-4-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                      A-4-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-4-6

<PAGE>

                            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.

                                      A-4-7

<PAGE>

                                   EXHIBIT A-5
                                   -----------

                         FORM OF CLASS A-I-4 CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-4 Certificates as of the Issue Date:
Pass-Through Rate: 4.760%                                  $119,980,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $119,980,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EB  3
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-5-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-4 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-4 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-4 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-5-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-5-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-5-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                      A-5-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                        (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-5-6

<PAGE>

                            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.

                                      A-5-7

<PAGE>

                                   EXHIBIT A-6
                                   -----------

                         FORM OF CLASS A-I-5 CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-5 Certificates as of the Issue Date:
Pass-Through Rate: 5.500% per annum                        $24,904,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $24,904,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EC  1
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-6-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-5 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-5 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-5 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-6-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-6-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-6-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                                      A-6-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-6-6

<PAGE>

                            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.

                                      A-6-7

<PAGE>

                                   EXHIBIT A-7
                                   -----------

                         FORM OF CLASS A-I-6 CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-6 Certificates as of the Issue Date:
Pass-Through Rate: 5.500% per annum                        $51,175,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $51,175,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  ED  9
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-7-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-6 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-6 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-6 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-7-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-7-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-7-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                                      A-7-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-7-6

<PAGE>

                            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.

                                      A-7-7

<PAGE>

                                   EXHIBIT A-8
                                   -----------

                        FORM OF CLASS A-I-6A CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-6A Certificates as of the Issue Date:
Pass-Through Rate: 5.500% per annum                        $40,000,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $40,000,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EE  7
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-8-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I- 6A Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-6A Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-6A Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-8-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-8-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-8-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                      A-8-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                        (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-8-6

<PAGE>

                            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.

                                      A-8-7

<PAGE>

                                   EXHIBIT A-9
                                   -----------

                         FORM OF CLASS A-I-7 CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-I-7 Certificates as of the Issue Date:
Pass-Through Rate: 5.150% per annum                        $87,175,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $87,175,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EF  4
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-9-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-I-7 Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-I-7 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-I-7 Certificates on such
Distribution Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided

                                      A-9-2

<PAGE>

in the Agreement, withdrawals from the Collection Account and the Distribution
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                                      A-9-3

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-9-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                      A-9-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                      A-9-6

<PAGE>

                            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.

                                      A-9-7

<PAGE>

                                  EXHIBIT A-10
                                  ------------

                         FORM OF CLASS A-II CERTIFICATE

         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 OF 1986 (THE "CODE").

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class A-II Certificates as of the Issue Date:
Pass-Through Rate:Variable                                 $74,250,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $74,250,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EG  2
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-10-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-II Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-II Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-II Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One-Month LIBOR plus 0.400%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Principal Balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus 0.800% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.

                                     A-10-2

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans

                                     A-10-3

<PAGE>

and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 10% of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-10-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                     A-10-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                        (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-10-6

<PAGE>

                            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.

                                     A-10-7

<PAGE>

                                  EXHIBIT A-11
                                  ------------

                          FORM OF CLASS M-1 CERTIFICATE

         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 OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE
         EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class M-1 Certificates as of the Issue Date:
Pass-Through Rate: 5.410% per annum                        $53,350,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $53,350,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EH  0
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

         EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL
         BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING
         OF THIS CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A
         PLAN OR INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS
         HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION
         EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT UNDERSTANDS
         THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION,
         INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE,
         NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P OR MOODY'S, AND
         THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE COMPANY,
         (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
         INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH
         TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
         95-60, AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE
         BEEN SATISFIED.

                                     A-11-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                                     A-11-2

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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.

                  Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this Certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii) it has acquired and is holding such
Certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Fitch, S&P or Moody's, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for

                                     A-11-3

<PAGE>

new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest, as requested by the Holder surrendering the
same. No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-11-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                     A-11-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-11-6

<PAGE>

                            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.

                                     A-11-7

<PAGE>

                                  EXHIBIT A-12
                                  ------------

                          FORM OF CLASS M-2 CERTIFICATE

         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 OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
         CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class M-2 Certificates as of the Issue Date:
Pass-Through Rate: 5.500% per annum                        $40,150,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $40,150,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust
                                                           Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EJ  6
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

         EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL
         BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING
         OF THIS CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A
         PLAN OR INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS
         HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION
         EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT UNDERSTANDS
         THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION,
         INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE,
         NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P OR MOODY'S, AND
         THE CERTIFICATE IS SO

                                     A-12-1

<PAGE>

         RATED OR (III) (1) IT IS AN INSURANCE COMPANY, (2) THE SOURCE OF FUNDS
         USED TO ACQUIRE OR HOLD THE CERTIFICATE OR INTEREST THEREIN IS AN
         "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH TERM IS DEFINED IN
         PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
         CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
                                       ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the

                                     A-12-2

<PAGE>

denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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.

                  Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this Certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii) it has acquired and is holding such
Certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Fitch, S&P or Moody's, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                     A-12-3

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-12-4

<PAGE>

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

Dated: October  __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                     A-12-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-12-6

<PAGE>

                            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.

                                     A-12-7

<PAGE>

                                  EXHIBIT A-13
                                  ------------

                          FORM OF CLASS M-3 CERTIFICATE

         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 OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
         M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE EXTENT DESCRIBED
         IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class M-3 Certificates as of the Issue Date:
Pass-Through Rate: 5.500% per annum                        $16,500,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $16,500,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EK  3
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

         EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL
         BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING
         OF THIS CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A
         PLAN OR INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS
         HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION
         EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT UNDERSTANDS
         THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION,
         INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE,
         NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P OR MOODY'S, AND
         THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE COMPANY,
         (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
         INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH
         TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
         95-60, AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE
         BEEN SATISFIED.

                                     A-13-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from

                                     A-13-2

<PAGE>

time to time for purposes other than distributions to Certificateholders, such
purposes including reimbursement of advances made, or certain expenses incurred,
with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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.

                  Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this Certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii) it has acquired and is holding such
Certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Fitch, S&P or Moody's, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but

                                     A-13-3

<PAGE>

does not require, the party designated in the Agreement to purchase from REMIC I
all the Mortgage Loans and all property acquired in respect of any Mortgage Loan
at a price determined as provided in the Agreement. The exercise of such right
will effect early retirement of the Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Loans at the time of purchase being less than 10% of the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee aasumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-13-4

<PAGE>

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

Dated: October __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                                     A-13-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-13-6

<PAGE>

                            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.

                                     A-13-7

<PAGE>

                                  EXHIBIT A-14
                                  ------------

                          FORM OF CLASS M-4 CERTIFICATE

         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 OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
         M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS M-3
         CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class M-4 Certificates as of the Issue Date:
Pass-Through Rate: 5.500% per annum                        $8,250,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $8,250,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EL  1
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

         EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL
         BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING
         OF THIS CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A
         PLAN OR INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS
         HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION
         EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT UNDERSTANDS
         THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION,
         INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE,
         NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P OR MOODY'S, AND
         THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE COMPANY,
         (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
         INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH
         TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE")
         95-60, AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE
         BEEN SATISFIED.

                                     A-14-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-4 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-4 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from

                                     A-14-2

<PAGE>

time to time for purposes other than distributions to Certificateholders, such
purposes including reimbursement of advances made, or certain expenses incurred,
with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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.

                  Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this Certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii) it has acquired and is holding such
Certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Fitch, S&P or Moody's, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but

                                     A-14-3

<PAGE>

does not require, the party designated in the Agreement to purchase from REMIC I
all the Mortgage Loans and all property acquired in respect of any Mortgage Loan
at a price determined as provided in the Agreement. The exercise of such right
will effect early retirement of the Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Loans at the time of purchase being less than 10% of the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-14-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                     A-14-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                        (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-14-6

<PAGE>

                            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.

                                     A-14-7

<PAGE>

                                  EXHIBIT A-15
                                  ------------

                          FORM OF CLASS M-5 CERTIFICATE

         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 OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS
         M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3
         CERTIFICATES AND THE CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN
         THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class M-5 Certificates as of the Issue Date:
Pass-Through Rate:5.500% per annum                         $8,250,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $8,250,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EM  9
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

         EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL
         BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING
         OF THIS CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A
         PLAN OR INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS
         HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION
         EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT UNDERSTANDS
         THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION,
         INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE,
         NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P OR MOODY'S, AND
         THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN INSURANCE COMPANY,
         (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE CERTIFICATE OR
         INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS SUCH
         TERM IS DEFINED IN

                                     A-15-1

<PAGE>

         PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND (3) THE
         CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.

                                     A-15-2

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-5 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-5 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from

                                     A-15-3

<PAGE>

time to time for purposes other than distributions to Certificateholders, such
purposes including reimbursement of advances made, or certain expenses incurred,
with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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.

                  Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this Certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets", (ii) it has acquired and is holding such
Certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Fitch, S&P or Moody's, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but

                                     A-15-4

<PAGE>

does not require, the party designated in the Agreement to purchase from REMIC I
all the Mortgage Loans and all property acquired in respect of any Mortgage Loan
at a price determined as provided in the Agreement. The exercise of such right
will effect early retirement of the Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Loans at the time of purchase being less than 10% of the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-15-5

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                                     A-15-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                        (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-15-7

<PAGE>

                            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.

                                     A-15-8

<PAGE>

                                  EXHIBIT A-16
                                  ------------

                          FORM OF CLASS B CERTIFICATES

         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 OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
         MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN.

         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 THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class B Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $16,500,000.00

Cut-off Date and date of Pooling and Servicing             Denomination: $16,500,000.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003

                                                           CUSIP: 64352V  EN  7
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-16-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
B Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class B Certificates in REMIC II created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among New Century Mortgage Securities, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                                     A-16-2

<PAGE>

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of

                                     A-16-3

<PAGE>

the same Class in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-16-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Signatory

                                     A-16-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                        (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-16-6

<PAGE>

                            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.

                                     A-16-7

<PAGE>

                                  EXHIBIT A-17
                                  ------------
                          FORM OF CLASS CE CERTIFICATE

         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 OF 1986 (THE "CODE").

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
         MEZZANINE CERTIFICATES AND THE CLASS B CERTIFICATES TO THE EXTENT
         DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         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 THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class CE Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $10,999,900.00

Cut-off Date and date of Pooling and Servicing             Denomination: $10,999,900.00
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

Aggregate Notional Amount of the Class                     Issue Date: October 17, 2003
CE Certificates as of the Issue Date:
$1,100,000,000.00

Notional Amount: $1,100,000,000.00
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-17-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Deutsche Bank National Trust Company, as
Indenture Trustee under the Indenture, dated as of October 17, 2003, relating to
NC Finance NIM Trust 2003-5 Notes, Series 2003-5 is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class CE Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                                     A-17-2

<PAGE>

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of

                                     A-17-3

<PAGE>

the same Class in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-17-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                     A-17-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-17-6

<PAGE>

                            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.

                                     A-17-7

<PAGE>

                                  EXHIBIT A-18
                                  ------------

                           FORM OF CLASS P CERTIFICATE

         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 OF 1986 (THE "CODE").

         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 THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Certificate Principal Balance of the
                                                           Class P Certificates as of the Issue Date: $100.00
Pass-Through Rate: N/A
                                                           Denomination: $100.00
Cut-off Date and date of Pooling and Servicing
Agreement: October 1, 2003                                 Master Servicer: New Century Mortgage
                                                           Corporation
First Distribution Date: November 25, 2003
                                                           Trustee: Deutsche Bank National Trust Company
No. 1
                                                           Issue Date: October 17, 2003
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-18-1

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Deutsche Bank National Trust Company, as
Indenture Trustee under the Indenture, dated as of October 17, 2003, relating to
NC Finance NIM Trust 2003-5 Notes, Series 2003-5 is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class P Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among New Century
Mortgage Securities, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                                     A-18-2

<PAGE>

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of

                                     A-18-3

<PAGE>

the same Class in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-18-4

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                    as Trustee

                                            By:________________________________
                                                    Authorized Signatory

                                     A-18-5

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                        (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-18-6

<PAGE>

                            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.

                                     A-18-7

<PAGE>

                                  EXHIBIT A-19
                                  ------------

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
         PERSON.

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
         "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
         ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
         AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         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 THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
         FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
         IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH
         PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
         HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN
         AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
         TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
         SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
         REGISTRATION IN THE CERTIFICATE REGISTER OF

                                     A-19-1

<PAGE>

         ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
         DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION,
         SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
         WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
         CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
         TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
         THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED
         TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION
         5.02(d) OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY
         PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
         BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>

<S>                                                        <C>
Series 2003-5                                              Aggregate Percentage Interest of the Class R
                                                           Certificates as of the Issue Date: 100.00%
Pass-Through Rate:  N/A
Cut-off Date and date of Pooling and Servicing             Percentage Interest: 100.00%
Agreement: October 1, 2003
                                                           Master Servicer: New Century Mortgage
First Distribution Date: November 25, 2003                 Corporation

No. 1                                                      Trustee: Deutsche Bank National Trust Company

                                                           Issue Date: October 17, 2003
</TABLE>

                                     A-19-2

<PAGE>

                      ASSET BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                      NEW CENTURY MORTGAGE SECURITIES, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN NEW
         CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE TRUSTEE OR
         ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that NC Capital Corporation is the registered
owner of the Percentage Interest specified above in that certain beneficial
ownership interest evidenced by all the Class R Certificates in REMIC I created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among New Century Mortgage Securities, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. 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 (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made 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 appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from

                                     A-19-3

<PAGE>

time to time for purposes other than distributions to Certificateholders, such
purposes including reimbursement of advances made, or certain expenses incurred,
with respect to the Mortgage Loans.

                  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 rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor 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 upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer

                                     A-19-4

<PAGE>

or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-19-5

<PAGE>

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

Dated: October __, 2003

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                           as Trustee

                                           By:_________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY
                                           as Trustee

                                           By:_________________________________
                                                    Authorized Signatory

                                     A-19-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                     UNIF GIFT MIN ACT - CUSTODIAN

TEN ENT - as tenants by the entireties                    (Cust) (Minor) under
                                                          Uniform Gifts
JT TEN - as joint tenants with right                             to Minors Act
         if survivorship and not as                            _______________
          tenants in common                                       (State)

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s)  unto__________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
 (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest 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

                                     A-19-7

<PAGE>

                            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.

                                     A-19-8

<PAGE>

                                    EXHIBIT B
                                    ---------

   Copy of Certificate Guaranty Insurance Policy with respect to the Insured
                                  Certificates

                CERTIFICATE GUARANTY INSURANCE POLICY ENDORSEMENT

Attached to and forming part of                  Effective Date of Endorsement:
Certificate Guaranty Insurance                                 October 17, 2003
Policy #AB0703BE issued to:

Deutsche Bank National Trust Company
as Trustee for the Holders of
New Century Home Equity Loan Trust, Series 2003-5
Asset Backed Pass-Through Certificates
Class A-I-2A and Class A-I-6A Certificates.

         For all purposes of this Policy, the following terms shall have the
following meanings:

         "Agreement" shall mean, for purposes of the Policy, the Pooling and
Servicing Agreement.

         "Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings and loan institutions in the State of California, the
State of New York or the citiy in which the Corporate Trust Office of the
Trustee is located, are authorized or obligated by law or executive order to be
closed.

         "Class A-I-2A Certificates" shall mean the Class A-I-2A Certificates,
substantially in the form set forth in Exhibit A-3 to the Agreement.

         "Class A-I-6A Certificates" shall mean the Class A-I-6A Certificates,
substantially in the form set forth in Exhibit A-8 to the Agreement.

         "Certificate Insurer" shall mean Ambac Assurance Corporation, or any
successor thereto, as issuer of this Policy.

         "Class A Overcollateralization Deficiency Amount" shall mean, with
respect to any Distribution Date, the excess of (i) the aggregate Certificate
Principal Balance of the Class A Certificates after giving effect to
distributions of principal to be made on such Distribution Date (without regard
to any payments of principal under the Policy) over (ii) the aggregate Stated
Principal Balance of the Mortgage Loans on the last day of the immediately
preceding Due Period, multiplied by a fraction, the numerator of which is the
aggregate Certificate Principal Balance of the Insured Certificates after giving
effect to distributions of principal to be made on such Distribution Date
(without regard to any payments of principal under the Policy) and the
denominator of which is the aggregate Certificate Principal Balance of all of
the Class A Certificates after giving effect to distributions of principal to be
made on such Distribution Date.

         "Deficiency Amount" shall mean the sum of (x) for any Distribution Date
(including the Distribution Date occurring on the Final Stated Maturity Date)
the excess, if any, of the Senior Interest Distribution Amount allocable to the
Insured Certificates on such Distribution Date, over the Available Distribution
Amount on such Distribution Date available to pay the Insured Certificates in
accordance with Section 4.01 of the Agreement, (y) for any Distribution Date
prior to the Final Stated Maturity Date, the Class A Overcollateralization
Deficiency Amount, if any, for such Distribution Date and (z) for the
Distribution Date

                                       B-1

<PAGE>

occurring on the Final Stated Maturity Date, the Certificate Principal Balance
of the Insured Certificates outstanding on such Distribution Date (after giving
effect to all distributions to be made thereon on such Distribution Date other
than pursuant to the Policy).

         "Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in November 2003.

         "Due for Payment" shall mean with respect to an Insured Amount, the
Distribution Date on which Insured Amounts are due and payable pursuant to the
terms of the Agreement.

         "Final Stated Maturity Date" shall mean the Distribution Date occurring
in November 2033.

         "First Distribution Date" shall mean November 25, 2003.

         "Holder" shall mean the registered owner or beneficial owner of an
Insured Certificate, but shall not include the Trustee, the Seller, the
Depositor, the Master Servicer or any of their respective affiliates.

         "Insurance Agreement" shall mean the Insurance and Indemnity Agreement,
dated as of October 17, 2003, among the Certificate Insurer, New Century
Mortgage Corporation, as Originator and Master Servicer, NC Capital Corporation,
as Seller, New Century Mortgage Securities, Inc., as Depositor and Deutsche Bank
National Trust Company, as Trustee, as such agreement may be amended, modified
or supplemented from time to time.

         "Insured Amounts" shall mean, with respect to any Distribution Date,
the Deficiency Amount for such Distribution Date.

         "Insured Certificates" shall mean the Class A-I-2A Certificates and
Class A-I-6A Certificates.

         "Insured Payments" shall mean, with respect to any Distribution Date,
the aggregate amount actually paid by the Certificate Insurer to the Trustee in
respect of (i) Insured Amounts for a Distribution Date and (ii) Preference
Amounts for any given Business Day.

         "Late Payment Rate" shall mean for any Distribution Date, the lesser of
(i) the greater of (a) the rate of interest, as it is publicly announced by
Citibank, N.A. at its principal office in New York, New York as its prime rate
(any change in such prime rate of interest to be effective on the date such
change is announced by Citibank, N.A.) plus 2% and (b) the then applicable
highest rate of interest on the Insured Certificates and (ii) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.

         "Nonpayment" shall mean, with respect to any Distribution Date, an
Insured Amount is Due for Payment but has not been paid pursuant to the
Agreement.

         "Notice" shall mean the telephonic or telegraphic notice, promptly
confirmed in writing by facsimile substantially in the form of Exhibit A to the
Policy, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Amount or Preference
Amount which shall be due and owing on the applicable Distribution Date.

         "Policy" shall mean the Certificate Guaranty Insurance Policy together
with each and every endorsement thereto.

                                       B-2

<PAGE>

         "Pooling and Servicing Agreement" shall mean the Pooling and Servicing
Agreement, dated October 1, 2003, among New Century Mortgage Corporation, as
Master Servicer, New Century Mortgage Securities, Inc., as Depositor and
Deutsche Bank National Trust Company, as Trustee, as such agreement may be
amended, modified or supplemented from time to time.

         "Preference Amount" shall mean any payment of principal or interest on
an Insured Certificate, which would have been covered under the Policy as an
Insured Amount, and which is made to a Holder by or on behalf of the Trust,
which has been deemed a preferential transfer and was previously recovered from
the Holder pursuant to the United States Bankruptcy Code in accordance with a
final, non-appealable order a court of competent jurisdiction.

         "Premium" shall mean the amount payable to the Certificate Insurer on
each Distribution Date calculated at the Premium Percentage.

         "Premium Percentage" shall have the meaning set forth in the Insurance
Agreement.

         "Reimbursement Amount" shall mean, as to any Distribution Date, the sum
of (x) (i) all Insured Payments paid by the Certificate Insurer, but for which
the Certificate Insurer has not been reimbursed prior to such Distribution Date
pursuant to Section 4.01 of the Agreement, plus (ii) interest accrued on such
Insured Payments not previously repaid, calculated at the Late Payment Rate from
the date the Trustee received the related Insured Payments or the date such
Insured Payments were made, and (y) without duplication (i) any amounts then due
and owing to the Certificate Insurer under the Insurance Agreement, as certified
to the Trustee by the Certificate Insurer plus (ii) interest on such amounts at
the Late Payment Rate.

         "Trustee" shall mean Deutsche Bank National Trust Company or its
successor-in-interest, in its capacity as Trustee under the Agreement, or if any
successor trustee shall be appointed as provided therein, then "Trustee" shall
also mean such successor trustee, subject to the provisions thereof.

         Capitalized terms used herein as defined terms and not otherwise
defined herein shall have the meaning assigned to them in the Insurance
Agreement and the Agreement, without regard to any amendment or modification
thereof, unless such amendment or modification has been approved in writing by
the Certificate Insurer.

         Notwithstanding any other provision of the Policy, the Certificate
Insurer will pay any Insured Amount payable hereunder no later than 12:00 noon,
New York City time, on the later of (i) the Distribution Date on which the
related Insured Amount is Due for Payment and (ii) the second Business Day
following receipt in New York, New York on a Business Day by the Certificate
Insurer of a Notice at the address and in the manner provided in Section 6.02 of
the Insurance Agreement; provided that, if such Notice is received after 12:00
noon, New York City time, on such Business Day, it shall be deemed to be
received on the following Business Day. If any such Notice is not in proper form
or is otherwise insufficient for the purpose of making a claim under the Policy,
it shall be deemed not to have been received for purposes of this paragraph, and
the Certificate Insurer shall promptly so advise the Trustee and the Trustee may
submit an amended or corrected Notice.

         The Certificate Insurer shall pay any Preference Amount when due to be
paid pursuant to the Order referred to below, but in any event no earlier than
the third Business Day following receipt by the Certificate Insurer of (i) a
certified copy of a final, non-appealable order of a court or other body
exercising jurisdiction in such insolvency proceeding to the effect that the
Trustee, or Holder, as applicable, is required to return such Preference Amount
paid during the term of this Policy because such payments were avoided as a

                                       B-3

<PAGE>

preferential transfer or otherwise rescinded or required to be restored by the
Trustee or Holder (the "Order"), (ii) a certificate by or on behalf of the
Trustee or Holder that the Order has been entered and is not subject to any
stay, (iii) an assignment, in form and substance satisfactory to the Certificate
Insurer, duly executed and delivered by the Trustee or Holder, as applicable,
irrevocably assigning to the Certificate Insurer all rights and claims of the
Trustee or Holder relating to or arising under the Agreement against the estate
of the Trust or otherwise with respect to such Preference Amount and (iv) a
Notice (in the form attached hereto as Exhibit A) appropriately completed and
executed by the Trustee; provided, that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day; provided, further, that the Certificate
Insurer shall not be obligated to make any payment in respect of any Preference
Amount representing a payment of principal on the Insured Certificates prior to
the time the Certificate Insurer would have been required to make a payment in
respect of such principal pursuant to the first paragraph of the Policy. Such
payment shall be disbursed to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order, and not to the Holder directly, unless
the Holder has made a payment of the Preference Amount to the court or such
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order, in which case the Certificate Insurer will pay the Holder, subject to
the delivery of (a) the items referred to in clauses (i), (ii), (iii) and (iv)
above to the Certificate Insurer and (b) evidence satisfactory to the
Certificate Insurer that payment has been made to such court or receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Order.

         The Certificate Insurer shall be subrogated to the rights of each
Holder to the extent of any payment by the Certificate Insurer under the Policy.

         The Certificate Insurer hereby agrees that if it shall be subrogated to
the rights of Holders by virtue of any payment under this Policy, no recovery of
such payment will occur unless the full amount of the Holders' allocable
distributions for such Distribution Date can be made. In so doing, the
Certificate Insurer does not waive its rights to seek full payment of all
Reimbursement Amounts owed to it under the Insurance Agreement and Agreement.

         The Policy does not cover Net WAC Rate Carryover Amounts, Prepayment
Interest Shortfalls or Relief Act Interest Shortfalls allocated to the Insured
Certificates, nor does the Policy guarantee to the Holders of the Insured
Certificates any particular rate of principal payment. In addition, the Policy
does not cover shortfalls, if any, attributable to the liability of the Trust,
any Holder, any REMIC or the Trustee for withholding taxes, if any, (including
interest and penalties in respect of any liability for withholding taxes) nor
any risk other than Nonpayment, including the failure of the Trustee to make any
payment required under the Agreement to the Holders of the Insured Certificates.

         The terms and provisions of the Agreement constitute the instrument of
assignment referred to in the second paragraph of the face of this Policy.

         A premium will be payable on this Policy on each Distribution Date as
provided in Section 4.01 of the Agreement, beginning with the First Distribution
Date, in an amount equal to the Premium.

         The Certificate Insurer's obligations under the Policy will be
discharged to the extent that funds are received by the Trustee for payment to
the holders of the Insured Certificates whether or not those funds are properly
paid by the Trustee. Payments of Insured Amounts will be made only at the time
set forth in the Policy, and no accelerated payments of Insured Amounts will be
made regardless of any acceleration of the Insured Certificates, unless the
acceleration is at the sole option of the Certificate Insurer.

                                       B-4

<PAGE>

         THE INSURANCE PROVIDED BY THE POLICY IS NOT COVERED BY THE
PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW
YORK INSURANCE LAW.

         IN THE EVENT THAT AMBAC ASSURANCE CORPORATION WERE TO BECOME INSOLVENT,
ANY CLAIMS ARISING UNDER THE POLICY WOULD BE EXCLUDED FROM COVERAGE BY THE
CALIFORNIA INSURANCE GUARANTY ASSOCIATION.

         Nothing herein contained shall be held to vary, alter, waive or extend
any of the terms, conditions, provisions, agreements or limitations of the above
mentioned Policy other than as above stated.

         To the extent the provisions of this endorsement conflict with the
provisions in the above-mentioned Policy, the provisions of this endorsement
shall govern.

         The Policy and the obligations of the Certificate Insurer thereunder
will terminate without any action on the part of the Certificate Insurer or any
other person on the date that is one year and one day following the earlier to
occur of (i) the date on which all amounts required to be paid on the Insured
Certificates have been paid in full and (ii) the Final Stated Maturity Date.
Upon termination of the Policy, the Trustee shall deliver the original of the
Policy to the Certificate Insurer.

         No person other than the Trustee shall be entitled to present the
Notice.

         No waiver of any rights or powers of the Certificate Insurer, the
Holders or the Trustee or consent by any of them shall be valid unless signed by
an authorized officer or agent thereof.

         This Policy is issued under and pursuant to, and shall be construed in
accordance with, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.

                                       B-5

<PAGE>

         IN WITNESS WHEREOF, Ambac Assurance Corporation has caused this
endorsement to the Policy to be signed by its duly authorized officers

_________________________________             _________________________________
Assistant Secretary                                   Vice President

                                       B-6

<PAGE>

                                    EXHIBIT A
                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY
                  --------------------------------------------
                               Policy No. AB0703BE

                         NOTICE OF NONPAYMENT AND DEMAND
              FOR PAYMENT OF INSURED AMOUNTS AND PREFERENCE AMOUNTS

                                                         Date: [          ]

Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention:  General Counsel

         Reference is made to Certificate Guaranty Insurance Policy No. AB0703BE
(the "Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms
capitalized herein and not otherwise defined shall have the meanings specified
in the Policy and the Pooling and Servicing Agreement, dated as of October 1,
2003, among New Century Mortgage Corporation, as Master Servicer, New Century
Mortgage Securities, Inc., as Depositor and Deutsche Bank National Trust
Company, as Trustee, as the case may be, unless the context otherwise requires.

         The Trustee hereby certifies as follows:

1.       The Trustee is the Trustee under the Agreement for the Holders.

2.       The relevant Distribution Date is [date].

3.       Payment on the Insured Certificates in respect of the Distribution Date
is due to be received on _________________________ under the Agreement in an
amount equal to $_________.

4.       [There is an Insured Amount of $______________ in respect of the [Class
A-I-2A Certificates] [Class A-I-6A Certificates], which amount is Due for
Payment pursuant to the terms of the Agreement.] [There is a Preference Amount
of $______________ in respect of the [Class A-I-2A Certificates] [Class A-I-6A
Certificates], which is due and payable pursuant to the terms of the Agreement.]

5.       The Trustee has not heretofore made a demand for the [Insured Amount]
[Preference Amount] in respect of the Distribution Date.

6.       The Trustee hereby requests the payment of the [Insured Amount that is
Due For Payment] [Preference Amount] be made by Ambac under the Policy and
directs that payment under the Policy be made to the following account by bank
wire transfer of federal or other immediately available funds in accordance with
the terms of the Policy to: ______________________________ (Trustee's account
number).

7.       The Trustee hereby agrees that, following receipt of the [Insured
Amount] [Preference Amount] from Ambac, it shall (a) hold such amounts in trust
and apply the same directly to the distribution of payment on the [Class A-I-2A
Certificates] [Class A-I-6A Certificates] when due; (b) not apply such funds for
any other purpose; (c) deposit such funds to the Insurance Account and not
commingle such funds with other funds

                                       B-7

<PAGE>

held by Trustee and (d) maintain an accurate record of such payments with
respect to each certificate and the corresponding claim on the Policy and
proceeds thereof.

FOR YOUR PROTECTION CALIFORNIA LAW REQUIRES THE FOLLOWING TO APPEAR ON THIS
FORM. ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR THE
PAYMENT OF A LOSS IS GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND
CONFINEMENT IN STATE PRISON.
                                            By:____________________________
                                                     Trustee

                                            Title:_________________________
                                                     (Officer)

                                       B-8

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                             <C>
[Ambac logo]
CERTIFICATE GUARANTY INSURANCE POLICY

Insured Obligations:                                                            Policy Number:

New Century Home Equity Loan Trust                                              AB0703BE
Series 2003-5, Asset Backed Pass-Through
Certificates, Class A-I-2A and Class A-I-6A
                                                                                Premium:

                                                                                As specified in the
                                                                                endorsement attached hereto.
</TABLE>

AMBAC ASSURANCE CORPORATION (AMBAC), a Wisconsin stock insurance corporation, in
consideration of the payment of the premium and subject to the terms of this
Policy, hereby agrees unconditionally and irrevocably to pay to the Trustee for
the benefit of the Holders of the Insured Obligations, that portion of the
insured Amounts which shall become Due for Payment but shall be unpaid by reason
of Nonpayment.

Ambac will make such payments to the Trustee from its own funds on the later of
(a) one (1) Business Day following notification to Ambac of Nonpayment or (b)
the Business Day on which the Insured Amounts are Due for Payment. Such payments
of principal or interest shall be made only upon presentation of an instrument
of assignment in form and substance satisfactory to Ambac, transferring to Ambac
all rights under such Insured Obligations to receive the principal of and
interest on the Insured Obligation. Ambac shall be subrogated to all the
Holders' rights to payment on the Insured Obligations to the extent of the
insurance disbursements so made. Once payments of the Insured Amounts have been
made to the Trustee, Ambac shall have no further obligation hereunder in respect
of such Insured Amounts.

In the event the Trustee for the Insured Obligations has notice that any payment
of principal or interest on an Insured Obligation which has become Due for
Payment and which is made to a Holder by or on behalf of the Trustee has been
deemed a preferential transfer and theretofore recovered from its Holder
pursuant to the United States Bankruptcy Code in accordance with a final,
nonappealable order of a court of competent jurisdiction, such Holder will be
entitled to payment from Ambac to the extent of such recovery if sufficient
funds are not otherwise available.

This Policy is noncancelable by Ambac for any reason, including failure to
receive payment of any premium due hereunder. The premium on this Policy is not
refundable for any reason. This Policy does not insure against loss of any
prepayment or other acceleration payment which at any time may become due in
respect of any Insured Obligation, other than at the sole option of Ambac, nor
against any risk other than Nonpayment, including failure of the Trustee to make
any payment due Holders of Insured Amounts.
To the fullest extent permitted by applicable law, Ambac hereby waives and
agrees not to assert any and all rights and defenses, to the extent such rights
and defenses may be available to Ambac, to avoid payment of its obligations
under this Policy in accordance with the express provisions hereof.

Any capitalized terms not defined herein shall have the meaning given such terms
in the endorsement attached hereto or in the Agreement.

In witness whereof, Ambac has caused this Policy to be affixed with its
corporate seal and to be signed by its duly authorized officers in facsimile to
become effective as their original signatures and binding upon Ambac by virtue
of the countersignature of its duly authorized representative.

         [SEAL]

President                  Secretary

Effective Date:  October 17, 2003           Authorized Representative

                                       B-9

<PAGE>

                                   EXHIBIT C-1
                                   -----------

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                                 [Date]

New Century Mortgage Securities, Inc.
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612

New Century Mortgage Corporation
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612

                  Re:      Pooling and Servicing Agreement, dated as of October
                           1, 2003, among New Century Mortgage Securities, Inc.,
                           New Century Mortgage Corporation and Deutsche Bank
                           National Trust Company, Asset Backed Pass-Through
                           Certificates, Series 2003-5
                           ---------------------------

Ladies and Gentlemen:

                  Pursuant to Section 2.01 of the Pooling and Servicing
Agreement, dated as of October 1, 2003 (the "Agreement"), among New Century
Mortgage Securities, Inc. as Depositor, New Century Mortgage Corporation, as
master servicer and Deutsche Bank National Trust Company as trustee, we hereby
acknowledge that as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full, any Delayed Delivery Group I
Mortgage Loan or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification) (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(v)) required to be delivered to it pursuant to the
Agreement are in its possession, (ii) such documents have been reviewed by it
and appear regular on their face and relate to such Mortgage Loan and (iii)
based on its examination and only as to the foregoing, the information set forth
in the Mortgage Loan Schedule that corresponds to items (i) through (iii),
(vi),(xi), (xii), (xv), (xvii), (xviii), (xx) through (xxiii) and (xxv) of the
definition of "Mortgage Loan Schedule" accurately reflects information set forth
in the Mortgage File.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement.

                  The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan, or (iii) whether any Mortgage File
included any of the documents specified in clause (v) of Section 2.01 of the
Agreement.

                                      C-1-1

<PAGE>

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY

                                        By:______________________________
                                        Name:
                                        Title:

                                      C-1-2

<PAGE>

                                   EXHIBIT C-2
                                   -----------

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                                 [Date]

New Century Mortgage Securities, Inc.
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612

New Century Mortgage Corporation
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612

                  Re:      Pooling and Servicing Agreement, dated as of October
                           1, 2003, among New Century Mortgage Securities, Inc.,
                           New Century Mortgage Corporation and Deutsche Bank
                           National Trust Company, Asset Backed Pass-Through
                           Certificates, Series 2003-5
                           ---------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto), it or a
Custodian on its behalf has received:

                  (i) the original recorded Mortgage, and the original recorded
         power of attorney, if the Mortgage was executed pursuant to a power of
         attorney, or a certified copy thereof in those instances where the
         public recording office retains the original or where the original has
         been lost; and

                  (ii) an original Assignment in ______________ or a recorded
         Assignment to the Trustee together with the original recorded
         Assignment or Assignments showing a complete chain of assignment from
         the originator, or a certified copy of such Assignments in those
         instances where the public recording retains the original or where
         original has been lost; and

                  (iii) the original lender's title insurance policy.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in the Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.

                                          DEUTSCHE BANK NATIONAL TRUST COMPANY

                                      C-2-3

<PAGE>

                                          By:________________________________
                                          Name:
                                          Title:

                                      C-2-4

<PAGE>

                                    EXHIBIT D
                                    ---------

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (this "Agreement"),
dated October 16 2003, between NC Capital Corporation, a California corporation
(the "Seller") and New Century Mortgage Securities, Inc., a Delaware corporation
(the "Purchaser").

                              PRELIMINARY STATEMENT

                  The Seller intends to sell the Mortgage Loans (as hereinafter
identified) and the Cap Contracts (as defined in the Pooling and Servicing
Agreement) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser intends to deposit the Mortgage Loans and the
Cap Contracts into a mortgage pool comprising the Trust Fund. The Trust Fund
will be evidenced by a single series of mortgage pass-through certificates
designated as Series 2003-5 (the "Certificates"). The Certificates will consist
of nineteen classes of certificates. The Class CE Certificates, the Class P
Certificates and the Class R Certificates (collectively, the "NC Capital
Certificates") will be delivered to the Seller or its designee as partial
consideration for the Mortgage Loans as further described below. The
Certificates will be issued pursuant to a Pooling and Servicing Agreement for
Series 2003-5, dated as of October 1, 2003 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor, New Century Mortgage Corporation
as master servicer (the "Master Servicer") and Deutsche Bank National Trust
Company as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell
and the Purchaser agrees to purchase, on or before October 17, 2003 (the
"Closing Date"), certain fixed-rate and adjustable-rate conventional, one- to
four-family, residential mortgage loans (the "Mortgage Loans"), having an
aggregate principal balance as of the close of business on October 1, 2003, (the
"Cut-off Date") of $[________] (the "Closing Balance"), after giving effect to
all payments due on the Mortgage Loans on or before the Cut-off Date, whether or
not received including the right to any Prepayment Charges payable by the
related Mortgagors in connection with any Principal Prepayments on the Mortgage
Loans.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that shall describe such Mortgage Loans and set forth
all of the Mortgage Loans to be purchased under this Agreement, including the
Prepayment Charges. The Closing Schedule will conform to the requirements set
forth in this Agreement and to the definition of "Mortgage Loan Schedule" under
the Pooling and Servicing Agreement. The Closing Schedule shall be used as the
Mortgage Loan Schedule under the Pooling and Servicing Agreement.

<PAGE>

                  SECTION 3. CONSIDERATION.

                  (a) In consideration for the Mortgage Loans to be purchased
hereunder, the Purchaser shall, as described in Section 8, (i) pay to or upon
the order of the Seller in immediately available funds an amount (the "Mortgage
Loan Purchase Price") equal to the net sale proceeds of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates and (ii)
will have delivered the NC Capital Certificates to the Seller or its designee.

                  (b) The Purchaser or any assignee, transferee or designee of
the Purchaser shall be entitled to all scheduled payments of principal due after
the Cut-off Date, all other payments of principal due and collected after the
Cut-off Date, and all payments of interest on the Mortgage Loans allocable to
the period after the Cut-off Date. All scheduled payments of principal and
interest due on or before the Cut-off Date and collected after the Cut-off Date
shall belong to the Seller.

                  (c) Pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the Certificateholders.

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                  (a) POSSESSION OF MORTGAGE FILES. The Seller does hereby sell,
and in connection therewith hereby assigns to the Purchaser, effective as of the
Closing Date, without recourse but subject to the terms of this Agreement, all
of its right, title and interest in, to and under the Mortgage Loans, including
the related Prepayment Charges. The contents of each Mortgage File not delivered
to the Purchaser or to any assignee, transferee or designee of the Purchaser on
or prior to the Closing Date are and shall be held in trust by the Seller for
the benefit of the Purchaser or any assignee, transferee or designee of the
Purchaser. Upon the sale of the Mortgage Loans, the ownership of each Mortgage
Note, the related Mortgage and the other contents of the related Mortgage File
is vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or that come into the
possession of the Seller on or after the Closing Date shall immediately vest in
the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.

                  (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Seller will, on
or prior to the Closing Date, deliver or cause to be delivered to the Purchaser
or any assignee, transferee or designee of the Purchaser each of the following
documents for each Mortgage Loan:

                  (i) the original Mortgage Note, endorsed in blank or in the
         following form "Pay to the order of Deutsche Bank National Trust
         Company, as Trustee under the applicable agreement, without recourse,"
         with all prior and intervening endorsements showing a complete chain of
         endorsement from the originator to the Person so endorsing to the
         Trustee;

                  (ii) the original Mortgage with evidence of recording thereon,
         and the original recorded power of attorney, if the Mortgage was
         executed pursuant to a power of attorney, with evidence of recording
         thereon;

                                       -2-

<PAGE>

                  (iii) an original Assignment in blank;

                  (iv) the original recorded Assignment or Assignments showing a
         complete chain of assignment from the originator to the Person
         assigning the Mortgage to the Trustee as contemplated by the
         immediately preceding clause (iii);

                  (v) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any; and

                  (vi) the original lender's title insurance policy or, if the
         original title policy has not been issued, the irrevocable commitment
         to issue the same.

                  The Seller promptly shall (within sixty Business Days
following the later of the Closing Date and the date of the receipt by the
Seller of the recording information for a Mortgage but in no event later than
ninety days following the Closing Date) submit or cause to be submitted for
recording, at no expense to the Purchaser (or the Trust Fund or the Trustee
under the Pooling and Servicing Agreement), in the appropriate public office for
real property records, each Assignment referred to in clauses (b)(iii) and
(b)(iv) of this Section 4 and shall execute each original Assignment in the
following form: "Deutsche Bank National Trust Company, as Trustee under the
applicable agreement." In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Seller promptly shall prepare a
substitute Assignment or cure such defect, as the case may be, and thereafter
cause each such Assignment to be duly recorded.

                  With respect to a maximum of approximately 2.0% of the
Mortgage Loans, by outstanding principal balance of the Mortgage Loans as of the
Cut-off Date, if any original Mortgage Note referred to in Section 4(b)(i) above
cannot be located, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon delivery to the Purchaser of a photocopy of such
Mortgage Note, if available, with a lost note affidavit substantially in the
form of Exhibit I to the Pooling and Servicing Agreement. If any of the original
Mortgage Notes for which a lost note affidavit was delivered to the Purchaser is
subsequently located, such original Mortgage Note shall be delivered to the
Purchaser within three Business Days.

                  Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates (which in the case of the Insured Certificates
shall be without regard to the Policy); PROVIDED, HOWEVER, each Assignment shall
be submitted for recording by the Seller in the manner described above, at no
expense to the Purchaser, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Master
Servicer, (iv) the occurrence of a servicing transfer as described in Section
7.02 of the Pooling and Servicing Agreement, (v) with respect to any one
Assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Mortgagor under the related Mortgage and (vi) any Mortgage Loan that is
90 days or more Delinquent. Upon (a) receipt of written notice that recording of
the Assignments is required pursuant to one or more

                                       -3-

<PAGE>

of the conditions (excluding condition (vi) above) set forth in the preceding
sentence or (b) upon the occurrence of condition (vi) in the preceding sentence,
the Seller shall be required to deliver such Assignments within 30 days
following receipt of such notice.

                  If any of the documents referred to in Sections 4(b)(ii),
(iii) or (iv) above has, as of the Closing Date, been submitted for recording
but either (x) has not been returned from the applicable public recording office
or (y) has been lost or such public recording office has retained the original
of such document, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Purchaser or its assignee,
transferee or designee of a copy of each such document certified by the
Originator in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Originator,
delivery to the Purchaser or its assignee, transferee or designee promptly upon
receipt thereof of either the original or a copy of such document certified by
the applicable public recording office to be a true and complete copy of the
original. Notice shall be provided to the Trustee and the Rating Agencies by the
Seller if delivery pursuant to clause (2) above will be made more than 180 days
after the Closing Date. If the original lender's title insurance policy was not
delivered pursuant to Section 4(b)(vi) above, the Seller shall deliver or cause
to be delivered to the Purchaser or its assignee, transferee or designee
promptly after receipt thereof, the original lender's title insurance policy.
The Seller shall deliver or cause to be delivered to the Purchaser or its
assignee, transferee or designee promptly upon receipt thereof any other
original documents constituting a part of a Mortgage File received with respect
to any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

                  Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Seller, shall be so held for the benefit of the Purchaser, its assignee,
transferee or designee.

                  (c) ACCEPTANCE OF MORTGAGE LOANS. The documents delivered
pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or any
assignee, transferee or designee of the Purchaser at any time before or after
the Closing Date (and with respect to each document permitted to be delivered
after the Closing Date, within seven days of its delivery) to ascertain that all
required documents have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                  (d) TRANSFER OF INTEREST IN AGREEMENT. The Purchaser has the
right to assign its interest under this Agreement, in whole or in part, to the
Trustee, as may be required to effect the purposes of the Pooling and Servicing
Agreement, without the consent of the Seller, and the assignee shall succeed to
the rights and obligations hereunder of the Purchaser. Any expense reasonably
incurred by or on behalf of the Purchaser or the Trustee in connection with
enforcing any obligations of the Seller under this Agreement will be promptly
reimbursed by the Seller.

                  (e) EXAMINATION OF MORTGAGE FILES. Prior to the Closing Date,
the Seller shall either (i) deliver in escrow to the Purchaser, or to any
assignee, transferee or designee of the Purchaser for examination, the Mortgage
File pertaining to each Mortgage Loan or (ii) make such Mortgage Files available
to the Purchaser or to any assignee, transferee or designee of the Purchaser

                                       -4-

<PAGE>

for examination. Such examination may be made by the Purchaser or the Trustee,
and their respective designees, upon reasonable notice to the Seller during
normal business hours before the Closing Date and within 60 days after the
Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             SELLER

                  The Seller hereby represents and warrants to the Purchaser, as
of the date hereof and as of the Closing Date, and covenants, that:

                  (i) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of California with full
corporate power and authority to conduct its business as presently conducted by
it to the extent material to the consummation of the transactions contemplated
herein. The Seller has the full corporate power and authority to own the
Mortgage Loans and to transfer and convey the Mortgage Loans to the Purchaser
and has the full corporate power and authority to execute and deliver, engage in
the transactions contemplated by, and perform and observe the terms and
conditions of this Agreement.

                  (ii) The Seller has duly authorized the execution, delivery
and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.

                  (iii) The execution, delivery and performance of this
Agreement by the Seller (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provisions of the
articles of incorporation or by-laws of the Seller, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the Seller
is a party or by which the Seller or any of its property is bound or (C) any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Seller or any of its
property and (y) does not create or impose and will not result in the creation
or imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans.

                  (iv) No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of the Seller to any
governmental authority or court is required, under federal laws

                                       -5-

<PAGE>

or the laws of the State of California, for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation by the Seller of any other transaction contemplated hereby
and by the Pooling and Servicing Agreement; provided, however, that the Seller
makes no representation or warranty regarding federal or state securities laws
in connection with the sale or distribution of the Certificates.

                  (v) This Agreement does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained herein not misleading. The written statements, reports and other
documents prepared and furnished or to be prepared and furnished by the Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby taken in the aggregate do not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein not misleading.

                  (vi) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder.

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

                  (viii) Immediately prior to the sale of the Mortgage Loans to
the Purchaser as herein contemplated, the Seller will be the owner of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note,
and, upon the payment to the Seller of the Mortgage Loan Purchase Price, in the
event that the Seller retains or has retained record title, the Seller shall
retain such record title to each Mortgage, each related Mortgage Note and the
related Mortgage Files with respect thereto in trust for the Purchaser as the
owner thereof from and after the date hereof.

                  (ix) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans by the Seller or the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the Seller
of its obligations under, or validity or enforceability of, this Agreement.

                  (x) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or any similar statutory
provisions.

                  (xi) [intentionally omitted]

                                       -6-

<PAGE>

                  (xii) Neither the Seller nor the Originator has dealt with any
broker, investment banker, agent or other person, except for the Purchaser or
any of its affiliates, that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans (except that an entity that
previously financed the Seller's ownership of the Mortgage Loans may be entitled
to a fee to release its security interest in the Mortgage Loans, which fee shall
have been paid and which security interest shall have been released on or prior
to the Closing Date).

                  (xiii) There is no litigation currently pending or, to the
best of the Seller's knowledge without independent investigation, threatened
against the Seller or the Originator that would reasonably be expected to
adversely affect the transfer of the Mortgage Loans, the issuance of the
Certificates or the execution, delivery, performance or enforceability of this
Agreement, or that would result in a material adverse change in the financial
condition of the Seller.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER
                             RELATING TO THE MORTGAGE LOANS.

                  REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL MORTGAGE
LOANS. The Seller hereby represents and warrants to the Purchaser that as to
each Mortgage Loan as of the Closing Date:

                  (i) The information set forth in the Mortgage Loan Schedule,
including the field concerning any related Prepayment Charge, is complete, true
and correct as of the Cut-off Date;

                  (ii) [intentionally omitted]

                  (iii) (a) All payments required to be made on or before the
first day of the month prior to the month of the Closing Date, with respect to
such Mortgage Loan under the terms of the Mortgage Note have been made; (b)
neither the Seller nor the Originator has advanced funds, or induced, solicited
or knowingly received any advance of funds from a party other than the owner of
the related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage and (c) as of October 1, 2003,
the payment required under any Mortgage Loan will not and has not been 30 or
more days delinquent more than once during the last twelve months;

                  (iv) There are no delinquent taxes, ground rents, water
charges, sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments or other outstanding
charges affecting the related Mortgaged Property;

                  (v) To the best knowledge of the Seller, the terms of the
Mortgage Note and the Mortgage have not been impaired, waived, altered or
modified in any respect, except by written instruments, recorded in the
applicable public recording office if necessary to maintain the lien priority of
the Mortgage; the substance of any such waiver, alteration or modification has
been approved by the title insurer, to the extent required by the related
policy, and is reflected on the Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed by the Seller or the Originator or
any other person in the chain of title from the Originator to the Seller to the
Purchaser, and no Mortgagor has been released, in whole or in part, except in
connection with

                                       -7-

<PAGE>

an assumption agreement approved by the title insurer, to the extent required by
the policy, and the terms of which are reflected in the Mortgage Loan Schedule;

                  (vi) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;

                  (vii) All buildings upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the Mortgaged
Property is located, pursuant to insurance policies conforming to the
requirements of the Pooling and Servicing Agreement. All such insurance policies
contain a standard mortgagee clause naming the Originator, its successors and
assigns as mortgagee and all premiums thereon have been paid. If upon
origination of the Mortgage Loan, the Mortgaged Property was in an area
identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect which policy conforms to the requirements of Fannie Mae and Freddie
Mac. The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and on the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;

                  (viii) Any and all requirements of any federal, state or local
law including, without limitation, all applicable predatory and abusive lending
laws, usury, truth in lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity or disclosure laws applicable to the
origination and servicing of the Mortgage Loan have been complied with. Any and
all statements or acknowledgments required to be made by the Mortgagor relating
to such requirements are and will remain in the Mortgage File;

                  (ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;

                  (x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the appraised
value of the Mortgaged Property, (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related

                                       -8-

<PAGE>

Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable first lien and first
priority security interest, as applicable, on the property described therein and
the Seller had full right to contribute and assign the same to the Purchaser.
The Mortgaged Property was not, as of the date of origination of the Mortgage
Loan, subject to a mortgage, deed of trust, deed to secure debt or other
security instrument creating a lien subordinate to the lien of the Mortgage;

                  (xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms;

                  (xii) All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been
duly and properly executed by such parties. The Mortgagor is a natural person
who is a party to the Mortgage Note and the Mortgage is in an individual
capacity or family trust that is guaranteed by a natural person;

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

                  (xiv) As of the Closing Date and prior to the sale of the
Mortgage Loan to the Purchaser, the Seller was the sole legal, beneficial and
equitable owner of the Mortgage Note and the Mortgage and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest;

                  (xv) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in compliance
with any and all applicable "doing business" and licensing requirements of the
laws of the state wherein the Mortgaged Property is located;

                  (xvi) The Mortgage Loan is covered by an ALTA lender's title
insurance policy, and with respect to each adjustable-rate Mortgage Loan, an
adjustable rate mortgage endorsement in an amount at least equal to the balance
of the Mortgage Loan as of the Cut-off Date, such endorsement substantially in
the form of ALTA Form 6.0 or 6.1, acceptable to Fannie Mae or Freddie Mac,
issued by a title insurer acceptable to Fannie Mae and Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring (subject to the exceptions contained in (x)(a) and (b) above) the
Originator, its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment in the Mortgage Rate and
monthly payment (in the case of a Group II Mortgage Loan). Additionally, such
lender's title insurance policy affirmatively insures ingress and egress to

                                       -9-

<PAGE>

and from the Mortgaged Property, and against encroachments by or upon the
Mortgaged Property or any interest therein. The Originator is the sole insured
of such lender's title insurance policy, and such lender's title insurance
policy is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Originator and the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy;

                  (xvii) Other than as specified in paragraph (iii) above, there
is no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and neither the Originator
nor the Seller has waived any default, breach, violation or event of
acceleration;

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

                  (xix) All improvements which were considered in determining
the appraised value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property. Each
appraisal has been performed in accordance with the provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989;

                  (xx) The Mortgage Loan was (i) originated by the Originator or
by a savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved as such by the Secretary of HUD or (ii)
acquired by the Originator directly through loan brokers or correspondents such
that (a) the Mortgage Loan was originated in conformity with the Originator's
underwriting guidelines, (b) the Originator approved the Mortgage Loan prior to
funding and (c) the Originator provided the funds used to originate the Mortgage
Loan and acquired the Mortgage Loan on the date of origination thereof;

                  (xxi) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. With respect to the Group II
Mortgage Loans, the Mortgage Note is payable on the first day of each month in
Monthly Payments which are changed on each Adjustment Date to an amount which
will amortize the Stated Principal Balance of the Mortgage Loan over its
remaining term at the Mortgage Rate. Interest on the Mortgage Loan is calculated
on the basis of a 360-day year consisting of twelve 30-day months. The Mortgage
Note does not permit negative amortization. No Mortgage Loan permits the
Mortgagor to convert the Mortgage Rate thereon to a fixed Mortgage Rate;

                  (xxii) The origination and collection practices used by the
Originator and Master Servicer with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper,

                                      -10-

<PAGE>

prudent and customary in the mortgage origination and servicing industry. The
Mortgage Loan has been serviced in accordance with the terms of the Mortgage
Note. With respect to escrow deposits and Escrow Payments, if any, all such
payments are in the possession of, or under the control of, the Master Servicer
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
Escrow Payments or other charges or payments due the Master Servicer have been
capitalized under any Mortgage or the related Mortgage Note;

                  (xxiii) The Mortgaged Property is free of damage and waste and
there is no proceeding pending for the total or partial condemnation thereof;

                  (xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale and (b)
otherwise by judicial foreclosure. Since the date of origination of the Mortgage
Loan, the Mortgaged Property has not been subject to any bankruptcy proceeding
or foreclosure proceeding and the Mortgagor has not filed for protection under
applicable bankruptcy laws. There is no homestead or other exemption available
to the Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage. To the best
of the Seller's knowledge, the Mortgagor has not notified the Originator or the
Master Servicer of any relief requested or allowed to the Mortgagor under the
Soldiers and Sailors Civil Relief Act of 1940 and, to the best of the Seller's
knowledge, no such request has been made or allowance granted.

                  (xxv) The related Mortgaged Property is not a leasehold estate
or, if such Mortgaged Property is a leasehold estate, the remaining term of such
lease is at least ten (10) years greater than the remaining term of the related
Mortgage Note;

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

                  (xxvii) The Mortgage File contains an appraisal of the related
Mortgaged Property made and signed, prior to the approval of the Mortgage Loan
application, by a qualified appraiser, approved by the Originator or the Seller,
who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, whose compensation is not affected by the approval
or disapproval of the Mortgage Loan and who met the minimum qualifications of
Fannie Mae and Freddie Mac;

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

                                      -11-

<PAGE>

                  (xxix) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in any
separate account established by the Originator, the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor, (b) paid by any source other than the
Mortgagor or (c) contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loans are not graduated payment mortgage loans
and the Mortgage Loans do not have shared appreciation or other contingent
interest features;

                  (xxx) With respect to the Group II Mortgage Loans, the
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by applicable law with respect to the making
of adjustable rate mortgage loans; and if the Mortgage Loan is a Refinanced
Mortgage Loan, the Mortgagor has received all disclosure and rescission
materials required by applicable law with respect to the making of a Refinanced
Mortgage Loan, and evidence of such receipt is and will remain in the Mortgage
File;

                  (xxxi) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;

                  (xxxii) The Mortgage Note, the Mortgage, the Assignment and
any other documents required to be delivered with respect to each Mortgage Loan
pursuant to the Pooling and Servicing Agreement, have been delivered to the
Trustee all in compliance with the specific requirements of the Pooling and
Servicing Agreement;

                  (xxxiii) The Mortgaged Property is lawfully occupied under
applicable law; all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities;

                  (xxxiv) No error, omission, misrepresentation, negligence,
fraud or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;

                  (xxxv) Each Assignment is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;

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

                                      -12-

<PAGE>

                  (xxxvii) No Mortgage Loan has a balloon payment feature;

                  (xxxviii) If the Residential Dwelling on the Mortgaged
Property is a condominium unit or a unit in a planned unit development (other
than a de minimis planned unit development) such condominium or planned unit
development project meets the Fannie Mae's eligibility requirements;

                  (xxxix) Neither the Originator nor any affiliate of the
Originator has made a mortgage on any Mortgaged Property other than the Mortgage
Loan;

                  (xl) [Reserved];

                  (xli) The Mortgage Loan was not intentionally selected by the
Seller in a manner intended to adversely affect the interest of the Purchaser;

                  (xlii) [Reserved];

                  (xliii) The Mortgaged Property consists of a parcel of real
property of not more than ten acres with a single family residence erected
thereon, or a two to four-family dwelling, or a multi- family property, or an
individual condominium unit in a low-rise or high-rise condominium project, or
an individual unit in a planned unit development. The Mortgaged Property is
improved with a Residential Dwelling. Without limiting the foregoing, the
Mortgaged Property does not consist of any of the following property types: (a)
co-operative units, (b) log homes, (c) earthen homes, (d) underground homes, (e)
mobile homes and (f) manufactured homes (as defined in the Fannie Mae
Originator-Servicer's Guide), except when the appraisal indicates that the home
is of comparable construction to a stick or beam construction home, is readily
marketable, has been permanently affixed to the site and is not in a mobile home
"park." The Mortgaged Property is either a fee simple estate or a long-term
residential lease. If the Mortgage Loan is secured by a long-term residential
lease, unless otherwise specifically disclosed in the Mortgage Loan Schedule,
(A) the terms of such lease expressly permit the mortgaging of the leasehold
estate, the assignment of the lease without the lessor's consent (or the
lessor's consent has been obtained and such consent is the Mortgage File) and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protection; (B) the terms of such lease do
not (x) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default or (y) prohibit the holder of the Mortgage
from being insured under the hazard insurance policy relating to the Mortgaged
Property; (C) the original term of such lease is not less than 15 years; (D) the
term of such lease does not terminate earlier than ten years after the maturity
date of the Mortgage Note; and (E) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates for residential properties is
an accepted practice;

                  (xliv) At the time of origination, the Loan-To-Value Ratio of
the Mortgage Loan will not be greater than 100.00%;

                  (xlv) The Mortgage, and if required by applicable law the
related Mortgage Note, contains a provision for the acceleration of the payment
of the unpaid Stated Principal Balance of

                                      -13-

<PAGE>

the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgagee, at the option of
the Mortgagee;

                  (xlvi) The Mortgage Loan either contains a customary
due-on-sale clause or may be assumed by a creditworthy purchaser of the related
Mortgaged Property;

                  (xlvii) As of any Adjustment Date for any Group II Mortgage
Loan, the Index applicable to the determination of the Mortgage Rate on such
Mortgage Loan will be the average of the interbank offered rates for six-month
or one-month United States dollar deposits in the London market, generally as
published in THE WALL STREET JOURNAL and as most recently available as of either
(i) the first business day 45 days prior to such Adjustment Date or (ii) the
first business day of the month preceding the month of such Adjustment Date, as
specified in the related Mortgage Note;

                  (xlviii) Each Mortgage Loan is a "qualified mortgage loan"
within the meaning of Section 860G(a)(3) of the Code;

                  (xlix) The Originator is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, that would make the
Originator unable to comply with HUD eligibility requirements or that would
require notification to HUD;

                   (l) None of the Mortgage Loans are classified as "high cost"
loans under the Home Ownership and Equity Protection Act of 1994 as amended
("HOEPA") and/or a reasonably equivalent provision as defined by the applicable
predatory and abusive lending laws. No Mortgage Loan is subject to the
requirements of HOEPA and no Mortgage Loan is in violation of any state law or
ordinance similar to HOEPA;

                  (li) No Mortgage Loans, originated in Georgia, are subject to
the Georgia Fair Lending Act, as amended ("GFLA") effective from October 1, 2002
to March 6, 2003;

                  (lii) [Reserved];

                  (liii) Each Prepayment Charge is enforceable and was
originated in compliance with all applicable federal, state and local laws.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Purchaser to review or examine such documents and shall inure to the
benefit of any assignee, transferee or designee of the Purchaser, including the
Trustee for the benefit of holders of the Certificates and the Certificate
Insurer. With respect to the representations and warranties contained herein as
to which the Seller has no knowledge, if it is discovered that the substance of
any such representation and warranty was inaccurate as of the date

                                      -14-

<PAGE>

such representation and warranty was made or deemed to be made, and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interest therein of the Purchaser or the Purchaser's assignee,
transferee or designee, then notwithstanding the lack of knowledge by the Seller
with respect to the substance of such representation and warranty being
inaccurate at the time the representation and warranty was made, the Seller
shall take such action described in the following paragraph in respect of such
Mortgage Loan.

                  Upon discovery by the Purchaser or any assignee, transferee or
designee of the Purchaser of any materially defective document in, or that a
document was not transferred by the Seller (as listed on the Trustee's
preliminary exception report) as part of any Mortgage File, or of a breach of
any of the representations and warranties contained in Section 6 that materially
and adversely affects the value of any Mortgage Loan or the interest therein of
the Certificateholders or the Certificate Insurer, the Purchaser or the
Purchaser's assignee, transferee or designee, the party discovering such breach
shall give prompt written notice to the Seller. Within sixty (60) days of its
discovery or its receipt of notice of any such missing documentation that was
not transferred by the Seller as described above, or of materially defective
documentation, or of any such breach of a representation and warranty, the
Seller promptly shall deliver such missing document or cure such defect or
breach in all material respects or, in the event the Seller cannot deliver such
missing document or cannot cure such defect or breach, the Seller shall, within
ninety (90) days of its discovery or receipt of notice, either (i) repurchase
the affected Mortgage Loan at the Purchase Price (as such term is defined in the
Pooling and Servicing Agreement) or (ii) pursuant to the provisions of the
Pooling and Servicing Agreement, cause the removal of such Mortgage Loan from
the Trust Fund and substitute one or more Qualified Substitute Mortgage Loans.
The Seller shall amend the Closing Schedule to reflect the withdrawal of such
Mortgage Loan from the terms of this Agreement and the Pooling and Servicing
Agreement. The Seller shall deliver to the Purchaser such amended Closing
Schedule and shall deliver such other documents as are required by this
Agreement or the Pooling and Servicing Agreement within five (5) days of any
such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by transfer to an account designated by the Purchaser of the amount
of the Purchase Price (as such term is defined in the Pooling and Servicing
Agreement) in accordance with Section 2.03 of the Pooling and Servicing
Agreement. Any repurchase required by this Section 7(a) shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

                  (b) It is understood and agreed that the obligations of the
Seller set forth in this Section 7 to cure or repurchase a defective Mortgage
Loan constitute the sole remedies of the Purchaser against the Seller respecting
a missing document or a breach of the representations and warranties contained
in Section 6.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood LLP at 10:00 a.m. New York City time
on the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Seller under this Agreement shall be true and correct
                           in all material respects as of the date as of which
                           they

                                      -15-

<PAGE>

                           are made and no event shall have occurred which, with
                           notice or the passage of time, would constitute a
                           default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (d)      The Seller shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser pursuant to Section 2.01
                           of the Pooling and Servicing Agreement; and

                  (e)      All other terms and conditions of this Agreement and
                           the Pooling and Servicing Agreement shall have been
                           complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the Mortgage Loan Purchase Price in immediately available funds and
the NC Capital Certificates.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                  (a)      An Officers' Certificate of the Seller, dated the
                           Closing Date, in form satisfactory to and upon which
                           the Purchaser, Bear, Stearns & Co. Inc.
                           "Representative") and the Certificate Insurer may
                           rely, and attached thereto copies of the certificate
                           of incorporation, by-laws and certificate of good
                           standing of the Seller under the laws of California;

                  (b)      An Opinion of Counsel of the Seller, dated the
                           Closing Date, in form satisfactory to and addressed
                           to the Purchaser, the Certificate Insurer and the
                           Representative;

                  (c)      Such opinions of counsel as the Rating Agencies or
                           the Trustee may request in connection with the sale
                           of the Mortgage Loans by the Seller to the Purchaser
                           or the Seller's execution and delivery of, or
                           performance under, this Agreement;

                  (d)      An Officers' Certificate of the Master Servicer,
                           dated the Closing Date, in form satisfactory to and
                           upon which the Purchaser, the Certificate Insurer and
                           the Representative may rely, and attached thereto
                           copies of the certificate of

                                      -16-

<PAGE>

                           incorporation, by-laws and certificate of good
                           standing of the Master Servicer under the laws of
                           California;

                  (e)      An Officers' Certificate of the Master Servicer,
                           dated the Closing Date, in form satisfactory to and
                           upon which the Purchaser, the Certificate Insurer and
                           the Representative may rely, stating that on the
                           Closing Date the representations and warranties of
                           the Master Servicer contained in the Pooling and
                           Servicing Agreement will be true and correct and no
                           event has occurred with respect to the Master
                           Servicer that would constitute an Event of Default
                           thereunder;

                  (f)      An Opinion of Counsel of the Master Servicer, dated
                           the Closing Date, in form satisfactory to and
                           addressed to the Purchaser, the Certificate Insurer
                           and the Representative;

                  (g)      (i) A letter from KPMG L.L.P., certified public
                           accountants, to the effect that they have performed
                           certain specified procedures as a result of which
                           they determined that certain information of an
                           accounting, financial or statistical nature set forth
                           in the Prospectus Supplement relating to the Offered
                           Certificates contained under the captions
                           "Summary--The Mortgage Loans," "Risk Factors," (to
                           the extent of information concerning the Mortgage
                           Loans contained therein) and "The Mortgage Pool"
                           agrees with the records of the Seller and the
                           information contained under the caption "The
                           Originator" agrees with the records of the
                           Originator; and

                  (h)      Such further information, certificates, opinions and
                           documents as the Purchaser or the Representative may
                           reasonably request.

                  SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation,
recording fees, fees for title policy endorsements and continuations and the
fees for recording Assignments, the fees and expenses of the Seller's
accountants and attorneys, the costs and expenses incurred in connection with
producing the Master Servicer's or any Subservicer's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9, the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus and Prospectus
Supplement, and any private placement memorandum relating to the Certificates
and other related documents, the initial fees, costs and expenses of the
Trustee, the fees and expenses of the Purchaser's counsel in connection with the
preparation of all documents relating to the securitization of the Mortgage
Loans, the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates and the fees charged by any rating agency to
rate the Certificates. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expense.

                  SECTION 11. [RESERVED].

                                      -17-

<PAGE>

                  SECTION 12. INDEMNIFICATION. The Seller shall indemnify and
hold harmless each of (i) the Purchaser, (ii) the Underwriter, (iii) the Person,
if any, to which the Purchaser assigns its rights in and to a Mortgage Loan and
each of their respective successors and assigns and (iv) each person, if any,
who controls the Purchaser within the meaning of Section 15 of the Securities
Act of 1933, as amended (the "1933 Act") ((i) through (iv) collectively, the
"Indemnified Party") against any and all losses, claims, expenses, damages or
liabilities to which the Indemnified Party may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, expenses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement or alleged untrue statement of any material fact contained
in the Prospectus Supplement or any private placement memorandum relating to the
offering by the Purchaser or an affiliate thereof, of the Class CE Certificates
or the Class P Certificates, or the omission or the alleged omission to state
therein the material fact necessary in order to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with (i) information furnished in writing to
the Purchaser or any of its affiliates by the Seller or any of its affiliates
specifically for use therein, which shall include, with respect to the
Prospectus Supplement, the information set forth under the captions
"Summary--The Mortgage Loans," "Risk Factors" (to the extent of information
concerning the Mortgage Loans contained therein), "The Mortgage Pool" and, with
respect to any private placement memorandum, any information of a comparable
nature, or (ii) the data files containing information with respect to the
Mortgage Loans as transmitted by modem to the Purchaser by the Seller or any of
its affiliates (as such transmitted information may have been amended in writing
by the Seller or any of its affiliates with the written consent of the Purchaser
subsequent to such transmission), (b) any representation, warranty or covenant
made by the Seller or any affiliate of the Seller herein or in the Pooling and
Servicing Agreement, on which the Purchaser has relied, being, or alleged to be,
untrue or incorrect or (c) any updated collateral information provided by any
Underwriter to a purchaser of the Certificates derived from the data contained
in clause (ii) and the Remittance Report or a current collateral tape obtained
from the Seller or an affiliate of the Seller, including the current Stated
Principal Balances of the Mortgage Loans; provided, however, that to the extent
that any such losses, claims, expenses, damages or liabilities to which the
Indemnified Party may become subject arise out of or are based upon both (1)
statements, omissions, representations, warranties or covenants of the Seller
described in clause (a), (b) or (c) above and (2) any other factual basis, the
Seller shall indemnify and hold harmless the Indemnified Party only to the
extent that the losses, claims, expenses, damages, or liabilities of the person
or persons asserting the claim are determined to rise from or be based upon
matters set forth in clause (1) above and do not result from the gross
negligence or willful misconduct of such Indemnified Party. This indemnity shall
be in addition to any liability that the Seller may otherwise have.

                  SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing

                                      -18-

<PAGE>

each such Mortgage Loan to secure the performance by the Seller of its
obligation hereunder, and the Seller agrees that it holds such Mortgage Loans in
custody for the Purchaser, subject to the Purchaser's (i) right, prior to the
Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement, and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.

                  Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Mortgage Loan Purchase
Price, or any such condition shall not have been waived or satisfied and the
Purchaser determines not to pay or cause to be paid the Mortgage Loan Purchase
Price, the Purchaser shall immediately effect the redelivery of the Mortgage
Loans, if delivery to the Purchaser has occurred, and the security interest
created by this Section 13 shall be deemed to have been released.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by fax and, receipt of which is confirmed by telephone, if to the
Purchaser, addressed to the Purchaser at 18400 Von Karman, Suite 1000, Irvine,
California 92612, fax (949) 440-7033, or such other address as may hereafter be
furnished to the Seller in writing by the Purchaser and if to the Seller,
addressed to the Seller at 18400 Von Karman, Suite 1000, Irvine, California
92612, fax (949) 440-7033, or to such other address as the Seller may designate
in writing to the Purchaser.

                  SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement that is prohibited or that is held
to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void 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 as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 16. AGREEMENT OF PARTIES. The Seller and the Purchaser
each agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement and the
Pooling and Servicing Agreement.

                  SECTION 17. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or

                                      -19-

<PAGE>

hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then (a) it is the express
intent of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Seller to the Purchaser to secure a debt or other obligation of the
Seller and (b) (1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code; (2) the conveyance provided for in Section 4 hereof shall be
deemed to be a grant by the Seller to the Purchaser of a security interest in
all of the Seller's right, title and interest in and to the Mortgage Loans and
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of Mortgage Notes, the related Mortgages and such other items of
property that constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession" by the secured party for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code; and (4) notifications to persons holding such property and
acknowledgments, receipts or confirmations from persons holding such property
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest

                                      -20-

<PAGE>

of the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.

         Section 20. RIGHTS OF THE CERTIFICATE INSURER. The Certificate Insurer
is an express third-party beneficiary of this Agreement.

                                      -21-

<PAGE>

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

                                     NEW CENTURY MORTGAGE SECURITIES, INC.

                                     By:________________________________
                                     Name:
                                     Title:

                                     NC CAPITAL CORPORATION

                                     By:________________________________
                                     Name:
                                     Title:

<PAGE>

                                    EXHIBIT E
                                    ---------

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION

         Name of Mortgagor:         ______________________________

         Master Servicer
         Loan No.:                  ______________________________

TRUSTEE

         Name:                      ______________________________

         Address:                   ______________________________
                                    ______________________________

         Trustee Mortgage
         File No.:                  ______________________________

DEPOSITOR

         Name:             NEW CENTURY MORTGAGE SECURITIES, INC.

         Address:                   ______________________________

         Certificates:              Asset-Backed Pass-Through
                                    Certificates, Series 2003-5.

                           The undersigned Master Servicer hereby acknowledges
that it has received from _______________________, as Trustee for the Holders of
Asset-Backed Pass-Through Certificates, Series 2003-5, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of October 1, 2003, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").

( )      Promissory Note dated _______________, 20__, in the original principal
         sum of $__________, made by _____________________, payable to, or
         endorsed to the order of, the Trustee.

( )      Mortgage recorded on _________________________ as instrument no.
         ____________________ in the County Recorder's Office of the County of
         _______________, State of __________________ in
         book/reel/docket_________________ of official records at page/image
         _____________.

( )      Deed of Trust recorded on ___________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         _________________, State of ____________________ in book/reel/docket
         _________________ of official records at page/image ______________.

( )      Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         __________________ as instrument no. _________ in the County Recorder's
         Office of the County of _______________,

                                       E-1

<PAGE>

         State of _______________________ in book/reel/docket ____________ of
         official records at page/image ____________.

( )      Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

( )      ---------------------------------------------

( )      ---------------------------------------------

( )      ---------------------------------------------

( )      ---------------------------------------------

                                       E-2

<PAGE>

                           The undersigned Master Servicer hereby acknowledges
and agrees as follows:

                           (1) The Master Servicer shall hold and retain
possession of the Documents in trust for the benefit of the Trustee, solely for
the purposes provided in the Agreement.

                           (2) The Master Servicer shall not cause or permit the
Documents to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or against
the Documents or any proceeds thereof.

                           (3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.

                           (4) The Documents and any proceeds thereof, including
any proceeds of proceeds, coming into the possession or control of the Master
Servicer shall at all times be earmarked for the account of the Trustee, and the
Master Servicer shall keep the Documents and any proceeds separate and distinct
from all other property in the Master Servicer's possession, custody or control.

Dated:

                                              [MASTER SERVICER]

                                              By:______________________________
                                              Name:
                                              Title:

                                       E-3

<PAGE>

                                   EXHIBIT F-1
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                                  [Date]

Deutsche Bank National Trust Company
1761 East St. Andrews Place
Santa Ana, CA 92705-4935

                  Re:      New Century Home Equity Loan Trust, Series 2003-5,
                           Asset Backed Pass-Through Certificates, Class ___,
                           representing a ___% Class ___ Percentage Interest
                           -------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
October 1, 2003, among New Century Mortgage Securities, Inc. as depositor, New
Century Mortgage Corporation as master servicer and Deutsche Bank National Trust
Company as trustee (the "Pooling and Servicing Agreement"), pursuant to which
Pooling and Servicing Agreement the Certificates were issued.

                                      F-1-1

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                              Very truly yours,

                                              [Transferor]

                                              By:___________________________
                                              Name:
                                              Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                              [Date]

Deutsche Bank National Trust Company
1761 East St. Andrews Place
Santa Ana, CA 92705-4935

                  Re:      New Century Home Equity Loan Trust, Series 2003-5,
                           Asset Backed Pass-Through Certificates, Class ___,
                           representing a ___% Percentage Interest
                           ---------------------------------------

Ladies and Gentlemen:

                  In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"1933 Act") and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that the
sale to it is being made in reliance on Rule 144A. The Transferee is acquiring
the Certificates for its own account or for the account of a qualified
institutional buyer, and understands that such Certificate may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.

                  2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the nature,
performance and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement referred to below, and (d) any credit enhancement mechanism associated
with the Certificates, that it has requested.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of October 1, 2003, among New Century Mortgage Securities,
Inc. as depositor, New Century Mortgage Corporation as master servicer and
Deutsche Bank National Trust Company as trustee (the "Pooling and Servicing
Agreement"), pursuant to which the Certificates were issued.

                                      F-1-3

<PAGE>

                                                  [TRANSFEREE]

                                                  By:__________________________
                                                  Name:
                                                  Title:

                                      F-1-4

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------
          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Deutsche Bank National Trust Company as
trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

         ___ CORPORATION, ETC. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986.

         ___ BANK. The Transferee (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of Columbia,
the business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a foreign
bank or equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy of
which is attached hereto.

         ___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by a State
or Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an
audited net worth of at least

         ___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.

         ___ INSURANCE COMPANY. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is subject to
supervision by the insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.

         ___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees.

--------
         1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities. $25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.

                                      F-1-5

<PAGE>

         ___ ERISA PLAN. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.

         ___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.

         ___      ___      Will the Transferee be purchasing the Certificates
         Yes      No       only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:

                                         ____________________________________
                                         Print Name of Transferee

                                         By:_________________________________

                                      F-1-6

<PAGE>

                                         Name:
                                         Title:

                                      F-1-7

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Deutsche Bank National Trust Company as
trustee, with respect to the mortgage pass- through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

         ____     The Transferee owned $___________________ in securities (other
                  than the excluded securities referred to below) as of the end
                  of the Transferee's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

         ____     The Transferee is part of a Family of Investment Companies
                  which owned in the aggregate $______________ in securities
                  (other than the excluded securities referred to below) as of
                  the end of the Transferee's most recent fiscal year (such
                  amount being calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

                                      F-1-8

<PAGE>

Dated:

                                   ___________________________________Print
                                   Name of Transferee or Advisor

                                   By:________________________________
                                   Name:
                                   Title:

                                   IF AN ADVISER:

                                   ___________________________________Print
                                   Name of Transferee

                                      F-1-9

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER
                    ----------------------------------------

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1.  I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933, as
amended.

                  3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.

                                                Name of Purchaser

                                                __________________________

                                                By:____________________________
                                                Name:
                                                Title:

Date of this certificate:

Date of information provided in paragraph 3

                                     F-1-10

<PAGE>

                                   EXHIBIT F-2
                                   -----------

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF _____________)
COUNTY _______________)

                  __________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly organized and
existing under the laws of ______________, the record owner of New Century Home
Equity Loan Trust, Series 2003-5, Asset Backed Mortgage Pass-Through
Certificates, Series 2003-5, Class R Certificates, (the "Class R Certificates"),
on behalf of whom I make this affidavit and agreement. Capitalized terms used
but not defined herein have the respective meanings assigned thereto in the
Pooling and Servicing Agreement pursuant to which the Class R Certificates were
issued.

                  2. The Owner (i) is and will be a "Permitted Transferee" as of
____________, 20__ and (ii) is acquiring the Class R Certificates for its own
account or for the account of another Owner which is a permitted transferee from
which it has received an affidavit in substantially the same form as this
affidavit. A "Permitted Transferee" is any person other than a "disqualified
organization" or a possession of the United States. For this purpose, a
"disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any such governmental entity) or any
foreign government, international organization or any agency or instrumentality
of such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income. The Owner will endeavor to
remain a Permitted Transferee for so long as it retains its Ownership Interest
in a Residual Certificate

                  3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                  4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (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.)

                                      F-2-1

<PAGE>

                  5. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

                  6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.

                  7. The Owner's taxpayer identification number is
_________________.

                  8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

                  9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.

                  10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.

                  11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.

                  12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

                  13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.

                  14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.

                  15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".

                                      F-2-2

<PAGE>

                  16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

                  17. The Owner of the Class R Certificate, hereby agrees that
in the event that the Trust Fund created by the Pooling and Servicing Agreement
is terminated pursuant to Section 9.01 thereof, the undersigned shall assign and
transfer to the Holders of the Class CE Certificates any amounts in excess of
par received in connection with such termination. Accordingly, in the event of
such termination, the Trustee is hereby authorized to withhold any such amounts
in excess of par and to pay such amounts directly to the Holders of the Class CE
Certificates. This agreement shall bind and be enforceable against any
successor, transferee or assigned of the undersigned in the Class R Certificate.
In connection with any transfer of the Class R Certificate, the Owner shall
obtain an agreement substantially similar to this clause from any subsequent
owner.

                                      F-2-3

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 20__.

                                                  [OWNER]

                                                  By:__________________________
                                                  Name:
                                                  Title:    [Vice] President

ATTEST:

By:_________________________________
Name:
Title:     [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
20___.

                                                  ____________________________
                                                           Notary Public

                                                  County of __________________
                                                  State of ___________________

                                                  My Commission expires:

                                      F-2-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT
                          ----------------------------

STATE OF ______________)

COUNTY OF _____________)

                  __________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ____________________ of ____________________________
(the "Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                      F-2-5

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 20__.

                                               [OWNER]

                                               By:_____________________________
                                               Name:
                                               Title:     [Vice] President

ATTEST:

By:______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
20___.

                                               ____________________________
                                                      Notary Public

                                               County of __________________
                                               State of ___________________

                                               My Commission expires:

                                      F-2-6

<PAGE>

                                    EXHIBIT G
                                    ---------

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                _____________, 20__

New Century Mortgage Securities, Inc.
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, CA 92705-4935

New Century Mortgage Corporation
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612

                  Re:      New Century Home Equity Loan Trust, Series 2003-5,
                           Asset Backed Pass-Through Certificates, Class ___
                           -------------------------------------------------

Dear Sirs:

                  _______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of New Century Home Equity Loan Trust, Series 2003-5, Asset
Backed Pass-Through Certificates, Class [B] [CE] [P] [R] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of October 1, 2003 among New Century Mortgage Securities,
Inc. as depositor (the "Depositor"), New Century Mortgage Corporation as master
servicer (the "Master Servicer") and Deutsche Bank National Trust Company as
trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned thereto in the Pooling and Servicing Agreement.
The Transferee hereby certifies, represents and warrants to, and covenants with
the Depositor, the Trustee and the Master Servicer the following:

                  The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101.

                                               Very truly yours,

                                               _______________________________

                                               By:____________________________
                                               Name:

                                       G-1

<PAGE>

                                               Title:

                                       G-2

<PAGE>

                                    EXHIBIT H

                     FORM OF REPORT PURSUANT TO SECTION 4.06

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

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-K

                                  Annual Report

                     Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934 (Fee Required)

                     For fiscal year ended ________________

                       Commission file number: 333-_______

                      NEW CENTURY MORTGAGE SECURITIES, INC.
            (as depositor under the Pooling and Servicing Agreement,
           dated as of October 1, 2003, providing for the issuance of
             Asset Backed Pass-Through Certificates, Series 2003-5)

                      NEW CENTURY MORTGAGE SECURITIES, INC.

             (Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------

           Delaware                                     33-0852169
           --------                                     ----------
(State or Other Jurisdiction                       (I.R.S. Employer
of Incorporation)                                       Identification Number)

18400 Von Karman, Suite 1000
Irvine, California                                 92612
------------------                                 -----
(Address of Principal Executive Offices)           (Zip Code)

Registrant's telephone number, including area code:  (949) 863-7243

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

Securities registered pursuant to Section 12(b) of the Act:

None

                                       H-1

<PAGE>

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate whether the Registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                                                       X YES    ___No
                                                      --

Item 1. Business:

Not applicable

Item 2. Properties:

Not applicable

Item 3. Legal Proceedings:

None

Item 4. Submission of Matters to a Vote of Security-Holders

None

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

To the best knowledge of the registrant there is no established public trading
market for the certificates.

There are approximately _____ holders of record as of the end of the reporting
year.

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Not applicable

Item 8. Financial Statements and Supplementary Data.

Not applicable.

Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

None

Item 10.

                                       H-2

<PAGE>

Not applicable

Item 11. Executive Compensation

Not applicable

Item 12. Security Ownership of Certain Beneficial Owners and Management

Not applicable

Item 13. Certain Relationships and Related Transactions

Not applicable

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

         a)       The company filed on Form 8-K, separately for each
                  distribution date, the distribution of funds related to the
                  trust for each of the following distribution dates:

                  DISTRIBUTION DATE                  FORM 8-K FILING DATE
                  _________________                  ________________
                  _________________                  ________________
                  _________________                  ________________

         b)       99.1     Annual Report of Independent Public Accountants' as
                           to master servicing activities or servicing
                           activities, as applicable, of:

                           (a) New Century Mortgage Corporation, as master
                           servicer

                  99.2     Annual Statement of Compliance with obligations under
                           the Pooling and Servicing Agreement or servicing
                           agreement, as applicable, of:

                           (a) New Century Mortgage Corporation, as master
                           servicer

Such document (i) is not filed herewith since such document was not received by
the Reporting Person at least three business days prior to the due date of this
report; and (ii) will be included in an amendment to this report on Form 10-K/A
to be filed within 30 days of the Reporting Person's receipt of such document.

                                   Signatures

                  Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.

Date: ___________

                                       New Century Mortgage Securities, Inc., by
                                       Deutsche Bank National Trust Company as

                                       H-3

<PAGE>

                                       Trustee for New Century Home Equity Loan
                                       Trust, Series 2003-5, Asset Backed
                                       Pass-Through Certificates.

                                       By:_______________________________
                                       Name:
                                       Title:
                                       Company:

                                       H-4

<PAGE>

                                    EXHIBIT I

                           FORM OF LOST NOTE AFFIDAVIT

Loan #: ____________
Borrower: _____________

                               LOST NOTE AFFIDAVIT

                  I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of New Century Mortgage Securities, Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:

         1.       The Seller's address is:  _____________________
                                            _____________________
                                            _____________________

         2.       The Seller previously delivered to the Purchaser a signed
                  Initial Certification with respect to such Mortgage and/or
                  Assignment of Mortgage.

         3.       Such Mortgage Note and/or Assignment of Mortgage was assigned
                  or sold to the Purchaser by ________________________, a
                  ____________ corporation pursuant to the terms and provisions
                  of a Mortgage Loan Purchase Agreement dated as of __________
                  __, _____.

         4.       Such Mortgage Note and/or Assignment of Mortgage is not
                  outstanding pursuant to a request for release of Documents.

         5.       Aforesaid Mortgage Note and/or Assignment of Mortgage (the
                  "Original") has been lost.

         6.       Deponent has made or caused to be made a diligent search for
                  the Original and has been unable to find or recover same.

         7.       The Seller was the Seller of the Original at the time of the
                  loss.

         8.       Deponent agrees that, if said Original should ever come into
                  Seller's possession, custody or power, Seller will immediately
                  and without consideration surrender the Original to the
                  Purchaser.

         9.       Attached hereto is a true and correct copy of (i) the Note,
                  endorsed in blank bthe Mortgagee and (ii) the Mortgage or Deed
                  of Trust (strike one) which secures the Note, which Mortgage
                  or Deed of Trust is recorded in the county where the property
                  is located.

         10.      Deponent hereby agrees that the Seller (a) shall indemnify and
                  hold harmless the Purchaser, its successors and assigns,
                  against any loss, liability or damage, including reasonable
                  attorney's fees, resulting from the unavailability of any
                  Notes, including but not limited to any loss, liability or
                  damage arising from (i) any false statement contained in this
                  Affidavit,

                                       I-1

<PAGE>

                  (ii) any claim of any party that has already purchased a
                  mortgage loan evidenced by the Lost Note or any interest in
                  such mortgage loan, (iii) any claim of any borrower with
                  respect to the existence of terms of a mortgage loan evidenced
                  by the Lost Note on the related property to the fact that the
                  mortgage loan is not evidenced by an original note and (iv)
                  the issuance of a new instrument in lieu thereof (items (i)
                  through (iv) above hereinafter referred to as the "Losses")
                  and (b) if required by any Rating Agency in connection with
                  placing such Lost Note into a Pass-Through Transfer, shall
                  obtain a surety from an insurer acceptable to the applicable
                  Rating Agency to cover any Losses with respect to such Lost
                  Note.

         11.      This Affidavit is intended to be relied upon by the Purchaser,
                  its successors and assigns. _____________________, a
                  ______________ corporation represents and warrants that is has
                  the authority to perform its obligations under this Affidavit
                  of Lost Note.

Executed this ____ day, of ___________ ______.

                                                   SELLER

                                                   By:______________________
                                                   Name:
                                                   Title:

                  On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.

                                                   Signature:

                                                   [Seal]

                                       I-2

<PAGE>

                                   EXHIBIT J-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

                  Re:      New Century Mortgage Securities, Inc., Series 2003-5
                           Asset-Backed Certificates, Series 2003-5

                  I, [identify the certifying individual], the senior officer of
New Century Mortgage Securities, Inc. (the "Registrant") in charge of
securitizations, certify that:

                  l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of
Registrant;

                  2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution information, and
the servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement for inclusion in these
reports, is included in these reports;

                  4. Based on my knowledge and upon the annual compliance
statements included in the report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and except as
disclosed in the reports, the Master Servicer have fulfilled their obligations
under the Pooling and Servicing Agreement; and

                  5. The reports disclose all significant deficiencies relating
to the Master Servicer's compliance with the minimum servicing standards based
upon the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement, that is included in these reports.

                  In giving the certifications above, I have reasonably relied
on information provided to me by the Trustee.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated October
1, 2003 (the "Pooling and Servicing Agreement"), among the Registrant as
depositor, New Century Mortgage Corporation as Master Servicer and Deutsche Bank
National Trust Company as trustee.

                                      J-1-1

<PAGE>

                                        NEW CENTURY MORTGAGE SECURITIES, INC.

                                        By:____________________________________
                                        Name:
                                        Title:
                                        Date:

                                       J-2

<PAGE>

                                   EXHIBIT J-2

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE TRUSTEE

            Re:     New Century Mortgage Securities, Inc., Series 2003-5
                    Asset-Backed Certificates, Series 2003-5

                  I, [identify the certifying individual], a [title] of Deutsche
Bank National Trust Company, as Trustee, hereby certify to New Century Mortgage
Securities, Inc. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these distribution reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated October
1, 2003 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, New Century Mortgage Corporation as Master Servicer and Deutsche Bank
National Trust Company as trustee.

                                     DEUTSCHE BANK NATIONAL TRUST COMPANY, as
                                     Trustee

                                     By:__________________________________
                                     Name:
                                     Title:
                                     Date:

                                      J-2-1

<PAGE>

                                    EXHIBIT K
                                    ---------

                                   [RESERVED]

                                       K-1

<PAGE>

                                    EXHIBIT L
                                    ---------

                              OFFICER'S CERTIFICATE
                    REGARDING ANNUAL STATEMENT OF COMPLIANCE

                   ___________________ Trust, Series 200_-___
                                     _______________ Pass-Through Certificates

                  I, _____________________, hereby certify that I am a duly
appointed __________________________ of _______________________________ (the
"[Master Servicer]"), and further certify as follows:

                  1. This certification is being made pursuant to the terms of
the Pooling and Servicing Agreement, dated as of ____________, _____ (the
"Agreement"), among ______________________, as depositor, the [Master Servicer],
as [master servicer] and ________________, as trustee.

                  2. I have reviewed the activities of the [Master Servicer]
during the preceding year and the [Master Servicer's] performance under the
Agreement and to the best of my knowledge, based on such review, the [Master
Servicer] has fulfilled all of its obligations under the Agreement throughout
the year.

                  Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreements.

Dated: _________________

                                       L-1

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.

                                      By:  _____________________________
                                      Name:
                                      Title:

                  I, _________________________, a (an) __________________ of the
[Master Servicer], hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the [Master Servicer] and that
the signature appearing above is his/her genuine signature.

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.

                                      By:  ______________________________
                                      Name:
                                      Title:

                                       L-2

<PAGE>

                                   Schedule 1

                             MORTGAGE LOAN SCHEDULE

                                [FILED BY PAPER]

                                  Schedule 1-1

<PAGE>

                                   Schedule 2

                         SCHEDULE OF PREPAYMENT CHARGES

                            [AVAILABLE UPON REQUEST]

                                  Schedule 2-1<PAGE>

                                                                   EXHIBIT 10.39

   [CLIFFORD CHANCE PUNDER LETTERHEAD]                            EXECUTION COPY

                              DATED 28 AUGUST 2003

                      WESTERN WIRELESS INTERNATIONAL D.O.O.

                          IKB DEUTSCHE INDUSTRIEBANK AG

                         KREDITANSTALT FUR WIEDERAUFBAU

              RAIFFEISENLANDESBANK OBEROSTERREICH REG. GEN. M.B.H.

                     NOVA LJUBLJANSKA BANKA D.D., LJUBLJANA

                                 HSH NORDBANK AG

                             HYPO ALPE-ADRIA-BANK AG

                            HYPO ALPE-ADRIA-BANK D.D.

         DEG - DEUTSCHE INVESTITIONS - UND ENTWICKLUNGSGESELLSCHAFT MBH

                                       and

                      AKA AUSFUHRKREDIT-GESELLSCHAFT M.B.H.
                               in the presence of

                   WESTERN WIRELESS INTERNATIONAL CORPORATION

               WESTERN WIRELESS INTERNATIONAL SLOVENIA CORPORATION

             WESTERN WIRELESS INTERNATIONAL SLOVENIA II CORPORATION

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

                           SECOND AMENDMENT AGREEMENT

                                 RELATING TO THE

                     FACILITY AGREEMENT DATED 30 APRIL 2002

                        RELATING TO THE FINANCING OF THE

                 VEGA GSM TELECOMMUNICATIONS NETWORK IN SLOVENIA

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

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
                                              CLAUSE                                                     PAGE
<S>                                                                                                      <C>
1.       Definitions and Interpretation...............................................................     2

2.       Amendment of the Original Facility Agreement.................................................     3

3.       Representations..............................................................................     3

4.       Continuity and Further Assurance.............................................................     4

5.       Fees, Costs and Expenses.....................................................................     4

6.       Miscellaneous................................................................................     4

SCHEDULE 1 Conditions Precedent.......................................................................     6

SCHEDULE 2 Conditions.................................................................................     9

SCHEDULE 3 Amendments to Original Facility Agreement..................................................    11
</TABLE>

<PAGE>

THIS AGREEMENT is dated           2003 and made between:

(1)      WESTERN WIRELESS INTERNATIONAL D.O.O., LJUBLJANA as borrower (the
         "BORROWER");

(2)      IKB DEUTSCHE INDUSTRIEBANK AG AND KREDITANSTALT FUR WIEDERAUFBAU, as
         lead arrangers (the "LEAD ARRANGERS");

(3)      RAIFFEISENLANDESBANK OBEROSTERREICH REG. GEN. M.B.H. and NOVA
         LJUBLJANSKA BANKA D.D., LJUBLJANA as senior co-arrangers (the "SENIOR
         CO-ARRANGERS");

(4)      HSH NORDBANK AG and HYPO ALPE-ADRIA-BANK AG as co-arrangers (the
         "CO-ARRANGERS");

(5)      IKB DEUTSCHE INDUSTRIEBANK AG, KREDITANSTALT FUR WIEDERAUFBAU,
         RAIFFEISENLANDESBANK OBEROSTERREICH REG. GEN. M.B.H., HSH NORDBANK AG
         and HYPO ALPE-ADRIA-BANK AG as original lenders with regard to the Euro
         Facility (the "ORIGINAL EURO FACILITY BANKS");

(6)      IKB DEUTSCHE INDUSTRIEBANK AG, as facility agent with regard to the
         Euro Facility and the SIT Facility (the "OFF SHORE FACILITY AGENT");

(7)      IKB DEUTSCHE INDUSTRIEBANK AG, as security agent with regard to the Off
         Shore Security (the "OFF SHORE SECURITY AGENT");

(8)      NOVA LJUBLJANSKA BANKA D.D., LJUBLJANA as an original lender and
         issuing bank with regard to the SIT Facility and HYPO ALPE-ADRIA-BANK
         D.D. as original lender with regard to the SIT Facility (the "ORIGINAL
         SIT FACILITY BANKS");

(9)      NOVA LJUBLJANSKA BANKA D.D., LJUBLJANA as local facility agent with
         regard to the SIT Facility (the "ON SHORE FACILITY AGENT");

(10)     NOVA LJUBLJANSKA BANKA D.D., LJUBLJANA as security agent with regard to
         the On Shore Security (the "ON SHORE SECURITY AGENT"); and

(11)     DEG - DEUTSCHE INVESTITIONS - UND ENTWICKLUNGSGESELLSCHAFT MBH and AKA
         AUSFUHRKREDIT-GESELLSCHAFT M.B.H. as lenders in relation to the Euro
         Facility (the "EURO FACILITY BANKS").

in the presence of

(12)     WESTERN WIRELESS INTERNATIONAL CORPORATION, WESTERN WIRELESS
         INTERNATIONAL SLOVENIA CORPORATION, and WESTERN WIRELESS INTERNATIONAL
         SLOVENIA II CORPORATION (together the "SPONSORS").

                                      - 1 -
<PAGE>

WHEREAS

(A)      On 30 April 2002 the Borrower and the Finance Parties have entered into
         a facility agreement (as amended on 28 October 2002) for the financing
         of the construction and operation of a wireless communication network
         in Slovenia.

(B)      The Parties have agreed to make certain amendments to the Finance
         Documents.

IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      DEFINITIONS

         In this Agreement:

         "AGREEMENT" means this agreement including all of its Schedules.

         "FACILITY AGREEMENT" means the Original Facility Agreement, as amended
         by this Agreement.

         "ORIGINAL SPONSORS' AND SHAREHOLDERS' UNDERTAKING AND COMPLETION
         GUARANTEE" has the meaning set out in the Second Amendment and
         Restatement of the Sponsors' and Shareholders' Undertaking and
         Completion Guarantee.

         "SECOND AMENDMENT AGREEMENT EFFECTIVE DATE" means the date on which the
         Off Shore Facility Agent confirms that the conditions precedent listed
         in Schedule 1 (Conditions Precedent) have been satisfied or waived, in
         a form and substance satisfactory to the Off Shore Facility Agent.

         "SECOND AMENDMENT AGREEMENT CONDITIONS SATISFACTION DATE" means the
         date on which the Off Shore Facility Agent confirms that the conditions
         listed in Schedule 2 (Conditions) have been satisfied or waived, in a
         form and substance satisfactory to the Off Shore Facility Agent.

         "SECOND AMENDMENT AND RESTATEMENT OF THE SPONSORS' AND SHAREHOLDERS'
         UNDERTAKING AND COMPLETION GUARANTEE" means the second amendment and
         restatement of the sponsors' and shareholders' undertaking and
         completion guarantee dated 30 April 2002 as amended and restated on [-]
         2003.

         "ORIGINAL FACILITY AGREEMENT" means the Facility Agreement dated 30
         April 2002 (as amended on 28 October 2002) between the Borrower, the
         Off Shore Facility Agent, and others.

1.2      INCORPORATION OF DEFINED TERMS

         Terms defined in the Facility Agreement shall, unless otherwise defined
         herein, have the same meaning herein and the principles of construction
         set out in the Facility Agreement shall have effect as if set out in
         this Agreement.

                                      - 2 -
<PAGE>

1.3      CLAUSES

         In this Agreement any reference to a "Clause" or "Schedule" is, unless
         the context otherwise requires, a reference to a Clause or Schedule
         hereof. Clause headings are for ease of reference only.

2.       AMENDMENT OF THE ORIGINAL FACILITY AGREEMENT

2.1      With effect from the Second Amendment Agreement Effective Date, the
         Original Facility Agreement shall be amended as set out in Schedule 3
         (Amendments to the Original Facility Agreement).

2.2      Without prejudice to any rights of the Banks under the Finance
         Documents on the date of this Agreement, the Borrower agrees that if
         the Second Amendment Agreement Conditions Satisfaction Date has not
         occurred on or before the date falling 10 (ten) Business Days after the
         date of this Agreement such failure shall constitute an Event of
         Default entitling the Banks to exercise their rights in accordance
         clause 25 (Events of Default) of the Facility Agreement and the other
         terms of the Finance Documents.

2.3      Upon the satisfaction of the conditions set forth in Schedule 2
         (Conditions), the Off Shore Security Agent shall release the security
         interests created by the Sponsors' Cash Collateral Account Pledge
         Agreement and the Sponsors' Cash Collateral Account #2 Pledge Agreement
         and close the Sponsors' Cash Collateral Account and the Sponsors' Cash
         Collateral Account #2.

2.4      By a Waiver Letter dated 7 August 2003 and entered into by the Banks
         and the Borrower, the Banks waived the requirement for the Borrower to
         comply with the Stage 1 covenants as set out in Clauses 22.2(a)(iv),
         22.2(b)(v), 22.2(c)(ii), 22.2(d) and 22.2(e)(ii) (Stage 1 covenants) of
         the Original Facility Agreement.

2.5      With effect from the Second Amendment Agreement Effective Date until
         the date upon which the Asset and Licence Pledge and Leases Contracts
         Assignment Agreement is amended, the provisions of the Facility
         Agreement shall prevail in the event of any conflict between the
         provisions of the Facility Agreement and the provisions of articles 2.2
         (Grant of Pledge, Pledge II, Substitution Pledge and Additional
         Pledge), 10.1 (Assignment of Leases, Substitution Leases and Additional
         Leases), 10.2 (Assignment of Leases, Substitution Leases and Additional
         Leases), 10.3 (Assignment of Leases, Substitution Leases and Additional
         Leases), 11.2 (Consent of the Landlords) and 11.3 (Consent of the
         Landlords) of the Asset and Licence Pledge and Lease Contracts
         Assignment Agreement.

3.       REPRESENTATIONS

3.1      The Borrower expressly repeats the Repeated Representations in the
         Facility Agreement as at the date of signing this Agreement (on the
         assumption that the amendments to the Original Facility Agreement
         contained herein are in effect at such date), upon the Second Amendment
         Agreement Effective Date and the Second Amendment Agreement Conditions
         Satisfaction Date.

                                      - 3 -
<PAGE>

4.       CONTINUITY AND FURTHER ASSURANCE

4.1      CONTINUING OBLIGATIONS

         The provisions of the Original Facility Agreement shall, save as
         amended hereby, continue in full force and effect.

4.2      FURTHER ASSURANCE

         The Borrower shall, at the request of the Off Shore Facility Agent and
         at its own expense, do all such acts and things necessary or desirable
         to give effect to the amendments effected or to be effected pursuant to
         this Agreement.

5.       FEES, COSTS AND EXPENSES

5.1      TRANSACTION EXPENSES

         The Borrower shall, from time to time on demand of the Off Shore
         Facility Agent, reimburse the Senior Creditors for all costs and
         expenses (including legal fees) together with any VAT thereon
         reasonably incurred by it in connection with the negotiation,
         preparation and execution of this Agreement, any other document
         referred to in this Agreement any other Finance Document and the
         completion of the transactions herein contemplated.

5.2      PRESERVATION AND ENFORCEMENT OF RIGHTS

         The Borrower shall, from time to time on demand of the Off Shore
         Facility Agent, reimburse the Senior Creditors for all costs and
         expenses (including legal fees) on a full indemnity basis together with
         any VAT thereon incurred in or in connection with the preservation,
         performance and/or enforcement or protection and/or attempted
         enforcement or protection of any of the rights of the Senior Creditors
         under this Agreement, any other document referred to in this Agreement
         and any other Finance Document.

5.3      STAMP TAXES

         The Borrower shall pay all stamp, registration and other taxes to which
         this Agreement, any other document referred to in this Agreement any
         other Finance Document or any judgment given in connection herewith is
         or at any time may be subject and shall, from time to time on demand of
         the Off Shore Facility Agent, indemnify the Senior Creditors against
         any liabilities, costs, claims and expenses resulting from any failure
         to pay or any delay in paying any such tax.

6.       MISCELLANEOUS

6.1      INCORPORATION OF TERMS

         The provisions of clause 32 (Notices), clause 34 (Partial Invalidity),
         clause 35 (Remedies and Waiver), clause 38 (Governing Law), clause 39
         (Arbitration) and clause 40 (Jurisdiction) of the Original Facility
         Agreement shall be incorporated into this Agreement as if set out in
         full herein and as if references therein to "this Agreement" or the
         Finance Documents are references to this Agreement.

                                      - 4 -
<PAGE>

6.2      COUNTERPARTS

         This Agreement may be executed in any number of counterparts, all of
         which taken together shall constitute one and the same instrument.

6.3      FINANCE DOCUMENT

         This Agreement is intended to be a "Finance Document" within the
         meaning of the Facility Agreement.

                                      - 5 -
<PAGE>

                                   SCHEDULE 1

                              CONDITIONS PRECEDENT

1.       In relation to the Borrower:

         (a)      a confirmation, given by an authorised signatory of the
                  Borrower, certifying that, as at the date hereof, there has
                  been no change to the constitutional documents delivered by
                  the Borrower pursuant to the Original Facility Agreement;

         (b)      a copy, certified as at the date of this Agreement a true and
                  up-to-date copy by an authorised signatory of the Borrower, of
                  a resolution of the board of directors of the Borrower
                  approving the execution, delivery and performance of this
                  Agreement and the terms and conditions hereof and authorising
                  a named person or persons to sign this Agreement and any
                  documents to be delivered by the Borrower pursuant hereto; and

         (c)      a certificate of an authorised signatory of the Borrower
                  setting out the names and signatures of the persons authorised
                  to sign, on behalf of the Borrower, this Agreement and any
                  documents to be delivered by the Borrower pursuant hereto.

2.       In relation to each of the Sponsors:

         (a)      a confirmation, given by an authorised signatory of the
                  Sponsors, certifying that, as at the date hereof, there has
                  been no change to the constitutional documents delivered by
                  the Sponsors pursuant to the Original Sponsors' and
                  Shareholders' Undertaking and Completion Guarantee;

         (b)      a copy, certified as at the date of this Agreement a true and
                  up to date copy by an authorised signatory of the Sponsors, of
                  a resolution of the board of directors of each of the Sponsors
                  approving the execution, delivery and performance of this
                  Agreement and the Second Amendment and Restatement of the
                  Sponsors' and Shareholders' Undertaking and Completion
                  Guarantee and the terms and conditions hereof and thereof and
                  authorising a named person or persons to sign such agreement
                  and any documents to be delivered by the Sponsors pursuant
                  thereto; and

         (c)      a certificate of an authorised signatory of the Sponsors
                  setting out the names and signatures of the persons authorised
                  to sign, on behalf of the Sponsors, this Agreement the Second
                  Amendment and Restatement of the Sponsors' and Shareholders'
                  Undertaking and Completion Guarantee and any documents to be
                  delivered by the Sponsors pursuant thereto.

3.       A copy, certified a true copy by or on behalf of the Borrower, of each
         such law, decree, consent, licence, approval, registration or
         declaration as is, in the opinion of counsel to the Finance Parties,
         necessary to render this Agreement or the Second Amendment and
         Restatement of the Sponsors' and Shareholders' Undertaking and
         Completion Guarantee legal, valid, binding and enforceable, to make
         this Agreement and the Second Amendment and Restatement of the
         Sponsors' and Shareholders' Undertaking and

                                      - 6 -
<PAGE>

         Completion Guarantee admissible in evidence in the Borrower's and any
         Finance Party's jurisdiction of incorporation and to enable the
         Borrower to perform its obligations thereunder.

4.       In respect of each Sponsor, a copy, certified a true copy by or on
         behalf of the respective Sponsor, of each such law, decree, consent,
         licence, approval, registration or declaration as is, in the opinion of
         counsel to the Finance Parties, necessary to render this Agreement or
         the amended and restated Sponsors' and Shareholders Undertaking and
         Completion Guarantee legal, valid, binding and enforceable, to make
         this Agreement and the Second Amendment and Restatement of the
         Sponsors' and Shareholders' Undertaking and Completion Guarantee
         admissible in evidence in the respective Sponsor's jurisdiction of
         incorporation and to enable the respective Sponsor to perform its
         obligations thereunder.

5.       The fees set out in the Second Amendment Agreement Fee Letter addressed
         by the Borrower to the Off Shore Facility Agent, dated on or about the
         date of this Agreement, have been paid to the Finance Parties.

6.       A confirmation from the ECA that the cover provided in the ECA Cover
         Documents will not be prejudiced as a consequence of the amendments
         contemplated by this Agreement and that the ECA Cover Documents remain
         in full force and effect.

7.       A confirmation from the Equipment Vendor, issued to the Off Shore
         Facility Agent and countersigned by the Borrower:

         (a)      that there are no amounts outstanding under the Delivery
                  Contract;

         (b)      of the amount of any refund due to the Borrower in respect of
                  prepayments made under the Delivery Contract, which shall be
                  applied in prepayment of the loans under the Lucent Loan
                  Agreement in full and subsequently, to the extent any such
                  refund is available, applied to pay outstanding amounts under
                  the Delivery Contract; and

         (c)      that the Delivery Contract has been terminated other than as
                  provided in the Termination Agreement dated [-] between the
                  Borrower, Lucent Technologies Inc., Lucent Technologies
                  Slovenia d.o.o. and the Equipment Vendor.

8.       An original, duly executed, copy of each of this Agreement and the
         Second Amendment and Restatement of the Sponsors' and Shareholders'
         Undertaking and Completion Guarantee.

9.       A confirmation from the Borrower that, as at the Second Amendment
         Agreement Effective Date:

         (a)      any invoices issued since 31 December 2002 which have become
                  payable to the Equipment Vendor have been paid by the Borrower
                  using its own funds or those made available to it by way of
                  Equity Contributions by the Sponsors or refund under the
                  Delivery Contract;

                                      - 7 -
<PAGE>

         (b)      all amounts due and payable by the Borrower under the Facility
                  Agreement in respect of interest has been paid in full by the
                  Borrower from its own funds or those made available to it by
                  way of Equity Contributions by the Sponsors; and

         (c)      the Loans outstanding under the Facility Agreement will not
                  exceed Euro 75,317,033.82.(1)

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

(1)      In relation to outstandings under the SIT Facility, the applied
         exchange rate is the applicable exchange rate as at the date of each
         drawdown of the SIT Facility.

                                      - 8 -
<PAGE>

                                   SCHEDULE 2

                                   CONDITIONS

1.       A legal opinion of Selih, Selih, Janezic and Jarcovic, Ljubljana, the
         local legal advisers to the Banks, substantially in the form agreed
         with the Off Shore Facility Agent.

2.       Prepayment by the Borrower of the following amounts utilising funds
         from the deposit, held by the On Shore Facility Agent, Sponsors' Cash
         Collateral Account and the Sponsor's Cash Collateral Account #2 or if
         such amounts are insufficient from funds made available to the Borrower
         by way of Equity Contributions by the Sponsors:

<TABLE>
<CAPTION>
                                              PREPAYMENT I
                                        (SPONSORS' CASH COLLATERAL             PREPAYMENT II
                                        ACCOUNT AND SPONSORS' CASH         (DEPOSIT HELD BY THE ON
      FACILITY                            COLLATERAL ACCOUNT #2)            SHORE FACILITY AGENT)(2)
----------------------------------------------------------------------------------------------------
<S>                                     <C>                                <C>
ECA Facility Tranche 1                       Euro 7,341,887.56                 USD 297,002.97
----------------------------------------------------------------------------------------------------
ECA Facility Tranche 2                             None                             None
----------------------------------------------------------------------------------------------------
ECA Facility Tranche 3                             None                             None
----------------------------------------------------------------------------------------------------
Commercial Facility                          Euro 7,972,934.67                 USD 322,530.85
----------------------------------------------------------------------------------------------------
SIT Facility                                 Euro 2,125,177.77                 USD 686,471.55
----------------------------------------------------------------------------------------------------
TOTAL                                       EURO 17,440,000.00               USD 1,306,005.37
----------------------------------------------------------------------------------------------------
</TABLE>

         Any amounts prepaid in USD shall be converted to the Euro equivalent
         thereof in accordance with Clause 1.2.1(d) (Construction) of the
         Facility Agreement and any amounts to be prepaid in SIT shall be
         converted from Euro to SIT at the rate of exchange quoted by the On
         Shore Facility Agent to the Off Shore Facility Agent on or prior to the
         relevant conversion date.

3.       Repayment by the Borrower in full of all amounts outstanding under the
         Lucent Loan Agreement and confirmation thereof from Lucent Technologies
         Inc.

4.      Payment of all costs and fees, costs and expenses referred to in Clause
        5 and any outstanding fees and expenses payable under the Facility
        Agreement from the Borrower's funds or if the Borrower does not have
        sufficient resources to make such payments from funds made available to
        the Borrower by way of Equity Contributions by the Sponsors.

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

(2)      The amounts of the deposit held by the On Shore Facility Agent includes
         accrued interest up to 23 July 2003. The USD amounts are indicative and
         for reference purposes only.

                                      - 9 -
<PAGE>

5.       A letter of comfort from Western Wireless Corporation substantially in
         the form agreed with the Off Shore Facility Agent.

6.       A legal opinion of Friedman Kaplan Seiler & Adelman LLP, legal advisers
         to the Sponsors, substantially in the form agreed with the Off Shore
         Facility Agent.

7.       Evidence that the DSRA-Required Balance, as of the Second Amendment
         Agreement Conditions Satisfaction Date, is standing to its credit of
         the Debt Service Reserve Account.

8.       Notification of the execution of this Agreement to Banka Slovenije.

9.       Confirmation of the amounts outstanding after prepayment by the Off
         Shore Facility Agent in respect of the Euro Facilities and by the On
         Shore Facility Agent in respect of the SIT Facilities.

10.      Legal opinions of Clifford Chance, legal advisors to the Banks, as to
         matters of German, Luxembourg and New York law, substantially in the
         form agreed with the Off Shore Facility Agent.

                                     - 10 -
<PAGE>

                                   SCHEDULE 3

                    AMENDMENTS TO ORIGINAL FACILITY AGREEMENT

1.       The cover page of the Original Facility Agreement is amended by
         deleting the words "Landesbank Schleswig-Holstein Girozentrale" and
         replacing it with the words "HSH NORDBANK AG".

2.       The cover page of the Original Facility Agreement is amended by
         deleting the words "Raiffeisenlandesbank Oberosterreich reg. Gen.
         m.b.H." and replacing them with the words "RAIFFEISENLANDESBANK
         OBEROSTERREICH REG. GEN. M.B.H."

3.       The cover page of the Original Facility Agreement is amended by adding
         the following parties after the party named "Hypo Alpe-Adria-Bank
         d.d.":

                       "DEG - DEUTSCHE INVESTITIONS - UND
                           ENTWICKLUNGSGESELLCHAFT MBH
                              as Euro Facility Bank

                      AKA AUSFUHRKREDIT-GESELLSCHAFT M.B.H.
                             as Euro Facility Bank"

4.       The cover page of the Original Facility Agreement is amended by
         deleting the title in its entirety and replacing it with the following:

                               "FACILITY AGREEMENT
                 (AS AMENDED ON 28 OCTOBER 2002 AND      2003)
                        RELATING TO THE FINANCING OF THE
                VEGA GSM TELECOMMUNICATIONS NETWORK IN SLOVENIA"

5.       Paragraph (4) in the Parties Clause of the Original Facility Agreement
         is amended by deleting the words "Landesbank Schleswig-Holstein
         Girozentrale" in the first line of such clause and replacing them with
         the words "HSH NORDBANK AG".

6.       Paragraph (5) in the Parties Clause of the Original Facility Agreement
         is amended by deleting the words "Landesbank Schleswig-Holstein
         Girozentrale" in the third line of such clause and replacing them with
         the words "HSH NORDBANK AG".

7.       Paragraph (9) in the Parties Clause of the Original Facility Agreement
         is amended by deleting the words "and" at the end of such clause.

8.       Paragraph (10) in the Parties Clause of the Original Facility Agreement
         is amended by adding the word "and" to the end of such clause.

9.       The Parties Clause of the Original Facility Agreement is amended by
         adding the following parties after Paragraph (10) of such clause:

         "(11)    DEG - DEUTSCHE INVESTITIONS - UND ENTWICKLUNGSGESELLSCHAFT MBH
                  and AKA

                                     - 11 -
<PAGE>

                  AUSFUHRKREDIT-GESELLSCHAFT M.B.H. as lenders in relation to
                  the Euro Facility (the "EURO FACILITY BANKS")."

10.      Recital C of the Original Facility Agreement is amended by deleting
         such recital in its entirety and replacing it with the following
         recital:

         "(C)     For the financing of the construction and operation of such
                  network the Original Euro Facility Banks agreed to grant two
                  term loan facilities in the amount of Euro 96,443,308.50 and
                  the Original SIT Facility Banks agreed to grant a revolving
                  loan, guarantee and letter of credit facility in the amount of
                  SIT 4,400,000,000 in each case, upon the terms and conditions
                  set out in the Agreement (as amended by the First Amendment
                  Agreement). On the date of the Second Amendment Agreement, the
                  Loans outstanding to the Banks under this Agreement equal, in
                  aggregate, approximately Euro 75,317,033.82* as more
                  particularly set out in Schedule 1 Part III.

                  *        In relation to outstandings under the SIT Facility,
                           the applied exchange rate is the applicable exchange
                           rate as at the date of each drawdown of the SIT
                           Facility."

11.      The Recitals of the Original Facility Agreement are amended by adding
         the following recital after the end of Recital C:

         "(D)     The Borrower and the Banks have further amended the Agreement
                  (pursuant to the Second Amendment Agreement) on the terms and
                  conditions set out herein."

12.      Paragraph (a) of the definition of "Abandonment of the Project" in
         Clause 1.1 (Definitions) of the Original Facility Agreement is amended
         by deleting the words "clause 3.2.2" in the first line of such
         paragraph and replacing them with the words "clause 3.2.4".

13.      The definition of "Availability Period" in Clause 1.1 of the Original
         Facility Agreement is amended by deleting such definition in its
         entirety and replacing it with the following definition:

         ""AVAILABILITY PERIOD" means:

         (a)      in relation to the ECA Facility, the period from the date upon
                  which the conditions precedent in Schedule 6 (Conditions
                  Precedent) have been satisfied up to and including the Second
                  Amendment Agreement Effective Date;

         (b)      in relation to the Commercial Facility, the period from the
                  date upon which the conditions precedent in Schedule 6
                  (Conditions Precedent) have been satisfied up to and including
                  the Second Amendment Agreement Effective Date; and

         (c)      in relation to the SIT Facility, subject to Clause 6.4
                  (Conversion of revolving SIT Facility Loans into term loans),
                  the period from the date upon which the conditions precedent
                  in Schedule 6 (Conditions Precedent) have been satisfied up to
                  and including the Second Amendment Agreement Effective Date."

                                     - 12 -
<PAGE>

14.      The definition of "Available Commitment" in Clause 1.1 (Definitions) of
         the Original Facility Agreement is amended by adding the following
         words after the words "SIT Facility only" in the ninth line of such
         definition:

         "and subject to Clause 6.4 (Conversion of revolving SIT Facility Loans
         into term loans)"

15.      The definition of "Business Plan" in Clause 1.1 (Definitions) of the
         Original Facility Agreement is amended by deleting such definition in
         its entirety and replacing it with the following definition:

         ""BUSINESS PLAN" means, prior to the delivery of the 2002 Revised
         Business Plan, the Initial Business Plan, thereafter but prior to the
         delivery of the first Updated Business Plan, the 2002 Revised Business
         Plan and thereafter, the Vega Status Quo Business Plan as most recently
         updated or amended from time to time."

16.      Clause 1.1 (Definitions) of the Original Facility Agreement is amended
         by including the following definitions after the definition of
         "Confidentiality Undertaking" and before the definition of "Contiguous
         Road Coverage":

         ""CONSOLIDATED ANNUALISED EBITDA" means twice the aggregate
         Consolidated EBITDA in respect of the last two (2) Quarters immediately
         preceding the relevant calculation date.

         "CONSOLIDATED EBITDA" means EBITDA in respect of the Group.

         "CONSOLIDATED FINANCIAL STATEMENTS" means the most recent financial
         statements of the Group.

         "CONSOLIDATED TANGIBLE NET WORTH" means at any time the aggregate of
         the amounts paid up or credited as paid up on the issued share capital
         of Western Wireless International Corporation (other than any
         redeemable shares) and the aggregate amount of the reserves of the
         Group plus:

         (a)      any amounts set out in the most recent Consolidated Financial
                  Statements for any financial year as payable to Western
                  Wireless International Holding Corporation; and

         (b)      any retained earnings,

         but deducting:

                  (i)      any deficit in the retained earnings; and

                  (ii)     any dividend or distribution declared, recommended or
                           made by any member of the Group to the extent payable
                           to a person who is not a member of the Group and such
                           distribution is not provided for in the most recent
                           financial statements,

         and so that no amount shall be included or excluded more than once.

                                     - 13 -
<PAGE>

         Any calculation of Consolidated Tangible Net Worth will ignore a
         negative or positive balance set out under "Accumulated Other
         Comprehensive Loss or Gain" in the Consolidated Financial Statements."

17.      The definition of "ECA" in Clause 1.1 (Definitions) of the Original
         Facility Agreement is amended by adding the word "Euler" after the word
         "means" at the beginning of such definition.

18.      Paragraph (a)(ii) of the definition of "Excess Cash Flow" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by deleting
         the words "(Contingent Equity)" in the first line of such paragraph and
         replacing them with the words "(Additional Funding Obligations)".

19.      The definition of "Fee Letter" in Clause 1.1 (Definitions) of the
         Original Facility Agreement is amended by adding the words "(including
         the Second Amendment Agreement Fee Letter)" after the words " as set
         out therein" in the second line of such definition.

20.      Paragraph (g) of the definition of "Finance Documents" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by deleting
         such paragraph in its entirety and replacing it with the following
         paragraph:

         "(g)     until the Second Amendment Agreement Conditions Satisfaction
                  Date, the Lucent Loan Agreement;"

21.      The definition of "First Facility Agreement" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by deleting
         such definition in its entirety and replacing it with the following
         definition:

         ""FIRST AMENDMENT AGREEMENT" means the first amendment agreement
         relating to this Agreement between the Borrower and the Banks, dated 28
         October 2002."

22.      Clause 1.1 (Definitions) of the Original Facility Agreement is amended
         by adding the following definition after the definition of "Government"
         and before the definition of "GSM":

         ""GROUP" means Western Wireless International Corporation and its
         Subsidiaries."

23.      The definition of "Insurance" in Clause 1.1 (Definitions) of the
         Original Facility Agreement is amended by deleting such definition in
         its entirety and replacing it with the following definition:

         ""INSURANCE" means any of the contracts of insurance which the Borrower
         is required from time to time to procure and maintain pursuant to
         Schedule 11 (Insurance), as the same may be amended, from time to time,
         in accordance with this Agreement."

24.      Paragraph (a) of the definition of "Material Adverse Effect" of the
         Original Facility Agreement is amended by deleting the words "the
         Shareholders" in the second line of such paragraph and replacing them
         with the words "a Sponsor".

                                     - 14 -
<PAGE>

25.      Paragraph (c) of the definition of "Material Contracts" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by deleting
         such paragraph in its entirety and replacing it with the following
         paragraph:

         "(c)     the Delivery Contract (and after the Second Amendment
                  Agreement Effective Date, that contract to the extent that the
                  terms and conditions thereof remain in force after that
                  date);"

26.      Paragraph (i) of the definition of "Material Contracts" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by adding
         the words "for the Network" after the word "infrastructure" in the
         first line of such paragraph.

27.      The definition of "Permitted Accounts" in Clause 1.1 (Definitions) of
         the Original Facility Agreement is amended by adding the words "with
         the Original SIT Facility Banks" after the words "such other accounts"
         in the third line of such definition.

28.      The definition of "Project Status and Progress Report" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by deleting
         the words "Clause 21.1(c)(iii)" of such definition and replacing them
         with the words "Clause 21.1(e)(iv)".

29.      The definition of "Quarter" in Clause 1.1 (Definitions) of the Original
         Facility Agreement is amended by adding the words "or, as the case may
         be, the Group" after the word "Borrower" in the first line of such
         definition.

30.      The definition of "Rollover SIT Facility Loan" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by adding
         the following words after the word "means" in the first line of such
         definition:

         ", subject to Clause 6.4 (Conversion of revolving SIT Facility Loans
         into term loans),"

31.      Clause 1.1 (Definitions) of the Original Facility Agreement is amended
         by adding the following definitions after the definition of "Screen
         Rate" and before the definition of "Security":

         ""SECOND AMENDMENT AGREEMENT" means the second amendment agreement
         relating to the Facility Agreement between the Borrower and the Banks,
         dated [-] 2003.

         "SECOND AMENDMENT AGREEMENT CONDITIONS SATISFACTION DATE" means the
         date upon which Off Shore Facility Agent (acting reasonably) confirms
         that the conditions listed in Schedule 2 of the Second Amendment
         Agreement have been satisfied or waived, in form and substance
         satisfactory to the Off Shore Facility Agent.

         "SECOND AMENDMENT AGREEMENT EFFECTIVE DATE" means the date upon which
         Off Shore Facility Agent (acting reasonably) confirms that the
         conditions precedent listed in Schedule 1 of the Second Amendment
         Agreement have been satisfied or waived, in form and substance
         satisfactory to the Off Shore Facility Agent.

                                     - 15 -
<PAGE>

         "SECOND AMENDMENT AGREEMENT FEE LETTER" means the fee letter dated on
         or about the date of the Second Amendment Agreement between the Off
         Shore Facility Agent and the Borrower."

32.      Paragraph (d) of the definition of "Security Documents" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by adding
         the words "until the Second Amendment Agreement Conditions Satisfaction
         Date," at the beginning of such paragraph.

33.      The definition of "Senior Creditors" in Clause 1.1 (Definitions) of the
         Original Facility Agreement is amended by adding the following words
         after the words "Technologies Inc." in the second line of such
         definition:

         " (until the irrevocable repayment in full of all amounts outstanding
         under the Lucent Loan Agreement)."

34.      The definition of "SIT Facility" in Clause 1.1 (Definitions) of the
         Original Facility Agreement is amended by adding the following words
         after the word "means" in the first line of such definition:

         ", subject to Clause 6.4 (Conversion of revolving SIT Facility Loans
         into term loans),"

35.      The definition of "Sponsors' and Shareholders' Undertaking and
         Completion Guarantee" in Clause 1.1 (Definitions) of the Original
         Facility Agreement is amended by adding the words "(as amended on 28
         October 2002 and [-] 2003)" after the word "Agreement" in the third
         line of such definition.

36.      The definition of "Sponsors' Cash Collateral Account" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by adding
         the words "(as amended on 28 October 2002)" after the word "Guarantee"
         in the second line of such definition.

37.      The definition of "Sponsors' Cash Collateral Account #2" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by adding
         the words "(as amended on 28 October 2002)" after the word "Guarantee"
         in the second line of such definition.

38.      The definition of "TOM" in Clause 1.1 (Definitions) of the Original
         Facility Agreement is amended by adding the words "as amended from time
         to time" after the words "and 81/1997)" at the end of such definition.

39.      The definition of "Total Commercial Facility Commitments" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by adding
         the following words after the word "Agreement" in the second line of
         such definition:

         "which, for the avoidance of doubt, shall on the Second Amendment
         Agreement Effective Date, be reduced to zero"

40.      The definition of "Total ECA Facility Commitments" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by adding
         the following words after the word "Agreement" in the second line of
         such definition:

                                     - 16 -
<PAGE>

         "which, for the avoidance of doubt, shall on the Second Amendment
         Agreement Effective Date, be reduced to zero"

41.      The definition of "Total SIT Facility Commitments" in Clause 1.1
         (Definitions) of the Original Facility Agreement is amended by deleting
         the words "as reduced in accordance with the terms hereof" in the third
         and fourth lines of such definition and replacing them with the
         following words:

         "which, for the avoidance of doubt, shall on the Second Amendment
         Agreement Effective Date, be reduced to zero"

42.      The definition of "Updated Business Plan" in Clause 1.1 (Definitions)
         of the Original Facility Agreement is amended by deleting such
         definition in its entirety and replacing it with the following
         definition:

         ""UPDATED BUSINESS PLAN" means an update of the Business Plan in a
         manner consistent with the most recent financial statements of the
         Borrower delivered and reviewed in accordance with Clause 21 (Reporting
         requirements) as most recently updated or amended from time to time."

43.      Clause 1.1 (Definitions) of the Original Facility Agreement is amended
         by inserting the following definition after the definition of "VAT" and
         before the definition of "Withdrawal of the Licence":

         ""VEGA STATUS QUO BUSINESS PLAN" means the business plan of the
         Borrower accommodating the changed technical, economic and tax
         assumptions, agreed between the Parties and referred to as the excel
         spreadsheet named "Vega Status Quo 040803.xls" (as attached hereto as
         Exhibit 1), as most recently updated or amended from time to time."

44.      Clause 2.1(a) (The Facilities) of the Original Facility Agreement is
         amended by adding the following words after the word "Borrower" in the
         first line of such clause:

         "until the Second Amendment Agreement Effective Date"

45.      Clause 2.1(b) (The Facilities) of the Original Facility Agreement is
         amended by adding the following words after the word "Borrower" in the
         first line of such clause:

         ", subject to Clause 6.4 (Conversion of revolving SIT Facility Loans
         into term loans),"

46.      Clause 4.2.1 (Further conditions precedent to all Utilisations) of the
         Original Facility Agreement is amended by deleting the words "Subject
         to Clause 4.2.2" at the beginning of such clause and replacing it with
         the words "Subject to Clauses 4.2.2 and 6.4 (Conversion of revolving
         SIT Facility Loans into term loans)".

47.      Clause 4.2.1(a)(iv) (Further conditions precedent to all Utilisations)
         of the Original Facility Agreement is amended by deleting the word
         "and" from the end of such clause.

                                     - 17 -
<PAGE>

48.      Clause 4.2.1(a)(v) (Further conditions precedent to all Utilisations)
         of the Original Facility Agreement is amended by adding the word "and"
         after the word "utilised;" at the end of such clause.

49.      Clause 4.2.1(a) (Further conditions precedent to all Utilisations) of
         the Original Facility Agreement is amended by adding the following
         words after the end of Clause 4.2.1(a)(v) and before Clause 4.2.1(b):

         "(vi)    the proposed Utilisation Date is a date on or before the
                  Second Amendment Agreement Effective Date;"

50.      Clause 4.2.2 (Further conditions precedent to all Utilisations) of the
         Original Facility Agreement is amended by deleting such clause in its
         entirety and replacing it with the following clause:

         "4.2.2   Subject to Clause 6.4 (Conversion of revolving SIT Facility
                  Loans into term loans) the Banks will only be obliged to
                  comply with Clause 6 (Loans) in relation to a Rollover SIT
                  Facility Loan if on the Utilisation Date:

                  (a)      no Event of Default is continuing or would result
                           from the Rollover SIT Facility Loan;

                  (b)      the aggregate SIT Facility Loans and reimbursement
                           obligations under the SIT Facility Guarantees or LCs
                           will not exceed the lesser of:

                           (i)      an equivalent amount of Euro 20,000,000
                                    until the Second Amendment Agreement
                                    Effective Date and thereafter Euro 7,500,000
                                    at the exchange rate (middle rate) of Banka
                                    Slovenije on the proposed Utilisation Date;
                                    and

                           (ii)     the amount to which the SIT Facility
                                    Commitment is to be reduced in accordance
                                    with Clause 13.3 (Reduction of the SIT
                                    Facility Commitment) on or before the
                                    proposed Utilisation Date."

51.      Clause 5.2(a)(ii) (Completion of a Utilisation Request) of the Original
         Facility Agreement is amended by renumbering such clause as
         5.2(a)(i)(4).

52.      Clause 5.2(a)(iii) (Completion of a Utilisation Request) of the
         Original Facility Agreement is amended by renumbering such clause as
         5.2(a)(ii).

53.      Clause 5.2(a)(iv) (Completion of a Utilisation Request) of the Original
         Facility Agreement is amended by renumbering such clause as
         5.2(a)(iii).

54.      Clause 6 (Loans) of the Original Facility Agreement is amended by
         adding the following clause after the end of Clause 6.3 (Revaluation of
         SIT Facility Loans):

         "6.4     CONVERSION OF REVOLVING SIT FACILITY LOANS INTO TERM LOANS

                                     - 18 -
<PAGE>

                  Notwithstanding any other provision of this Agreement, on the
                  Second Amendment Agreement Effective Date, the SIT Facility
                  Commitments shall be reduced to zero. All SIT Facility Loans
                  outstanding on the Second Amendment Agreement Effective Date
                  shall be repayable as a term loan on the dates and in the
                  amounts set out in Clause 13 (Repayment) and Schedule 2
                  (Repayment Dates). For the avoidance of doubt, from the Second
                  Amendment Agreement Effective Date:

                  (a)      no amounts repaid may be reborrowed;

                  (b)      no Rollover SIT Facility Loans may be utilised; and

                  (c)      except as expressly provided in this Clause 6.4, the
                           rights and obligations of the Parties under this
                           Agreement continue in full force and effect."

55.      Clause 9.1(b) (Calculation of floating rate interest under the ECA
         Facility) of the Original Facility Agreement is amended by adding the
         following words to the beginning of such clause:

         "Up to but excluding the Second Amendment Agreement Effective Date,"

56.      Clause 9.1(b)(i)(2) (Calculation of floating rate interest under the
         ECA Facility) of the Original Facility Agreement is amended by deleting
         the word "(c)" in the fifth line of such clause and replacing it with
         the word "21.1(e)".

57.      Clause 9.1(b)(ii) (Calculation of floating rate interest under the ECA
         Facility) of the Original Facility Agreement is amended by deleting the
         word "(c)" in the third line of such clause and replacing it with the
         word "(e)".

58.      Clause 9.1 (Calculation of floating rate interest under the ECA
         Facility) of the Original Facility Agreement is amended by adding the
         following clause after the end of Clause 9.1(b)(iii):

         "(c)     From and including the Second Amendment Agreement Effective
                  Date, the ECA Facility Applicable Margin shall be an amount
                  of, initially, 1.50% per annum and thereafter the rate per
                  annum set out in the column headed "Margin (% p.a.)" subject
                  to the achievement by the Borrower, as at the end of the most
                  recently ended Quarter, of the relevant financial performance
                  tests set out in the same line in the column headed "Financial
                  Performance" in the table below:

<TABLE>
<CAPTION>
                                                                         MARGIN
                     FINANCIAL PERFORMANCE                               (% P.A.)
---------------------------------------------------------------------------------
<S>                                                                      <C>
EBITDA for the preceding two (2) Quarters is positive                      1.25
---------------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive and the Total        1.15
Leverage Ratio is greater that 6 but less than 10
---------------------------------------------------------------------------------
</TABLE>

                                     - 19 -
<PAGE>

<TABLE>
---------------------------------------------------------------------------------
<S>                                                                        <C>
EBITDA for the preceding two (2) Quarters is positive and the Total        1.05
Leverage Ratio is less than or equal to 6 but greater than 5
---------------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive and the Total        0.95
Leverage Ratio is less than or equal to 5 but greater than 4
---------------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive and the Total        0.85
Leverage Ratio is less than or equal to 4 but greater than 3
---------------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive and the Total        0.75
Leverage Ratio is less than or equal to 3 but greater than 2
---------------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive and the Total        0.65
Leverage Ratio is less than or equal to 2 but greater than 1
---------------------------------------------------------------------------------
</TABLE>

         PROVIDED THAT:

                  (i)      any change to the ECA Facility Applicable Margin
                           shall take place from the immediately following ECA
                           Facility Applicable Margin Adjustment Date (subject
                           to Clause 9.1(c)(ii)) if:

                           (1)      the Borrower has requested a reduction in
                                    the Applicable Margin in the Covenant
                                    Compliance Certificate at least 15 Business
                                    Days prior to such Euro Facility Interest
                                    Payment Date or the Off Shore Facility Agent
                                    has notified the Borrower, based on the
                                    information referred to in (2) below, that
                                    there will be an increase in the Applicable
                                    Margin in accordance with the above
                                    provisions of this paragraph (c);

                           (2)      the Off Shore Facility Agent has confirmed
                                    the satisfaction of the above conditions
                                    relating to financial performance of the
                                    Borrower on the basis of the most recent
                                    information for the Borrower required to be
                                    provided by the Borrower pursuant to Clauses
                                    21.1(a) and (e) (Financial statements and
                                    other information) and Clause 21.3 (Covenant
                                    Compliance Certificate);

                           (3)      no Event of Default or Potential Event of
                                    Default is continuing;

                  (ii)     if the Off Shore Facility Agent has not received the
                           information for the Borrower required to be provided
                           by the Borrower pursuant to Clauses 21.1(a) and (e)
                           (Financial statements and other information) and
                           Clause 21.3 (Covenant Compliance Certificate) in
                           respect of the relevant period by its due date for
                           delivery pursuant to this Agreement, the Applicable
                           Margin will be 1.50% per annum from that date until
                           such time as the Borrower satisfies the conditions
                           set out in this paragraph (c) and the Borrower is in
                           compliance with its obligations under Clause 21
                           (Reporting requirements)."

                                     - 20 -
<PAGE>

59.      Clause 9.2(b) (Calculation of floating rate interest under the
         Commercial Facility) of the Original Facility Agreement is amended by
         adding the following words to the beginning of such clause:

         "Up to but excluding the Second Amendment Agreement Effective Date,"

60.      Clause 9.2(b)(i)(2) (Calculation of floating rate interest under the
         Commercial Facility) of the Original Facility Agreement is amended by
         deleting such clause in its entirety and replacing it with the
         following:

         "(2)     the Off Shore Facility Agent has confirmed the satisfaction of
                  the above conditions relating to financial performance of the
                  Borrower on the basis of the most recent information for the
                  Borrower required to be provided by the Borrower pursuant to
                  Clauses 21.1(a) and (e) (Financial statements and other
                  information) and Clause 21.3 (Covenant Compliance
                  Certificate);"

61.      Clause 9.2(b)(ii) (Calculation of floating rate interest under the
         Commercial Facility) of the Original Facility Agreement is amended by
         deleting such clause in its entirety and replacing it with the
         following clause:

         "(ii)    if the Off Shore Facility Agent has not received the
                  information for the Borrower required to be provided by the
                  Borrower pursuant to Clauses 21.1(a) and (e) (Financial
                  statements and other information) and Clause 21.3 (Covenant
                  Compliance Certificate) in respect of the relevant period by
                  its due date for delivery pursuant to this Agreement, the
                  Applicable Margin will be 3.25% per annum from that date until
                  such time as the Borrower satisfies the conditions set out in
                  this paragraph (b) and is in compliance with its obligations
                  under Clause 21 (Reporting requirements);"

62.      Clause 9.2 (Calculation of floating rate interest under the Commercial
         Facility) of the Original Facility Agreement is amended by adding the
         following clause after the end of Clause 9.2(b)(iii):

         "(c)     From and including the Second Amendment Agreement Effective
                  Date, the Commercial Facility Applicable Margin shall be an
                  amount of, initially, 3.50% per annum and thereafter the rate
                  per annum set out in the column headed "Margin (% p.a.)"
                  subject to the achievement by the Borrower, as at the end of
                  the most recently ended Quarter, of the relevant financial
                  performance tests set out in the same line in the column
                  headed "Financial Performance" in the table:

<TABLE>
<CAPTION>
                FINANCIAL PERFORMANCE                         MARGIN (% P.A.)
-----------------------------------------------------------------------------
<S>                                                           <C>
EBITDA for the preceding two (2) Quarters is positive              2.75
-----------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive              2.50
and the Total Leverage Ratio is greater that 6 but
less than 10
-----------------------------------------------------------------------------
</TABLE>

                                     - 21 -
<PAGE>

<TABLE>
-----------------------------------------------------------------------------
<S>                                                           <C>
EBITDA for the preceding two (2) Quarters is positive              2.25
and the Total Leverage Ratio is less than or equal to
6 but greater than 5
-----------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive              2.00
and the Total Leverage Ratio is less than or equal to
5 but greater than 4
-----------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive              1.75
and the Total Leverage Ratio is less than or equal to
4 but greater than 3
-----------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive              1.50
and the Total Leverage Ratio is less than or equal to
3 but greater than 2
-----------------------------------------------------------------------------
EBITDA for the preceding two (2) Quarters is positive              1.25
and the Total Leverage Ratio is less than or equal to
2 but greater than 1
-----------------------------------------------------------------------------
</TABLE>

                  PROVIDED THAT:

                  (i)      any change to the Commercial Facility Applicable
                           Margin shall take place from the immediately
                           following Commercial Facility Applicable Margin
                           Adjustment Date (subject to Clause 9.2(c)(ii)) if:

                           (1)      the Borrower has requested a reduction in
                                    the Applicable Margin in the Covenant
                                    Compliance Certificate at least 15 Business
                                    Days prior to such Euro Facility Interest
                                    Payment Date or the Off Shore Facility Agent
                                    has notified the Borrower, based on the
                                    information referred to in (2) below, that
                                    there will be an increase in the Applicable
                                    Margin in accordance with the above
                                    provisions of this paragraph (c);

                           (2)      the Off Shore Facility Agent has confirmed
                                    the satisfaction of the above conditions
                                    relating to financial performance of the
                                    Borrower on the basis of the most recent
                                    information for the Borrower required to be
                                    provided by the Borrower pursuant to Clauses
                                    21.1(a) and (e) (Financial statements and
                                    other information) and Clause 21.3 (Covenant
                                    Compliance Certificate);

                           (3)      no Event of Default or Potential Event of
                                    Default is continuing;

                  (ii)     if the Off Shore Facility Agent has not received the
                           information for the Borrower required to be provided
                           by the Borrower pursuant to Clauses 21.1(a) and (e)
                           (Financial statements and other information) and
                           Clause 21.3 (Covenant Compliance Certificate) in
                           respect of the

                                     - 22 -
<PAGE>

                           relevant period by its due date for delivery pursuant
                           to this Agreement, the Applicable Margin will be
                           3.50% per annum from that date until such time as the
                           Borrower satisfies the conditions set out in this
                           paragraph (c) and the Borrower is in compliance with
                           its obligations under Clause 21 (Reporting
                           requirements)."

63.      Clause 9.3.1(a) (Calculation of floating rate interest under the SIT
         Facility) of the Original Facility Agreement is amended by deleting the
         word "and" at the end of such clause.

64.      Clause 9.3.1(b) (Calculation of floating rate interest under the SIT
         Facility) of the Original Facility Agreement is amended by adding the
         following words to the beginning of such clause:

         "Up to but excluding the Second Amendment Agreement Effective Date,"

65.      Clause 9.3.1(b)(i)(2) (Calculation of floating rate interest under the
         SIT Facility) of the Original Facility Agreement is amended by deleting
         the word "(c)" in the fifth line of such clause and replacing it with
         the word "(e)".

66.      Clause 9.3.1(b)(ii) (Calculation of floating rate interest under the
         SIT Facility) of the Original Facility Agreement is amended by deleting
         such clause in its entirety and replacing it with the following clause:

         "(ii)    if the On Shore Facility Agent has not received the
                  information for the Borrower required to be provided by the
                  Borrower pursuant to Clauses 21.1(a) and (e) (Financial
                  statements and other information) and Clause 21.3 (Covenant
                  Compliance Certificate) in respect of the relevant period by
                  its due date for delivery pursuant to this Agreement, the
                  Applicable Margin will be 1.50% per annum from that date until
                  such time as the Borrower satisfies the conditions set out in
                  this paragraph (b) and is in compliance with its obligations
                  under Clause 21 (Reporting requirements)."

67.      Clause 9.3.1 (Calculation of floating rate interest under the SIT
         Facility) of the Original Facility Agreement is amended by adding the
         following clause after the end of Clause 9.3.1(b)(ii):

         "(c)     From and including the Second Amendment Agreement Effective
                  Date, the SIT Facility Applicable Margin shall be an amount
                  of, initially, 1.75% per annum and thereafter the rate per
                  annum set out in the column headed "Margin (% p.a.)" subject
                  to the achievement by the Borrower, as at the end of the most
                  recently ended Quarter, of the relevant financial performance
                  tests set out in the same line in the column headed "Financial
                  Performance" in the table below:

<TABLE>
<CAPTION>
               FINANCIAL PERFORMANCE                          MARGIN (% P.A.)
-----------------------------------------------------------------------------
<S>                                                           <C>
EBITDA for the preceding two (2) Quarters is positive              1.50
and the Total Leverage Ratio greater than 2 but less
than or equal to 4
-----------------------------------------------------------------------------
</TABLE>

                                     - 23 -
<PAGE>

<TABLE>
-----------------------------------------------------------------------------
<S>                                                           <C>
EBITDA for the preceding two (2) Quarters is positive              1.25
and the Total Leverage Ratio less than or equal to
2.00
-----------------------------------------------------------------------------
</TABLE>

                  PROVIDED THAT:

                  (i)      any change to the SIT Facility Applicable Margin
                           shall take place from the first day of the
                           immediately following Interest Period if:

                           (1)      the Borrower has requested a reduction in
                                    the Applicable Margin in the Covenant
                                    Compliance Certificate at least 15 Business
                                    Days prior to such Interest Period or the
                                    Off Shore Facility Agent has notified the
                                    Borrower, based on the information referred
                                    to in (2) below, that there will be an
                                    increase in the Applicable Margin in
                                    accordance with the above provisions of this
                                    paragraph (c);

                           (2)      the On Shore Facility Agent has confirmed
                                    the satisfaction of the above conditions
                                    relating to financial performance of the
                                    Borrower on the basis of the most recent
                                    information for the Borrower required to be
                                    provided by the Borrower pursuant to Clauses
                                    21.1(a) and (e) (Financial statements and
                                    other information) and Clause 21.3 (Covenant
                                    Compliance Certificate); and

                           (3)      no Event of Default or Potential Event of
                                    Default is continuing;

                  (ii)     if the On Shore Facility Agent has not received the
                           information for the Borrower required to be provided
                           by the Borrower pursuant to Clauses 21.1(a) and (e)
                           (Financial statements and other information) and
                           Clause 21.3 (Covenant Compliance Certificate) in
                           respect of the relevant period by its due date for
                           delivery pursuant to this Agreement, the Applicable
                           Margin will be 1.75% per annum from that date until
                           such time as the Borrower satisfies the conditions
                           set out in this paragraph (c) and the Borrower is in
                           compliance with its obligations under Clause 21
                           (Reporting requirements).

                                     - 24 -
<PAGE>

68.      Clause 12.1 (Commitment fees) of the Original Facility Agreement is
         amended by deleting such clause in its entirety and replacing it with
         the following clause:

         "12.1    COMMITMENT FEES

         (a)      The Borrower shall pay to the Off Shore Facility Agent (for
                  the account of each Euro Facility Bank) a fee computed at the
                  rate of:

                  (i)      0.75% per annum on each Bank's Available Commitment
                           under the Euro Facility until the date which is the
                           earlier of (A) 75% of the ECA Facility Commitment and
                           the Commercial Facility Commitment has been disbursed
                           or (B) on 20 February 2003 or such other date as
                           agreed between the Borrower and the Banks; and

                  (ii)     thereafter 0.50% per annum on that Bank's Available
                           Commitment under the Euro Facility for the
                           Availability Period applicable to the Euro Facility
                           up to 20 February 2003 or such other date as agreed
                           between the Borrower and the Banks.

         (b)      The Borrower shall pay to the On Shore Facility Agent (for the
                  account of each SIT Facility Bank) a fee computed at the rate
                  of 0.10% per annum on the Available Commitment under the SIT
                  Facility up to 20 February 2003 or such other date as agreed
                  between the Borrower and the Banks.

         (c)      The fees under paragraphs (a) and (b) above shall be payable
                  quarterly in arrears from the date of execution of this
                  Agreement."

69.      Clause 12.7 (Off Shore Facility Agent fee) of the Original Facility
         Agreement is amended by deleting the word "Offshore" in the first line
         of such clause and replacing it with the words "Off Shore".

70.      Clause 13.2 (Repayment of the SIT Facility Loans) of the Original
         Facility Agreement is amended by deleting the word "Each" at the
         beginning of such clause and replacing it with the following words:

         "Subject to Clause 13.4 (Repayment of the SIT Facility Loans after the
         Second Amendment Agreement Effective Date), each"

71.      Clause 13.3 (Reduction of the SIT Facility Commitment) of the Original
         Facility Agreement is amended by deleting such clause in its entirety
         and replacing it with the following clause:

         "13.3    REDUCTION OF THE SIT FACILITY COMMITMENT

                  Up to and including the Second Amendment Agreement Effective
                  Date, the SIT Facility Commitment shall be reduced on the
                  dates and in the amounts which correspond to the percentage
                  rates set out in Schedule 2 (Repayment Dates)."

                                     - 25 -
<PAGE>

72.      Clause 13 (Repayment) of the Original Facility Agreement is amended by
         adding the following clause after the end of Clause 13.3 (Reduction of
         the SIT Facility Commitment):

         "13.4    REPAYMENT OF THE SIT FACILITY LOANS AFTER THE SECOND AMENDMENT
                  AGREEMENT EFFECTIVE DATE

                  From the Second Amendment Agreement Effective Date, each SIT
                  Facility Loan shall be repaid on the dates and in the amounts
                  which correspond to the percentage rates set out in Schedule 2
                  (Repayment Dates)."

73.      Clause 14.4 (Voluntary prepayment of Euro Facility Loans) of the
         Original Facility Agreement is amended by deleting such clause in its
         entirety and replacing it with the following clause:

         "14.4    VOLUNTARY PREPAYMENTS

         14.4.1   In addition to the Borrower's rights set forth in Clause 14.6
                  (Right of repayment and cancellation in relation to a single
                  Bank) the Borrower may, after the end of the Availability
                  Period and if it gives the Off Shore Facility Agent not less
                  than five (5) Business Days' (or such shorter period as the
                  Majority Banks may agree) prior notice, prepay any part of any
                  ECA Facility Loan and any Commercial Facility Loan in minimum
                  amounts of Euro 1,000,000.

         14.4.2   In addition to the Borrower's rights set forth in Clause 14.6
                  (Right of repayment and cancellation in relation to a single
                  Bank) the Borrower may, after the end of the Availability
                  Period and if it gives the On Shore Facility Agent not less
                  than five (5) Business Days' (or such shorter period as the
                  Majority Banks may agree) prior written notice, prepay any
                  part of any SIT Facility Loan in minimum amounts of an
                  equivalent amount of Euro 1,000,000."

74.      Clause 14.5 (Mandatory prepayments) of the Original Facility Agreement
         is amended by adding the following clauses after the end of Clause
         14.5.2:

         "14.5.3  Notwithstanding the provisions of Clause 14.5.1 above, the
                  Borrower shall, on or prior to the Second Amendment Agreement
                  Conditions Satisfaction Date, prepay the Loans and the loans
                  made under the Lucent Loan Agreement in accordance with the
                  requirements of Schedule 2 of the Second Amendment Agreement,
                  such prepayments to be applied in accordance with the
                  requirements thereof.

         14.5.4   Any amounts (if any) in respect of the ECA Premium reimbursed
                  by the ECA shall (i) be applied by the Off Shore Facility
                  Agent on the immediately following Interest Payment Date after
                  receipt of such reimbursement, to prepay Loans made under ECA
                  Facility Tranche 2 or the other Loans made under the ECA
                  Facility to the extent such tranche has been repaid in full
                  and (ii) be paid to the Borrower if all Loans have been
                  irrevocably repaid in full."

                                     - 26 -
<PAGE>

75.      Clause 14.7.7 (Restrictions) of the Original Facility Agreement is
         amended by deleting the words "(Voluntary prepayment of Euro Facility
         Loans)" in the first and second lines of such clause and replacing it
         with the words "(Voluntary prepayments)".

76.      Clause 19.2 (Amendment costs) of the Original Facility Agreement is
         amended by deleting such clause in its entirety and replacing it with
         the following clause:

         "19.2    AMENDMENT COSTS

                  If (a) the Borrower requests an amendment, waiver or consent
                  (which, for the avoidance of doubt, includes the preparation
                  and implementation of the requirements of the First Amendment
                  Agreement and the Second Amendment Agreement) or (b) an
                  amendment is required pursuant to Clause 30.9 (Change of
                  currency), the Borrower shall, within three (3) Business Days
                  of demand, reimburse each Agent for the amount of all costs
                  and expenses (including legal fees) reasonably incurred by it
                  in responding to, evaluating, negotiating or complying with
                  that request or requirement and preparing and implementing
                  such amendment, waiver or consent."

77.      Clause 20.1.1 (Status) of the Original Facility Agreement is amended by
         deleting such clause in its entirety and replacing it with the
         following clause:

         "20.1.1  STATUS

                  The Borrower is a corporation duly incorporated and validly
                  existing under the laws of Slovenia and has the power and,
                  except as expressly disclosed to the Off Shore Facility Agent
                  prior to the Second Amendment Agreement Effective Date, all
                  necessary governmental and other material Authorisations under
                  any applicable jurisdiction to own its property and assets and
                  to carry on its business as currently conducted."

78.      Clause 20.1.6(a) (Authorisations) of the Original Facility Agreement is
         amended by deleting the word "All" at the beginning of such clause and
         replacing it with the words:

         "Except as expressly disclosed to the Off Shore Facility Agent prior to
         the Second Amendment Agreement Effective Date, all"

79.      Clause 20.1.12(d) (Financial statements) of the Original Facility
         Agreement is amended by deleting the word "There" at the beginning of
         such clause and replacing it with the words:

         "As at and prior to the Second Amendment Agreement Effective Date,
         except as expressly disclosed to the Off Shore Facility Agent and
         distributed to the Banks, there"

80.      Clause 20.1.26 (Amendments to Material Contracts) of the Original
         Facility Agreement is amended by deleting the word "(Amendments)" in
         the second line of such clause and replacing it with the word
         "(Amendments))".

81.      Clause 21 (Reporting Requirements) of the Original Facility Agreement
         is amended by deleting the first paragraph of such clause in its
         entirety and replacing it with the following paragraph:

                                     - 27 -
<PAGE>

         "The undertakings in this Clause 21 remain in force from the date of
         this Agreement for so long as any amount is outstanding under the
         Finance Documents (other than the Sponsors Unsecured Loan Agreement, to
         the extent that amounts remain outstanding thereunder after all amounts
         outstanding under the other Finance Documents have been repaid in full)
         or any Commitment is in force."

82.      Clause 21.1 (Financial statements and other information) of the
         Original Facility Agreement is amended by deleting such clause in its
         entirety and replacing it with the following clause:

         "21.1    FINANCIAL STATEMENTS AND OTHER INFORMATION

                  The Borrower shall supply to the Off Shore Facility Agent in
                  sufficient copies for all of the Banks:

                  (a)      as soon as the same become available, but in any
                           event not later than 120 days after the end of each
                           financial year one set of its audited annual
                           financial statements for that financial year prepared
                           in accordance with US GAAP and one set of its audited
                           annual financial statements for that financial year
                           prepared in accordance with Slovenian Accounting
                           Standards;

                  (b)      from the Second Amendment Agreement Effective Date,
                           as soon as the same become available, but in any
                           event not later than 120 days after the end of each
                           financial year one set of the consolidated audited
                           annual financial statements of the Group for that
                           financial year prepared in accordance with US GAAP;

                  (c)      as soon as the same becomes available, but in any
                           event not later than six weeks after the commencement
                           of a new financial year of the Borrower, the Updated
                           Business Plan in respect of the following financial
                           year which shall, without limitation:

                           (i)      be in the same format and comprise the same
                                    items as the most recent Business Plan and
                                    otherwise include a description of any
                                    changes and sufficient information, in form
                                    and substance as may be reasonably required
                                    by the Off Shore Facility Agent, to enable
                                    the Banks to make an accurate comparison
                                    between the most recent Business Plan and
                                    such Updated Business Plan;

                           (ii)     demonstrate that the Borrower is in
                                    compliance with the requirements of Clause
                                    22 (Financial covenants and network
                                    milestones) (to the extent such requirements
                                    are applicable to the Borrower) and such
                                    Updated Business Plan is consistent with
                                    Clause 24 (General undertakings); and

                           (iii)    include a profit and loss statement, balance
                                    sheet, cash flow statement and details of
                                    investments in fixed assets, capital

                                     - 28 -
<PAGE>

                                    and operation expenditures updated to
                                    reflect the circumstances then existing and
                                    anticipated for the forthcoming financial
                                    year and any information relevant at such
                                    time that was not included in the Initial
                                    Business Plan; and

                           (iv)     include an outline of major future business
                                    plans;

                           PROVIDED THAT if at any time the then current
                           Business Plan is updated or amended by the Borrower,
                           it shall forthwith supply to the Off Shore Facility
                           Agent such updates or amendments and a description
                           and explanation thereof;

                  (d)      from the Second Amendment Agreement Effective Date,
                           as soon as the same becomes available, but in any
                           event not later than six weeks after the commencement
                           of a new financial year of Western Wireless
                           International Corporation, a three year business plan
                           for the Group in respect of the following three
                           financial years which shall, without limitation:

                           (i)      be in the same format and comprise the same
                                    items as the most recent business plan for
                                    the Group as set out in Exhibit 2 and
                                    otherwise include a description of any
                                    changes and sufficient information, in form
                                    and substance as may be reasonably required
                                    by the Off Shore Facility Agent, to enable
                                    the Banks to make an accurate comparison
                                    between the most recent three year business
                                    plan and such updated business plan;

                           (ii)     demonstrate that the Group is in compliance
                                    with the requirements of Clause 22
                                    (Financial covenants and network
                                    milestones); and

                           (iii)    include a profit and loss statement, cash
                                    flow statement and details of investments
                                    in, capital and expenditures in each case on
                                    a consolidated basis in respect of the Group
                                    in the same format as the most recent
                                    business plan for the Group and updated to
                                    reflect the circumstances then existing and
                                    anticipated for the forthcoming three
                                    financial years and any information relevant
                                    at such time that was not included in the
                                    previous business plan; and

                           (iv)     include an outline of major business
                                    developments;

                           PROVIDED THAT if at any time the then current
                           business plan for the Group is updated or amended the
                           Borrower shall forthwith supply to the Off Shore
                           Facility Agent such updates or amendments and a
                           description and explanation thereof;

                                     - 29 -
<PAGE>

                  (e)      as soon as the same becomes available but in any
                           event not later than 45 days after the end of each
                           Quarter and starting as at 31 December 2001, a
                           management report for that Quarter, signed by the
                           CFO, which shall include, without limitation:

                           (i)      a profit and loss statement, balance sheet,
                                    cash flow statement, details of investments
                                    in fixed assets, debt profile (including
                                    aggregate lease obligations) short term and
                                    long term for the Borrower and in addition,
                                    from the Second Amendment Agreement
                                    Effective Date, on a consolidated basis for
                                    the Group;

                           (ii)     from the Second Amendment Agreement
                                    Effective Date, details of any funding that
                                    has been provided by Western Wireless
                                    International Corporation in the preceding
                                    Quarter to ensure that at all times the
                                    balance standing to the credit of the
                                    Proceeds and Revenues Account is equal to or
                                    greater than Euro 1;

                           (iii)    a list of all existing accounts of the
                                    Borrower identifying the financial
                                    institution with which those are held and
                                    the balances thereon; and

                           (iv)     a Project Status and Progress Report setting
                                    out in detail information addressing the
                                    matters referred to in Schedule 15 (Project
                                    Status and Progress Report) (signed by the
                                    CFO and the chief technical officer of the
                                    Borrower); and

                  (f)      until the Second Amendment Agreement Effective Date,
                           every week bank statements (in the form agreed
                           between the Off Shore Facility Agent, the On Shore
                           Facility Agent and Hypo Alpe-Adria-Bank d.d.) in
                           respect of the Permitted Accounts and the Proceeds
                           and Revenue Accounts and the Borrower authorises and
                           instructs the On Shore Facility Agent and Hypo
                           Alpe-Adria-Bank d.d. to provide such bank statements
                           in respect of the Proceeds and Revenue Accounts to
                           the Off Shore Facility Agent at such times."

83.      Clause 21.2(a) (Requirements as to financial statements) of the
         Original Facility Agreement is amended by deleting such clause in its
         entirety and replacing it with the following clause:

         "(a)     Each set of financial statements delivered by the Borrower
                  pursuant to Clause 21.1 (Financial statements and other
                  information) shall be certified by the CFO (or if in respect
                  of the Group the chief financial officer of Western Wireless
                  International Corporation) as fairly representing its (or in
                  the case of the Group, the Group's) financial condition as at
                  the end of and for the period up to the date as at which those
                  financial statements were drawn up."

                                     - 30 -
<PAGE>

84.      Clause 21.3 (Covenant Compliance Certificate) of the Original Facility
         Agreement is amended by deleting such clause in its entirety and
         replacing it with the following clause:

         "21.3    COVENANT COMPLIANCE CERTIFICATE

                  (a)      The Borrower shall supply the Off Shore Facility
                           Agent, with each set of financial statements prepared
                           in accordance with US GAAP delivered pursuant to
                           Clauses 21.1(a), 21.1(b) and 21.1(e)(i) (Financial
                           statements and other information), a Covenant
                           Compliance Certificate setting out (in reasonable
                           detail) computations as to compliance with Clause 22
                           (Financial covenants and network milestones) as at
                           the date as at which those financial statements were
                           drawn up and confirming compliance with the
                           requirements of Clause 23.3 (Application of moneys on
                           the Proceeds and Revenue Accounts).

                  (b)      Each Covenant Compliance Certificate shall be signed
                           by the CFO (or if the financial statements are in
                           respect of the Group the chief financial officer of
                           Western Wireless International Corporation) and, if
                           required to be delivered with the financial
                           statements delivered pursuant to Clause 21.1(a)
                           (Financial statements and other information), shall
                           be reported on by the Borrower's or the Group's
                           auditors, as the case may be."

85.      Clause 21.4 (Information: miscellaneous) of the Original Facility
         Agreement is amended by deleting such clause in its entirety and
         replacing it by the following clause:

         "21.4    INFORMATION: MISCELLANEOUS

                  The Borrower shall supply the Off Shore Facility Agent (in
                  sufficient copies for all the Banks, if the Off Shore Facility
                  Agent so requests) with:

                  (a)      all documents dispatched by the Borrower or a member
                           of the Group to its creditors generally at the same
                           time as they are dispatched;

                  (b)      promptly upon becoming aware of them, the details of
                           any litigation, arbitration or administrative
                           proceedings against the Borrower or a member of the
                           Group (which are not considered to be frivolous or
                           vexatious) which are current, threatened or pending,
                           and which might, if adversely determined, have a
                           Material Adverse Effect;

                  (c)      promptly, such further information regarding its or
                           the Group's financial condition, business and
                           operations as any Finance Party (through the Agent)
                           may reasonably request; and

                  (d)      any other information that from time to time may be
                           reasonably asked for by the Off Shore Facility Agent
                           and the Independent Technical Consultant."

                                     - 31 -
<PAGE>

86.      Clause 21.6 (Business Plan Review) of the Original Facility Agreement
         is amended by deleting such clause in its entirety and replacing it
         with the following clause:

         "21.6    BUSINESS PLAN REVIEW

         21.6.1   Within the earlier of:

                  (a)      14 days from the receipt by the Off Shore Facility
                           Agent of an Updated Business Plan; and

                  (b)      eight weeks from the commencement of a financial year
                           of the Borrower,

                  the Borrower and the Off Shore Facility Agent shall meet and
                  review the Updated Business Plan delivered in accordance with
                  Clause 21.1(c) (Financial statements and other information)."

         "21.6.2  In addition to the requirements of Clause 21.6.1, from the
                  Second Amendment Agreement Effective Date, the Borrower shall
                  use its best endeavours to procure Western Wireless
                  International Corporation to meet, within the same period set
                  out in Clause 21.6.1, the Off Shore Facility Agent to review
                  the three year business plan delivered in accordance with
                  Clause 21.1(d) (Financial statements and other information).

         21.6.3   The Borrower shall (with respect to its Business Plan), and
                  shall use its best endeavours to procure Western Wireless
                  International Corporation to (with respect to any Group
                  business plan), meet the Off Shore Facility Agent and review
                  any updates or amendments provided pursuant to Clause 21.1(c)
                  or Clause 21.1(d) respectively (Financial statements and other
                  information) within 14 days from the receipt by the Off Shore
                  Facility Agent of such updates or amendments."

87.      Clause 21.7 (Building Permit Reports) of the Original Facility
         Agreement is amended by deleting such clause in its entirety and
         replacing it with the following clause:

         "21.7    BUILDING PERMIT REPORTS

         21.7.1   The Borrower shall use its best efforts to obtain all
                  outstanding building permits as soon as possible.

         21.7.2   The Borrower shall provide to the Off Shore Facility Agent
                  within 10 Business Days of the last day of each Month from the
                  date of the First Amendment Agreement until the Second
                  Amendment Agreement Conditions Satisfaction Date and
                  thereafter within 10 Business Days of the last day of each
                  Quarter until the date on which all building permits are
                  obtained, a report indicating:

                  (a)      the number of sites for which building permits have
                           been achieved;

                  (b)      the number of sites for which building permits remain
                           outstanding; and

                                     - 32 -
<PAGE>

                  (c)      an explanation as to the status of applications for
                           all outstanding permits including details of any
                           problems encountered in relation to the obtaining of
                           those permits and the steps taken by the Borrower to
                           remedy such problems."

88.      Clause 22 (Financial Covenants and Network Milestones) of the Original
         Facility Agreement is amended by deleting such clause in its entirety
         and replacing it with the following clause:

         "22.     FINANCIAL COVENANTS AND NETWORK MILESTONES

                  The calculation of ratios and other amounts under this Clause
                  22 shall be made by reference to the most recent financial
                  statements, Covenant Compliance Certificate and Project Status
                  and Progress Report for the period or periods in relation to
                  which the calculation or determination falls to be made.

         22.1     SPONSOR CONTRIBUTIONS

         22.1.1   The Borrower shall request the Sponsors make their funding
                  contributions in accordance with the Sponsors' and
                  Shareholders' Undertaking and Completion Guarantee.

         22.1.2   Until the Second Amendment Agreement Effective Date, the
                  Borrower shall ensure that, at all times, the Contributed
                  Capital Ratio is at least 0.4.

         22.2     STAGE I COVENANTS

                  From the first Utilisation until the Second Amendment
                  Agreement Effective Date, the Borrower shall ensure that the
                  financial and performance parameters set out in Clauses
                  22.2(a) to (d) are achieved, as confirmed by the Independent
                  Technical Consultant in respect of the performance parameters
                  set out in paragraphs (a) and (b) below and in accordance with
                  Clause 22.4 (Confirmation by Independent Technical
                  Consultant), to the satisfaction of the Off Shore Facility
                  Agent (acting reasonably) by the dates set out therein:

                  (a)      MINIMUM SUBSCRIBERS

                           The number of Subscribers shall be:

                           (i)      as at 31 March 2002, at least 8,000;

                           (ii)     as at 30 June 2002, at least 40,000; and

                           (iii)    as at 31 December 2002, at least 80,000;

                  (b)      POPULATION COVERAGE

                           The Population Coverage shall be:

                           (i)      as at 28 February 2002, at least 60%;

                           (ii)     as at 31 March 2002, at least 65%;

                                     - 33 -
<PAGE>

                           (iii)    as at 30 June 2002, at least 65% or 70% if
                                    no national roaming agreement is in place;
                                    and

                           (iv)     as at 31 December 2002, at least 80%;

                  (c)      QUARTERLY REVENUE TEST

                           At the end of each Quarter commencing from 31 March
                           2002 until the Second Amendment Agreement Effective
                           Date, the Service Revenues in Euro shall be at least:

                           (i)      in respect of the period from 1 January 2002
                                    to 30 June 2002, 80% of the Service Revenues
                                    forecast in the table below; and

                           (ii)     thereafter, 85% of the Service Revenues
                                    forecast in the table below.

<TABLE>
<CAPTION>
                  Q I 2002       Q II 2002       Q III 2002      Q IV 2002
--------------------------------------------------------------------------
<S>               <C>            <C>             <C>             <C>
Forecast
Service
Revenues          487,046        3,132,584       2,037,802       3,556,654
--------------------------------------------------------------------------
Applicable
Percentage
of Service
Revenues          389,637        2,506,067       1,732,132       3,023,156
--------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                            Q I 2003                   Q II 2003
----------------------------------------------------------------
<S>                        <C>                         <C>
Forecast Service
Revenues                   6,162,659                   8,282,223
----------------------------------------------------------------
Applicable Percentage
of Service Revenues        5,238,260                   7,039,890
----------------------------------------------------------------
</TABLE>

                  (d)      QUARTERLY EBITDA TEST

                           At the end of each Quarter commencing from 31
                           December 2001 until the Second Amendment Agreement
                           Effective Date the aggregate EBITDA in Euro of the
                           immediately preceding two Quarters shall not
                           negatively deviate more than 15% from the level set
                           out in column headed "Aggregate EBITDA Base Case" in
                           the table below.

                                     - 34 -
<PAGE>

<TABLE>
<CAPTION>
                                                                MAXIMUM
                                                                NEGATIVE
                                         AGGREGATE              AGGREGATE
                    EBITDA BASE          EBITDA BASE             EBITDA
                       CASE                 CASE                (-15%)
-------------------------------------------------------------------------
<S>                 <C>                 <C>                  <C>
Quarter IV 2001     - 4,271,528         -  7,397,292         -  8,876,751
-------------------------------------------------------------------------
Quarter I 2002      - 5,912,729         - 10,184,257         - 12,669,263
-------------------------------------------------------------------------
Quarter II 2002     - 7,818,181         - 13,730,910         - 16,388,161
-------------------------------------------------------------------------
Quarter III 2002    - 6,536,862         - 14,355,043         - 16,888,286
-------------------------------------------------------------------------
Quarter IV 2002     - 8,598,335         - 15,135,197         - 17,806,115
-------------------------------------------------------------------------
Quarter I 2003      - 4,764,173         - 13,362,508         - 15,720,598
-------------------------------------------------------------------------
Quarter II 2003     - 4,425,510         -  9,189,683         - 10,811,392
-------------------------------------------------------------------------
</TABLE>

         22.3     STAGE II COVENANTS

                  (a)      MINIMUM CONSOLIDATED TANGIBLE NET WORTH

                           As at 31 December of each financial year, commencing
                           from the Second Amendment Agreement Effective Date,
                           the Consolidated Tangible Net Worth of the Group
                           shall be greater than zero.

                  (b)      MINIMUM CONSOLIDATED EBITDA

                           As at 31 December of each financial year set out
                           below, commencing from the Second Amendment Agreement
                           Effective Date, the Consolidated EBITDA of the Group
                           in Euro for such financial year shall not be less
                           than the product of (i) the principal amount of Loans
                           outstanding on 31 December of such financial year,
                           multiplied by (ii) the number set out below the
                           relevant year in the table below:

<TABLE>
<CAPTION>
  GROUP
FINANCIAL
  YEAR            2003            2004           2005            2006
---------------------------------------------------------------------
<S>               <C>             <C>            <C>             <C>
MULTIPLE           0.2             1.0            2.0             3.2
</TABLE>

                  (c)      For the purpose of determining compliance with this
                           Clause, amounts denominated in any currency other
                           than Euros shall be converted:

                                     - 35 -
<PAGE>

                           (i)      first, into US Dollars on the same basis
                                    such amounts are converted into US Dollars
                                    for the purposes of preparing the Group's
                                    consolidated audited financial statements;
                                    and

                           (ii)     thereafter, from US Dollars into Euros using
                                    the reciprocal exchange rate applicable in
                                    paragraph (i) above.

         22.4     CONFIRMATION BY INDEPENDENT TECHNICAL CONSULTANT

                  The figures in Clauses 22.2(a) and (b) (Stage I covenants)
                  shall be confirmed by the Independent Technical Consultant
                  annually commencing on 31 December 2002 and ending on the
                  Second Amendment Agreement Effective Date."

89.      Clause 23.3(d) (Application of moneys on the Proceeds and Revenue
         Accounts) of the Original Facility Agreement is amended by deleting
         such clause in it entirety and replacing it with the following clause:

         "(d)     subject to Clause 23.9 (Debt Service Reserve Account) and
                  Clause 23.6.2 (Debt Service Account) all Proceeds and Revenues
                  (other than those expressly referred to in paragraphs (a) to
                  (c) above) shall be applied for the following purposes and
                  exclusively in the following order:

                  (i)      first, in and towards payment of any Tax payment due
                           and payable;

                  (ii)     second, in or towards payment of all due and payable
                           operating costs as shown in the 2002 Revised Business
                           Plan and from the Second Amendment Agreement
                           Conditions Satisfaction Date, the Vega Status Quo
                           Business Plan as set out in Exhibit 1 and thereafter
                           any Updated Business Plan (including amounts in
                           respect of direct costs payable under the Management
                           Agreement which are provided for in the Initial
                           Business Plan but excluding any amounts payable under
                           the Lucent Loan Agreement);

                  (iii)    third, in or towards payment of all due and payable
                           on-going capital costs in relation to the build-out
                           of the Network as shown in the 2002 Revised Business
                           Plan and from the Second Amendment Agreement
                           Conditions Satisfaction Date, the Vega Status Quo
                           Business Plan as set out in Exhibit 1 and thereafter
                           any Updated Business Plan and necessary to perform
                           its business but excluding any amounts payable under
                           the Lucent Loan Agreement;

                  (iv)     fourth, in and towards Debt Service Payments due and
                           payable and payments to be made to the Debt Service
                           Account in accordance with Clause 23.6 (Debt Service
                           Account) which shall be applied:

                           (1)      towards payment of any unpaid costs and
                                    expenses of the Banks, the Agents, the
                                    Security Agents, with the exception of the
                                    payments mentioned under paragraphs (2) to
                                    (4) and (viii) below;

                                     - 36 -
<PAGE>

                           (2)      in or towards payment of any amount due and
                                    payable under the Hedging Agreements;

                           (3)      in or towards payment of any accrued
                                    interest and fees due and payable to the
                                    Banks hereunder and to the Sponsors under
                                    the Sponsors Unsecured Loan Agreement and
                                    Lucent Technologies Inc. under the Lucent
                                    Loan Agreement;

                           (4)      in or towards payment of any principal due
                                    and payable to the Banks under this
                                    Agreement and to the Sponsors under the
                                    Sponsors Unsecured Loan Agreement and Lucent
                                    Technologies Inc. under the Lucent Loan
                                    Agreement;

                  (v)      fifth, in or towards any payment of any amount due
                           and payable into the Debt Service Reserve Account in
                           accordance with Clause 23.9 (Debt Service Reserve
                           Account);

                  (vi)     sixth, in and towards payment of all due and payable
                           operating costs and expenses that have not been paid
                           pursuant to Clause 23.3(d)(ii);

                  (vii)    seventh, in or towards payment of capital costs in
                           the amounts and at the times set out in the Business
                           Plan (which, prior to the Second Amendment Agreement
                           Conditions Satisfaction Date, shall be the Initial
                           Business Plan and the 2002 Revised Business Plan) and
                           subject to Clause 23.3(e)(ii) amounts in respect of
                           any margin payable under the Management Agreement in
                           an amount not exceeding (A) US Dollars 700,000 or its
                           equivalent in the financial year ending 31 December
                           2002 and (B) in each financial year thereafter the
                           lesser of (Y) 50% of any direct costs payable under
                           the Management Agreement and (Z) US Dollars 700,000
                           or its equivalent;

                  (viii)   eighth, in payment, prior to the Second Amendment
                           Agreement Conditions Satisfaction Date, of any
                           amounts planned to be paid by the Borrower in the
                           immediately following 12 month period in respect of
                           capital expenditure to the Capital Expenditure
                           Reserve Account PROVIDED THAT any amounts standing to
                           the credit of such account on the Second Amendment
                           Agreement Conditions Satisfaction Date shall be paid
                           into the Proceeds and Revenues Accounts;

                  (ix)     ninth, in prepayment of the Facilities in accordance
                           with Clause 14.5 (Mandatory prepayments); and

                  (x)      tenth, in or towards any payment due and payable to
                           the Shareholders (including any interest payable on
                           any Subordinated Loans or other amounts payable under
                           the Management Agreement that have not been paid
                           pursuant to Clauses 23.3(d)(ii) or (vii) or any
                           prepayment pursuant to the Sponsor Subordinated Loan
                           Agreement #2) in an amount not to exceed 50% of the
                           Excess Cash Flow."

                                     - 37 -
<PAGE>

90.      Clause 23.3(e)(ii)(1) (Application of moneys on the Proceeds and
         Revenue Accounts) of the Original Facility Agreement is amended by
         deleting such clause in its entirety and replacing it with the
         following clause:

         "(1)     from the date of the First Amendment Agreement until 1 January
                  2005 such fees (the "SUBORDINATED MANAGEMENT FEES") may only
                  be paid, subject to Clause 23.3(e)(iii), in accordance with
                  paragraph (x) above and the obligations of the Borrower to pay
                  the Subordinated Management Fees outstanding between the date
                  of the First Amendment Agreement and 1 January 2005 shall be
                  converted into and treated as Subordinated Loans;"

91.      Clause 23.3(f) (Application of moneys on the Proceeds and Revenue
         Accounts) of the Original Facility Agreement is amended by deleting
         such clause in its entirety and replacing it with the following clause:

         "(f)     Payments by the Borrower from the Proceeds and Revenue
                  Accounts to the Shareholders pursuant to paragraph (d)(x)
                  above are permitted only:

                  (i)      from the expiry of the Availability Period of the
                           Euro Facility;

                  (ii)     subject to the absence of an Event of Default or
                           Potential Event of Default;

                  (iii)    upon provision of the most recent financial
                           statements required in accordance with Clause 21
                           (Reporting requirements) covering the relevant period
                           and showing a net profit before payments are made to
                           the Shareholders;

                  (iv)     upon the provision of a Covenant Compliance
                           Certificate confirming that the Borrower complies
                           with the financial covenants and other requirements
                           set out in the Covenant Compliance Certificate; and

                  (v)      within a period of ten (10) Business Days following a
                           Repayment Date of a Euro Facility Loan."

92.      Clause 23.7.1 (Capital Expenditure Reserve Account) of the Original
         Facility Agreement is amended by the adding the following words after
         the words " Utilisation Date" in the third line of such clause:

         "which shall remain open until the Second Amendment Agreement
         Conditions Satisfaction Date"

93.      Clause 23.8.2 (Loan Proceeds Account) of the Original Facility
         Agreement is amended by deleting such clause in its entirety and
         replacing it with the following clause:

         "23.8.2  The Borrower may withdraw amounts standing to the credit of
                  the Loan Proceeds Account PROVIDED THAT funds so withdrawn are
                  used:

                                     - 38 -
<PAGE>

                  (a)      to make payment in respect of Project Costs but in
                           the case of the proceeds of any Loans, excluding any
                           amounts payable to the Debt Service Reserve Account;
                           and

                  (b)      after giving effect to the conversion of Euro
                           18,500,000 of Existing WWIC Loans into Sponsors
                           Contributions and Euro 1,561,318.60 of Existing WWIC
                           Loans into Sponsors Unsecured Loans, to repay any
                           remaining Existing WWIC Loans which are outstanding
                           in respect of agreed Project Costs PROVIDED THAT:

                           (i)      such repayment is made from the proceeds of
                                    a Utilisation of the Commercial Facility;

                           (ii)     no Event of Default or Potential Event of
                                    Default will be caused by such repayment;

                           (iii)    no Cash Shortfall will be caused by such
                                    repayment;

                           (iv)     no breach of the financial covenants set out
                                    in Clause 22 (Financial covenants and
                                    network milestones) will be caused by such
                                    repayment;

                           (v)      interest shall be payable thereon at the
                                    rate set out in the Existing WWIC Loan
                                    Agreement; and

                           (vi)     the Borrower has obtained the prior written
                                    approval of the Off Shore Facility Agent,
                                    which will not be withheld if the Off Shore
                                    Facility Agent is satisfied that conditions
                                    set out in this paragraph (b) are met and
                                    the Off Shore Facility Agent has received:

                                    (1)     a certificate, in form and substance
                                            reasonably satisfactory to the Off
                                            Shore Facility Agent, signed by a
                                            director of the Borrower stating
                                            that the Existing WWIC Loans to be
                                            repaid were in respect of payments
                                            made for Project Costs; and

                                    (2)      evidence of payment of the Existing
                                             WWIC Loans to the Borrower and
                                             payment by the Borrower of the
                                             respective Project Costs; and

                  (c)      from the Second Amendment Agreement Effective Date,
                           in accordance with Clause 23.3(d)(i) to (vii)
                           (Application of moneys on the Proceeds and Revenue
                           Accounts) to fund amounts payable by the Borrower,
                           strictly in accordance with the terms of that
                           Clause."

                                     - 39 -
<PAGE>

94.      Clause 23.9.3(d) (Debt Service Reserve Account) of the Original
         Facility Agreement is amended by deleting such clause in its entirety
         and replacing it with the following clause:

         "(d)     Each Agent may assume:

                  (i)      for the purposes of calculating the Debt Service
                           Payments (other than in respect of principal
                           repayments) under the Facilities, the Hedging
                           Agreements and the Lucent Loan Agreement that:

                           (1)      interest will accrue for the following six
                                    (6) Month period under the relevant Facility
                                    and the Lucent Loan Agreement on principal
                                    outstanding at the rate of interest which
                                    applies on the relevant date of calculation
                                    (including the Applicable Margin thereunder
                                    at such time);

                           (2)      the principal outstanding under the
                                    Facilities and the Lucent Loan Agreement
                                    during the following six (6) Month period is
                                    the principal amount outstanding on the
                                    relevant date of calculation taking into
                                    account any repayments that are required to
                                    be made in such period pursuant to Clause 13
                                    (Repayment); and

                           (3)      until the Second Amendment Agreement
                                    Effective Date, any outstanding SIT Facility
                                    Loans on the relevant date of calculation
                                    will be refinanced with SIT Facility
                                    Rollover Loans;

                  (ii)     for the purposes of calculating the Debt Service
                           Payments under the Facilities, the Hedging Agreements
                           and the Lucent Loan Agreement in respect of principal
                           repayments that fall due over the following six (6)
                           Month period:

                           (1)      only those repayments and, in the case of
                                    the SIT Facility, reductions of the SIT
                                    Facility Commitment, required to be made
                                    under Clause 13 (Repayment) will be made;
                                    and

                           (2)      until the Second Amendment Agreement
                                    Effective Date, any outstanding SIT Facility
                                    Loans on the relevant date of calculation
                                    will be refinanced with SIT Facility
                                    Rollover Loans."

95.      Clause 23.9.4 (Debt Service Reserve Account) of the Original Facility
         Agreement is amended by deleting the words "(Contingent Equity)" in the
         fifth and sixth lines of such clause and replacing them with the words
         "(Additional Funding Obligations)".

96.      Clause 24.1(b) (Maintenance of legal validity) of the Original Facility
         Agreement is amended by adding the following words after the words
         "promptly apply for and" at the beginning of such clause:

                                     - 40 -
<PAGE>

         ", subject to Clause 21.7.1 (Building Permit Reports) and Clause
         24.18(b) and (c) (Real estate site leases and other contracts relating
         to the use of land),"

97.      Clause 24.2(a) (Authorisations to conduct business) of the Original
         Facility Agreement is amended by adding the following words after the
         words "Licence and" at the end of the second line of such clause:

         ",subject to Clause 21.7.1 (Building Permit Reports) and Clause 24.18
         (b) and (c) (Real estate site leases and other contracts relating to
         the use of land),"

98.      Clause 24.5 (Network) of the Original Facility Agreement is amended by
         deleting the words "in accordance with prudent industry practice" from
         the third and fourth lines of such clause and replacing them with the
         following words:

         "if a failure to do so might reasonably be expected to breach the terms
         of the Licence or impair or prejudice the Senior Creditors' rights
         under the Security Documents"

99.      Clause 24.6 (Insurance) of the Original Facility Agreement is amended
         by deleting such clause in its entirety and replacing it with the
         following clause:

         "24.6    INSURANCE

                  The Borrower shall give effect to the insurance requirements
                  set out in Schedule 11 (Insurance), as the same may be amended
                  from time to time with the consent of the Majority Banks."

100.     Clause 24.18 (Real estate site leases and other contracts relating to
         the use of land) of the Original Facility Agreement is amended by
         deleting such clause in its entirety and replacing it with the
         following clause:

         "24.18   REAL ESTATE SITE LEASES AND OTHER CONTRACTS RELATING TO THE
                  USE OF LAND

                  (a)      The Borrower shall exercise all of its rights and/or
                           options to extend the term of, and shall not exercise
                           any options to terminate, any of the real estate site
                           leases or other contracts relating to the use of land
                           unless it would not:

                           (i)      cause an interruption to the operation of
                                    the Network; or

                           (ii)     be necessary to the operation of the
                                    Project; and

                           (iii)    affect the Security created under the
                                    Security Documents.

                  (b)      The Borrower shall validly register at the competent
                           Slovenian land registry its rights of use and/or of
                           entry against the respective owner obtained according
                           to any real estate site lease upon which Material
                           Assets subject to the Asset and Licence Pledge and
                           Lease Contracts Assignment Agreement are situated
                           (except for the 13 real estate site leases entered
                           into with Electro Slovenia and its affiliates, RTV
                           and its

                                     - 41 -
<PAGE>

                           affiliates) within twenty (20) Months from the date
                           of the Second Amendment Agreement.

                  (c)      The Borrower shall use its best efforts to obtain the
                           consent of each of the owners of the land the subject
                           of the lease agreements which are the subject of the
                           Lease Agreement Assignments as soon as possible."

101.     Clause 24.22 (Bank accounts) of the Original Facility Agreement is
         amended by deleting such clause in its entirety and replacing it with
         the following clause:

         "24.22   BANK ACCOUNTS

                  Prior to the Second Amendment Agreement Effective Date, the
                  Borrower shall not open any bank accounts except:

                  (a)      as provided in this Agreement;

                  (b)      Permitted Accounts; or

                  (c)      with the prior written consent of the Off Shore
                           Facility Agent and subject to the Borrower's
                           compliance with any conditions attached thereto,

                  and thereafter, may open and use additional bank accounts
                  (after giving notice to the Off Shore Facility Agent of the
                  details thereof) PROVIDED THAT in each case such accounts are
                  held with an Original SIT Facility Bank and secured to the
                  satisfaction of the Off Shore Facility Agent and in the case
                  of accounts opened after the Second Amendment Agreement
                  Effective Date such accounts must be secured within 30 days
                  after opening by the Borrower."

102.     Clause 24.27(a)(i) (Amendments) of the Original Facility Agreement is
         amended by deleting such clause in its entirety and replacing it with
         the following clause:

         "(i)     such modification, substitution or amendment relates to the
                  same subject matter (and in the case of substitution such
                  Material Contract is substituted by another contract) and:

                  (1)      does not result in and is not reasonably expected to
                           have an adverse effect on the Borrower's obligations
                           under the Licence or cause a breach thereof;

                  (2)      does not and is not reasonably expected to impair or
                           prejudice the Senior Creditors' rights under the
                           Security Documents; and

                  (3)      does not and is not reasonably expected to have a
                           Material Adverse Effect."

103.     Clause 24.33 (UMTS and other licences) of the Original Facility
         Agreement is amended by deleting the final paragraph of such clause and
         replacing it with the following paragraph:

                                     - 42 -
<PAGE>

         "(c)     The Borrower shall promptly notify the Off Shore Facility
                  Agent if it or any of its Affiliates acquires any
                  telecommunications business or any new licence (excluding any
                  renewal of or addition to any existing telecommunications
                  licence), in particular any UMTS licence."

104.     Clause 24.39 (Roaming) of the Original Facility Agreement is amended by
         adding the words "(as amended on 11 November 2002)" after the words "9
         November 2001" in the second line of such clause.

105.     Clause 25.1.1 (Non-payment) of the Original Facility Agreement is
         amended by adding the words "or a Sponsor on behalf of the Borrower"
         after the words "The Borrower" at the beginning of such clause.

106.     Clause 25.1.2(b) (Financial covenants and network milestones) of the
         Original Facility Agreement is amended by deleting such clause in its
         entirety and replacing it with the following clause:

         "(b)     No Event of Default under paragraph (a) above will occur if
                  failure to satisfy such requirement, if capable of remedy, is
                  remedied within 30 Business Days PROVIDED THAT in the event
                  that any of the requirements of Clause 22 (Financial covenants
                  and network milestones) (other than Clauses 22.2(a) and (b))
                  is not satisfied, then, in addition to any other actions that
                  may be taken to correct such failures, within five (5)
                  Business Days of delivery of the Covenant Compliance
                  Certificate, the Shareholders may, in addition to the
                  Sponsors' rights and obligations under the Sponsors' and
                  Shareholders' Undertaking and Completion Guarantee, cure such
                  failure to satisfy any such requirement by:

                  (i)      making Subordinated Loans and/or Equity Contributions
                           to the Borrower (PROVIDED THAT after the date of the
                           Second Amendment Agreement such contributions must be
                           Equity Contributions) which Subordinated Loans and/or
                           Equity Contributions shall be treated as having been
                           contributed on the last day of the relevant Quarter
                           and additional capital or revenues of the Borrower;

                  (ii)     after the Second Amendment Agreement Effective Date,
                           making equity contributions to any member of the
                           Group or Western Wireless International Corporation
                           receiving from Western Wireless International Holding
                           Corporation contributions or funding which shall be
                           treated (for the purposes of determining Consolidated
                           Tangible Net Worth) as having been made as at 31
                           December of the relevant Financial year; or

                  (iii)    making Equity Contributions and procure the
                           pre-repayment of Loans, in whole or part, and the
                           prepayment shall be considered to have been made as
                           at 31 December of the relevant financial year."

                                     - 43 -
<PAGE>

107.     Clauses 25.1.9(a), (b) and (c) (Insolvency proceedings) of the Original
         Facility Agreement are amended by deleting the words "the Borrower" in
         each such clause and replacing them with the words "a Debtor" in each
         such clause.

108.     Clause 25.1.10 (Litigation) of the Original Facility Agreement is
         amended by deleting the words "the Borrower" in the second and third
         lines of such clause and replacing them with the words "a Debtor".

109.     Clause 25.1.12 (Illegality) of the Original Facility Agreement is
         amended by deleting such clause in its entirety and replacing it with
         the following clause:

         "25.1.12 ILLEGALITY

                  At any time it is or becomes unlawful for a Debtor to perform
                  or comply with any of its material obligations under the
                  Finance Documents or any of the material obligations of that
                  Debtor hereunder (in the case of the Borrower) or thereunder
                  (in the case of a Debtor) are not or cease to be legal, valid
                  and binding."

110.     Clause 25.1.13 (Sponsors' and Shareholders' Undertaking and Completion
         Guarantee) of the Original Facility Agreement is amended by deleting
         the words "clauses 2 (Completion guarantee)" in the first and second
         lines of such clause and replacing them with the words "clauses 2
         (Guarantee)".

111.     Clause 27 (Role of the Agent and the Arranger) of the Original Facility
         Agreement is amended by adding the following clause after the end of
         Clause 27.16 (Deduction from amounts payable by the Agents) of such
         clause:

         "27.17   CALCULATION OF EURO EQUIVALENTS AMONG THE FINANCE PARTIES

                  For such time that there are Euro Facility Loans outstanding,
                  for the determination of any matter or the calculation of any
                  amounts vis-a-vis the Finance Parties any amount denominated
                  in any currency other than Euro shall be converted to the Euro
                  equivalent thereof at the spot rate of exchange quoted to the
                  Off Shore Facility Agent at or about 11:00 a.m. (Dusseldorf
                  time) as of such date which is reasonably determined by the
                  Off Shore Facility Agent."

112.     Clause 32.2(a) (Addresses) of the Original Facility Agreement is
         amended by deleting the fax details "+386 1 5801 109" in the "Fax" line
         of such clause and replacing it with the following fax details: "+386 1
         5801 011".

113.     Clause 32.2(c) (Addresses) of the Original Facility Agreement is
         amended by deleting the words "Andreas Nestel" in the 'Attention of'
         line of such clause and replacing them with the words "Dr. Peer
         Gunzel".

114.     Clause 32.2(d) (Addresses) of the Original Facility Agreement is
         amended by adding the contact details "or +386 1 476 5108" after the
         contact number "+386 1 520 7273" in the "Telephone" line of such
         clause.

                                     - 44 -
<PAGE>

115.     Clause 32.2(d) (Addresses) of the Original Facility Agreement is
         amended by deleting the words "or Mr. Bostjan Kovae" from the
         'Attention of' line of such clause and replacing it with the words "or
         Ms. Ida Menard".

116.     Schedule 1 (Commitments) of the Original Facility Agreement is amended
         by deleting such Schedule in its entirety and replacing it with the
         following schedule:

                                   "SCHEDULE 1

                                   COMMITMENTS

                                     PART I

                                  EURO FACILITY

<TABLE>
<CAPTION>
                                                          ECA FACILITY
                                                           COMMITMENT
                                  --------------------------------------------------------------
                                     ECA FACILITY          ECA FACILITY          ECA FACILITY             COMMERCIAL
                                       TRANCHE 1             TRANCHE 2             TRANCHE 3               FACILITY
FINANCIAL INSTITUTION                 COMMITMENT            COMMITMENT            COMMITMENT              COMMITMENT
------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                     <C>                  <C>                    <C>
IKB Deutsche Industriebank AG     Euro 13,038,702.76      Euro 586,864.81      Euro 1,204,405.24      Euro 11,180,000.00
------------------------------------------------------------------------------------------------------------------------
Kreditanstalt fur Wiederaufbau    Euro 14,311,045.58      Euro 644,132.26      Euro 1,321,933.52      Euro 11,180,000.00
------------------------------------------------------------------------------------------------------------------------
Raiffeisenlandesbank
Oberosterreich reg.Gen.m.b.H.     Euro  8,026,974.26      Euro 361,289.68      Euro   741,464.09      Euro  6,880,000.00
------------------------------------------------------------------------------------------------------------------------
HSH Nordbank AG                   Euro  7,074,582.98      Euro 318,423.08      Euro   653,490.23      Euro  6,420,000.00
------------------------------------------------------------------------------------------------------------------------
Hypo Alpe-Adria-Bank AG           Euro  2,198,032.14      Euro  98,932.21      Euro   203,035.65             None
------------------------------------------------------------------------------------------------------------------------
DEG - Deutsche Investitions -
und Entwicklungsgesellschaft
mbH                                      None                  None                   None            Euro     5,000,000
------------------------------------------------------------------------------------------------------------------------
AKA Ausfuhrkredit-
Gesellschaft m.b.H.               Euro  2,514,548.77      Euro 113,178.45      Euro   232,272.78      Euro  2,140,000.00
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 45 -
<PAGE>

                                     PART II

                                  SIT FACILITY

<TABLE>
<CAPTION>
FINANCIAL INSTITUTION                                 SIT FACILITY COMMITMENT
-----------------------------------------------------------------------------
<S>                                                   <C>
Nova Ljubljanska Banka d.d., Ljubljana                SIT    3,400,000,000.00
-----------------------------------------------------------------------------
Hypo Alpe-Adria-Bank d.d.                             SIT    1,000,000,000.00
-----------------------------------------------------------------------------
</TABLE>

                                   SCHEDULE 1

                                    PART III

LOANS OUTSTANDING ON THE DATE OF THE SECOND AMENDMENT AGREEMENT AND PREPAYMENTS
TO BE MADE ON OR PRIOR TO THE SECOND AMENDMENT AGREEMENT CONDITIONS SATISFACTION
DATE*

<TABLE>
<CAPTION>
                                                                     COMMERCIAL
                                                ECA FACILITY          FACILITY       SIT FACILITY                 TOTAL
----------------------------------------------------------------------------------------------------------------------------
<S>               <C>                           <C>                <C>             <C>                         <C>
IKB               Amount outstanding             8,765,551.71       8,994,208.84                               17,759,760.55
                  before prepayments (EUR)
                  prepayment I (EUR)            -2,029,703.16      -2,082,649.76                               -4,112,352.92
                  prepayment II (USD)              -82,108.01         -84,249.88                                 -166,357.89
----------------------------------------------------------------------------------------------------------------------------

KfW               Amount outstanding             9,620,911.86       8,994,208.84                               18,615,120.70
                  before prepayments (EUR)
                  prepayment I (EUR)            -2,227,765.68      -2,082,649.76                               -4,310,415.44
                  prepayment II (USD)              -90,120.29         -84,249.88                                 -174,370.17
----------------------------------------------------------------------------------------------------------------------------

RLB               Amount outstanding             5,396,308.15       5,534,897.75                               10,931,205.90
                  before prepayments (EUR)
                  prepayment I (EUR)            -1,249,539.57      -1,281,630.62                               -2,531,170.19
                  prepayment II (USD)              -50,547.90         -51,846.07                                 -102,393.97
----------------------------------------------------------------------------------------------------------------------------

HSH Nordbank      Amount outstanding             4,756,042.38       5,164,831.91                                9,920,874.29
                  before prepayments (EUR)
                  prepayment I (EUR)            -1,101,283.13      -1,195,940.20                               -2,297,223.33
                  prepayment II (USD)              -44.550,45         -48,379.63                                  -92,930.08
----------------------------------------------------------------------------------------------------------------------------

AKA               Amount outstanding             1,690,460.13       1,721,610.64                                3,412,070.77
                  before prepayments (EUR)
                  prepayment I (EUR)              -391,433.70        -398,646.73                                 -790,080.43
                  prepayment II (USD)              -15,834.75         -16,126.54                                  -31,961.29
----------------------------------------------------------------------------------------------------------------------------

DEG               Amount outstanding                                4,022,454.75                                4,022,454.75
                  before prepayments (EUR)
                  prepayment I (EUR)                                 -931,417.60                                 -931,417.60
                  prepayment II (USD)                                 -37,678.85                                  -37,678.85
                  ----------------------------------------------------------------------------------------------------------

Hypo-Alpe Wien    Amount outstanding             1,477,674.94                                                   1,477,674.94
                  before prepayments (EUR)
                  prepayment I (EUR)              -342,162.32                                                    -342,162.32
                  prepayment II (USD)              -13,841.57                                                     -13,841.57
----------------------------------------------------------------------------------------------------------------------------

NLB               Amount outstanding                                               1,622,670,000.00             7,091,741.63
                  before
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 46 -
<PAGE>

<TABLE>
<CAPTION>
                                                                     COMMERCIAL
                                                ECA FACILITY          FACILITY       SIT FACILITY                 TOTAL
----------------------------------------------------------------------------------------------------------------------------
<S>               <C>                           <C>                <C>             <C>                     <C>
                  prepayments (SIT)
                  prepayment I (EUR)                                                  -1,642,124.86            -1,642,124.86
                  prepayment II (USD)                                                   -666,930.51              -666,930.51
----------------------------------------------------------------------------------------------------------------------------
Hypo-Alpe         Amount outstanding                                                 477,330,000.00             2,086,130.29
Slov,             before prepayments (SIT)
                  prepayment I (EUR)                                                    -483,052.91              -483,052.91
                  prepayment II (USD)                                                    -19,541.04               -19,541.04
----------------------------------------------------------------------------------------------------------------------------

Total             Amount outstanding                      EUR                EUR                SIT        EUR 75,317,033.82**
                  before prepayments            31,706,949.17      34,432,212.73   2,100,000,000.00
                  prepayment I (EUR)            -7,341,887.56      -7,972,934.67      -2,125,177.77           -17,440,000.00
                  prepayment II (USD)             -297,002.97        -322,530.85        -686,471.55            -1,306,005.37
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

*        All amounts are indicative and for reference purposes only. Any amounts
         prepaid in USD shall be converted to the Euro equivalent thereof in
         accordance with Clause 1.2.1(d) (Construction) and any amounts to be
         prepaid in SIT shall be converted from Euro to SIT at the rate of
         exchange quoted by the On Shore Facility Agent to the Off Shore
         Facility Agent on or prior to the relevant conversion date.

**       In relation to outstandings under the SIT Facility, the applied
         exchange rate is the applicable exchange rate as at the date of each
         drawdown of the SIT Facility."

117.     Schedule 2 (Repayment Dates) of the Original Facility Agreement is
         amended by deleting such Schedule in its entirety and replacing it with
         the following schedule:

                                   SCHEDULE 2

                                 REPAYMENT DATES

Up to but excluding the Second Amendment Agreement Conditions Satisfaction Date
the Repayment Dates shall be:

<TABLE>
<CAPTION>
REPAYMENT DATE /
REDUCTION DATE            ECA FACILITY          COMMERCIAL FACILITY        SIT FACILITY
---------------------------------------------------------------------------------------
<S>                       <C>                   <C>                        <C>
   30.05.2004                 1.25%                    0.00%
---------------------------------------------------------------------------------------
   30.11.2004                 1.25%                    0.00%
---------------------------------------------------------------------------------------
   30.05.2005                 5.75%                    5.75%
---------------------------------------------------------------------------------------
   30.11.2005                 5.75%                    5.75%                   5.00%
---------------------------------------------------------------------------------------
   30.05.2006                 8.00%                    8.00%
---------------------------------------------------------------------------------------
   30.11.2006                 8.00%                    8.00%                   5.00%
---------------------------------------------------------------------------------------
   30.05.2007                10.00%                   12.50%
---------------------------------------------------------------------------------------
   30.11.2007                10.00%                   12.50%                  10.00%
---------------------------------------------------------------------------------------
   30.05.2008                12.00%                   12.50%
---------------------------------------------------------------------------------------
   30.11.2008                12.00%                   12.50%                  20.00%
---------------------------------------------------------------------------------------
</TABLE>

                                     - 47 -
<PAGE>

<TABLE>
<CAPTION>
REPAYMENT DATE /
REDUCTION DATE            ECA FACILITY          COMMERCIAL FACILITY        SIT FACILITY
---------------------------------------------------------------------------------------
<S>                       <C>                   <C>                        <C>
  30.05.2009                  13.00%                   14.00%                   20.00%
---------------------------------------------------------------------------------------
  30.11.2009                  13.00%                    8.50%                   40.00%
---------------------------------------------------------------------------------------
     TOTAL                   100.00%                  100.00%                  100.00%
---------------------------------------------------------------------------------------
</TABLE>

From and including the Second Amendment Agreement Conditions Satisfaction Date
the Repayment Dates shall be:

<TABLE>
<CAPTION>
REPAYMENT DATE /
REDUCTION DATE            ECA FACILITY          COMMERCIAL FACILITY        SIT FACILITY
---------------------------------------------------------------------------------------
<S>                       <C>                   <C>                        <C>
30 May 2004                    1.64%                    0.00%
---------------------------------------------------------------------------------------
30 November 2004               1.64%                    0.00%
---------------------------------------------------------------------------------------
30 May 2005                    7.55%                    7.55%
---------------------------------------------------------------------------------------
30 November 2005               7.55%                    7.55%                   7.09%
---------------------------------------------------------------------------------------
30 May 2006                   10.50%                   10.50%
---------------------------------------------------------------------------------------
30 November 2006              10.50%                   10.50%                   7.09%
---------------------------------------------------------------------------------------
30 May 2007                   13.13%                   16.41%
---------------------------------------------------------------------------------------
30 November 2007              13.13%                   16.41%                  14.17%
---------------------------------------------------------------------------------------
30 May 2008                   15.76%                   16.41%
---------------------------------------------------------------------------------------
30 November 2008              15.76%                   14.67%                  28.35%
---------------------------------------------------------------------------------------
30 May 2009                    2.84%                    0.00%                  28.35%
---------------------------------------------------------------------------------------
30 November 2009               0.00%                    0.00%                  14.95%
---------------------------------------------------------------------------------------
          TOTAL              100.00%                  100.00%                 100.00%
---------------------------------------------------------------------------------------
</TABLE>

118.     Schedule 8 (Form of letter of confirmation) of the Original Facility
         Agreement is amended by deleting the words "FORM OF LETTER OF
         CONFIRMATION" from the heading of such Schedule and replacing them with
         the words "FORM OF LETTER OF CONFIRMATION".

119.     Schedule 9 (Security Documents - Conditions Precedent and Conditions
         Subsequent) of the Original Facility Agreement is amended by deleting
         the section headed 'On Shore Security Documents' in its entirety and
         replacing it with the following section:

                                     - 48 -
<PAGE>

                           ON SHORE SECURITY DOCUMENTS

<TABLE>
<CAPTION>
                                                                       STEPS FOR PERFECTION
------------------------------------------------------------------------------------------------------------------------------
    DOCUMENT        SECURED ASSETS         CONDITION PRECEDENT TO DRAWDOWN                      CONDITION SUBSEQUENT
------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                  <C>                                           <C>
ASSET AND         Pledged Equipment    -        Execution of Asset Pledge,
LICENCE PLEDGE                                  Licence Transfer, Licence
AND LEASE                                       Pledge and Lease Contracts
CONTRACTS                                       Assignment Agreement
ASSIGNMENT
AGREEMENT

------------------------------------------------------------------------------------------------------------------------------
                                       -        Execution of notarial deed in
                                                respect of Pledged Equipment

------------------------------------------------------------------------------------------------------------------------------
                                       -        Provide Schedule 1, 2 & 3 to         -        Competent court officer must
                                                the Asset and Licence Pledge                  take record of the pledged
                                                and Lease Contracts                           assets, make lists of pledged
                                                Assignment Agreement -                        assets per site and mark the
                                                provide missing addresses of                  pledged assets by putting
                                                sites and relevant court                      stickers on them (Court officer
                                                districts, as well as modify                  when visiting sites to be
                                                designation (description) of                  accompanied by WWI technical
                                                certain items (confirmed by                   staff) Borrower shall have
                                                Sami Ali and N. Selih)                        achieved 50% after 6 months
                                                                                              following the date of signing
                                                                                              of the Facility Agreement

------------------------------------------------------------------------------------------------------------------------------
                                                                                     -        Within 9 months of signing of
                                                                                              the Facility Agreement, On Shore
                                                                                              Security Agent to check
                                                                                              conformity of Schedule 1 with
                                                                                              the lists issued by the court;
                                                                                              Nina Selih to give notice of
                                                                                              receipt of the list

------------------------------------------------------------------------------------------------------------------------------
                                       -        Application by Selih for
                                                registration of the Asset Pledge
                                                in respect of the Pledged
                                                Equipment with the competent
                                                court (depending on where each
                                                asset is located)

------------------------------------------------------------------------------------------------------------------------------
                                       -        Pay notary fees and
                                                application fees for
                                                registration, Nina Selih to
                                                advise Steven Fast of bank
                                                account for fee to be paid
                                                into, Steven Fast to provide
                                                proof of payment (e.g. bank
                                                statement)

------------------------------------------------------------------------------------------------------------------------------
                                       -        Copies of the building
                                                permits for sites on which
                                                Pledged Equipment is situated

------------------------------------------------------------------------------------------------------------------------------
                  Pledged Equipment                                                  -        1 month after first drawdown,
                  II and                                                                      under the Commercial Facility,
                  Substitution                                                                confirm to On Shore Security
                  Equipment                                                                   Agent that title in respect of
                                                                                              Pledged Equipment II has passed

------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     - 49 -
<PAGE>

<TABLE>
<CAPTION>
DOCUMENT          SECURED ASSETS                                          STEPS FOR PERFECTION
------------------------------------------------------------------------------------------------------------------------------------
                                          CONDITION PRECEDENT TO DRAWDOWN                 CONDITION SUBSEQUENT
<S>               <C>                  <C>                                      <C>
                                                                                -         So long as any building permits are
                                                                                          outstanding, provide to the On Shore
                                                                                          Security Agent (i) prior to the Second
                                                                                          Amendment Agreement Conditions
                                                                                          Satisfaction Date, 10 Business Days after
                                                                                          the end of each Month, and (ii)
                                                                                          thereafter, 10 Business Days after the
                                                                                          last day of each Quarter a list with those
                                                                                          of the 41 sites for which a building
                                                                                          permit has been issued.

                                                                                -         Within 2 months from the date of issue of
                                                                                          the last building permit in respect of the
                                                                                          41 sites, execution of notarial deed in
                                                                                          respect of Pledged Equipment II and any
                                                                                          Substitution Equipment, if applicable

                                                                                -         Within 1 month from the date of the
                                                                                          notarial deed referred to above, filing of
                                                                                          application of Pledged Equipment II and
                                                                                          any Substitution Equipment, if applicable

                                                                                -         Pay notary fees and application fees for
                                                                                          registration, Nina Selih to advise Steven
                                                                                          Fast of bank account for fee to be paid
                                                                                          into, Steven Fast to provide proof of
                                                                                          payment (e.g. bank statement)

                                                                                -         Within 4 months of the filing of the
                                                                                          application, competent court officer must
                                                                                          take record of the Pledged Equipment II,
                                                                                          make a list of pledged assets per site and
                                                                                          mark the pledged assets by putting
                                                                                          stickers on them

                                                                                -         Within 4 months of the filing of the
                                                                                          application, On Shore Security Agent to
                                                                                          check conformity of Schedule 2 with the
                                                                                          lists issued by the court; Nina Selih to
                                                                                          give notice of receipt of the list

                  Licence              -        Copy of concession              -         Within 5 business days of issue of
                                                                                          licence, inform On Shore and Off Shore
                                                                                          Security Agent and send copy

                                       -        Copy of application / bid       -         Within 2 months after issue of licence,
                                                                                          enter into the contractual pledge (as
                                                                                          attached as a Schedule to Asset Pledge)

                                       -        Certificate that as of the      -         Borrower to sign Power of Attorney as set
                                                date of signing of the                    out in Schedule 10 (once licence granted)
                                                Facility Agreement no
                                                change/amendment of/to the
                                                Concession Agreement has
                                                been made
</TABLE>

                                     - 50 -

<PAGE>

<TABLE>
<CAPTION>
DOCUMENT          SECURED ASSETS                                          STEPS FOR PERFECTION
------------------------------------------------------------------------------------------------------------------------------------
                                          CONDITION PRECEDENT TO DRAWDOWN                 CONDITION SUBSEQUENT
<S>               <C>                  <C>                                      <C>

                  Leases               -        Evidence of filing of the       -         Borrower to use best efforts to provide
                                                applications for the                      originals of consent letter from Landlords
                                                registration of the 40 lease              I, II and Substitution Landlords
                                                site agreements (except for               confirming the consent to the conditional
                                                the 13 leases entered with                assignment
                                                Elektro Slovenia and its
                                                affiliates and RTV and its
                                                affiliates) with the
                                                competent courts in
                                                accordance with Clauses
                                                11.4(f) and 12.4(b) of the
                                                Asset and Licence Pledge and
                                                Lease Contracts Assignment;
                                                Agreement

                                       -        Copies of Leases I and II and
                                                Substitution Lease (as
                                                applicable)

                                                                                -         File for registration of Substitution
                                                                                          Leases (applicable only in case of
                                                                                          substitution pledge) and, where
                                                                                          applicable, provide the consent of the
                                                                                          relevant Substitution Landlords to the
                                                                                          Substitution Assignment within 2 Months
                                                                                          from the date of receipt of the last
                                                                                          building permit in respect of the 41 sites

                                                                                -         Inform the On Shore Security Agent
                                                                                          immediately of rejection of filed
                                                                                          applications for registration of the
                                                                                          relevant leases in respect of the 41 site
                                                                                          leases (except for the 13 site leases
                                                                                          entered with Elektro Slovenia and its
                                                                                          affiliates and RTV and its affiliates) (eg
                                                                                          where building permit missing) after
                                                                                          becoming aware of such rejection and of
                                                                                          refilling of the application

                                                                                -         Within 20 Months from the date of signing
                                                                                          of the Second Amendment Agreement,
                                                                                          register the relevant leases in respect of
                                                                                          the 41 site leases (with the exception of
                                                                                          the 13 site leases entered with Elektro
                                                                                          Slovenia and its affiliates and RTV and
                                                                                          its affiliates) with the Land Registers

BORROWER'S        Shares               -        Execution of agreement          -         Within 2 Months from the date of the
SHARE PLEDGE                                                                              signing of the Facility Agreement,
AGREEMENT                                                                                 register the share pledge with the
                                                                                          Register of Commercial Companies (there
                                                                                          must be an obligation for the Borrower in
                                                                                          the Facility Agreement to provide
                                                                                          evidence for such registration)
</TABLE>

                                     - 51 -
<PAGE>

<TABLE>
<CAPTION>
DOCUMENT          SECURED ASSETS                                          STEPS FOR PERFECTION
------------------------------------------------------------------------------------------------------------------------------------
                                          CONDITION PRECEDENT TO DRAWDOWN                 CONDITION SUBSEQUENT
<S>               <C>                  <C>                                      <C>
                                       -        Execution of notarial deed in   -         Provide evidence of registration within 9
                                                respect of pledged equipment              Months from the date of signing of the
                                                                                          Facility Agreement

                                       -        Submission to the competent
                                                court in Ljubljana of the
                                                application for the
                                                registration of the share
                                                pledge with the Register of
                                                Commercial Companies

                                       -        Pay notary fees and
                                                application fees for
                                                registration of the pledge,
                                                Nina Selih to advise Steven
                                                Fast of bank account for fee
                                                to be paid into, Steven Fast
                                                to provide proof of payment
                                                (e.g. bank statement) and the
                                                escrow agreement relating to
                                                the holding of such envelope

TRADEMARK         Trademarks           -        Execution of agreement          -         Within 9 months from signing of the
PLEDGE                                                                                    Facility Agreement, provide evidence of
AGREEMENT                                                                                 registration of the TM Pledge by the
                                                                                          PATENT Office

                                       -        Withdraw 2 outstanding
                                                applications for registration
                                                of the trademarks "EHO" and
                                                "VIVA" and provide to the On
                                                Shore Security Agent evidence
                                                of such withdrawal at the
                                                latest 10 Business Days before
                                                it makes the first Utilisation
                                                Request under the Facility
                                                Agreement

                                       -        Borrower's consent to
                                                registration of the pledge
                                                (Schedule 5)

                                       -        Submission to the Patent
                                                Office of application to
                                                register the TM Pledge

                                       -        Pay notary fees and
                                                application fees for
                                                registration, Nina Selih to
                                                advise Steven Fast of bank
                                                account for fee to be paid
                                                into, Steven Fast to provide
                                                proof of payment (e.g. bank
                                                statement)

SOFTWARE          Oracle Software      -        Execution of agreement
LICENSE           License Agreement
ASSIGNMENT
AGREEMENT

                                       -        Schedule 2 - Copy of Deed of
                                                Consent and Waiver

                                       -        Schedule 1 (Oracle License
                                                Agreement)
</TABLE>

                                     - 52 -
<PAGE>

<TABLE>
<CAPTION>
DOCUMENT          SECURED ASSETS                                          STEPS FOR PERFECTION
------------------------------------------------------------------------------------------------------------------------------------
                                          CONDITION PRECEDENT TO DRAWDOWN                 CONDITION SUBSEQUENT
<S>               <C>                  <C>                                                <C>
ASSIGNMENT OF     Receivables          -        Signing of agreement
RECEIVABLES AS
SECURITY AND
ASSIGNMENT OF
INSURANCE
POLICIES
AGREEMENT

                                       -        Borrower to provide Schedule 1
                                                complete information

                                       -        Sealed Envelope (containing
                                                details of all subscribers
                                                (natural persons) must be
                                                submitted to the notary,
                                                identified in the Assignment
                                                of Receivables as Security and
                                                Assignment of Insurance
                                                Policies Agreement

                  Insurance            -        Copies of the insurance
                                                policies as required under
                                                the Facility Agreement

                                       -        Original vinculation
                                                certificates

                                       -        Borrower to provide Schedule 2
                                                (list of insurances, amounts,
                                                claims)

CLAIMS            Claims               -        Signing of agreement
ASSIGNMENT AND
BILLS of
EXCHANGE
AGREEMENT

                                       -        Notarised copies of account
                                                agreements (NLB + Hypo
                                                Alpe-Adria Bank) must be
                                                submitted to the Off Shore
                                                Facility Agent

                                       -        Acknowledgement by NLB and
                                                Hypo Alpe-Adria Bank

                                       -        Schedule 1 (account details)

                  Bills of Exchange    -        Provide set of 10 bills of
                                                exchange duly signed and
                                                filled in only with the date
                                                of issuance (Schedule 5)

                                       -        Confirmation by holders of
                                                bills of exchange that they
                                                will inform NLB at the latest
                                                5 Business Days before
                                                presenting any bills of
                                                exchange to NLB
</TABLE>

120.     Schedule 9 (Security Documents - Conditions Precedent and Conditions
         Subsequent) of the Original Facility Agreement is amended by deleting
         the section headed 'Substitution

                                     - 53 -
<PAGE>

         Conditions Subsequent For On Shore Security Documents' and replacing it
         with the following section:

            SUBSTITUTION CONDITIONS SUBSEQUENT FOR ON SHORE SECURITY
                                    DOCUMENTS

         In case under Slovenian law moveable assets may validly be pledged by
         registering the respective assets with an official register the
         following conditions subsequent shall, at the request of the Off Shore
         Security Agent, replace the conditions subsequent for the secured
         Assets "Pledged Equipment II and Substitution Equipment" under the
         Asset and Licence Pledge and Lease Contracts Assignment Agreement set
         out above in the table "On Shore Security Documents" in the column
         "Conditions Subsequent" and for such purpose the Borrower shall enter
         into all necessary documentation to give effect hereto.

<TABLE>
<CAPTION>
DOCUMENT          SECURED ASSETS                                          STEPS FOR PERFECTION
------------------------------------------------------------------------------------------------------------------------------------
                                          CONDITION PRECEDENT TO DRAWDOWN                 CONDITION SUBSEQUENT
<S>               <C>                     <C>                                  <C>
ASSET AND         Pledged Equipment                                            -          1 month after first drawdown, under the
LICENCE PLEDGE    II and                                                                  Commercial Facility, confirm to On Shore
AND LEASE         Substitution                                                            Security Agent that title in respect of
CONTRACTS         Equipment                                                               Pledged Equipment II has passed
ASSIGNMENT
AGREEMENT

                                                                                -         So long as any building permits are
                                                                                          outstanding, provide to the On Shore
                                                                                          Security Agent (i) prior to the Second
                                                                                          Amendment Agreement Conditions
                                                                                          Satisfaction Date, 10 Business Days after
                                                                                          the end of each Month, and (ii)
                                                                                          thereafter, 10 Business Days after the
                                                                                          last day of each Quarter a list with those
                                                                                          of the 41 sites for which a building
                                                                                          permit has been issued.

                                                                                -         Within 10 months after the Second
                                                                                          Amendment Agreement Conditions
                                                                                          Satisfaction Date execution of notarial
                                                                                          deed in respect of Pledged Equipment II
                                                                                          and any Substitution Equipment, if
                                                                                          applicable

                                                                                -         Within 7 months after establishment of the
                                                                                          Slovenian Official Register of the Pledged
                                                                                          Moveables and Pledges (Uradni Registar
                                                                                          Zarubljenih Premicnin in Zastavnih Pravic)
                                                                                          filing of application for registration of
                                                                                          Pledged Equipment II and any Substitution
                                                                                          Equipment, if applicable and provision of
                                                                                          evidence of such filing to Nina Selih

                                                                                -         Pay notary fees, Nina Selih to advise
                                                                                          Steven Fast of bank account for fee to be
                                                                                          paid into, Steven Fast to provide proof of
                                                                                          payment (e.g. bank statement)
</TABLE>

                                     - 54 -
<PAGE>

121.     Paragraph 2(a) of Schedule 10 (Form of Transfer Certificates) of the
         Original Facility Agreement is amended by deleting such paragraph in
         its entirety and replacing it with the following paragraph:

         "(a)     The Existing Bank and the New Bank agree to the Existing Bank
                  transferring to the New Bank [all or part] of the Existing
                  Bank's Commitment, referred to in the Schedule hereto together
                  with all corresponding rights and obligations under or in
                  connection with the Finance Documents in accordance with
                  Clause 26.5 (Procedure for transfer)."

122.     Paragraph 5 of Schedule 10 (Form of Transfer Certificates) of the
         Original Facility Agreement is amended by deleting such paragraph in
         its entirety and replacing it with the following paragraph:

         "5.      In respect of:

                  (a)      the transfer of the Existing Bank's Commitment
                           pursuant to paragraph 2 hereof the Existing Bank
                           herby transfers in favour of the New Bank an interest
                           in the Relevant Security Documents set out below, the
                           exact percentage of which is equal to the proportion
                           of the claims (from time to time) of the New Bank
                           against the Borrower under the Facility Agreement to
                           the aggregate amount of all claims (from time to
                           time) of the Senior Creditors against the Borrower
                           under the Facility Agreement, Lucent Loan Agreement
                           and the Hedging Agreement (as summarised in the
                           Summarised Hedging Agreement attached as Schedule to
                           each Relevant Security Document), the amounts of such
                           claims to be determined in an enforcement situation):

                           (i)      the Borrower's Share Pledge Agreement;

                           (ii)     the Asset and Licence Pledge and Lease
                                    Contracts Assignment Agreement;

                           (iii)    the Claims Assignment and Bills of Exchange
                                    Agreement;

                           (iv)     the Assignment of Receivables as Security
                                    and Assignment of Insurance Policies
                                    Agreement;

                           (v)      the Licence Pledge Agreement;

                           (vi)     the Trademark Pledge Agreement; and

                           (vii)    the Oracle Software Assignment Agreement

                           (together the "RELEVANT SECURITY DOCUMENTS");

                           [UPDATE WHERE APPROPRIATE]

                                     - 55 -
<PAGE>

                  (b)      the transfer relating to the interest in:

                           (i)      the movable assets specified in notarial
                                    deed no.: SV1314/02

                           (ii)     and the shares specified in notarial deed
                                    no.: SV1315/02

                           both made on June 11, 2002 by the Notary Miro Kosak,
                           Ljubljana, the Existing Bank hereby assents to and
                           permits the registration of such transfer in favour
                           of the New Bank in relevant court register(s) in
                           Slovenia. The New Bank may apply to the competent
                           court registrar for the registration of the transfer
                           from the Existing Bank to the New Bank in accordance
                           with this Transfer Certificate.

                           [UPDATE WHERE APPROPRIATE]"

123.     Schedule 11(Insurance) of the Original Facility Agreement is amended by
         deleting such Schedule in its entirety and replacing it with the
         following schedule:

                                  "SCHEDULE 11
                                    INSURANCE

         The Borrower shall comply with the insurance policies in force at the
         date of this Agreement and shall enter into, perform and execute the
         following insurance requirements as such requirements may be amended
         from time to time with the consent of the Majority Banks. Each bank may
         prior to consenting to any amendment of the insurance requirements
         (Schedule), request always through the Offshore Facility Agent, an
         opinion of an independent insurance advisor.

INSURANCE REQUIREMENTS

<TABLE>
<CAPTION>
                                                                                   page
<S>      <C>                                                                       <C>
A.       ERECTION PHASE INSURANCES

1.       Erection All Risk                                                            3

2.       Marine Cargo                                                                 6

3.       Third Party Liability Insurance                                              9

B.       OPERATING PHASE INSURANCES

1.       Property All Risks                                                          11

2.       Business Interruption                                                       12

3.       Third Party Liability                                                       14

4.       Marine                                                                      15

5.       Directors & Officers Liability                                              16
</TABLE>

                                     - 56 -
<PAGE>

<TABLE>
<S>      <C>                                                                         <C>
C.       OTHER INSURANCES

1.       Automobile Third Party Liability and Own Damage Liability                   17

2.       Personal Accident & Travel                                                  17

3.       Fidelity Guarantee/Crime                                                    17
</TABLE>

A. ERECTION PHASE INSURANCES

THE INTENT OF AN ERECTION PHASE INSURANCE IS TO INSURE EVERYTHING THAT IS
DESTINED TO BE PART OF THE FINISHED PROJECT. COVERAGE IS GRANTED DURING THE
PERIOD OF ERECTION AND TESTING. THE INSURANCE COVER SHOULD START WHEN THE
PROPERTY BECOMES AT THE RISK OF THE INSURED (USUALLY UNLOADING AT THE SITE OF
ERECTION) AND SHOULD BASICALLY CONTINUE UNTIL THE PROJECT IS COMPLETED AND
ACCEPTED BY THE OWNER. THE ERECTION PHASE INSURANCE IS THEN TO BE REPLACED BY AN
OPERATING PHASE INSURANCE.

1.       ERECTION ALL RISKS

INSURED:                  (a)       The Borrower;

CO-INSURED INTERESTS:     (b)       the Consortium, Construction Manager, and/or
                                    associated/affiliated companies and/or
                                    sub-contractors and/or co-contractors;

                          (c)       Engineering consultants and/or vendors
                                    and/or suppliers and/or other parties to the
                                    extent required by contract but only in
                                    respect of Project site activities;

                          (d)       the Senior Creditors

DESCRIPTION OF PROJECT:   The design, development, financing, engineering,
                          procurement and construction/ erection, installation,
                          testing, commissioning, ownership, completion,
                          operation and maintenance of a mobile network and
                          connected facilities.

LOCATION OF PROJECT:      The Project site and all related buildings and
                          equipment and all related ancillary and temporary
                          works whether on or off site and inland transit and
                          storage.

DESCRIPTION OF COVER:     Physical loss, destruction or damage to the erection
                          works to be undertaken in terms of the

                                     - 57 -
<PAGE>

                          project (being all works in connection with the
                          design, development, engineering, procurement,
                          construction, testing, commissioning and defects
                          liability period of the mobile network including all
                          preliminary works (including enabling and associated
                          works and site mobilisation and establishment) and
                          interconnection work, permanent and temporary works
                          erected or in the course of erection and all
                          materials and other things for incorporation therein,
                          including property of every kind and description
                          belonging to or in the care, custody or control of
                          the Insured or held by them in trust or on commission
                          or for which they are responsible, including but not
                          limited to machinery, apparatus, materials,
                          equipment, temporary structures and supplies (but not
                          including employees construction plant, tools and
                          equipment and personal effects, Project site
                          accommodation unless forming part of the permanent
                          works and contents), including free issue items used
                          in connection with the Project or intended for
                          incorporation therein and the spares inventory and
                          fuel in storage to be included in the Project and
                          ancillary works.)

PERIOD:                   From the commencement date until the inception date
                          of provisional acceptance plus 24 months visit
                          maintenance of each project.

CONDITIONS:               Policy to include inter alia:

                          (a)       interim settlements;

                          (b)       professional fees;

                          (c)       removal to place of safety;

                          (d)       reinstatement of sum insured - no additional
                                    premium;

                          (e)       expediting expenses;

                          (f)       removal of debris 3 % of sums insured,
                                    minimum US$ 250.000,- any one occurrence;

                          (g)       offsite storage & inland transit;

                                     - 58 -
<PAGE>

                          (h)       documents and data;

                          (i)       escalation clause - 115% of the total sum
                                    insured;

                          (j)       consecutive events (deductible) - 72 hours
                                    clause;

                          (k)       testing and commissioning, start-up and
                                    operational reliability running;

                          (l)       50/50 clause;

                          (m)       sue and labour;

                          (n)       public authorities clause for sites with
                                    building permits;

                          (o)       defective design clause incl. damage due to
                                    faulty design, faulty material and faulty
                                    workmanship;

                          (p)       strikes, riots and civil commotion;

                          (q)       hazard risks;

                          (r)       customs duties

                          (s)       non-contribution from other insurance;

                          (t)       existing and neighbouring objects

                          (u)       banks clauses

DEDUCTIBLES:              Not to exceed US$ 5,000 each and every loss

SUM INSURED:              Full contract value of each project incl. all
                          shipments. Current sums insured of US$ 15,000,000 as
                          to be increased from time to time should construction
                          costs or owner works in aggregate exceed the amount
                          which would be provided by operation of the
                          escalation clause or such other amounts as would be
                          required for full reinstatement of the Project.

2.       MARINE CARGO

A MARINE COVER CAN BE PROVIDED BY THE HAULIER/CONSTRUCTION COMPANY OR
BY AN OWN INSURANCE POLICY. HOWEVER THE FOLLOWING ISSUES SHOULD BE
GRANTED.

                                     - 59 -
<PAGE>

INSURED:                  As per Insured for Paragraph 1 of this Part A.

CO-INSURED INTERESTS:     As per co-Insured for Paragraph 1 of this Part A.

DESCRIPTION OF COVER:     Coverage will extend to all risks of direct physical
                          loss or damage to materials, supplies, equipment,
                          machinery, spares and goods required for the Project.
                          Coverage to be arranged on an open cover basis, for
                          all risks covering all transport requirements for the
                          period from the suppliers' premises to arrival at the
                          Project site and return transits to supplier's
                          premises and/or easements and includes, for the
                          avoidance of doubt, unloading and reloading at
                          temporary locations and transhipment to the Project
                          site and/or easements.

SUM INSURED:              Being the expected maximum value of the largest
                          single consignment/shipment plus 10% for CIF at least
                          US$ 2,500,000.

PERIOD:                   From the date of the despatch of the first
                          consignment until completion of unloading of the last
                          consignment at the Project site and/or easements and
                          any return transit incl. maintenance.

DEDUCTIBLES:              Not exceeding US$ 5,000 each and every loss or series
                          of losses consequent upon one event.

PRINCIPAL EXTENSIONS:     (a)       all forms of air, sea and land conveyances
                                    to be covered; and

                          (b)       automatic cover, subject to declaration of
                                    values for premium purposes.

PRINCIPAL CONDITIONS:     (a)       all risks of physical loss or damage as per
                                    institute clauses or equivalent;

                          (b)       institute war clauses (cargo, air cargo) or
                                    equivalent;

                          (c)       institute strikes clause (cargo, air cargo)
                                    or equivalent;

                          (d)       institute classification clause, replacement
                                    clause;

                          (e)       debris removal clause;

                                     - 60 -
<PAGE>

                          (f)       50/50 clause;

                          (g)       offsite storage, intermediate storage;

                          (h)       non contribution from other insurance;

                          (i)       subrogation waiver; and

                          (j)       bank clauses (loss payee clause, assignment
                                    clause).

PRINCIPAL EXCLUSIONS:     (a)       excluding rust, oxidation, discoloration and
                                    costs of chipping, scratching and
                                    repainting/coating except where
                                    plant/machinery is packed/shipped using
                                    approved specifications; and

                          (b)       excluding electrical and mechanical
                                    derangement unless caused by an insured
                                    peril.

3.       THIRD PARTY LIABILITY INSURANCE

INSURED:                  As per Insured for Paragraph 1 of this Part A
                          together within each case, each of such party's
                          servants, agents, officers, employees, secondees and
                          assigns.

CO-INSURED INTERESTS:     As per co-Insured for Paragraph 1 of this Part A
                          together within each case, each of such party's
                          servants, agents, officers, employees, seconds and
                          assigns.

LIMIT OF INDEMNITY:       At least US$ 2,500,000 per occurrence or series of
                          occurrences, during the period of insurance (same
                          limit as per the general liability insurance).

DESCRIPTION OF COVER:     Indemnity in respect of all sums which the Insured
                          shall become legally liable to pay to third parties
                          arising out of the project in respect of:

                          (a)       accidental death of, or accidental bodily
                                    injury to, illness or disease contracted by,
                                    any person (the term "bodily injury" shall
                                    be deemed to include mental injury,
                                    defamation, libel and slander); and

                                     - 61 -
<PAGE>

                          (b)       accidental loss or damage to property
                                    including but not limited to loss of use,
                                    interference with any easement, right of
                                    air, light or water, stoppage of traffic,
                                    nuisance, trespass, loss of amenities,
                                    destruction, obstruction or any like cause.

GEOGRAPHICAL SCOPE:       Slovenia / Worldwide for business travel

PERIOD:                   From the Commencement Date until the Commercial
                          Operations Date, plus maintenance period.

DEDUCTIBLES:              US$ 1,000 (or local currency equivalent) per
                          occurrence

PRINCIPAL EXCLUSIONS:     (a)       liability arising in circumstances requiring
                                    insurances under applicable road traffic
                                    legislation other than constructional plant
                                    as a tool of trade;

                          (b)       liability arising under penalty or
                                    liquidated damages clauses;

                          (c)       liability for loss or damage to the contract
                                    works prior to the Commercial Operations
                                    Date; and

                          (d)       liability arising from aircraft or
                                    watercraft.

PRINCIPAL EXTENSIONS:     (a)       employers liability;

                          (b)       cross liabilities clause (thereby ensuring
                                    each Insured is considered as a separate
                                    legal entity);

                          (c)       expenses, legal fees, defence costs in
                                    addition to the sum insured;

                          (d)       Europewide jurisdiction; and

                          (e)       banks' clauses (loss payee clause,
                                    assignment clause)

                                     - 62 -
<PAGE>

B.       OPERATING PHASE INSURANCES

         The operating phase insurances intend to cover everything in connection
         with the operation. They start with the operation date and should
         replace the erection phase insurances for finished projects or parts of
         the projects.

         Operating phase insurances are usually issued for one year period with
         automatic prolongation.

1.       PROPERTY ALL RISK INCLUDING BUT NOT LIMITED TO:

                          -         FLEXA (Fire, lightning, explosion, aircraft
                                    crash);

                          -         Extended Coverage (Tap water, storm, hail,
                                    vehicle impact, strike, riot, sprinkler
                                    leakage;);

                          -         Forces of nature (Earthquake, subsidence and
                                    landslide, flood, volcanic eruption etc);

                          -         Electronic insurance (for internal operating
                                    losses e.g. by overvoltage and indirect
                                    stroke of lightning as well as handling
                                    errors).

INSURED:                  Western Wireless International d.o.o. (the Borrower);

CO-INSURED
INTERESTS:                The Lender

COVER:                    All assets, the site and all other property and
                          interests used for or in connection with the
                          operation and maintenance of the operation including
                          Buildings, Office Equipment, Inventory,
                          EDP/Computer-Equipment, the electrical
                          interconnection facilities and stocks against all
                          risks of physical loss or damage including burglary
                          and theft, natural hazards, mechanical and electrical
                          breakdown or a Property insurance, which contains at
                          least the following components:-

                          -         FLEXA (Fire, lightning, explosion, aircraft
                                    crash)-

                          -         Extended Coverage (Tap water, storm, hail,
                                    vehicle impact, strike, riot,
                                    sprinkler-leakage)-

                                     - 63 -
<PAGE>

                          -         Forces of nature (Earthquake, subsidence and
                                    landslide, flood, volcanic eruption etc)-

                          -         Electronic insurance (for internal operating
                                    losses e.g. by overvoltage and indirect
                                    stroke of lightning as well as handling
                                    errors).

SUM INSURED:              An amount equal to not less than 100% of the full
                          reinstatement value of all properties, at a minimum
                          of not less than US$ 33,000,000. (current sums
                          insured in 2002).

DEDUCTIBLES:              Not exceeding US$ 5,000 (for each and every claim)
                          except Earthquake where a deductible not exceeding 5%
                          of the claim amount will be applicable

PRINCIPAL EXTENSIONS      (a)       debris removal

                          (b)       professional fees;

                          (c)       expediting expenses;

                          (d)       local authorities (in cases of sites with
                                    building permits);

                          (e)       computer equipment, data carrying media and
                                    reinstatement of data;

                          (f)       temporary removal;

                          (g)       Automatic coverage for capital additions
                                    (15% of sums insured); and

                          (h)       bank clauses (loss payee clause, assignment
                                    clause).

PRINCIPAL EXCLUSIONS:     (a)       war, radioactivity etc.;

                          (b)       latent defects.

PERIOD:                   From the earlier of (a) the date upon which the
                          Insurance under Paragraph 1 of Part A of this
                          Appendix 1 expires and (b) the Commercial Operations
                          Date, until the date falling 12 months thereafter, to
                          be renewed annually prior to its expiry until payment
                          in full of the Senior Loans,

                                     - 64 -
<PAGE>

         2.       BUSINESS INTERRUPTION

         INSURED:                            The Borrower

         CO-INSURED INTERESTS:               The Senior Creditors

         COVER:                              As a minimum, debt service, fixed
                                             operating expenses, extra expenses
                                             (incl. contractual liquidated
                                             damages) and increased cost of
                                             working as a direct consequence of
                                             loss of or damage to any part of
                                             the Project and insured under
                                             Paragraph 1 of Part A above
                                             incurred during the indemnity
                                             period.

                                             To be extended to loss of profits
                                             as soon as break-even is reached.

         SUM INSURED:                        The amount determined to provide
                                             the cover for all fixed costs and
                                             debt services for the duration of
                                             the indemnity period, at least US$
                                             2,000,000.

                                             US$ 250,000 for extra expenses.

         INDEMNITY PERIOD:                   12 months from the occurrence of
                                             loss or damage.

         WAITING PERIOD:                     Not to exceed 7 days (for each and
                                             every claim), except extra expense
                                             US$ 2.500.

         PRINCIPAL EXTENSIONS:               (a)      suppliers extension;

                                             (b)      failure of utilities;

                                             (c)      denial of access;

                                             (d)      interim payments clause;
                                                      and

                                             (e)      banks clauses (loss payee
                                                      clause, assignment
                                                      clause).

         PRINCIPAL EXCLUSIONS:               As per the Property All Risk
                                             section 1

         PERIOD:                             From the earlier of (a) the date
                                             upon which the Insurances under
                                             Paragraph 1 of Part A of this
                                             Appendix 1 expires, and (b) the
                                             Commercial Operations Date, until
                                             the date falling 12 months
                                             thereafter, to be renewed annually
                                             prior to its expiry until payment
                                             in full of the Senior Loans

                                      -65-

<PAGE>

         3.       THIRD PARTY LIABILITY

         INSURED:                            The Borrower, together with its
                                             respective assigns, directors,
                                             employees, secondees, servants and
                                             agents.

         CO-INSURED INTERESTS:               The Senior Creditors, together with
                                             their respective assigns,
                                             directors, employees, secondees,
                                             servants and agents.

         COVER:                              Indemnity in respect of all sums
                                             which the Insured shall become
                                             legally liable to pay to third
                                             parties arising out of the Project
                                             in respect of:

                                             (a)      accidental death of, or
                                                      accidental bodily injury
                                                      to, illness or disease
                                                      contracted by, any person
                                                      (the term "bodily injury"
                                                      shall be deemed to include
                                                      mental injury, defamation,
                                                      libel and slander); and

                                             (b)      accidental loss or damage
                                                      to property including but
                                                      not limited to loss of
                                                      use, interference with any
                                                      easement, right of air,
                                                      light or water, stoppage
                                                      of traffic, nuisance,
                                                      trespass, loss of
                                                      amenities, destruction,
                                                      obstruction or any like
                                                      cause.

         SUM INSURED:                        At least US$ 2,500,000 per
                                             occurrence or series of occurrences
                                             during the period of insurance

         GEOGRAPHICAL SCOPE:                 Slovenia / Worldwide for business
                                             travel

         DEDUCTIBLE:                         Not to exceed US$ 1,000 for each
                                             claim.

         PERIOD:                             From the earlier of (a) the date on
                                             which the Insurances referred to in
                                             Paragraph 4 of Part A of this
                                             Appendix 1 expire and (b) the
                                             Commercial Operations Date until
                                             the date falling 12 months
                                             thereafter to be renewed annually
                                             prior to its expiry until the
                                             payment in full of the Senior
                                             Loans.

         PRINCIPAL EXTENSIONS:               (a)      Employers Liability;

                                             (b)      Tenants Liability;

                                             (c)      Europewide jurisdiction;

                                      -66-

<PAGE>

                                             (d)      expenses, legal fees and
                                                      defence costs in addition
                                                      to the  sum insured; and

                                             (e)      Environmental Liability.

         4.       MARINE

         A MARINE COVER CAN BE PROVIDED BY THE HAULIER OR BY AN OWN INSURANCE
         POLICY. HOWEVER THE FOLLOWING ISSUES SHOULD BE GRANTED.

         INSURED:                            The Borrower;

         CO-INSURED INTERESTS:               The Senior Creditors

         DESCRIPTION OF COVER:               Coverage will extend to all risks
                                             of direct physical loss or damage
                                             to any goods whilst on
                                             transportation. Coverage is
                                             arranged on an open cover basis,
                                             for all risks covering all
                                             transport requirements.

         SUM INSURED:                        The expected maximum value of the
                                             largest single consignment/shipment
                                             plus 10% for CIF, at least US$
                                             2,500,000.

         PERIOD:                             From Commercial Operations Date
                                             resp. Day one of the first
                                             consignment until the date falling
                                             12 months thereafter to be renewed
                                             annually prior to its expiry until
                                             the payment in full of the Senior
                                             Loans.

         DEDUCTIBLES:                        Not exceeding US$ 5,000 each and
                                             every loss or series of losses
                                             consequent upon one event.

         PRINCIPAL EXTENSIONS:               (a)      all forms of air, sea and
                                                      land conveyances to be
                                                      covered; and

                                             (b)      automatic cover, subject
                                                      to declaration of values
                                                      for premium purposes.

         PRINCIPAL CONDITIONS:               (a)      all risks of physical loss
                                                      or damage as per institute
                                                      clauses or equivalent;

                                             (b)      institute war clauses
                                                      (cargo, air cargo) or
                                                      equivalent;

                                             (c)      institute strikes clause
                                                      (cargo, air cargo) or
                                                      equivalent;

                                             (d)      institute classification
                                                      clause, replacement
                                                      clause;

                                      -67-

<PAGE>

                                             (e)      debris removal clause;

                                             (f)      delayed unpacking (150
                                                      days) clause;

                                             (g)      offsite storage;

                                             (h)      non contribution from
                                                      other insurance;

                                             (i)      subrogation waiver; and

                                             (j)      bank clauses (loss payee
                                                      clause, assignment
                                                      clause).

         PRINCIPAL EXCLUSIONS:               (a)      excluding rust, oxidation,
                                                      discoloration and costs of
                                                      chipping,  scratching and
                                                      repainting/coating except
                                                      where plant/machinery is
                                                      packed/shipped using
                                                      approved specifications;
                                                      and

                                             (b)      excluding electrical and
                                                      mechanical derangement
                                                      unless caused by an
                                                      insured peril.

         5.       DIRECTORS & OFFICERS LIABILITY

         INSURED:                            The Borrower

         INSURED PERSONS:                    All of the Borrower's Directors and
                                             Officers

         COVER:                              D&O insurance provides cover for
                                             claims made against the individual
                                             directors & officers for 'wrongful
                                             acts' committed as directors &
                                             officers of the "company".

         SUM INSURED:                        US$ 2.500.000 per occurrence or
                                             series of occurrences during the
                                             period of insurance.

         GEOGRAPHICAL SCOPE:                 Worldwide

         DEDUCTIBLE:                         Not to exceed US$ 5.000 for each
                                             claim

         PERIOD:                             From the General Operations Date
                                             until the date falling 12 months
                                             thereafter to be renewed annually
                                             prior to its expiry until the
                                             payment in full of the Senior
                                             Loans.

         PRINCIPAL CONDITIONS:               Legal Liability with respect of
                                             Civil Law

         PRINCIPAL EXCLUSIONS:               Wilful acts

                                      -68-

<PAGE>

         C.       OTHER INSURANCES

         1.       AUTOMOBILE THIRD PARTY LIABILITY AND OWN DAMAGE LIABILITY

                  Automobile bodily injury and property damage liability
                  insurance for vehicles of the Borrower requiring such cover
                  under the statutory requirements of Slovenia.

         2.       PERSONAL ACCIDENT & TRAVEL

                  If overseas travel is undertaken by employees, consideration
                  should be given to the purchase of this cover.

                  If benefits available under this cover are provided as part of
                  employees' contracts (as opposed to a benefit to the
                  employer), then it will be important to ensure that no less
                  cover is provided post completion.

         3.       FIDELITY GUARANTEE/CRIME

                  Dishonesty from employees can represent a significant exposure
                  to employers. The exposure to fraud from outside third parties
                  may also be an area of concern going forward. Examples of
                  potential exposures include:

                  Funds transfer - this area is vulnerable to short and
                  long-term fraud;

                  Cheques - this is an area that may be susceptible to long term
                  fraud;

                  Computer Systems - accounting areas are also vulnerable to
                  short or long term fraud.

                  Terms and conditions of an insurance cover can not be provided
                  prior to a security check, usually done by an insurer."

124.     Schedule 14 (Covenant Compliance Certificate) of the Original Facility
         Agreement is amended by deleting such Schedule in its entirety and
         replacing it with the following schedule:

                                  "SCHEDULE 14
                         COVENANT COMPLIANCE CERTIFICATE

To:      IKB Deutsche Industriebank AG as Off Shore Facility Agent

From:    [Western Wireless International d.o.o.] [Western Wireless International
         Corporation](1)

Dated:

----------
(1)  Western Wireless International Corporation Certificate only required after
     the Second Amendment Agreement Effective Date and to include the
     information in paragraph 1, paragraph 2(a), (j), (k), (l) (as it applies to
     the Group), paragraph 3(a) as it relates to the Sponsors' and Shareholders'
     Undertaking and Completion Guarantee.

                                      -69-

<PAGE>

Dear Sirs

                               FACILITY AGREEMENT

                           DATED [-] (THE "AGREEMENT")

1.       We refer to the Agreement. This is a Covenant Compliance Certificate.
         Terms defined in the Agreement have the same meaning in this Covenant
         Compliance Certificate unless given a different meaning in this
         Covenant Compliance Certificate.

2.       We confirm that as at the date of the financial statements in respect
         of [-]:

         (a)      all contributions required to be made by the Shareholders
                  pursuant to the Sponsors' and Shareholders' Undertaking and
                  Completion Guarantee have been made when due;

         (b)      the Contributed Capital Ratio is [-]*;

         (c)      the number of Subscribers was [-]*;

         (d)      the Population Coverage was [-]*;

         (e)      the Service Revenues were [-]*;

         (f)      EBITDA of the Borrower was [-];

         (g)      the Total Leverage Ratio was [-];

         (h)      the Interest Coverage Ratio was [-]*;

         (i)      the Debt Service Cover Ratio was [-]*;

         (j)      from the Second Amendment Agreement Effective Date, the
                  Consolidated Tangible Net Worth of the Group was [-] for the
                  preceding financial year of the Group;

         (k)      from the Second Amendment Agreement Effective Date, the
                  Consolidated EBITDA of the Group for the preceding financial
                  year of the Group was [-];

         (l)      the financial statements were prepared in accordance with [US
                  GAAP] [and, if applicable, Slovenian Accounting Standards]
                  consistently applied and represent a true and fair view of the
                  [Borrower] [Group] and do not omit any material liability;

         (m)      we have received Sponsors Unsecured Loans in the amount of
                  [-],

----------
* Only required to be included for Covenant Compliance Certificates issued prior
  to the Second Amendment Agreement Effective Date.

                                      -70-

<PAGE>

         and attached hereto are detailed calculations and/or evidence thereof.

3.       We confirm that as of the date hereof:

         (a)      no Potential Event of Default or Event of Default is
                  continuing;(2)

         (b)      [no Cash Shortfall] [a Cash Shortfall] exists [in an amount
                  equal to [-]].(3)

4.       As at the date of this Covenant Compliance Certificate the Repeated
         Representations are correct by reference to the facts and circumstances
         as at the date hereof except for representations which were made as of
         a specific date which shall be correct in all material respects as of
         such date.

5.       We hereby request that the Applicable Margin in relation to the [state
         Facility] be adjusted from [insert] to [insert].

         Signed:     ---------------------            --------------------------
                     Director                         Director

         [insert applicable auditor certification language](4)

                           --------------------------
                              for and on behalf of

                 [name of auditors of the Borrower or Group](5)"

125.     Paragraph 2 of Schedule 15 (Project Status and Progress Report) of the
         Original Facility Agreement is amended by deleting such paragraph in
         its entirety and replacing with the following paragraph:

         "2.      Set out below is:

                  (1)      with respect to the Eligible Expenditures under the
                           ECA Facility a list of (i) all purchase orders
                           placed, and (ii) deliveries received and/or services
                           rendered during the Quarter together with copies of
                           the relevant invoices from the Equipment Vendor(+);
----------

(2)      If this statement cannot be made, the certificate should identify any
         Event of Default or Potential Event of Default that is continuing and
         the steps, if any, being taken to remedy it.

(3)      Include if Cash Shortfall exists.

(4)      To be agreed with the Borrower's/Group's auditors and the Banks.
         Auditors must verify all of the above statements other than points
         2(c), (d) or 3.

(5)      Only applicable if the Covenant Compliance Certificate accompanies the
         audited financial statements and is to be signed by the auditors. To be
         agreed with the Borrower's/Group's auditors.

(+)      Only required to be included for Project Status and Progress Report
         issued prior to the Second Amendment Agreement Effective Date.

                                      -71-

<PAGE>

                  (2)      a detailed and full description of the status of the
                           installation of the Network in comparison to the most
                           recent Business Plan and the status of all national
                           roaming agreements;

                  (3)      a comparison of the Borrower's actual business and
                           network development (including but not limited to
                           network roll out and network quality measured in
                           Population Coverage and dBm and services offered)
                           with the Licence requirements and the Business Plan;

                  (4)      until the Second Amendment Agreement Conditions
                           Satisfaction Date, the information contained in the
                           annex hereto;

                  (5)      a description of any non-compliance with delays in
                           performance of, cost increases under or other issues
                           arising out of any Material Contracts that could
                           reasonably be expected to affect the Borrower's
                           ability to perform its obligations under the Finance
                           Documents;

                  (6)      a detailed description of any material financial,
                           operational, construction, regulatory,
                           administrative, legal or other issues that have had
                           or could reasonably be expected to have a significant
                           impact on the Borrower;

                  (7)      a list of all Material Contracts entered into,
                           amended, terminated or substituted in the last
                           Quarter; and

                  (8)      a description of any complaints received and
                           correspondence from the Government or any
                           governmental bodies or other authority in relation to
                           the Project; and

                  (9)      details of all tariff plans and Subscriber
                           acquisition costs (in total and per subscriber)
                           including (without limitation) subsidies spent on the
                           provision of handsets and any special offers to
                           Subscribers; and

                  (10)     an update of the sales and marketing strategy report
                           comprised in the most recent Business Plan and
                           covering subscriber acquisition cost, marketing cost
                           and handset and other subsidies; and

                  (11)     a written outline of major market and business
                           developments.

126.     Schedule 15 (Project Status and Progress Report) of the Original
         Facility Agreement is amended by adding a "+" after the word
         "Consultant*" at the end of such schedule.

127.     Schedule 15 (Project Status and Progress Report) of the Original
         Facility Agreement is amended by deleting the words "31.12.2003 or
         31.12.2004" from the end of the footnote marked "*" of such schedule.

128.     Schedule 16 (Form of Permitted Bill of Exchange) of the Original
         Facility Agreement is amended by deleting such Schedule in its entirety
         and replacing it by the following schedule:

                                      -72-

<PAGE>

                                  "SCHEDULE 16
                       FORM OF PERMITTED BILL OF EXCHANGE

         V______________________________              ([-])
               (kraj in datam [-])
         _______________________________ PLACAJTE ZA TO _________ MENICO
                    ([-])
         PO NALOGU _____________________________________________ ZNESEK
                                      ([-])

                                              ([-])

         VREDNOST PREJETA ______IN GA POLOZITE NA RAGUN _______ OBVESTIL

         OBVESTITE ________________________
                           ([-])
         PLACLJIVO PRI ___________________________________________________
                                                      ([-])"

129.     Schedule 17 (Population Coverage Verification) of the Original Facility
         Agreement is amended by adding footnote reference "6" after the number
         "17" in the heading and adding the following footnote to the footer at
         the bottom of the first page of such schedule:

         "6 Obsolete from the Second Amendment Agreement Effective Date."

130.     Schedule 17 (Population Coverage Verification) of the Original Facility
         Agreement is amended by changing the footnote reference "3" in
         paragraph 3.4.2 of such Schedule is re-numbered as footnote reference
         "7".

131.     Schedule 18 (Initial report of the Independent Technical Consultant) of
         the Original Facility Agreement is amended by deleting the word
         "report" in the heading of such Schedule and replacing it with the word
         "REPORT".

132.     Schedule 19 (Additional Coverage Requirements) of the Original Facility
         Agreement is amended by adding footnote reference "8" after the number
         "19" in the heading of such Schedule and adding the following footnote
         to the footer at the bottom of the first page of such schedule:

         "9 Obsolete from the Second Amendment Agreement Effective Date."

133.     The Original Facility Agreement is amended by inserting the following
         exhibits after the end of Annex 5 (Base Stations being "on air") and
         before the start of the Execution Clause (Signatories to the Facility
         Agreement):

                                   "Exhibit 1
                         Vega Status Quo Business Plan"

                                      -73-

<PAGE>

                                   "Exhibit 2

                              Group Business Plan"

134.     The execution block for the party named "IKB Deutsche Industriebank AG"
         in the Execution Clause (Signatories to the Facility Agreement) of the
         Original Facility Agreement is amended by deleting the words "Andreas
         Nestel" from the 'Attention of' line in such execution block and
         replacing it with "Dr. Peer Gunzel".

135.     The execution block for the party named "Raiffeisenlandesbank
         Oberosterreich reg. Gen. m.b.H." in the Execution Clause of the
         Original Facility Agreement is amended by deleting such party name in
         its entirety and replacing it with the following name:

         "RAIFFEISENLANDESBANK OBEROSTERREICH REG. GEN. M.B.H."

136.     The execution block for the party named "Western Wireless International
         d.o.o." in the Execution Clause of the Original Facility Agreement is
         amended by deleting the fax details "+386 1 5801 109" in the "Fax" line
         of such clause and replacing it with the following fax details: "+386 1
         5801 011".

137.     The execution block for the party named "Nova Ljubljanska Banka d.d.,
         Ljubljana" in the Execution Clause of the Original Facility Agreement
         is amended by adding the contact details "or +386 1 476 5108" after the
         contact number "+386 1 520 7273" in the "Telephone" lines of such
         execution block.

138.     The execution block for the party named "Nova Ljubljanska Banka d.d.,
         Ljubljana" in the Execution Clause of the Original Facility Agreement
         is amended by adding the words "or Ms. Ida Menard" to the end of the
         "Attention of" line of such execution block.

139.     The Execution Clause of the Original Facility Agreement is amended by
         deleting the execution block for the party named "Landesbank
         Schleswig-Holstein Girozentrale" in its entirety and replacing it with
         the following execution block:

         "CO-ARRANGER AND ORIGINAL EURO FACILITY BANK

         HSH NORDBANK AG

         By:         MARION POETSCHKE                 MANFRED ZIWEY
                     ----------------                 -------------
                     Name:  Marion Poetschke          Name:  Manfred Ziwey
                     Title: Assistant Director        Title: Director

         Address:       Martensdamm 6, 24103 Kiel, Germany
         Telephone:     +431 900 11604
         Fax:           +431 900 34151
         Attention of:  Klaus-Volker Lenk"

140.     The Execution Clause of the Original Facility Agreement is amended by
         deleting the execution blocks for the party named "Hypo Alpe-Adria-Bank
         AG" and "Hypo Alpe-Adria-Bank d.d." in such clause and replacing them
         with the following execution blocks:

                                      -74-

<PAGE>

         "CO-ARRANGER AND ORIGINAL EURO FACILITY BANK

         HYPO ALPE-ADRIA BANK AG

         By:         MARION POETSCHKE                 MANFRED ZIWEY
                     ----------------                 -------------
                     Name:  Marion Poetschke          Name:  Manfred Ziwey
                     Title: Assistant Director        Title: Director

         Address:       Stock im Eisen-Platz 3, 1010 Wien, Austria
         Telephone:     +43 50202 6952 or +43 50202 2315 or 2483
         Fax:           +43 (0) 50202 6990
         Attention of:  International Finance (for credit matters)
                        International Services (for administrative matters)

         EURO FACILTY BANK
         DEG - DEUTSCHE INVESTITIONS -
         UND ENTWICKLUNGSGESELLSCHAFT MBH

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

         Address:       Belvederestr. 40
                        50933 Cologne, Germany

         Telephone:     +49 221 4986 576
         Fax:           +49 221 4986 107
         Attention of:  Matthias Goulnik

         EURO FACILITY BANK
         AKA  AUSFUHRKREDIT-GESELLSCHAFT M.B.H.

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

         Address:       Grosse Gallusstrasse 1-7
                        60311 Frankfurt am Main, Germany

         Telephone:     +49 69 29891 236 or +49 69 29891 167
         Fax:           +49 29891 150
         Attention of:  Heike Koenebruch or Beate Muller

         ORIGINAL SIT FACILITY BANK
         HYPO ALPE-ADRIA-BANK D.D.

                                      -75-

<PAGE>

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

         Address:       Trg Osvobodilne fronte 12
         PO Box 1601, SI - 1001 Ljubljana, Slovenia
         Telephone:     +386 1 300 4408
         Fax:           +386 1 300 4491
         Attention of:  Mr. Ivo Rep"

                                      -76-

<PAGE>

          SIGNATURE PAGE OF THE SECOND AMENDMENT AGREEMENT RELATING TO
                             THE FACILITY AGREEMENT

         THE BORROWER
         WESTERN WIRELESS INTERNATIONAL D.O.O.

         By:

         Name:
         Title:

         Address:       Brnciceva ulica 49, 1231 Ljubljana, Slovenia
         Telephone:     +386 1 5801 200
         Fax:           +386 1 5801 011
         Attention of:  Steven Fast

         LEAD ARRANGER, OFF SHORE SECURITY AGENT, OFF SHORE FACILITY AGENT AND
         ORIGINAL EURO FACILITY BANK

         IKB DEUTSCHE INDUSTRIEBANK AG

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Wilhelm-Botzkes-Strasse 1, 40474 Dusseldorf, Germany
         Telephone:     +49 211 8221 4887 or +49 211 8221 4193
         Fax:           +49 211 8221 2887 or +49 211 8221 2193
         Attention of:  Martina Messing or Dr. Peer Gunzel

<PAGE>

          SIGNATURE PAGE OF THE SECOND AMENDMENT AGREEMENT RELATING TO
                             THE FACILITY AGREEMENT

         LEAD ARRANGER AND ORIGINAL EURO FACILITY BANK
         KREDITANSTALT FUR WIEDERAUFBAU

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:      Palmengartenstrasse 5-9, 60325 Frankfurt am Main, Germany
         Telephone:    +49 69 7431 4247
         Fax:          +49 69 7431 2258
         Attention of: Andre Collin

         SENIOR CO-ARRANGER AND ORIGINAL EURO FACILITY BANK
         RAIFFEISENLANDESBANK OBEROSTERREICH REG. GEN. M.B.H.

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Raiffeisenplatz 1, 4021 Linz, Austria
         Telephone:     +43 732 6596 3170
         Fax:           +43 732 6596 3131
         Attention of:  Dr. Lambert Hofbauer

<PAGE>

          SIGNATURE PAGE OF THE SECOND AMENDMENT AGREEMENT RELATING TO
                             THE FACILITY AGREEMENT

         SENIOR CO-ARRANGER, ON SHORE SECURITY AGENT, ON SHORE FACILITY AGENT
         AND ORIGINAL SIT FACILITY BANK

         NOVA LJUBLJANSKA BANKA D.D., LJUBLJANA

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Smartinska 130, SI - 1520 Ljubljana, Slovenia
         Telephone:     +386 1 520 7273 or +386 1 476 5108
         Fax:           +386 1 425 60 02
         Attention of:  Ms. Jasna Istenic or Ms. Ida Menard

         CO-ARRANGER AND ORIGINAL EURO FACILITY BANK
         HSH NORDBANK AG

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Martensdamm 6, 24103 Kiel, Germany
         Telephone:     +431 900 11604
         Fax:           +431 900 34151
         Attention of:  Klaus-Volker Lenk

<PAGE>

          SIGNATURE PAGE OF THE SECOND AMENDMENT AGREEMENT RELATING TO
                             THE FACILITY AGREEMENT

         CO-ARRANGER AND ORIGINAL EURO FACILITY BANK
         HYPO ALPE-ADRIA-BANK AG

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Stock im Eisen-Platz 3, 1010 Wien, Austria
         Telephone:     +43 50202  6952 or +43 50202 2315 or 2483
         Fax:           +43 (0) 50202  6990
         Attention of:  International Finance (for credit matters)
                        International Services (for administrative matters)

         ORIGINAL SIT FACILITY BANK
         HYPO ALPE-ADRIA-BANK D.D.

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Trg Osvobodilne fronte 12
                        PO Box 1601, SI - 1001 Ljubljana, Slovenia

         Telephone:     +386 1 300 4408
         Fax:           +386 1 300 4491
         Attention of:  Mr. Ivo Rep

<PAGE>

          SIGNATURE PAGE OF THE SECOND AMENDMENT AGREEMENT RELATING TO
                             THE FACILITY AGREEMENT

         EURO FACILITY BANK

         DEG - DEUTSCHE INVESTITIONS -
         UND ENTWICKLUNGSGESELLSCHAFT MBH

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Belvederestr. 40
                        50933 Cologne, Germany

         Telephone:     +49 221 4986 576
         Fax:           +49 221 4986 107
         Attention of:  Matthias Goulnik

         EURO FACILITY BANK
         AKA AUSFUHRKREDIT-GESELLSCHAFT M.B.H.

         By:                                 By:

         Name:                               Name:
         Title:                              Title:

         Address:       Grosse Gallusstrasse 1-7
                        60311 Frankfurt am Main, Germany

         Telephone:     +49 69 29891 236 or +49 69 29891 167
         Fax:           +49 69 29891 150
         Attention of:  Heike Koenebruch or Beate Muller

<PAGE>

          SIGNATURE PAGE OF THE SECOND AMENDMENT AGREEMENT RELATING TO
                             THE FACILITY AGREEMENT

         ACKNOWLEDGEMENT

         By signing hereunder, each Sponsor and Shareholder acknowledges and
         consents to the terms and conditions of this Agreement and of the
         amendments made to the Original Facility Agreement.

         Each Sponsor and Shareholder confirms that it has no defence under any
         Finance Document, in particular the Sponsor's and Shareholders'
         Undertaking and Completion Guarantee (as amended on 28 October 2002 and
         on or about the date hereof), as a consequence of the amendments made
         thereto and further confirm the rights and obligations of each Sponsor
         and Shareholder under each unamended and amended term of any Finance
         Document.

         THE SPONSORS
         WESTERN WIRELESS INTERNATIONAL CORPORATION

         By:

         Name:

         Title:

         Address:       3650 131st Avenue, S.E., Suite 400, Bellevue, Washington
                        98006, USA
         Telephone:     +1 425 586 8161
         Fax:           +1 425 586 8777
         Attention of:  Scott Alderman

         WESTERN WIRELESS INTERNATIONAL SLOVENIA CORPORATION

         By:

         Name:
         Title:

         Address:       3650 131st Avenue, S.E., Suite 400, Bellevue, Washington
                        98006, USA
         Telephone:     +1 425 586 8161
         Fax:           +1 425 586 8777
         Attention of:  Scott Alderman

<PAGE>

          SIGNATURE PAGE OF THE SECOND AMENDMENT AGREEMENT RELATING TO
                             THE FACILITY AGREEMENT

         WESTERN WIRELESS INTERNATIONAL SLOVENIA II CORPORATION

         By:

         Name:
         Title:

         Address:       3650 131st Avenue, S.E., Suite 400, Bellevue, Washington
                        98006, USA
         Telephone:     +1 425 586 8161
         Fax:           +1 425 586 8777
         Attention of:  Scott Alderman

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