Document:

ACE SECURITIES CORP.
                                    Depositor

                             OCWEN FEDERAL BANK FSB
                                   a Servicer

                             WELLS FARGO BANK, N.A.
                  Master Servicer and Securities Administrator

                       HSBC BANK USA, NATIONAL ASSOCIATION
                                     Trustee

                         POOLING AND SERVICING AGREEMENT
                          Dated as of November 1, 2004

          ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE4
                     Asset Backed Pass-Through Certificates

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                                TABLE OF CONTENTS

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   ARTICLE I DEFINITIONS................................................................................4

SECTION 1.01.    Defined Terms..........................................................................4

   Accepted Master Servicing Practices..................................................................4

   Accepted Servicing Practices.........................................................................4

   Account..............................................................................................4

   Accrued Certificate Interest.........................................................................4

   Adjustable Rate Mortgage Loan........................................................................4

   Adjustment Date......................................................................................5

   Administration Fees..................................................................................5

   Administration Fee Rate..............................................................................5

   Advance Facility.....................................................................................5

   Advance Financing Person.............................................................................5

   Advance Reimbursement Amounts........................................................................5

   Affiliate............................................................................................5

   Aggregate Loss Severity Percentage...................................................................5

   Agreement............................................................................................5

   Allocated Realized Loss Amount.......................................................................5

   Amounts Held for Future Distribution.................................................................5

   Assignment...........................................................................................5

   Assignment Agreement.................................................................................6

   Authorized Officers..................................................................................6

   Available Distribution Amount........................................................................6

   Avoided Payment......................................................................................6

   Balloon Mortgage Loan................................................................................6

   Balloon Payment......................................................................................6

   Bankruptcy Code......................................................................................7

   Book-Entry Certificates..............................................................................7

   Book-Entry Custodian.................................................................................7

   Business Day.........................................................................................7

   Cap Contracts........................................................................................7

   Cash-Out Refinancing.................................................................................7

   Certificate..........................................................................................7
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   Certificate Factor...................................................................................7

   Certificate Insurance Policy.........................................................................7

   Certificate Insurer..................................................................................7

   Certificate Insurer Default..........................................................................7

   Certificate Margin...................................................................................8

   Certificateholder....................................................................................9

   Certificate Owner...................................................................................10

   Certificate Principal Balance.......................................................................10

   Certificate Register................................................................................10

   Class...............................................................................................10

   Class A Certificate.................................................................................10

   Class A Principal Distribution Amount...............................................................10

   Class A-1 Allocation Percentage.....................................................................10

   Class A-1 Certificate...............................................................................10

   Class A-1 Certificate Deficiency Amount.............................................................11

   Class A-1 Principal Distribution Amount.............................................................11

   Class A-1 Principal Loss Amount.....................................................................11

   Class A-2 Allocation Percentage.....................................................................11

   Class A-2 Certificate...............................................................................11

   Class A-2 Certificate Deficiency Amount.............................................................12

   Class A-2 Principal Distribution Amount.............................................................12

   Class A-2 Principal Loss Amount.....................................................................12

   Class B Certificate.................................................................................12

   Class B Principal Distribution Amount...............................................................13

   Class CE Certificate................................................................................13

   Class M Certificates................................................................................13

   Class M-1 Certificate...............................................................................13

   Class M-1 Principal Distribution Amount.............................................................14

   Class M-2 Certificate...............................................................................14

   Class M-2 Principal Distribution Amount.............................................................14

   Class M-3 Certificate...............................................................................14

   Class M-3 Principal Distribution Amount.............................................................15

   Class M-4 Certificate...............................................................................15
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                                       ii
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<S>                                                                                                    <C>
   Class M-4 Principal Distribution Amount.............................................................15

   Class M-5 Certificate...............................................................................16

   Class M-5 Principal Distribution Amount.............................................................16

   Class M-6 Certificate...............................................................................16

   Class M-6 Principal Distribution Amount.............................................................16

   Class M-7 Certificate...............................................................................17

   Class M-7 Principal Distribution Amount.............................................................17

   Class M-6 Certificate...............................................................................17

   Class M-8 Principal Distribution Amount.............................................................18

   Class M-9 Certificate...............................................................................18

   Class M-9 Principal Distribution Amount.............................................................18

   Class M-10 Certificate..............................................................................19

   Class M-10 Principal Distribution Amount............................................................19

   Class M-11 Certificate..............................................................................20

   Class M-11 Principal Distribution Amount............................................................20

   Class P Certificate.................................................................................21

   Class R Certificates................................................................................21

   Class R-I Interest..................................................................................21

   Class R-II Interest.................................................................................21

   Closing Date........................................................................................21

   Code................................................................................................21

   Collection Account..................................................................................21

   Commission..........................................................................................21

   Corporate Trust Office..............................................................................21

   Corresponding Certificate...........................................................................21

   Credit Enhancement Percentage.......................................................................22

   Credit Risk Management Agreements...................................................................22

   Credit Risk Management Fee..........................................................................22

   Credit Risk Management Fee Rate.....................................................................22

   Credit Risk Manager.................................................................................22

   Custodial Account...................................................................................22

   Custodial Agreement.................................................................................22

   Custodian...........................................................................................22
</TABLE>

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   Cut-off Date........................................................................................23

   DBRS................................................................................................23

   Debt Service Reduction..............................................................................23

   Deficient Valuation.................................................................................23

   Definitive Certificates.............................................................................23

   Deleted Mortgage Loan...............................................................................23

   Delinquency Percentage..............................................................................23

   Depositor...........................................................................................23

   Depository..........................................................................................23

   Depository Institution..............................................................................23

   Depository Participant..............................................................................24

   Determination Date..................................................................................24

   Directly Operate....................................................................................24

   Disqualified Organization...........................................................................24

   Distribution Account................................................................................24

   Distribution Date...................................................................................24

   Due Date............................................................................................25

   Due Period..........................................................................................25

   Eligible Account....................................................................................25

   ERISA...............................................................................................25

   Estate in Real Property.............................................................................25

   Excess Liquidation Proceeds.........................................................................25

   Expense Adjusted Mortgage Rate......................................................................25

   Extraordinary Trust Fund Expense....................................................................25

   Extra Principal Distribution Amount.................................................................25

   Fannie Mae..........................................................................................25

   FDIC................................................................................................25

   Final Maturity Date.................................................................................25

   Final Recovery Determination........................................................................26

   Freddie Mac.........................................................................................26

   Fremont.............................................................................................26

   Fremont Assignment Agreement........................................................................26

   Fremont Mortgage Loans..............................................................................26
</TABLE>

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   Fremont Servicing Agreement.........................................................................26

   Gross Margin........................................................................................26

   Group I Interest Remittance Amount..................................................................26

   Group I Mortgage Loans..............................................................................26

   Group I Principal Distribution Amount...............................................................26

   Group I Principal Remittance Amount.................................................................27

   Group II Interest Remittance Amount.................................................................27

   Group II Mortgage Loans.............................................................................27

   Group II Principal Distribution Amount..............................................................27

   Group II Principal Remittance Amount................................................................27

   Independent.........................................................................................27

   Independent Contractor..............................................................................28

   Index...............................................................................................28

   Insolvency Proceeding...............................................................................28

   Institutional Accredited Investor...................................................................28

   Insurance Agreement.................................................................................28

   Insurance Proceeds..................................................................................28

   Insured Certificate Deficiency Amount...............................................................28

   Insured Certificates................................................................................28

   Insured Payments....................................................................................29

   Interest Accrual Period.............................................................................29

   Interest Carry Forward Amount.......................................................................29

   Interest Distribution Amount........................................................................29

   Interest Remittance Amount..........................................................................29

   Last Scheduled Distribution Date....................................................................29

   Late Collections....................................................................................29

   Liquidation Event...................................................................................30

   Liquidation Proceeds................................................................................30

   Loan-to-Value Ratio.................................................................................30

   London Business Day.................................................................................30

   Loss Severity Percentage............................................................................30

   Marker Rate.........................................................................................30

   Master Servicer.....................................................................................31
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                                       v
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   Master Servicer Certification.......................................................................31

   Master Servicer Event of Default....................................................................31

   Master Servicer Fee Rate............................................................................31

   Master Servicing Fee................................................................................31

   Maximum I-LTZZ Uncertificated Interest Deferral Amount..............................................31

   Maximum Mortgage Rate...............................................................................32

   MERS................................................................................................32

   MERS(R) System......................................................................................32

   Mezzanine Certificate...............................................................................32

   MIN.................................................................................................32

   Minimum Mortgage Rate...............................................................................32

   MOM Loan............................................................................................32

   Monthly Payment.....................................................................................32

   Moody's.............................................................................................32

   Mortgage............................................................................................32

   Mortgage File.......................................................................................32

   Mortgage Loan.......................................................................................32

   Mortgage Loan Documents.............................................................................33

   Mortgage Loan Purchase Agreement....................................................................33

   Mortgage Loan Schedule..............................................................................33

   Mortgage Note.......................................................................................35

   Mortgage Rate.......................................................................................35

   Mortgaged Property..................................................................................35

   Mortgagor...........................................................................................35

   Net Monthly Excess Cashflow.........................................................................35

   Net Mortgage Rate...................................................................................36

   Net WAC Pass-Through Rate...........................................................................36

   Net WAC Rate Carryover Amount.......................................................................37

   New Lease...........................................................................................37

   Nonrecoverable P&I Advance..........................................................................37

   Nonrecoverable Servicing Advance....................................................................37

   Non-United States Person............................................................................38

   Notional Amount.....................................................................................38
</TABLE>

                                       vi
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<S>                                                                                                    <C>
   Ocwen...............................................................................................38

   Ocwen Mortgage Loans................................................................................38

   Offered Certificates................................................................................38

   Officer's Certificate...............................................................................38

   One-Month LIBOR.....................................................................................38

   One-Month LIBOR Pass-Through Rate...................................................................39

   Opinion of Counsel..................................................................................40

   Optional Termination Date...........................................................................40

   Originators.........................................................................................40

   Overcollateralization Amount........................................................................40

   Overcollateralization Increase Amount...............................................................40

   Overcollateralization Reduction Amount..............................................................40

   Ownership Interest..................................................................................40

   P&I Advance.........................................................................................41

   Pass-Through Rate...................................................................................41

   Percentage Interest.................................................................................42

   Periodic Rate.......................................................................................43

   Permitted Investments...............................................................................43

   Permitted Transferee................................................................................44

   Person..............................................................................................44

   Plan................................................................................................44

   Policy Payment......................................................................................45

   Policy Payment Account..............................................................................45

   Premium Amount......................................................................................45

   Premium Rate........................................................................................45

   Prepayment Assumption...............................................................................45

   Prepayment Charge...................................................................................45

   Prepayment Charge Schedule..........................................................................45

   Prepayment Interest Excess..........................................................................46

   Prepayment Interest Shortfall.......................................................................46

   Prepayment Period...................................................................................46

   Principal Prepayment................................................................................46

   Principal Distribution Amount.......................................................................47
</TABLE>

                                      vii
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   Principal Remittance Amount.........................................................................47

   Purchase Price......................................................................................47

   QIB.................................................................................................47

   Qualified Substitute Mortgage Loan..................................................................47

   Rate/Term Refinancing...............................................................................48

   Rating Agency or Rating Agencies....................................................................48

   Realized Loss.......................................................................................48

   Record Date.........................................................................................50

   Reference Banks.....................................................................................50

   Refinanced Mortgage Loan............................................................................50

   Regular Certificate.................................................................................50

   Regular Interest....................................................................................50

   Regulation S Temporary Global Certificate...........................................................50

   Regulation S Permanent Global.......................................................................50

   Reimbursement Amount................................................................................50

   Release Date........................................................................................50

   Relief Act..........................................................................................50

   Relief Act Interest Shortfall.......................................................................50

   REMIC...............................................................................................51

   REMIC I.............................................................................................51

   REMIC I Interest Loss Allocation Amount.............................................................51

   REMIC I Marker Allocation Percentage................................................................51

   REMIC I Overcollateralization.......................................................................51

   REMIC I Principal Loss Allocation Amount............................................................52

   REMIC I Regular Interest............................................................................52

   REMIC I Regular Interest I-LTAA.....................................................................52

   REMIC I Regular Interest I-LTA1.....................................................................52

   REMIC I Regular Interest I-LTA2.....................................................................52

   REMIC I Regular Interest I-LTB......................................................................53

   REMIC I Regular Interest I-LTM1.....................................................................53

   REMIC I Regular Interest I-LTM2.....................................................................53

   REMIC I Regular Interest I-LTM3.....................................................................53

   REMIC I Regular Interest I-LTM4.....................................................................53
</TABLE>

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   REMIC I Regular Interest I-LTM5.....................................................................53

   REMIC I Regular Interest I-LTM6.....................................................................53

   REMIC I Regular Interest I-LTM7.....................................................................54

   REMIC I Regular Interest I-LTM8.....................................................................54

   REMIC I Regular Interest I-LTM9.....................................................................54

   REMIC I Regular Interest I-LTM10....................................................................54

   REMIC I Regular Interest I-LTM11....................................................................54

   REMIC I Regular Interest I-LTP......................................................................54

   REMIC I Regular Interest I-LTXX.....................................................................54

   REMIC I Regular Interest I-LTZZ.....................................................................55

   REMIC I Regular Interest I-LT1SUB...................................................................55

   REMIC I Regular Interest I-LT1GRP...................................................................55

   REMIC I Regular Interest I-LT2SUB...................................................................55

   REMIC I Regular Interest I-LT2GRP...................................................................55

   REMIC I Remittance Rate.............................................................................55

   REMIC I Sub WAC Allocation Percentage...............................................................56

   REMIC I Subordinated Balance Ratio..................................................................56

   REMIC I Required Overcollateralization..............................................................56

   REMIC II............................................................................................56

   REMIC II Certificate................................................................................56

   REMIC II Certificateholder..........................................................................56

   REMIC Provisions....................................................................................56

   REMIC Regular Interest..............................................................................56

   REMIC Remittance Rate...............................................................................56

   Remittance Report...................................................................................56

   Rents from Real Property............................................................................56

   REO Account.........................................................................................57

   REO Disposition.....................................................................................57

   REO Imputed Interest................................................................................57

   REO Principal Amortization..........................................................................57

   REO Property........................................................................................57

   Required Overcollateralization......................................................................57

   Reserve Fund........................................................................................57
</TABLE>

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   Reserve Interest Rate...............................................................................57

   Residential Dwelling................................................................................58

   Residual Certificate................................................................................58

   Residual Interest...................................................................................58

   Responsible Officer.................................................................................58

   Rule................................................................................................58

   S&P.................................................................................................58

   Scheduled Principal Balance.........................................................................58

   Securities..........................................................................................59

   Securities Administrator............................................................................59

   Select Portfolio....................................................................................59

   Select Portfolio Assignment Agreement...............................................................59

   Select Portfolio Mortgage Loans.....................................................................59

   Select Portfolio Servicing Agreement................................................................59

   Seller..............................................................................................59

   Senior Interest Distribution Amount.................................................................59

   Servicer............................................................................................59

   Servicer Event of Default...........................................................................59

   Servicer Remittance Date............................................................................59

   Servicer Report.....................................................................................59

   Servicing Advance...................................................................................59

   Servicing Agreement.................................................................................60

   Servicing Fee.......................................................................................60

   Servicing Fee Rate..................................................................................60

   Servicing Officer...................................................................................60

   Servicing Transfer Date.............................................................................60

   Single Certificate..................................................................................60

   Startup Day.........................................................................................60

   Stated Principal Balance............................................................................60

   Stepdown Date.......................................................................................61

   Subordinate Certificates............................................................................61

   Subsequent Recoveries...............................................................................61

   Sub-Servicer........................................................................................62
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<S>                                                                                                    <C>
   Sub-Servicing Agreement.............................................................................62

   Substitution Shortfall Amount.......................................................................62

   Tax Returns.........................................................................................62

   Telerate Page.......................................................................................62

   Termination Price...................................................................................62

   Terminator..........................................................................................62

   Transfer............................................................................................62

   Transferee..........................................................................................62

   Transferor..........................................................................................62

   Trigger Event.......................................................................................62

   Trust...............................................................................................63

   Trust Fund..........................................................................................63

   Trust REMIC.........................................................................................63

   Trustee.............................................................................................63

   Uncertificated Balance..............................................................................63

   Uncertificated Interest.............................................................................63

   Uninsured Cause.....................................................................................63

   United States Person................................................................................63

   Value...............................................................................................64

   Verification Report.................................................................................64

   Voting Rights.......................................................................................64

   Wells Fargo.........................................................................................65

SECTION 1.02.    Allocation of Certain Interest Shortfalls.............................................65

   ARTICLE II CONVEYANCE OF MORTGAGE LOANS;............................................................67

SECTION 2.01.    Conveyance of the Mortgage Loans......................................................67

SECTION 2.02.    Acceptance of REMIC I by Trustee......................................................68

SECTION 2.03.    Repurchase or Substitution of Mortgage Loans..........................................68

SECTION 2.04.    Representations and Warranties of the Master Servicer.................................71

SECTION 2.05.    Representations, Warranties and Covenants of Ocwen....................................72

SECTION 2.06.    Issuance of the REMIC I Regular Interests and the Class R-I Interest..................74

SECTION 2.07.    Conveyance of the REMIC I Regular Interests; Acceptance of REMIC I by the Trustee.....75

SECTION 2.08.    Issuance of Residual Certificates.....................................................75

SECTION 2.09.    Establishment of the Trust............................................................75
</TABLE>

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   ARTICLE III ADMINISTRATION AND SERVICING OF THE OCWEN MORTGAGE LOANS; ACCOUNTS......................76

SECTION 3.01.    Ocwen to Act as a Servicer............................................................76

SECTION 3.02.    Sub-Servicing Agreements Between Ocwen and Sub-Servicers..............................78

SECTION 3.03.    Successor Sub-Servicers...............................................................79

SECTION 3.04.    No Contractual Relationship Between Sub-Servicer, Trustee or the Certificateholders...79

SECTION 3.05.    Assumption or Termination of Sub-Servicing Agreement by Successor Servicer............79

SECTION 3.06.    Collection of Certain Mortgage Loan Payments..........................................80

SECTION 3.07.    Collection of Taxes, Assessments and Similar Items; Servicing Accounts................80

SECTION 3.08.    Collection Account and Distribution Account...........................................81

SECTION 3.09.    Withdrawals from the Collection Account and Distribution Account......................83

SECTION 3.10.    Investment of Funds in the Investment Accounts........................................85

SECTION 3.11.    Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage and
                 Primary Mortgage Insurance............................................................87

SECTION 3.12.    Enforcement of Due-on-Sale Clauses; Assumption Agreements.............................89

SECTION 3.13.    Realization Upon Defaulted Mortgage Loans.............................................89

SECTION 3.14.    Trustee to Cooperate; Release of Mortgage Files.......................................91

SECTION 3.15.    Servicing Compensation................................................................93

SECTION 3.16.    Collection Account Statements.........................................................93

SECTION 3.17.    Statement as to Compliance............................................................93

SECTION 3.18.    Independent Public Accountants' Servicing Report......................................94

SECTION 3.19.    Annual Certification..................................................................94

SECTION 3.20.    Access to Certain Documentation.......................................................95

SECTION 3.21.    Title, Management and Disposition of REO Property.....................................95

SECTION 3.22.    Obligations of Ocwen in Respect of Prepayment Interest Shortfalls; Relief Act
                 Interest Shortfalls...................................................................98

SECTION 3.23.    Obligations of Ocwen in Respect of Mortgage Rates and  Monthly Payments...............99

SECTION 3.24.    Reserve Fund..........................................................................99

SECTION 3.25.    Advance Facility.....................................................................100

SECTION 3.26.    The Servicer Indemnification.........................................................102

SECTION 3.27.    Certificate Insurer Access...........................................................102
</TABLE>

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   ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS BY THE MASTER SERVICER........103

SECTION 4.01.    Master Servicer......................................................................103

SECTION 4.02.    REMIC-Related Covenants..............................................................104

SECTION 4.03.    Monitoring of Servicer...............................................................104

SECTION 4.04.    Fidelity Bond........................................................................105

SECTION 4.05.    Power to Act; Procedures.............................................................105

SECTION 4.06.    Due-on-Sale Clauses; Assumption Agreements...........................................106

SECTION 4.07.    Documents, Records and Funds in Possession of Master Servicer To Be Held
                 for Trustee..........................................................................107

SECTION 4.08.    Standard Hazard Insurance and Flood Insurance Policies...............................107

SECTION 4.09.    Presentment of Claims and Collection of Proceeds.....................................107

SECTION 4.10.    Maintenance of Primary Mortgage Insurance Policies...................................108

SECTION 4.11.    Trustee to Retain Possession of Certain Insurance Policies and Documents.............108

SECTION 4.12.    Realization Upon Defaulted Mortgage Loans............................................109

SECTION 4.13.    Compensation for the Master Servicer.................................................109

SECTION 4.14.    REO Property.........................................................................109

SECTION 4.15.    Annual Officer's Certificate as to Compliance........................................110

SECTION 4.16.    Annual Independent Accountant's Servicing Report.....................................110

SECTION 4.17.    UCC..................................................................................111

SECTION 4.18.    Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls.......111

SECTION 4.19.    Prepayment Penalty Verification......................................................111

   ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS...........................................................113

SECTION 5.01.    Distributions........................................................................113

SECTION 5.02.    Statements to Certificateholders.....................................................128

SECTION 5.03.    Servicer Reports; P&I Advances.......................................................131

SECTION 5.04.    Allocation of Realized Losses........................................................133

SECTION 5.05.    Compliance with Withholding Requirements.............................................136

SECTION 5.06.    Reports Filed with Securities and Exchange Commission................................136

SECTION 5.07.    The Certificate Insurance Policy.....................................................137

SECTION 5.08.    Effect of Payments by the Certificate Insurer; Subrogation...........................139

   ARTICLE VI THE CERTIFICATES........................................................................140

SECTION 6.01.    The Certificates.....................................................................140
</TABLE>

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SECTION 6.02.    Registration of Transfer and Exchange of Certificates................................142

SECTION 6.03.    Mutilated, Destroyed, Lost or Stolen Certificates....................................147

SECTION 6.04.    Persons Deemed Owners................................................................148

SECTION 6.05.    Certain Available Information........................................................148

SECTION 6.06.    Rights of the Certificate Insurer to Exercise Rights of Holders of Insured
                 Certificates.........................................................................148

SECTION 6.07.    Certificate Insurer Default..........................................................149

   ARTICLE VII THE DEPOSITOR, OCWEN AND THE MASTER SERVICER...........................................150

SECTION 7.01.    Liability of the Depositor, Ocwen and the Master Servicer............................150

SECTION 7.02.    Merger or Consolidation of the Depositor, Ocwen or the Master Servicer...............150

SECTION 7.03.    Limitation on Liability of the Depositor, Ocwen, the Master Servicer and Others......150

SECTION 7.04.    Limitation on Resignation of Ocwen...................................................151

SECTION 7.05.    Limitation on Resignation of the Master Servicer.....................................152

SECTION 7.06.    Assignment of Master Servicing.......................................................153

SECTION 7.07.    Rights of the Depositor in Respect of Ocwen and the Master Servicer..................153

SECTION 7.08.    Duties of the Credit Risk Manager....................................................154

SECTION 7.09.    Limitation Upon Liability of the Credit Risk Manager.................................154

SECTION 7.10.    Removal of the Credit Risk Manager...................................................155

   ARTICLE VIII DEFAULT...............................................................................156

SECTION 8.01.    Servicer Events of Default...........................................................156

SECTION 8.02.    Master Servicer to Act; Appointment of Successor.....................................159

SECTION 8.03.    Notification to Certificateholders...................................................161

SECTION 8.04.    Waiver of Servicer Events of Default.................................................162

   ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR.................................163

SECTION 9.01.    Duties of Trustee and Securities Administrator.......................................163

SECTION 9.02.    Certain Matters Affecting Trustee and Securities Administrator.......................164

SECTION 9.03.    Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans...166

SECTION 9.04.    Trustee and Securities Administrator May Own Certificates............................166

SECTION 9.05.    Fees and Expenses of Trustee and Securities Administrator............................166

SECTION 9.06.    Eligibility Requirements for Trustee and Securities Administrator....................167

SECTION 9.07.    Resignation and Removal of Trustee and Securities Administrator......................168

SECTION 9.08.    Successor Trustee or Securities Administrator........................................169
</TABLE>

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SECTION 9.09.    Merger or Consolidation of Trustee or Securities Administrator.......................169

SECTION 9.10.    Appointment of Co-Trustee or Separate Trustee........................................170

SECTION 9.11.    Appointment of Office or Agency......................................................170

SECTION 9.12.    Representations and Warranties.......................................................171

   ARTICLE X TERMINATION..............................................................................172

SECTION 10.01.   Termination Upon Repurchase or Liquidation of All Mortgage Loans.....................172

SECTION 10.02.   Additional Termination Requirements..................................................174

   ARTICLE XI REMIC PROVISIONS........................................................................176

SECTION 11.01.   REMIC Administration.................................................................176

SECTION 11.02.   Prohibited Transactions and Activities...............................................178

SECTION 11.03.   Indemnification......................................................................179

   ARTICLE XII MISCELLANEOUS PROVISIONS...............................................................180

SECTION 12.01.   Amendment............................................................................180

SECTION 12.02.   Recordation of Agreement; Counterparts...............................................181

SECTION 12.03.   Limitation on Rights of Certificateholders...........................................181

SECTION 12.04.   Governing Law........................................................................182

SECTION 12.05.   Notices..............................................................................182

SECTION 12.06.   Severability of Provisions...........................................................183

SECTION 12.07.   Notice to Rating Agencies............................................................183

SECTION 12.08.   Article and Section References.......................................................184

SECTION 12.09.   Grant of Security Interest...........................................................184

SECTION 12.10.   Survival of Indemnification..........................................................185

SECTION 12.11.   Servicing Agreements.................................................................185
</TABLE>

Exhibits

Exhibit A-1   Form of Class A Certificate
Exhibit A-2   Form of Class M Certificate
Exhibit A-3   Form of Class B Certificate
Exhibit A-4   Form of Class CE Certificate
Exhibit A-5   Form of Class P Certificate
Exhibit A-6   Form of Class R Certificate
Exhibit B-1   Form of Transferor Representation Letter and Form of Transferee
              Representation Letter in Connection with Transfer of the Class B
              Certificates, Class P Certificates, Class CECertificates and
              Residual Certificates Pursuant to Rule 144A Under the 1933 Act

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Exhibit B-2   Form of Transferor Representation Letter and Form of Transferee
              Representation Letter in Connection with Transfer of the Class B
              Certificates, Class P Certificates, Class CE Certificates and
              Residual Certificates Pursuant to Rule 501 (a) Under the 1933 Act

Exhibit B-3   Form of Transfer Affidavit and Agreement and Form of Transferor
              Affidavit in Connection with Transfer of Residual Certificates

Exhibit C     Form of Servicer Certification
Exhibit D     Form of Power of Attorney
Schedule 1    Mortgage Loan Schedule
Schedule 2    Prepayment Charge Schedule
Schedule 3    Reserved.
Schedule 4    Standard File Layout - Delinquency Reporting
Schedule 5    Standard File Layout - Scheduled/Scheduled
Schedule 6    Servicing Advances Incurred Prior to Cut-off Date

                                      xvi
<PAGE>

            This Pooling and Servicing Agreement, is dated and effective as of
November 1, 2004, among ACE SECURITIES CORP., as Depositor, OCWEN FEDERAL BANK
FSB, as a Servicer, WELLS FARGO BANK, N.A., as Master Servicer and Securities
Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, 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 of the Trust Fund 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
subject to this Agreement (other than the Reserve Fund) 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.

<PAGE>

<TABLE>
<CAPTION>
                               REMIC I                  Initial
                             Remittance             Uncertificated              Latest Possible
    Designation                 Rate                    Balance                Maturity Date (1)
--------------------         -----------          -----------------            -----------------
<S>                          <C>                  <C>                          <C>
I-LTAA                       Variable(2)          $  678,787,084.36            December 25, 2034
I-LTA1                       Variable(2)          $    3,971,140.00            December 25, 2034
I-LTA2                       Variable(2)          $    1,590,750.00            December 25, 2034
I-LTM1                       Variable(2)          $      232,035.00            December 25, 2034
I-LTM2                       Variable(2)          $      214,720.00            December 25, 2034
I-LTM3                       Variable(2)          $      138,530.00            December 25, 2034
I-LTM4                       Variable(2)          $      121,210.00            December 25, 2034
I-LTM5                       Variable(2)          $      117,750.00            December 25, 2034
I-LTM6                       Variable(2)          $      100,435.00            December 25, 2034
I-LTM7                       Variable(2)          $       69,265.00            December 25, 2034
I-LTM8                       Variable(2)          $       69,265.00            December 25, 2034
I-LTM9                       Variable(2)          $       76,190.00            December 25, 2034
I-LTM10                      Variable(2)          $       34,630.00            December 25, 2034
I-LTM11                      Variable(2)          $       65,800.00            December 25, 2034
I-LTB                        Variable(2)          $       62,340.00            December 25, 2034
I-LTZZ                       Variable(2)          $    6,988,737.64            December 25, 2034
I-LTP                        Variable(2)          $          100.00            December 25, 2034
I-LT1SUB                     Variable(2)          $       19,484.91            December 25, 2034
I-LT1GRP                     Variable(2)          $       98,907.72            December 25, 2034
I-LT2SUB                     Variable(2)          $        7,805.27            December 25, 2034
I-LT2GRP                     Variable(2)          $       39,620.27            December 25, 2034
I-LTXX                       Variable(2)          $  692,474,063.84            December 25, 2034
</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.

                                    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. 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.

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                                          Initial Aggregate
                                                        Certificate Principal           Latest Possible
     Designation             Pass-Through Rate                 Balance                 Maturity Date (1)
----------------------       -----------------          ---------------------          -----------------
<S>                             <C>                        <C>                         <C>
Class A-1                       Variable(2)                $794,228,000.00             December 25, 2034
Class A-2                       Variable(2)                $318,150,000.00             December 25, 2034
Class M-1                       Variable(2)                $ 46,407,000.00             December 25, 2034
Class M-2                       Variable(2)                $ 42,944,000.00             December 25, 2034
Class M-3                       Variable(2)                $ 27,706,000.00             December 25, 2034
Class M-4                       Variable(2)                $ 24,242,000.00             December 25, 2034
Class M-5                       Variable(2)                $ 23,550,000.00             December 25, 2034
Class M-6                       Variable(2)                $ 20,087,000.00             December 25, 2034
Class M-7                       Variable(2)                $ 13,853,000.00             December 25, 2034
Class M-8                       Variable(2)                $ 13,853,000.00             December 25, 2034
Class M-9                       Variable(2)                $ 15,238,000.00             December 25, 2034
Class M-10                      Variable(2)                $  6,926,000.00             December 25, 2034
Class M-11                      Variable(2)                $ 13,160,000.00             December 25, 2034
Class B                         Variable(2)                $ 12,468,000.00             December 25, 2034
Class P                           N/A(3)                   $        100.00             December 25, 2034
Class CE                          N/A(4)                   $    12,467,764             December 25, 2034
</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 Class of Certificates.

(2)   Calculated in accordance with the definition of "Pass-Through Rate"
      herein.

(3)   The Class P Certificates will not accrue interest.

(4)   The Class CE Certificates will accrue interest at their variable
      Pass-Through Rate on the Notional Amount of the Class CE Certificates
      outstanding from time to time which shall equal the Uncertificated Balance
      of the REMIC I Regular Interests (other than REMIC I Regular Interest
      I-LTP). The Class CE Certificates will not accrue interest on their
      Certificate Principal Balance.

            As of the Cut-off Date, the Group I Mortgage Loans had an aggregate
Scheduled Principal Balance equal to approximately $989,077,160 and the Group II
Mortgage Loans had an aggregate Scheduled Principal Balance equal to
approximately $396,202,704.

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

                                       3
<PAGE>

                                   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 Master Servicing Practices": With respect to any Mortgage
Loan, as applicable, either (x) those customary mortgage master servicing
practices of prudent mortgage servicing institutions that master service
mortgage loans of the same type and quality as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, to the extent
applicable to the Master Servicer (except in its capacity as successor to the
Servicer), or (y) as provided in Section 3.01 hereof, but in no event below the
standard set forth in clause (x).

            "Accepted Servicing Practices": As defined in Section 3.01.

            "Account": The Collection Account and the Distribution Account as
the context may require.

            "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 Class A Certificates, the Mezzanine
Certificates and the Class B 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 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, if any, 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 3.22 or Section 4.18 of this Agreement or
pursuant to the Servicing Agreements 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 1.02
and Section 5.04 hereof.

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

                                       4
<PAGE>

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

            "Administration Fees": The sum of (i) the Servicing Fee, (ii) the
Master Servicing Fee and (iii) the Credit Risk Management Fee.

            "Administration Fee Rate": The sum of (i) the Servicing Fee Rate ,
(ii) the Master Servicer Fee Rate and (iii) the Credit Risk Management Fee Rate.

            "Advance Facility": As defined in Section 3.25(a).

            "Advance Financing Person": As defined in Section 3.25(a).

            "Advance Reimbursement Amounts": As defined in Section 3.25(b).

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

            "Aggregate Loss Severity 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 on any Mortgage Loans
from the Cut-off Date to the last day of the preceding calendar month and the
denominator of which is the aggregate principal balance of such Mortgage Loans
immediately prior to the liquidation of such Mortgage Loans.

            "Agreement": This Pooling and Servicing Agreement, including all
exhibits and schedules hereto and all amendments hereof and supplements hereto.

            "Allocated Realized Loss Amount": With respect to any Class of
Mezzanine Certificates or Class B Certificates and any Distribution Date, an
amount equal to the sum of any Realized Loss allocated to that Class of
Certificates on the Distribution Date and any Allocated Realized Loss Amount for
that Class remaining unpaid from the previous Distribution Date.

            "Amounts Held for Future Distribution": As to any Distribution Date,
the aggregate amount held in the Custodial Accounts and the Collection Account
at the close of business on the immediately preceding Determination Date on
account of (i) all Monthly Payments or portions thereof received in respect of
the Mortgage Loans due after the related Due Period and (ii) Principal
Prepayments and Liquidation Proceeds received in respect of such Mortgage Loans
after the last day of the related Prepayment Period.

            "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, 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

                                       5
<PAGE>

blanket assignments covering Mortgages secured by Mortgaged Properties located
in the same county, if permitted by law.

            "Assignment Agreement": Collectively, the Fremont Assignment
Agreement, the Long Beach Assignment Agreement, the People's Choice Assignment
Agreement and the Select Portfolio Assignment Agreement.

            "Authorized Officers": A managing director of the whole loan trading
desk and a managing director in global markets.

            "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 Custodial Accounts, Collection Account and Distribution Account
as of the close of business on the related Servicer Remittance Date, (b) the
aggregate of any amounts deposited in the Distribution Account by Ocwen or the
Master Servicer in respect of Prepayment Interest Shortfalls for such
Distribution Date pursuant to Section 3.22 or Section 4.18 of this Agreement or
by Fremont or Select Portfolio pursuant to the related Servicing Agreement, (c)
the aggregate of any P&I Advances for such Distribution Date made by Ocwen
pursuant to Section 5.03 of this Agreement or by Fremont or Select Portfolio
pursuant to the related Servicing Agreement and (d) the aggregate of any P&I
Advances made by a successor Servicer (including the Master Servicer) for such
Distribution Date pursuant to Section 8.02 of this Agreement or pursuant to the
related Servicing Agreement, reduced (to not less than zero) by (2) the portion
of the amount described in clause (1)(a) above that represents (i) Amounts Held
for Future Distribution, (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, a Servicer, the
Trustee, the Master Servicer, the Securities Administrator or the Custodian
pursuant to Section 3.09 or 9.05 of this Agreement or otherwise payable in
respect of Extraordinary Trust Fund Expenses or reimbursable or payable to
Fremont or Select Portfolio under the related Servicing Agreement, (v) the
Credit Risk Management Fee, (vi) amounts deposited in a Custodial Account, the
Collection Account or the Distribution Account in error, (vii) the amount of any
Prepayment Charges collected by a Servicer or Fremont in connection with the
Principal Prepayment of any of the Mortgage Loans and (viii) amounts
reimbursable to a successor Servicer (including the Master Servicer) pursuant to
Section 8.02 of this Agreement or pursuant to the related Servicing Agreement.

            "Avoided Payment": As such term is defined in the Certificate
Insurance Policy.

            "Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment, that is substantially greater than the preceding monthly payment at the
maturity of such Mortgage Loan.

            "Balloon Payment": A payment of the unamortized principal balance of
a Mortgage Loan in a single payment, that is substantially greater than the
preceding Monthly Payment at the maturity of such Mortgage Loan.

                                       6
<PAGE>

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

            "Book-Entry Certificates": The Offered 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
6.01.

            "Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings and loan institutions in the States of New York,
Florida, Maryland, Texas, Minnesota 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": Shall mean (i) the Cap Contract between the Trustee
and the counterparty named thereunder, for the benefit of the Holders of the
Class A-1 Certificates, the Mezzanine Certificates and the Class B Certificates
(the "Group I Cap Contract") and (ii) the Cap Contract between the Trustee and
the counterparty thereunder, for the benefit of the Class A-2 Certificates, the
Mezzanine Certificates and the Class B Certificates (the "Group 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 plus any subordinate mortgage on the related Mortgaged
Property and related closing costs.

            "Certificate": Any one of ACE Securities Corp., Asset Backed
Pass-Through Certificates, Series 2004-HE4, Class A-1, Class A-2, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9, Class M-10, Class M-11, Class B, Class P, Class CE and Class R issued
under this Agreement.

            "Certificate Factor": With respect to any Class of Certificates
(other than the Residual Certificates) as of any Distribution Date, a fraction,
expressed as a decimal carried to six places, the numerator of which is the
aggregate Certificate Principal Balance (or 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 resulting in reduction of the Certificate Principal Balance (or
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 Notional Amount, in
the case of the Class CE Certificates) of such Class of Certificates as of the
Closing Date.

            "Certificate Insurance Policy": The Financial Guaranty Insurance
Policy No. CA01177A, and all endorsements thereto dated the Closing Date, issued
by the Certificate Insurer for the benefit of the Holders of the Insured
Certificates.

            "Certificate Insurer": XL Capital Assurance Inc., a New York
monoline insurance corporation or its successors in interest.

            "Certificate Insurer Default": The occurrence and continuance of any
of the following:

                                       7
<PAGE>

            (a) the Certificate Insurer shall have failed to make a required
payment when due under the Certificate Insurance Policy in accordance with its
terms;

            (b) the Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the United
States Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization, (ii) made a general assignment for the benefit
of its creditors or (iii) had an order for relief entered against it under the
United States Bankruptcy Code, the New York State Insurance Law or any other
similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation, or reorganization that is final and nonappealable; or

            (c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a final
and nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent, or receiver for the Certificate Insurer or for all or any material
portion of its property or (ii) 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 property of the Certificate
Insurer).

            "Certificate Margin": With respect to the Class A-1 Certificates
and, for purposes of the definition of "Marker Rate", REMIC I Regular Interest
I-LTA1 0.330% in the case of each Distribution Date through and including the
Optional Termination Date and 0.660% in the case of each Distribution Date
thereafter.

            With respect to the Class A-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2 0.310% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.620% in the case of each Distribution Date thereafter.

            With respect to the Class M-1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM1, 0.600% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.900% in the case of each Distribution Date thereafter.

            With respect to the Class M-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM2, 0.650% in the case
of each Distribution Date through and including the Optional Termination Date
and 0.975% in the case of each Distribution Date thereafter.

            With respect to the Class M-3 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM3, 0.700% in the case
of each Distribution Date through and including the Optional Termination Date
and 1.050% in the case of each Distribution Date thereafter.

            With respect to the Class M-4 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM4, 1.000% in the case
of each Distribution Date through and including the Optional Termination Date
and 1.500% in the case of each Distribution Date thereafter.

                                       8
<PAGE>

            With respect to the Class M-5 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM5, 1.100% in the case
of each Distribution Date through and including the Optional Termination Date
and 1.650% in the case of each Distribution Date thereafter.

            With respect to the Class M-6 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM6, 1.300% in the case
of each Distribution Date through and including the Optional Termination Date
and 1.950% in the case of each Distribution Date thereafter.

            With respect to the Class M-7 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM7, 1.700% in the case
of each Distribution Date through and including the Optional Termination Date
and 2.550% in the case of each Distribution Date thereafter.

            With respect to the Class M-8 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM8, 1.800% in the case
of each Distribution Date through and including the Optional Termination Date
and 2.700% in the case of each Distribution Date thereafter.

            With respect to the Class M-9 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM9, 3.100% in the case
of each Distribution Date through and including the Optional Termination Date
and 4.650% in the case of each Distribution Date thereafter.

            With respect to the Class M-10 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM10, 3.500% in the
case of each Distribution Date through and including the Optional Termination
Date and 5.250% in the case of each Distribution Date thereafter.

            With respect to the Class M-11 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM11, 3.500% in the
case of each Distribution Date through and including the Optional Termination
Date and 5.250% in the case of each Distribution Date thereafter.

            With respect to the Class B Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB, 3.500% in the case
of each Distribution Date through and including the Optional Termination Date
and 5.250% in the case of each Distribution Date thereafter.

            "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 or beneficially owned by the Depositor, the Seller, a Servicer, the
Master Servicer, the Securities Administrator, the Trustee 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 12.01. The Trustee and the

                                       9
<PAGE>

Securities Administrator may conclusively rely upon a certificate of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or a
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 and the Securities Administrator
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 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 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 plus any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 5.04, minus all distributions
allocable to principal made thereon and Realized Losses allocated thereto, if
any, 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. The aggregate initial Certificate Principal Balance of each Class
of Regular Certificates is set forth in the Preliminary Statement hereto.

            "Certificate Register": The register maintained pursuant to Section
6.02.

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

            "Class A Certificate": Any Class A-1 Certificate or Class A-2
Certificate.

            "Class A Principal Distribution Amount": The Class A Principal
Distribution Amount is an amount equal to the sum of: (i) the Class A-1
Principal Distribution Amount and (ii) the Class A-2 Principal Distribution
Amount.

            "Class A-1 Allocation Percentage": With respect to any Distribution
Date is 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.

            "Class A-1 Certificate": Any one of the Class A-1 Certificates
executed and authenticated by the Securities Administrator 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.

                                       10
<PAGE>

            "Class A-1 Certificate Deficiency Amount": With respect to any
Distribution Date and the Class A-1 Certificates, an amount equal to the sum of
the following amounts, in each case after giving effect to distributions made on
such date from sources other than the Certificate Insurance Policy:

                  (i) the excess of (x) the Senior Interest Distribution Amount
      for the Class A-1 Certificates for such Distribution Date (calculated
      without regard to any step-up of the Pass-Through Rate following the
      Optional Termination Date) over (y) the amount of available funds
      allocated to pay such Senior Interest Distribution Amount pursuant to
      Section 5.01;

                  (ii) the Class A-1 Principal Loss Amount, if any, for such
      Distribution Date; and

                  (iii) without duplication of the amount specified in clause
      (ii) above, the Certificate Principal Balance of the Class A-1
      Certificates on the Final Maturity Date or, if earlier, the date on which
      the final scheduled distribution is made to the Class A-1
      Certificateholders pursuant to Article X.

            "Class A-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the Certificate Principal Balance of the Class
A-1 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 60.60% and (ii) the aggregate Stated Principal Balance
of the Group I Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced and
unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Group I Mortgage Loans as of the Cut-off Date.

            "Class A-1 Principal Loss Amount": With respect to any Distribution
Date, the amount by which (i) the aggregate Certificate Principal Balance of the
Class A-1 Certificates, after taking into account distributions in reduction of
such aggregate Certificate Principal Balance from sources other than the
Certificate Insurance Policy on such Distribution Date, exceeds (ii) the
aggregate Stated Principal Balance of the Group I Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period).

            "Class A-2 Allocation Percentage": With respect to any Distribution
Date is 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.

            "Class A-2 Certificate": Any one of the Class A-2 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the

                                       11
<PAGE>

form annexed hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC II
for purposes of the REMIC Provisions.

            "Class A-2 Certificate Deficiency Amount": With respect to any
Distribution Date and the Class A-2 Certificates, an amount equal to the sum of
the following amounts, in each case after giving effect to distributions made on
such date from sources other than the Certificate Insurance Policy:

                  (iv) the excess of (x) the Senior Interest Distribution Amount
      for the Class A-2 Certificates for such Distribution Date (calculated
      without regard to any step-up of the Pass-Through Rate following the
      Optional Termination Date) over (y) the amount of available funds
      allocated to pay such Senior Interest Distribution Amount pursuant to
      Section 5.01;

                  (v) the Class A-2 Principal Loss Amount, if any, for such
      Distribution Date; and

            without duplication of the amount specified in clause (ii) above,
the Certificate Principal Balance of the Class A-2 Certificates on the Final
Maturity Date or, if earlier, the date on which the final scheduled distribution
is made to the Class A-2 Certificateholders pursuant to Article X.

            "Class A-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of the Certificate Principal Balances
of the Class A-2 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 60.60% and (ii) the aggregate Stated
Principal Balance of the Group II Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced and unscheduled collections of principal received during
the related Prepayment Period) minus the product of (i) 0.50% and (ii) the
aggregate principal balance of the Group II Mortgage Loans as of the Cut-off
Date.

            "Class A-2 Principal Loss Amount": With respect to any Distribution
Date, the amount by which (i) the aggregate Certificate Principal Balance of the
Class A-2 Certificates, after taking into account distributions in reduction of
such aggregate Certificate Principal Balance from sources other than the
Certificate Insurance Policy on such Distribution Date, exceeds (ii) the
aggregate Stated Principal Balance of the Group II Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period).

            "Class B Certificate": Any one of the Class B Certificates executed
and authenticated by the Securities Administrator 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.

                                       12
<PAGE>

            "Class B Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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 payment 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 payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates
(after taking into account the payment of the Class M-10 Principal Distribution
Amount on such Distribution Date), (xii) the Certificate Principal Balance of
the Class M-11 Certificates (after taking into account the payment of the Class
M-11 Principal Distribution Amount on such Distribution Date) and (xiii) 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) 98.20% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

            "Class CE Certificate": Any one of the Class CE Certificates
executed and authenticated by the Securities Administrator 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 M Certificates": The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates.

            "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the

                                       13
<PAGE>

form annexed hereto as Exhibit A-2 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 on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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) 67.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

            "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed and authenticated by the Securities Administrator 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 M-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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) 73.50% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

            "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed and authenticated by the Securities Administrator 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.

                                       14
<PAGE>

            "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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) 77.50% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) minus the product of (i) 0.50% and (ii) the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.

            "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed and authenticated by the Securities Administrator 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 M-4 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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) 81.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

                                       15
<PAGE>

            "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed and authenticated by the Securities Administrator 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 M-5 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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 payment 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) 84.40% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

            "Class M-6 Certificate": Any one of the Class M-6 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

            "Class M-6 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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 payment 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 payment of the Class M-5
Principal Distribution Amount on such

                                       16
<PAGE>

Distribution Date) and (vii) the Certificate Principal Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 87.30% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

            "Class M-7 Certificate": Any one of the Class M-7 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

            "Class M-7 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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 payment 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 payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 89.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) minus the product of
(i) 0.50% and (ii) the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date.

            "Class M-8 Certificate": Any one of the Class M-8 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the

                                       17
<PAGE>

form annexed hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC
III for purposes of the REMIC Provisions.

            "Class M-8 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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 payment 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 payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date) and (ix) the Certificate Principal Balance of
the Class M-8 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 91.30% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) minus the product of (i) 0.50% and (ii) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.

            "Class M-9 Certificate": Any one of the Class M-9 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

            "Class M-9 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such

                                       18
<PAGE>

Distribution Date), (v) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment 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 payment of
the Class M-5 Principal Distribution Amount on such Distribution Date), (vii)
the Certificate Principal Balance of the Class M-6 Certificates (after taking
into account the payment of the Class M-6 Principal Distribution Amount on such
Distribution Date). (viii) the Certificate Principal Balance of the Class M-7
Certificates (after taking into account the payment of the Class M-7 Principal
Distribution Amount on such Distribution Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates (after taking into account the payment of
the Class M-8 Principal Distribution Amount on such Distribution Date) and (vii)
the Certificate Principal Balance of the Class M-9 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 (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

            "Class M-10 Certificate": Any one of the Class M-10 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

            "Class M-10 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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 payment 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 payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after

                                       19
<PAGE>

taking into account the payment of the Class M-9 Principal Distribution Amount
on such Distribution Date) and (vii) the Certificate Principal Balance of the
Class M-10 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 94.50% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) minus
the product of (i) 0.50% and (ii) the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.

            "Class M-11 Certificate": Any one of the Class M-11 Certificates
executed and authenticated by the Securities Administrator and delivered by the
Trustee, substantially in the form annexed hereto as Exhibit A-2 and evidencing
a Regular Interest in REMIC III for purposes of the REMIC Provisions.

            "Class M-11 Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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 payment 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 payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates
(after taking into account the payment of the Class M-10 Principal Distribution
Amount on such Distribution Date) and (vii) the Certificate Principal Balance of
the Class M-11 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 96.40% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the

                                       20
<PAGE>

Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced and unscheduled collections of principal received
during the related Prepayment Period) minus the product of (i) 0.50% and (ii)
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.

            "Class P Certificate": Any one of the Class P Certificates executed
and authenticated by the Securities Administrator 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 R Certificates": Any one of the Class R Certificates executed
and authenticated by the Securities Administrator and delivered by the Trustee,
substantially in the form annexed hereto as Exhibit A-6, and evidencing 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": November 29, 2004.

            "Code": The Internal Revenue Code of 1986 as amended from time to
time.

            "Collection Account": The account or accounts created and
maintained, or caused to be created and maintained, by Ocwen pursuant to Section
3.08(a) of this Agreement, which shall be entitled "Ocwen Federal Bank FSB, as
Servicer for HSBC Bank USA, National Association as Trustee, in trust for the
registered holders of ACE Securities Corp., Home Equity Loan Trust, Series
2004-HE4, Asset Backed Pass-Through Certificates" or by Select Portfolio in
accordance with the Select Portfolio Servicing Agreement. The Collection Account
maintained by Ocwen must be an Eligible Account.

            "Commission": The Securities and Exchange Commission.

            "Corporate Trust Office": The principal corporate trust office of
the Trustee which office at the date of the execution of this instrument is
located at 452 Fifth Avenue, New York, New York 10018, Attention: ACE Securities
Corp., 2004-HE4, or at such other address as the Trustee may designate from time
to time by notice to the Certificateholders, the Depositor, the Master Servicer,
the Securities Administrator and the Servicer. The office of the Securities
Administrator, which for purposes of Certificate transfers and surrender is
located at Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust (ACE 2004-HE4), and for
all other purposes is located at Wells Fargo Bank, N.A., P.O. Box 98, Columbia,
Maryland 21046, Attention: Corporate Trust (ACE 2004-HE4) (or for overnight
deliveries, at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention:
Corporate Trust (ACE 2004-HE4)).

            "Corresponding Certificate": With respect to each REMIC I Regular
Interest, as follows:

                                       21
<PAGE>

                       REMIC I Regular Interest             Class
                  -------------------------------          -------
                  REMIC I Regular Interest I-LTA1            A-1
                  REMIC I Regular Interest I-LTA2            A-2
                  REMIC I Regular Interest I-LTM1            M-1
                  REMIC I Regular Interest I-LTM2            M-2
                  REMIC I Regular Interest I-LTM3            M-3
                  REMIC I Regular Interest I-LTM4            M-4
                  REMIC I Regular Interest I-LTM5            M-5
                  REMIC I Regular Interest I-LTM6            M-6
                  REMIC I Regular Interest I-LTM7            M-7
                  REMIC I Regular Interest I-LTM8            M-8
                  REMIC I Regular Interest I-LTM9            M-9
                  REMIC I Regular Interest I-LTM10          M-10
                  REMIC I Regular Interest I-LTM10          M-11
                  REMIC I Regular Interest I-LTB              B
                  REMIC I Regular Interest I-LTP              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, and the denominator of which
is the aggregate Stated Principal Balance of the Mortgage Loans, calculated
after taking into account distributions of principal on the Mortgage Loans and
distribution of the Principal Distribution Amount to the Certificates then
entitled to distributions of principal on such Distribution Date.

            "Credit Risk Management Agreements": The agreements between the
Credit Risk Manager and the Servicers and/or Master Servicer, regarding the loss
mitigation and advisory services to be provided by the Credit Risk Manager.

            "Credit Risk Management Fee": The amount payable to the Credit Risk
Manager on each Distribution Date as compensation for all services rendered by
it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under the Credit Risk Management Agreements, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the Stated Principal Balance of the Mortgage Loans and
any related REO Properties as of the first day of the related Due Period.

            "Credit Risk Management Fee Rate": 0.0135% per annum.

            "Credit Risk Manager": The Murrayhill Company, a Colorado
corporation, and its successors and assigns.

            "Custodial Account": Shall mean the account maintained by Fremont
under the Fremont Servicing Agreement.

            "Custodial Agreement": The Custodial Agreement dated as of November
1, 2004, among the Trustee, the Custodian and the Servicers as such agreement
may be amended or supplemented from time to time, or any other custodial
agreement entered into after the date hereof with respect to any Mortgage Loan
subject to this Agreement.

            "Custodian": Wells Fargo or any other custodian appointed under any
custodial agreement entered into after the date of this Agreement.

                                       22
<PAGE>

            "Cut-off Date": With respect to each Mortgage Loan, November 1,
2004. 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.

            "DBRS": Dominion Bond Rating Service, or any successor in interest.

            "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.

            "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 6.01(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.

            "Depositor": ACE Securities Corp., 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 A-1+ by S&P, F-1+
by Fitch and P-1 by Moody's (or, if such Rating Agencies are no longer rating
the Offered Certificates, comparable ratings by any other nationally recognized
statistical rating agency then rating the Offered Certificates).

                                       23
<PAGE>

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

            "Determination Date": With respect to Ocwen and 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. With respect to Fremont and Select Portfolio, the date
specified in the related Servicing Agreement.

            "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 related Servicer, on behalf
of the Trustee, shall not be considered to Directly Operate an REO Property
solely because the related Servicer 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 so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership Interest in a
Residual Certificate by such Person may cause any Trust REMIC 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 Securities Administrator pursuant to Section 3.08(b) in the
name of the Securities Administrator for the benefit of the Certificateholders
and designated "Wells Fargo Bank, N.A., in trust for registered holders of ACE
Securities Corp. Home Equity Loan Trust, Series 2004-HE4". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement. 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 December 2004.

                                       24
<PAGE>

            "Due Date": With respect to each Distribution Date, the day of the
month on which the Monthly Payment is due on a Mortgage Loan during the related
Due Period, exclusive of any days of grace.

            "Due Period": With respect to any Distribution Date and the Ocwen
Mortgage Loans, the period commencing on the second day of the month immediately
preceding the month in which such Distribution Date occurs and ending on the
first day of the month in which such Distribution Date occurs. With respect to
any Distribution Date and Fremont and Select Portfolio, the periods as set forth
in the related Servicing Agreement.

            "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 trust account or accounts maintained
with a federal depository institution or state chartered depository institution
acting in its fiduciary capacity. Eligible Accounts may bear interest.

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

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

            "Excess Liquidation Proceeds": To the extent that such amount is not
required by law to be paid to the related mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a liquidated Mortgage Loan exceed the
sum of (i) the outstanding principal balance of such Mortgage Loan and accrued
but unpaid interest at the related Net Mortgage Rate through the last day of the
month in which the related Liquidation Event occurs, plus (ii) related
liquidation expenses or other amounts to which the related Servicer or Fremont
is entitled to be reimbursed from Liquidation Proceeds with respect to such
liquidated Mortgage Loan pursuant to Section 3.09 of this Agreement or pursuant
to the related Servicing Agreement.

            "Expense Adjusted Mortgage Rate": With respect to any Mortgage Loan
or REO Property, the then applicable Mortgage Rate thereon minus the
Administration Fee Rate.

            "Extraordinary Trust Fund Expense": Any amounts payable or
reimbursable to the Trustee, the Master Servicer, the Securities Administrator,
the Custodian or any director, officer, employee or agent of any such Person
from the Trust Fund pursuant to the terms of this Agreement and any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
11.01(g)(v).

            "Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (i) the Net Monthly Excess Cashflow for such
Distribution Date and (ii) the Overcollateralization Increase Amount for such
Distribution Date.

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

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

            "Final Maturity Date": The Distribution Date occurring in December
2034.

                                       25
<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 an Originator, the Seller or the Terminator pursuant to or as
contemplated by Section 2.03, 3.13(c) or Section 10.01), a determination made by
the related Servicer or Fremont that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the related Servicer or Fremont,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered, which determination shall be evidenced
by a certificate of a Servicing Officer delivered to the Master Servicer and
maintained in its records.

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

            "Fremont": Fremont Investment & Loan, and any successor thereto.

            "Fremont Assignment Agreement": The Assignment, Assumption and
Recognition Agreement, dated as of November 29, 2004, by and among the Seller,
the Depositor and Fremont evidencing the assignment of the Fremont Servicing
Agreement to the Depositor.

            "Fremont Mortgage Loans": The Mortgage Loans being serviced by
Fremont as of the Closing Date.

            "Fremont Servicing Agreement": The Master Mortgage Loan Purchase and
Interim Servicing Agreement, dated as of May 1, 2004, by and among the Seller
and Fremont, as modified by the Fremont Assignment Agreement.

            "Gross Margin": With respect to each Adjustable Rate 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 Adjustable Rate
Mortgage Loan.

            "Group I Interest Remittance Amount": With respect to any
Distribution Date is that portion of the Available Distribution Amount for such
Distribution Date that represents interest received or advanced on the Group I
Mortgage Loans (net of the Administration Fees and any Prepayment Charges and
after taking into account amounts payable or reimbursable to the Trustee, the
Custodian, the Securities Administrator, the Master Servicer or Ocwen pursuant
to this Agreement or the Custodial Agreement or Fremont or Select Portfolio
pursuant to the related Servicing Agreement).

            "Group I Mortgage Loans": Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.

            "Group I Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments 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
principal portion of all proceeds received in respect of the repurchase of a
Group I Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01 of this Agreement or the related Servicing Agreement; (iii) the principal
portion of all other unscheduled collections, including

                                       26
<PAGE>

Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments in full
and in part, received during the related Prepayment Period, to the extent
applied as recoveries of principal on the Group I Mortgage Loans, net in each
case of payments or reimbursements to the Trustee, the Custodian, the Master
Servicer, the Securities Administrator, the related Servicer or Fremont and (iv)
the Class A-1 Allocation Percentage of the amount of any Overcollateralization
Increase Amount for such Distribution Date minus (v) the Class A-1 Allocation
Percentage of the amount of any Overcollateralization Reduction Amount for such
Distribution Date.

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

            "Group II Interest Remittance Amount": With respect to any
Distribution Date is that portion of the Available Distribution Amount for such
Distribution Date that represents interest received or advanced on the Group II
Mortgage Loans (net of the Administration Fees and any Prepayment Charges and
after taking into account amounts payable or reimbursable to the Trustee, the
Custodian, the Securities Administrator, the Master Servicer or Ocwen pursuant
to this Agreement or the Custodial Agreement or payable or reimbursable to
Fremont or Select Portfolio pursuant to the related Servicing Agreement).

            "Group II Mortgage Loans": Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.

            "Group II Principal Distribution Amount": With respect to any
Distribution Date will be the sum of (i) the principal portion of all Monthly
Payments 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
principal portion of all proceeds received in respect of the repurchase of a
Group II Mortgage Loan or, in the case of a substitution, certain amounts
representing a principal adjustment, during the related Prepayment Period
pursuant to or as contemplated by Section 2.03, Section 3.13(c) and Section
10.01; (iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, Liquidation Proceeds and all Principal Prepayments
in full and in part, received during the related Prepayment Period, to the
extent applied as recoveries of principal on the Group II Mortgage Loans, net in
each case of payments or reimbursements to the Trustee, the Custodian, the
Master Servicer, the Securities Administrator, the related Servicer or Fremont
and (iv) the Class A-2 Allocation Percentage of the amount of any
Overcollateralization Increase Amount for such Distribution Date minus (v) the
Class A-2 Allocation Percentage of the amount of any Overcollateralization
Reduction Amount for such Distribution Date.

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

            "Independent": When used with respect to any specified Person, any
such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Securities Administrator, the Servicers, the Seller, any
Originator 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, the Securities Administrator, the Servicers, the
Seller, any Originator or any Affiliate thereof, and (c) is not connected with
the Depositor, the Master

                                       27
<PAGE>

Servicer, the Securities Administrator, the Servicer, the Seller, any Originator
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, the Securities Administrator, the Servicers, the Seller, any
Originator 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, the Securities Administrator, the Servicer, the Seller, any
Originator or any Affiliate thereof, as the case may be.

            "Independent Contractor": Either (i) any Person (other than a
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 a Servicer) if the Trustee 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": As of any Adjustment Date, the index applicable to the
determination of the Mortgage Rate on each Adjustable Rate Mortgage Loan will
generally be the average of the interbank offered rates for six-month United
States dollar deposits in the London market as published in The Wall Street
Journal and as most recently available either (a) as of the first Business Day
45 days prior to such Adjustment Date or (b) as of the first Business Day of the
month preceding the month of such Adjustment Date, as specified in the related
Mortgage Note.

            "Insolvency Proceeding": As defined in Certificate Insurance Policy.

            "Institutional Accredited Investor": As defined in Section 6.01(c).

            "Insurance Agreement": The Insurance and Indemnity Agreement, dated
as of the Closing Date, among the Certificate Insurer, the Servicers, the
Seller, the Depositor and Deutsche Bank Securities Inc.

            "Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy, covering a Mortgage Loan or the related Mortgaged
Property, to the extent such proceeds are not to be applied to the restoration
of the related Mortgaged Property or released to the Mortgagor or a senior
lienholder in accordance with Accepted Servicing Practices, subject to the terms
and conditions of the related Mortgage Note and Mortgage.

            "Insured Certificate Deficiency Amount ": The Class A-1 Certificate
Deficiency Amount or Class A-2 Certificate Deficiency Amount.

            "Insured Certificates": The Class A-1 Certificates and Class A-2
Certificates.

                                       28
<PAGE>

            "Insured Payments": Any payments made by the Certificate Insurer
pursuant to the Certificate Insurance Policy.

            "Interest Accrual Period": With respect to any Distribution Date and
the Class A Certificates, the Mezzanine Certificate and the Class B
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 Class CE Certificates and the REMIC I Regular
Interests, the one-month period ending on the last day of the calendar month
immediately preceding the month in which such Distribution Date occurs.

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

            "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates, REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, 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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTM10, REMIC I Regular Interest I-LTM11, REMIC I Regular Interest I-LTB, and
any Interest Accrual Period 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.

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

            "Last Scheduled Distribution Date": December 25, 2034.

            "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 with respect to such Mortgage Loan, 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.

                                       29
<PAGE>

            "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 3.13(c) or Section 10.01. 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
10.01.

            "Liquidation Proceeds": The amount (other than Insurance Proceeds,
amounts received in respect of the rental of any REO Property prior to REO
Disposition, or required to be released to a Mortgagor or a senior lienholder in
accordance with applicable law or the terms of the related Mortgage Loan
Documents) received by the related Servicer or Fremont 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 (other than amounts required to be released to
the Mortgagor or a senior lienholder), (ii) the liquidation of a defaulted
Mortgage Loan through a trustee's sale, foreclosure sale or otherwise, (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.13(c), Section 3.21 or Section
10.01 of this Agreement or (iv) any Subsequent Recoveries.

            "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.

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

            "Loss Severity Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
principal balance of such Mortgage Loan immediately prior to the liquidation of
such Mortgage Loan.

            "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 each of REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2, 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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTM11,REMIC I Regular Interest I-LTB and REMIC I Regular Interest
I-LTZZ, with the rate on each such REMIC I Regular Interest (other than REMIC I
Regular Interest I-LTZZ) subject to a cap equal to the lesser of (i) the related
One-Month LIBOR Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate
for the corresponding Certificate 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, each
such cap for each REMIC I Regular Interest shall be multiplied by a fraction the
numerator of which is the actual number of days in the related Interest Accrual
Period and the denominator of which is 30.

                                       30
<PAGE>

            "Master Servicer": As of the Closing Date, Wells Fargo Bank, N.A.
and thereafter, its respective successors in interest who meet the
qualifications of this Agreement. The Master Servicer and the Securities
Administrator shall at all times be the same Person.

            "Master Servicer Certification": A written certification covering
servicing of the Mortgage Loans by a Servicer and signed by an officer of the
Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superseded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Seller following a negotiation in good
faith to determine how to comply with any such new requirements.

            "Master Servicer Event of Default": One or more of the events
described in Section 8.01(b).

            "Master Servicer Fee Rate": 0.001% per annum.

            "Master Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one twelfth of the product of the Master
Servicer Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month.

            "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 Overcollateralization 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-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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTM10, REMIC I Regular Interest I-LTM11 and REMIC I Regular Interest I-LTB for
such Distribution Date, with the rate on each such REMIC I Regular Interest
subject to a cap equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate and (ii) the related Net WAC Pass-Through Rate for the
corresponding Certificate for the purpose of this calculation for such
Distribution Date; provided however, each such cap for each REMIC I Regular
Interest shall be multiplied by a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is 30.

                                       31
<PAGE>

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

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

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

            "Mezzanine Certificate": Any Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 or Class
M-11 Certificate.

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

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

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

            "Monthly Payment": With respect to any Mortgage Loan, 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 or similar state laws; (b) without giving effect to any extension
granted or agreed to by Ocwen pursuant to Section 3.01 of this Agreement or by
Fremont or Select Portfolio pursuant to the applicable Servicing Agreement; 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 any successor
interest.

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

            "Mortgage File": The Mortgage Loan Documents pertaining to a
particular Mortgage Loan.

            "Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee and the Mortgage Loan Documents for which have been delivered to the
Custodian pursuant to Section 2.01 of this Agreement and pursuant to the
Custodial 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.

                                       32
<PAGE>

            "Mortgage Loan Documents": The documents evidencing or relating to
each Mortgage Loan delivered to the Custodian under the Custodial Agreement on
behalf of the Trustee.

            "Mortgage Loan Purchase Agreement": Shall mean the Mortgage Loan
Purchase Agreement dated as of November 29, 2004, between the Depositor and the
Seller.

            "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
Depositor shall deliver or cause the delivery of the initial Mortgage Loan
Schedule to the related Servicer, the Master Servicer, the Custodian and the
Trustee on the Closing Date. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:

                  (i) the Mortgage Loan identifying number;

                  (ii) the Mortgagor's first and last name;

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

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

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

                  (vi) the original months to maturity;

                  (vii) the original date of the Mortgage Loan and the 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) the date on which the first Monthly Payment was due on the
      Mortgage Loan;

                  (xi) the stated maturity date;

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

                  (xiii) the amount of the Monthly Payment as of 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;

                                       33
<PAGE>

                  (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 Adjustable Rate Mortgage Loan, the
      first Adjustment Date;

                  (xviii) with respect to each Adjustable Rate Mortgage Loan,
      the Gross Margin;

                  (xix) a code indicating the purpose of the loan (i.e.,
      purchase financing, rate/term refinancing, cash-out refinancing);

                  (xx) with respect to each Adjustable Rate Mortgage Loan, the
      Maximum Mortgage Rate under the terms of the Mortgage Note;

                  (xxi) with respect to each Adjustable Rate Mortgage Loan, the
      Minimum Mortgage Rate under the terms of the Mortgage Note;

                  (xxii) the Mortgage Rate at origination;

                  (xxiii) with respect to each Adjustable Rate Mortgage Loan,
      the Periodic Rate Cap;

                  (xxiv) with respect to each Adjustable Rate Mortgage Loan, the
      first Adjustment Date immediately following the Cut-off Date;

                  (xxv) with respect to each Adjustable Rate Mortgage Loan, the
      Index;

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

                  (xxvii) a code indicating whether the Mortgage Loan is an
      Adjustable Rate Mortgage Loan or a fixed rate Mortgage Loan;

                  (xxviii) a code indicating the documentation style (i.e.,
      full, stated or limited);

                  (xxix) a code indicating if the Mortgage Loan is subject to a
      primary insurance policy or lender paid mortgage insurance policy and the
      name of the insurer;

                  (xxx) the Appraised Value of the Mortgaged Property;

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

                  (xxxii) a code indicating whether the Mortgage Loan is subject
      to a Prepayment Charge, the term of such Prepayment Charge and the amount
      of such Prepayment Charge;

                                       34
<PAGE>

                  (xxxiii) the product type (e.g., 2/28, 15 year fixed, 30 year
      fixed, 15/30 balloon, etc.);

                  (xxxiv) the Mortgagor's debt to income ratio;

                  (xxxv) the FICO score at origination;

                  (xxxvi) the Servicer or Fremont, if applicable.

            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 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 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 with respect to
each Adjustable Rate Mortgage Loan (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 to
the nearest 0.125% 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 in the
related Mortgage Note, plus the related Gross Margin; provided that the Mortgage
Rate on such Adjustable Rate 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

                                       35
<PAGE>

Distribution Date of (A) the aggregate Senior Interest Distribution Amounts
payable to the Holders of the Class A Certificates, (B) the aggregate Interest
Distribution Amounts payable to the holders of the Mezzanine Certificates and
the Class B Certificates 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 Administration Fee Rate.

            "Net WAC Pass-Through Rate": With respect to the Class A-1
Certificates and any Distribution Date, a rate per annum equal to the product of
(x) the weighted average of the Expense Adjusted Mortgage Rates on the then
outstanding 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 minus the portion allocable to the Class A-1
Certificate of the fee, expressed as a rate, payable to the Certificate Insurer
for providing the Certificate Insurance Policy 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
economic equivalent of such rate shall be expressed as the weighted average of
(adjusted for the actual number of days elapsed in the related Interest Accrual
Period) 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.

            With respect to the Class A-2 Certificates and any Distribution
Date, a rate per annum equal to the product of (x) the weighted average of the
Expense Adjusted Mortgage Rates on the then outstanding 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 minus
the portion allocable to the Class A-2 Certificates of the fee, expressed as a
rate, payable to the Certificate Insurer for providing the Certificate Insurance
Policy 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 economic equivalent of such rate
shall be expressed as the weighted average of (adjusted for the actual number of
days elapsed in the related Interest Accrual Period) 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.

            With respect to the Mezzanine Certificates and any Distribution
Date, a rate per annum equal to the product of (x) the weighted average of the
Expense Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted
in proporation to the results of subtracting from the aggregate Stated Principal
Balance of each of the Group I Mortgage Loans and the Group II Mortgage Loans,
as of the first day of the calendar month preceding the month in which the
Distribution Date occurs, the Certificate Principal Balance of the related Class
A Certificates 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 economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC I Remittance Rates on (a) REMIC I Regular Interest I-LT1SUB, subject
to a cap and a floor equal to the REMIC I Remittance Rate on REMIC I Regular
Interest I-LT1GRP, and (b) REMIC I Regular Interest I-LT2SUB, subject to a cap
and a floor equal to the REMIC I Remittance Rate

                                       36
<PAGE>

on REMIC I Regular Interest I-LT2GRP, weighted on the basis of the
Uncertificated Balance of each such REMIC I Regular Interest

            With respect to the Class B Certificates and any Distribution Date,
a rate per annum equal to the product of (x) the weighted average of the Expense
Adjusted Mortgage Rates on the then outstanding Mortgage Loans, weighted in
proporation to the results of subtracting from the aggregate Stated Principal
Balance of the Group I Mortgage Loans and the Group II Mortgage Loans, as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs, the Certificate Principal Balance of the related Class A
Certificates 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 economic
equivalent of such rate shall be expressed as the weighted average of (adjusted
for the actual number of days elapsed in the related Interest Accrual Period)
the REMIC I Remittance Rates on (a) REMIC I Regular Interest I-LT1SUB, subject
to a cap and a floor equal to the REMIC I Remittance Rate on REMIC I Regular
Interest I-LT1GRP, and (b) REMIC I Regular Interest I-LT2SUB, subject to a cap
and a floor equal to the REMIC I Remittance Rate on 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 Amount" : With respect to any Class A
Certificate, Mezzanine Certificate or Class B Certificate and any Distribution
Date on which the Pass-Through Rate is limited to the applicable Net WAC
Pass-Through Rate, an amount equal to the sum of (i) the excess of (x) the
amount of interest such Class would have been entitled to receive on such
Distribution Date if the applicable Net WAC Pass-Through Rate would not have
been applicable to such Class on such Distribution Date over (y) the amount of
interest paid to such Class on such Distribution Date at the applicable Net WAC
Pass-Through Rate plus (ii) the related Net WAC Rate Carryover Amount for the
previous Distribution Date not previously distributed to such Class together
with interest thereon at a rate equal to the Pass-Through Rate for such Class
for the most recently ended Interest Accrual Period without taking into account
the applicable Net WAC Pass-Through Rate.

            "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 related Servicer, Fremont or a successor to
the related Servicer or Fremont (including 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 related Servicer or Fremont, 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 or in the
applicable Servicing Agreement.

                                       37
<PAGE>

            "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 (other than REMIC I Regular Interest I-LTP) for such Distribution
Date.

            "Ocwen": Ocwen Federal Bank FSB, and any successor thereto.

            "Ocwen Mortgage Loans": Those Mortgage Loans serviced by Ocwen
pursuant to the terms of this Agreement as specified on the Mortgage Loan
Schedule and from and after the related Servicing Transfer Date, the Fremont
Mortgage Loans transferred to Ocwen on such Servicing Transfer Date.

            "Offered Certificates" : The Class A Certificates and the Mezzanine
Certificates, collectively.

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

            "One-Month LIBOR" : With respect to the Class A Certificates, the
Mezzanine Certificates, the Class B Certificates, REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2, 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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTM11 and REMIC I Regular Interest I-LTB and any Interest Accrual
Period therefor, the rate determined by the Securities Administrator 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 Securities Administrator 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 Securities Administrator shall
select an alternative comparable index (over which the Securities Administrator
has no control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of One-Month LIBOR by the Securities Administrator and the
Securities Administrator's subsequent calculation of the

                                       38
<PAGE>

One-Month LIBOR Pass-Through Rates for the relevant Interest Accrual Period,
shall, in the absence of manifest error, be final and binding.

            "One-Month LIBOR Pass-Through Rate": With respect to the Class A-1
Certificates and, for purposes of the definition of "Marker Rate", REMIC I
Regular Interest I-LTA1, a per annum rate equal to One-Month LIBOR plus the
related Certificate Margin.

            With respect to the Class A-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTA2, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-1 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM1, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-2 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM2, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-3 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM3, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-4 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM4, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-5 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM5, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-6 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM6, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-7 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM7, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-8 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM8, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-9 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM9, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

                                       39
<PAGE>

            With respect to the Class M-10 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM10, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class M-11 Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTM11, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

            With respect to the Class B Certificates and, for purposes of the
definition of "Marker Rate", REMIC I Regular Interest I-LTB, a per annum rate
equal to One-Month LIBOR plus the related Certificate Margin.

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

            "Optional Termination Date": 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.

            "Originators": Fremont, People's Choice Home Loan, Inc., and various
other originators (each, an "Originator").

            "Overcollateralization 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 immediately following such Distribution Date
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 as of such Distribution Date (after taking into account the
payment of the Principal Remittance Amount on such Distribution Date).

            "Overcollateralization Increase Amount": With respect to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates and any
Distribution Date is any amount of Net Monthly Excess Cashflow actually applied
as an accelerated payment of principal to the extent the Required
Overcollateralization Amount exceeds the Overcollateralization Amount.

            "Overcollateralization Reduction Amount" : With respect to any
Distribution Date, is the lesser of (i) the amount by which the
Overcollateralization Amount exceeds the Required Overcollateralization Amount
and (ii) the Principal Remittance Amount; provided however that on any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Reduction Amount shall equal zero.

            "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.

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<PAGE>

            "P&I Advance": As to any Mortgage Loan or REO Property, any advance
made by Ocwen in respect of any Determination Date pursuant to Section 5.03 of
this Agreement, an Advance Financing Person pursuant to Section 3.25 of this
Agreement or in respect of any Distribution Date by a successor Servicer
(including the Master Servicer) pursuant to Section 8.02 of this Agreement, or
Fremont or Select Portfolio pursuant to the applicable Servicing Agreement
(which advances shall not include principal or interest shortfalls due to
bankruptcy proceedings or application of the Relief Act or similar state or
local laws.)

            "Pass-Through Rate": With respect to the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates, and any Distribution Date,
a rate per annum equal to the lesser of (i) the related One-Month LIBOR
Pass-Through Rate for such Distribution Date and (ii) the related Net WAC
Pass-Through Rate for such Distribution Date.

            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 (i) through
(xvii) below, and the denominator of which is the aggregate Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2, 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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTM11, REMIC I Regular Interest I-LTB and REMIC I Regular Interest
I-LTZZ. For purposes of calculating the Pass-Through Rate for the Class CE
Certificates, the numerator is equal to the sum of the following components:

                  (i) 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;

                  (ii) 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;

                  (iii) 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-LTA2;

                  (iv) 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;

                  (v) 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;

                  (vi) 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 Regular Interest I-LTM3;

                                       41
<PAGE>

                  (vii) 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;

                  (viii) 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;

                  (ix) the REMIC I Remittance Rate for REMIC I Regular Interest
      I-LTM6 minus the Marker Rate, applied to an amount equal to the
      Uncertificated Balance of REMIC I Regular Interest I-LTM6;

                  (x) the REMIC I Remittance Rate for REMIC I Regular Interest
      I-LTM7 minus the Marker Rate, applied to an amount equal to the
      Uncertificated Balance of REMIC I Regular Interest I-LTM7;

                  (xi) the REMIC I Remittance Rate for REMIC I Regular Interest
      I-LTM8 minus the Marker Rate, applied to an amount equal to the
      Uncertificated Balance of REMIC I Regular Interest I-LTM8;

                  (xii) the REMIC I Remittance Rate for REMIC I Regular Interest
      I-LTM9 minus the Marker Rate, applied to an amount equal to the
      Uncertificated Balance of REMIC I Regular Interest I-LTM9;

                  (xiii) the REMIC I Remittance Rate for REMIC I Regular
      Interest I-LTM10 minus the Marker Rate, applied to an amount equal to the
      Uncertificated Balance of REMIC I Regular Interest I-LTM10;

                  (xiv) the REMIC I Remittance Rate for REMIC I Regular Interest
      I-LTM11 minus the Marker Rate, applied to an amount equal to the
      Uncertificated Balance of REMIC I Regular Interest I-LTM11;

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

                  (xvi) 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

                  (xvii) 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 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

                                       42
<PAGE>

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 Notional Balances of $10,000 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 Notional Balance 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 integral multiples of 5% in excess thereof.

            "Periodic Rate Cap": With respect to each Adjustable Rate 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 Adjustable Rate 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 acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, a Servicer, 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) (A) demand and time deposits in, certificates of deposit
      of, bankers' acceptances issued by or federal funds sold by any depository
      institution or trust company (including the Trustee or its agent acting in
      their respective commercial capacities) incorporated under the laws of the
      United States of America or any state thereof and subject to supervision
      and examination by federal and/or state authorities, so long as, at the
      time of such investment or contractual commitment providing for such
      investment, such depository institution or trust company (or, if the only
      Rating Agency is S&P, in the case of the principal depository institution
      in a depository institution holding company, debt obligations of the
      depository institution holding company) or its ultimate parent has a
      short-term uninsured debt rating in the highest available rating category
      of Moody's, Fitch and S&P and provided that each such investment has an
      original maturity of no more than 365 days; and provided further that, if
      the only Rating Agency is S&P and if the depository or trust company is a
      principal subsidiary of a bank holding company and the debt obligations of
      such subsidiary are not separately rated, the applicable rating shall be
      that of the bank holding company; and, provided further that, if the
      original maturity of such short-term obligations of a domestic branch of a
      foreign depository institution or trust company shall exceed 30 days, the
      short-term rating of such institution shall be A-1+ in the case of S&P if
      S&P is the Rating Agency; and (B) any other demand or time deposit or
      deposit which is fully insured by the FDIC;

                                       43
<PAGE>

                  (iii) repurchase obligations with a term not to exceed 30 days
      with respect to any security described in clause (i) above and entered
      into with a depository institution or trust company (acting as principal)
      rated A-1+ or higher by S&P, F-1 or higher by Fitch and A2 or higher by
      Moody's, provided, however, that collateral transferred pursuant to such
      repurchase obligation must be of the type described in clause (i) above
      and must (A) be valued daily at current market prices plus accrued
      interest, (B) pursuant to such valuation, be equal, at all times, to 105%
      of the cash transferred by a party in exchange for such collateral and (C)
      be delivered to such party or, if such party is supplying the collateral,
      an agent for such party, in such a manner as to accomplish perfection of a
      security interest in the collateral by possession of certificated
      securities;

                  (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 "AAA" by
      Fitch (if rated by Fitch), "AAAm" by S&P or "Aaa" by Moody's including any
      such money market fund managed or advised by the Master Servicer, the
      Trustee or any of their Affiliates; and

                  (vii) 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, limited liability company, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

            "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

                                       44
<PAGE>

plans, accounts or arrangements are invested, that are subject to ERISA or
Section 4975 of the Code.

            "Policy Payment": With respect to any Distribution Date, the amount,
if any, paid under the Certificate Insurance Policy for such Distribution Date.

            "Policy Payment Account": The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 5.07 in the name
of the Trustee for the benefit of the Holders of the Insured Certificates and
the Certificate Insurer, and designated "HSBC Bank USA, National Association, as
Trustee, in trust for the registered holders of Ace Securities Corp.,
Asset-Backed Pass-Through Certificates, Series 2004-HE4, Class A-1 Certificates
and Class A-2 Certificates."

            "Premium Amount": As to any Distribution Date, the product of (x)
the Premium Rate and (y) the Certificate Principal Balance of the Class A-1
Certificates and Class A-2 Certificates immediately prior to such Distribution
Date.

            "Premium Rate": The per annum rate at which the "Premium" is
determined as described in the letter, dated November 29, 2004, among the
Certificate Insurer, the Master Servicer, the Trustee and the Depositor (a copy
of which has been provided by the Depositor to the Trustee).

            "Prepayment Assumption": A prepayment rate for the Adjustable Rate
Mortgage Loans of 28% CPR and a prepayment rate of 100% PPC for the fixed rate
Mortgage Loans. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool. A 100% PPC
represents (i) a per annum prepayment rate of 4% of the then outstanding
principal balance of the fixed rate Mortgage Loans in the first month of the
life of such Mortgage Loans, (ii) an additional 1.72727% per annum in each month
thereafter through the eleventh month and (iii) a constant prepayment rate of
23% per annum beginning in the twelfth month and in each month thereafter during
the life of the fixed rate Mortgage Loans.

            "Prepayment Charge": With respect to any Principal Prepayment, 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.

            "Prepayment Charge Schedule": As of any date, the list of Mortgage
Loans providing for a Prepayment Charge included in the Trust Fund on such date,
attached hereto as Schedule 2 (including the prepayment charge summary attached
thereto). The Depositor shall deliver or cause the delivery of the Prepayment
Charge Schedule to the related Servicer, the Master Servicer and the Trustee on
the Closing Date. The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:

                  (i) the Mortgage Loan identifying number;

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

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<PAGE>

                  (iii) the date on which the first Monthly Payment was due on
      the related Mortgage Loan;

                  (iv) the term of the related Prepayment Charge;

                  (v) the original Stated Principal Balance of the related
      Mortgage Loan; and

                  (vi) the Stated Principal Balance of the related Mortgage Loan
      as of the Cut-off Date.

            "Prepayment Interest Excess": With respect to each Ocwen Mortgage
Loan that was the subject of a Principal Prepayment in full during the portion
of the related Prepayment Period occurring between the first day of the calendar
month in which such Distribution Date occurs and the Determination Date of the
calendar month in which such Distribution Date occurs, an amount equal to
interest (to the extent received) at the applicable Net Mortgage Rate on the
amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Distribution Date occurs and
ending on the last date through which interest is collected from the related
Mortgagor. Ocwen may withdraw such Prepayment Interest Excess from the related
Collection Account in accordance with Section 3.09(a)(x).

            "Prepayment Interest Shortfall": With respect to any Distribution
Date, for each such Mortgage Loan that was the subject of a Principal Prepayment
in full or in part during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs that
was applied by the Servicer or Fremont to reduce the outstanding principal
balance of such Mortgage Loan on a date preceding the Due Date in the succeeding
Prepayment Period, an amount equal to interest at the applicable Net Mortgage
Rate on the amount of such Principal Prepayment for the number of days
commencing on the date on which the prepayment is applied and ending on the last
day of the calendar month preceding such Distribution Date. The obligations of
Ocwen and the Master Servicer in respect of any Prepayment Interest Shortfall
are set forth in Section 3.22 and Section 4.18, respectively of this Agreement.
The Certificate Insurance Policy with respect to the Insured Certificates will
not cover any such Prepayment Interest Shortfalls. The obligations of Fremont
and Select Portfolio in respect of any Prepayment Interest Shortfalls are set
forth in the Servicing Agreements.

            "Prepayment Period": (i) With respect to Ocwen and any Distribution
Date, the calendar month preceding the month in which the related Distribution
Date occurs with respect to prepayments in part, and the period beginning on the
16th day of the month preceding the related Distribution Date (or, the period
commencing on the Cut-off Date, in connection with the first Prepayment
Period)and ending on the 15th day of the month in which such Distribution Date
occurs with respect to prepayments in full; (ii) with respect to Select
Portfolio and any Distribution Date, the period beginning on the 16th day of the
month preceding the related Distribution Date (or, the period commencing on the
Cut-off Date, in connection with the first Prepayment Period) and ending on the
15th day of the month of such Distribution Date; and (iii) with respect to
Fremont, as set forth in the Fremont Servicing Agreement.

            "Principal Prepayment": Any voluntary payment of principal made by
the Mortgagor on a Mortgage Loan which is received in advance of its scheduled
Due Date and

                                       46
<PAGE>

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 Distribution Amount": With respect to any Distribution
Date is the sum of the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount.

            "Principal Remittance Amount": With respect to any Distribution Date
is the sum of the Group I Principal Remittance Amount and the Group II Principal
Remittance Amount.

            "Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03, Section 3.13(c)
or Section 10.01, and as confirmed by a certification of a Servicing Officer 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 10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on
such Stated Principal Balance at the applicable Net 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 a P&I Advance by the related Servicer or Fremont,
which payment or P&I Advance had as of the date of purchase been distributed
pursuant to Section 5.01, 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 Net 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 a P&I Advance by the related Servicer or
Fremont 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 5.01, (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 pursuant to
Section 3.09(a)(ix) and Section 3.13(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 Fremont, the related Servicer or the Trustee in respect of
the breach or defect giving rise to the purchase obligation and any costs and
damages incurred by the Trust Fund and the Trustee in connection with any
violation by any such Mortgage Loan of any predatory or abusive lending law.

            "QIB": As defined in Section 6.01(c).

            "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, (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 Scheduled 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) if the mortgage loan is an Adjustable Rate Mortgage
Loan, have a

                                       47
<PAGE>

Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted
Mortgage Loan, (iv) if the mortgage loan is an Adjustable Rate Mortgage Loan,
have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the
Deleted Mortgage Loan, (v) if the mortgage loan is an Adjustable Rate Mortgage
Loan, have a Gross Margin equal to the Gross Margin of the Deleted Mortgage
Loan, (vi) if the mortgage loan is an Adjustable Rate 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) be
secured by the same lien priority on the related Mortgaged Property as the
Deleted Loan, (xi) have a credit grade at least equal to the credit grading
assigned on the Deleted Mortgage Loan, (xii) be a "qualified mortgage" as
defined in the REMIC Provisions and (xiii) 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 credit grades
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 (xii) 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, DBRS 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, notice of
which designation shall be given to the Trustee and the 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), as
reported Ocwen to the Master Servicer (in substantially the form of Schedule 4
hereto) or by Fremont or Select Portfolio to the Master Servicer pursuant to the
applicable Servicing Agreement 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 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

                                       48
<PAGE>

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 related Collection Account or Custodial Account in respect of
such Mortgage Loan pursuant to Section 3.09(a)(ix) and Section 3.13(b) of this
Agreement or pursuant to the related Servicing Agreement, 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 related Servicer or Fremont with respect to such
Mortgage Loan pursuant to Section 3.09(a)(iii) of this Agreement or pursuant to
the related Servicing Agreement.

            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 related Collection Account or
Custodial Account in respect of the related Mortgage Loan pursuant to Section
3.09(a)(ix) and Section 3.13(b) of this Agreement or pursuant to the Servicing
Agreements, 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 related Servicer or Fremont in respect of such
REO Property or the related Mortgage Loan for which the related Servicer or
Fremont has been or, in connection with such Final Recovery Determination, will
be reimbursed pursuant to Section 3.21 of this Agreement or pursuant to the
related Servicing Agreement 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 3.21 of this Agreement or pursuant to the related
Servicing Agreement.

            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.

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<PAGE>

            To the extent the related Servicer or Fremont receives Subsequent
Recoveries, with respect to any Mortgage Loan, the amount of Realized Loss with
respect to that Mortgage Loan will be reduced to the extent such recoveries are
applied to reduce the Certificate Principal Balance of any Class on any
Distribution Date.

            "Record Date": With respect to each Distribution Date and the Class
A Certificates, the Mezzanine Certificates and the Class B Certificates, the
Business Day immediately preceding such Distribution Date for so long as such
Certificates are Book-Entry Certificates. With respect to each Distribution Date
and any other Class of Certificates, including any Definitive Certificates, the
last day of the calendar month immediately preceding the month in which such
Distribution Date occurs.

            "Reference Banks": 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 Securities Administrator
which are engaged in transactions in Eurodollar deposits in the International
Eurocurrency market (i) with an established place of business in London, (ii)
not controlling, under the control of or under common control with the Depositor
or any Affiliate thereof and (iii) which have been designated as such by the
Securities Administrator.

            "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.

            "Regulation S Temporary Global Certificate": As defined in Section
6.01(c).

            "Regulation S Permanent Global Certificate": As defined in Section
6.01(c).

            "Reimbursement Amount": The amount of all payments made by the
Certificate Insurer pursuant to the Certificate Insurance Policy which have not
been previously repaid, with interest thereon at the applicable Pass-Through
Rate, plus all costs and expenses incurred by the Certificate Insurer in
connection with any actions, suits or proceedings with respect to the
Certificate Insurance Policy that have been certified by the Certificate Insurer
to the Securities Administrator, with interest thereon at the applicable
Pass-Through Rate.

            "Release Date": The 40th day after the later of (i) commencement of
the offering of the Class B Certificates and (ii) the Closing Date.

            "Relief Act": The Servicemembers Civil Relief Act, as amended, or
similar state or local 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 Due Period as a result of the
application of the Relief Act. The

                                       50
<PAGE>

Certificate Insurance Policy with respect to the Insured Certificates will not
cover any such Relief Act Interest Shortfalls.

            "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 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), the Assignment Agreements and the Servicing
Agreements and (v) the Custodial Accounts, Collection Account, the Distribution
Account 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 and (vi) with respect to the Insured
Certificates only, the Certificate Insurance Policy. Notwithstanding the
foregoing, however, REMIC I specifically excludes (i) 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; (ii) the Reserve Fund and any amounts
on deposit therein from time to time and any proceeds thereof and (iii) the Cap
Contracts.

            "REMIC I Interest Loss Allocation Amount" : With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties 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": 0.50% 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-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-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular Interest I-LTM11,
REMIC I Regular Interest I-LTB, REMIC I Regular Interest I-LTZZ and REMIC I
Regular Interest I-LTP.

            "REMIC I Overcollateralization 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-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-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest I-LTM10, REMIC I Regular Interest I-LTM11, REMIC I Regular

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<PAGE>

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 (a) the product of (i) 0.50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties 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-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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTM11 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-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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular
Interest I-LTM11, REMIC I Regular Interest I-LTB and REMIC I Regular Interest
I-LTZZ.

            "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,

                                       52
<PAGE>

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.

            "REMIC I Regular Interest I-LTM6": 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-LTM6
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal,

                                       53
<PAGE>

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-LTM7": 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-LTM7
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-LTM8": 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-LTM8
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-LTM9": 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-LTM9
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-LTM10": 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-LTM10
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-LTM11": 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-LTM11
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-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 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-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,

                                       54
<PAGE>

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 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-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-LTM6, REMIC I Regular Interest I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest I-LTM10, REMIC I Regular Interest I-LTM11, 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, provided that for purposes of this definition, the Expense
Adjusted Net Mortgage Rate shall be calculated using a Servicing Fee Rate equal
to the Wells Fargo Servicing Fee Rate for as long as Wells Fargo acts as
Servicer. With respect to REMIC I Regular Interest I-LT1GRP, the weighted
average of the Expense Adjusted Mortgage Rates of the Group I Mortgage Loans,
provided that for purposes of this definition, the Expense Adjusted Net Mortgage
Rate shall be calculated using a Servicing Fee Rate equal to the Wells Fargo

                                       55
<PAGE>

Servicing Fee Rate for as long as Wells Fargo acts as Servicer. With respect to
REMIC I Regular Interest I-LT2GRP, the weighted average of the Expense Adjusted
Mortgage Rates of the Group II Mortgage Loans, provided that for purposes of
this definition, the Expense Adjusted Net Mortgage Rate shall be calculated
using a Servicing Fee Rate equal to the Wells Fargo Servicing Fee Rate for as
long as Wells Fargo acts as Servicer.

            "REMIC I Sub WAC Allocation Percentage": 0.50% 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 between, with respect to each such REMIC
I Regular Interest, the excess of (x) the aggregate Stated Principal Balance of
the Group I Mortgage Loans or Group II Mortgage Loans, as applicable over (y)
the current Certificate Principal Balance of related Class A Certificates.

            "REMIC I Required Overcollateralization Amount": 1% of the Required
Overcollateralization Amount.

            "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 REMIC II Certificateholders pursuant to Section 2.07, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

            "REMIC II Certificate": Any Regular Certificate or Class R
Certificate.

            "REMIC II Certificateholder": The Holder of any REMIC II
Certificate.

            "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.

            "REMIC Regular Interest": Any REMIC I Regular Interest.

            "REMIC Remittance Rate": The REMIC I Remittance Rate.

            "Remittance Report": A report by Ocwen pursuant to Section 5.03(a)
of this Agreement or Fremont or Select Portfolio pursuant to the related
Servicing Agreement.

            "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 property."

                                       56
<PAGE>

            "REO Account": The account or accounts maintained, or caused to be
maintained, by Ocwen in respect of an REO Property pursuant to Section 3.21 of
this Agreement or by Fremont or Select Portfolio pursuant to the related
Servicing Agreement.

            "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 10.01 of this
Agreement that is allocable to such REO Property) or otherwise, net of any
portion of such amounts (i) payable in respect of the proper operation,
management and maintenance of such REO Property or (ii) payable or reimbursable
to Ocwen pursuant to Section 3.21(d) of this Agreement or Fremont or Select
Portfolio pursuant to the related Servicing Agreement 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 Ocwen or its
nominee on behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure,
as described in Section 3.21 of this Agreement or Fremont or Select Portfolio
pursuant to the related Servicing Agreement.

            "Required Overcollateralization Amount" : With respect to any
Distribution Date (i) prior to the Stepdown Date, the product of (A) 0.90% and
(B) the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 1.80% of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (y) an
amount equal to the product of (A) 0.50% and (B) the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, and (iii) on or after the Stepdown
Date and a Trigger Event is in effect, the Required Overcollateralization Amount
for the immediately preceding Distribution Date.

            "Reserve Fund": A fund created pursuant to Section 3.24 which shall
be an asset of the Trust Fund but which shall not be an asset of any Trust
REMIC.

            "Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Securities Administrator 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 Securities Administrator, 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

                                       57
<PAGE>

the Securities Administrator can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which New York City banks selected by the
Securities Administrator are quoting on such Interest Determination Date to
leading European banks.

            "Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a Fannie Mae eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.

            "Residual Certificate": Any one of 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
officer of the Trustee having direct responsibility for the administration of
this Agreement 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.

            "Rule 144A": As defined in Section 6.01(c).

            "S&P": Standard and Poor's, a division of the McGraw-Hill Companies,
Inc.

            "Scheduled Principal Balance": With respect to any Mortgage Loan:
(a) as of the Cut-off Date, the outstanding principal balance of such Mortgage
Loan as of such date, net of the principal portion of all unpaid Monthly
Payments, if any, due on or before such date; (b) as of any Due Date subsequent
to the Cut-off Date up to and including the Due Date in the calendar month in
which a Liquidation Event occurs with respect to such Mortgage Loan, the
Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date, minus
the sum of (i) the principal portion of each Monthly Payment due on or before
such Due Date but subsequent to the Cut-off Date, whether or not received, (ii)
all Principal Prepayments received before such Due Date but after the Cut-off
Date, (iii) the principal portion of all Liquidation Proceeds and Insurance
Proceeds received before such Due Date but after the Cut-off Date, net of any
portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of the Trust
Fund up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such REO Property, an amount (not less
than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan
as of the Due Date in the calendar month in which such REO Property was
acquired, minus the aggregate amount of REO Principal Amortization, if any, in
respect of REO Property for all previously ended calendar months; and (b) as of
any Due Date subsequent to the occurrence of a Liquidation Event with respect to
such REO Property, zero.

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<PAGE>

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

            "Securities Administrator": As of the Closing Date, Wells Fargo
Bank, N.A. and thereafter, its respective successors in interest that meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person.

            "Select Portfolio": Select Portfolio Servicing, Inc., and any
successor thereto.

            "Select Portfolio Assignment Agreement": The Assignment, Assumption
and Recognition Agreement, dated as of November 29, 2004, by and among the
Seller, the Depositor and Select Portfolio evidencing the assignment of the
Select Portfolio Servicing Agreement and the Select Portfolio Mortgage Loans to
the Depositor.

            "Select Portfolio Mortgage Loans": Those Mortgage Loans subject to
this Agreement that are serviced by Select Portfolio pursuant to the Select
Portfolio Servicing Agreement.

            "Select Portfolio Servicing Agreement": The Servicing Agreement
dated as of November 1, 2004, by and between the Seller and Select Portfolio, as
modified by the Select Portfolio Assignment Agreement.

            "Seller": DB Structured Products, Inc. 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.

            "Servicer": Ocwen or Select Portfolio, or any successor thereto
appointed hereunder or under the Select Portfolio Servicing Agreement in
connection with the servicing and administration of the Mortgage Loans
(together, the "Servicers").

            "Servicer Event of Default": One or more of the events described in
Section 8.01(a).

            "Servicer Remittance Date": With respect to any Distribution Date,
by 12:00 p.m. New York time three Business Days immediately preceding the
related Distribution Date.

            "Servicer Report": A report (substantially in the form of Schedule 5
hereto) or otherwise in form and substance acceptable to the Master Servicer and
Securities Administrator on an electronic data file or tape prepared by the
related Servicer or Fremont pursuant to Section 5.03(a) of this Agreement or
pursuant to the related Servicing Agreement, as applicable, with such additions,
deletions and modifications as agreed to by the Master Servicer, the Securities
Administrator and the related Servicer or Fremont.

            "Servicing Advances": The customary and reasonable "out-of-pocket"
costs and expenses incurred prior to or on or after the Cut-off Date (the
amounts incurred prior to the Cut-off Date are identified on Schedule 6 hereto)
by the related Servicer or Fremont in connection

                                       59
<PAGE>

with a default, delinquency or other unanticipated event by such Servicer or
Fremont 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, including
any expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS(R) System, (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
3.07, Section 3.11, Section 3.13 and Section 3.21 of this Agreement or under the
applicable Servicing Agreement. Servicing Advances also include any reasonable
"out-of-pocket" cost and expenses (including legal fees) incurred by the related
Servicer or Fremont in connection with executing and recording instruments of
satisfaction, deeds of reconveyance or Assignments to the extent not recovered
from the Mortgagor or otherwise payable under this Agreement or the related
Servicing Agreement. Neither Servicer nor Fremont shall be required to make any
Nonrecoverable Servicing Advances.

            "Servicing Agreement": The Fremont Servicing Agreement or the Select
Portfolio Servicing Agreement as applicable.

            "Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one-twelfth of the product of the Servicing
Fee Rate multiplied by the Scheduled Principal Balance of the Mortgage Loans as
of the Due Date in the preceding calendar month. The Servicing Fee is payable
solely from collections of interest on the Mortgage Loans.

            "Servicing Fee Rate": 0.50% per annum.

            "Servicing Officer": Any officer of the related Servicer or Fremont
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 related Servicer or Fremont to the Trustee, the Master
Servicer, the Securities Administrator and the Depositor on the Closing Date, as
such list may from time to time be amended.

            "Servicing Transfer Date": With respect to 49.00% of the Fremont
Mortgage Loans, January 1, 2005 (a schedule of such Fremont Mortgage Loans will
be provided to the Master Servicer by Fremont on or prior to such date) and with
respect to the remaining Fremont Mortgage Loans, February 1, 2005.

            "Single Certificate": With respect to any Class of Certificates
(other than the Residual Certificates), a hypothetical Certificate of such Class
evidencing a Percentage Interest for such Class corresponding to an initial
Certificate Principal Balance of $1,000. With respect to 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 11.01(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 Scheduled

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<PAGE>

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 related Servicer or Fremont or a
successor to such Servicer or Fremont (including the Master Servicer) and
distributed pursuant to Section 5.01 of this Agreement on or before such date of
determination, (ii) all Principal Prepayments received after the Cut-off Date,
to the extent distributed pursuant to Section 5.01 of this Agreement on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the related Servicer or Fremont as recoveries of principal
in accordance with the provisions of Section 3.13 of this Agreement or pursuant
to the related Servicing Agreement, to the extent distributed pursuant to
Section 5.01 of this Agreement 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 related
Servicer, Fremont or a successor to such Servicer or Fremont (including the
Master Servicer) and distributed pursuant to Section 5.01 of this Agreement, 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 of this
Agreement 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 later to occur of
(a) the Distribution Date occurring in December 2007 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 Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 39.40% and (ii) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero.

            "Subordinate Certificates" : Collectively, the Mezzanine
Certificates, the Class B Certificates and the Class CE Certificates.

            "Subsequent Recoveries": As of any Distribution Date, amounts
received during the related Prepayment Period by the related Servicer or Fremont
specifically related to a defaulted Mortgage Loan or disposition of an REO
Property prior to the related Prepayment Period that resulted in a Realized
Loss, after the liquidation or disposition of such defaulted Mortgage Loan.

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<PAGE>

            "Sub-Servicer": Any Person with which a Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicers
pursuant to Section 3.02 of this Agreement or the Select Portfolio Servicing
Agreement, as applicable.

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

            "Substitution Shortfall Amount": As defined in Section 2.03.

            "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 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 10.01.

            "Terminator": As defined in Section 10.01.

            "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.

            "Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if either (x) the Delinquency Percentage exceeds 40.00% of the
Credit Enhancement Percentage with respect to such Distribution Date or (y) the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Due Period divided by the aggregate 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     Percentage
       -----------------     ----------
       December 2007 to      3.50%, plus 1/12 of 2.00% for each month thereafter
       November 2008
       December 2008 to      5.50%, plus 1/12 of 1.50% for each month thereafter
       November 2009
       December 2009 to      7.00%, plus 1/12 of 0.50% for each month thereafter
       November 2010

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<PAGE>

       December 2010 and
       thereafter            7.50%

            "Trust": ACE Securities Corp., Home Equity Loan Trust, Series
2004-HE4, the trust created hereunder.

            "Trust Fund": Collectively, all of the assets of REMIC I, REMIC II
and the Reserve Fund and any amounts on deposit therein and any proceeds thereof
and the Cap Contracts.

            "Trust REMIC": REMIC I or REMIC II.

            "Trustee": HSBC Bank USA, National Association a national banking
association, or its successor in interest, or any successor trustee appointed as
herein provided.

            "Uncertificated Balance": The amount of the REMIC I Regular
Interests 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
the 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 5.01 and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses as provided in
Section 5.04 and the Uncertificated Balance of REMIC I Regular Interest I-LTZZ
shall be increased by interest deferrals as provided in Section 5.01(a)(1)(i).
The Uncertificated Balance of each REMIC I Regular Interest shall never be less
than zero.

            "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the 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 the REMIC
I Regular Interests 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 3.22
or Section 4.18 of this Agreement or pursuant to the related Servicing Agreement
and (b) the aggregate amount of any Relief Act Interest Shortfall, if any
allocated, in each case, to such REMIC I Regular Interest or REMIC I Regular
Interest pursuant to Section 1.02. In addition, Uncertificated Interest with
respect to each Distribution Date, as to any Uncertificated REMIC Regular
Interest, shall be reduced by Realized Losses, if any, allocated to such
Uncertificated REMIC Regular Interest pursuant to Section 1.02 and Section 5.04.

            "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 3.11.

            "United States Person": 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 (except, in the
case of a partnership, to the extent provided in

                                       63
<PAGE>

regulations) provided that, for purposes solely of the restrictions on the
transfer of any Class R Certificate, 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 to be United States Persons, or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter I of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.

            "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
related 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 related Originator of the Mortgage Loan in accordance with the
related Originator's underwriting guidelines, and (ii) the 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 related Originator of the Mortgage
Loan 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 related Originator of the Mortgage Loan in accordance
with the related 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 related 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.

            "Verification Report": As defined in Section 4.19.

            "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any such 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 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 among the holders of the Class P Certificates and 1% of all Voting
Rights will be allocated among the holders of the Class R Certificates. The
Voting Rights allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date. Notwithstanding any of the
foregoing, unless a Certificate Insurer Default is continuing, on any date on
which any Insured

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<PAGE>

Certificates are outstanding, or any amounts are owed to the Certificate Insurer
under this Agreement, the Certificate Insurer will have all Voting Rights of the
Insured Certificates. So long as the Certificate Insurer has the Voting Rights
pursuant to the preceding sentence, the reference to holders of the Class A-1
Certificates and Class A-2 Certificates shall be deemed to refer to the
Certificate Insurer.

            "Wells Fargo": Wells Fargo Bank, N.A. or any successor thereto.

            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 Ocwen
pursuant to Section 3.22 of this Agreement or by the Master Servicer pursuant to
Section 4.18 of this Agreement or by Fremont or Select Portfolio pursuant to the
applicable Servicing Agreement) and any Relief Act Interest Shortfalls incurred
in respect of the Mortgage Loans for any Distribution Date shall be allocated
first, to the Class CE Certificates, second, to the Class B Certificates, third,
to the Class M-11 Certificates, fourth, to the Class M-10 Certificates, fifth,
to the Class M-9 Certificates, sixth, to the Class M-8 Certificates, seventh, to
the Class M-7 Certificates, eighth, to the Class M-6 Certificates, ninth, to the
Class M-5 Certificates, tenth, to the Class M-4 Certificates, eleventh, to the
Class M-3 Certificates, twelfth, to the Class M-2 Certificates, thirteenth, to
the Class M-1 Certificates and fourteenth, to the Class A Certificates, on a pro
rata basis, in each case 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, as applicable, of each such Certificate
and (2) the aggregate amount of any Realized Losses allocated to the Class B
Certificates, the Mezzanine Certificates and Net WAC Rate Carryover Amounts paid
to the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates incurred for any Distribution Date shall be allocated to 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
Certificate Principal Balance or Notional Amount thereof, as applicable.

                        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 Prepayment Interest Shortfalls (to the
            extent not covered by payments by Ocwen pursuant to Section 3.22 of
            this Agreement or the Master Servicer pursuant to Section 4.18 or by
            Fremont or Select Portfolio pursuant to the applicable Servicing
            Agreement) and the REMIC I Marker Allocation Percentage of any
            Relief Act Interest Shortfalls incurred in respect of the Mortgage
            Loans for any Distribution Date shall be allocated among REMIC I
            Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, 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-LTM6, REMIC I
            Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I
            Regular Interest I-LTM9, REMIC I Regular

                                       65
<PAGE>

            Interest I-LTM10, REMIC I Regular Interest I-LTM11, 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 Ocwen pursuant to Section 3.22 of
            this Agreement or by the Master Servicer pursuant to Section 4.18 of
            this Agreement or by Fremont or Select Portfolio pursuant to the
            applicable Servicing Agreement) and the REMIC I Sub WAC Allocation
            Percentage 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.

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<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, on
behalf of the Trust, 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 (including, without
limitation the right to enforce the obligations of the other parties thereto
thereunder), and all other assets included or to be included in REMIC I. Such
assignment includes all interest and principal received by the Depositor, the
Servicers and Fremont 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 and each Servicer
an executed copy of the Mortgage Loan Purchase Agreement.

            In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with the Custodian pursuant to the Custodial
Agreement the documents with respect to each Mortgage Loan as described under
Section 2 of the Custodial Agreement (the "Mortgage Loan Documents"). In
connection with such delivery and as further described in the Custodial
Agreement, the Custodian will be required to review such Mortgage Loan Documents
and deliver to the Trustee, the Depositor, each Servicer and the Seller
certifications (in the forms attached to the Custodial Agreement) with respect
to such review with exceptions noted thereon. In addition, under the Custodial
Agreement the Depositor will be required to cure certain defects with respect to
the Mortgage Loan Documents for the related Mortgage Loans after the delivery
thereof by the Depositor to the Custodian as more particularly set forth
therein.

            Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files, including,
but not limited to certain insurance policies and documents contemplated by
Section 4.11, and preparation and delivery of the certifications shall be
performed by the Custodian pursuant to the terms and conditions of the Custodial
Agreement.

            The Depositor shall deliver or cause the related Originator to
deliver to each Servicer copies of all trailing documents required to be
included in the Mortgage File at the same time the originals or certified copies
thereof are delivered to the Trustee or Custodian, such documents including the
mortgagee policy of title insurance and any Mortgage Loan Documents upon return
from the recording office. The Servicers shall not be responsible for any
custodian fees or other costs incurred in obtaining such documents and the
Depositor shall cause the Servicers to be reimbursed for any such costs the
Servicers may incur in connection with performing its obligations under this
Agreement.

            The Mortgage Loans permitted by the terms of this Agreement to be
included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the

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<PAGE>

Mortgage Loan Purchase Agreement, which contains, among other representations
and warranties, a representation and warranty of the Seller that no Mortgage
Loan is a "High-Cost Home Loan" as defined in the New Jersey Home Ownership Act
effective November 27, 2003 or as defined in the New Mexico Home Loan Protection
Act effective January 1, 2004) and (ii) Qualified Substitute Mortgage Loans
(which, by definition as set forth herein and referred to in the Mortgage Loan
Purchase Agreement, are required to conform to, among other representations and
warranties, the representation and warranty of the Seller that no Qualified
Substitute Mortgage Loan is a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership Act effective November 27, 2003 or as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004. The Depositor and the
Trustee on behalf of the Trust understand and agree that it is not intended that
any mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003 or as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004.

            SECTION 2.02. Acceptance of REMIC I by Trustee.

            The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 hereof and Section 2 of the Custodial Agreement, of the Mortgage
Loan Documents 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 (or the Custodian on its
behalf holds) and will hold such documents and the other documents delivered to
it constituting a Mortgage Loan Document, and that it holds (or the Custodian on
its behalf 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.

            SECTION 2.03. Repurchase or Substitution of Mortgage Loans.

            (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 a breach
by the Seller of any representation, warranty or covenant under the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan that materially and
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 and the related Servicer of such defect, missing document or breach
and request that the Seller deliver such missing document, 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 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 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
related Servicer for deposit in the related Collection Account and the Trustee,
upon receipt of written certification from such Servicer of such deposit, shall
release or cause the Custodian (upon receipt of a request for release in the
form attached to the Custodial Agreement) to 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, representation or
warranty, as the Seller shall furnish to it and as shall be necessary to vest in
the Seller any Mortgage Loan released

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<PAGE>

pursuant hereto, and 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.

            In addition, promptly upon the earlier of discovery by a Servicer or
receipt of notice by a Servicer of the breach of the representation or covenant
of the Seller set forth in Section 5(xiv) of the Mortgage Loan Purchase
Agreement which materially and adversely affects the interests of the Holders of
the Class P Certificates in any Prepayment Charge, such Servicer shall promptly
notify the Seller and the Trustee of such breach. The Trustee shall enforce the
obligations of the Seller under the Mortgage Loan Purchase Agreement to remedy
such breach to the extent and in the manner set forth in the Mortgage Loan
Purchase Agreement.

            (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 or the Custodian on behalf of 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 of the Custodial Agreement, as applicable, 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
Custodian on behalf of the Trustee shall acknowledge receipt of such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents and deliver to the Depositor, the Trustee and the related
Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, an
initial certification pursuant to the Custodial Agreement, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Custodian on behalf of the Trustee shall deliver to the Depositor, the Trustee
and the related Servicer a final certification pursuant to the Custodial
Agreement 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. The Depositor shall give or
cause to be given written notice to the Certificateholders and the Certificate
Insurer 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

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<PAGE>

and shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee
and the related Servicer. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Trust Fund 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 herein or 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 related
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 Scheduled Principal Balance thereof as of the date of substitution, together
with one month's interest on such Scheduled 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 related Servicer for deposit in the related
Collection Account an amount equal to the Substitution Shortfall Amount, if any,
and the Trustee or the Custodian on behalf of the Trustee, upon receipt of the
related Qualified Substitute Mortgage Loan or Loans, upon receipt of a request
for release in the form attached to the Custodial Agreement and certification by
the related 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,
representation or warranty, as 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 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, a Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other parties.
In connection therewith, the Seller shall repurchase or 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. Such repurchase or substitution shall be made by (i) the
Seller if the affected Mortgage Loan's status as a non-qualified mortgage is or
results from a breach of any representation, warranty or covenant made by the
Seller under the Mortgage Loan Purchase Agreement or (ii) the Depositor, if the
affected Mortgage Loan's status as a non-qualified mortgage is a breach of no
representation or warranty. 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.

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<PAGE>

            (d) With respect to a breach of the representations made pursuant to
Section 5(xiv) of the Mortgage Loan Purchase Agreement that materially and
adversely affects the value of such Mortgage Loan or the interest therein of the
Certificateholders or the Certificate Insurer, the Seller shall be required to
take the actions set forth in this Section 2.03.

            (e) Within 90 days of the earlier of discovery by Ocwen or receipt
of notice by Ocwen of the breach of any representation, warranty or covenant of
Ocwen set forth in Section 2.05 which materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan or Prepayment Charge,
Ocwen shall cure such breach in all material respects.

            SECTION 2.04. Representations and Warranties of the Master Servicer.

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

                  (i) The Master Servicer is a national banking association duly
      formed, validly existing and in good standing under the laws of the United
      States of America and is duly authorized and qualified to transact any and
      all business contemplated by this Agreement to be conducted by the Master
      Servicer;

                  (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 other parties hereto,
      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 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
      charter and 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;

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<PAGE>

                  (iv) 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;

                  (v) 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
      perform any of its other obligations hereunder in accordance with the
      terms hereof,

                  (vi) 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;
      and

                  (vii) 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.

            It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive the resignation or
termination of the parties hereto and the termination of this Agreement and
shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders.

            SECTION 2.05. Representations, Warranties and Covenants of Ocwen.

            Ocwen hereby represents, warrants and covenants to the Master
Servicer, the Securities Administrator, the Depositor and the Trustee, for the
benefit of each of such Persons and the Certificateholders that as of the
Closing Date or as of such date specifically provided herein:

                  (i) Ocwen is a federally chartered savings bank duly organized
      and validly existing under the laws of the United States and is duly
      authorized and qualified to transact any and all business contemplated by
      this Agreement to be conducted by Ocwen in any state in which a Mortgaged
      Property related to an Ocwen Mortgage Loan 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 Ocwen Mortgage
      Loan and to service the Ocwen Mortgage Loans in accordance with the terms
      of this Agreement;

                  (ii) Ocwen 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. Ocwen has duly authorized the execution, delivery and
      performance of this Agreement, has duly executed and delivered this
      Agreement, and this Agreement, assuming due authorization,

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<PAGE>

      execution and delivery by the other parties hereto, constitutes a legal,
      valid and binding obligation of Ocwen, 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 Ocwen,
      the servicing of the Ocwen Mortgage Loans by Ocwen hereunder, the
      consummation by Ocwen 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 Ocwen and will not (A) result in
      a breach of any term or provision of the charter or by-laws of Ocwen 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 Ocwen is a party or by which it may be bound, or any
      statute, order or regulation applicable to Ocwen of any court, regulatory
      body, administrative agency or governmental body having jurisdiction over
      Ocwen; and Ocwen is not 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 Ocwen's knowledge, would
      in the future materially and adversely affect, (x) the ability of Ocwen to
      perform its obligations under this Agreement, (y) the business,
      operations, financial condition, properties or assets of Ocwen taken as a
      whole or (z) the legality, validity or enforceability of this Agreement;

                  (iv) Ocwen 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;

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

                  (vi) There are no actions or proceedings against, or
      investigations known to it of, Ocwen 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 Ocwen of its obligations under, or the validity
      or enforceability of, this Agreement;

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

                  (viii) Ocwen 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

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<PAGE>

      Equifax, Experian and Trans Union Credit Information Company or their
      successors on a monthly basis; and

                  (ix) Ocwen will not waive any Prepayment Charge other than in
      accordance with the standard set forth in Section 3.01.

            Notwithstanding anything to the contrary contained in this
Agreement, if the covenant of Ocwen set forth in Section 2.05(ix) above is
breached, Ocwen will pay the amount of such waived Prepayment Charge, from its
own funds without any right of reimbursement, for the benefit of the Holders of
the Class P Certificates, by depositing such amount into the related Collection
Account within 90 days of the earlier of discovery by Ocwen or receipt of notice
by Ocwen of such breach. Furthermore, notwithstanding any other provisions of
this Agreement, any payments made by Ocwen in respect of any waived Prepayment
Charges pursuant to this paragraph shall be deemed to be paid outside of the
Trust Fund.

            It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive the resignation or
termination of the parties hereto, the termination of this Agreement and the
delivery of the Mortgage Files to the Custodian and shall inure to the benefit
of the Trustee, the Master Servicer, the Securities Administrator, the
Depositor, the Certificateholders and the Certificate Insurer. Upon discovery by
any such Person or Ocwen of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value of any
Mortgage Loan, Prepayment Charge or the interests therein of the
Certificateholders or the Certificate Insurer, the party discovering such breach
shall give prompt written notice (but in no event later than two Business Days
following such discovery) to the Trustee. Subject to Section 8.01, unless such
breach shall not be susceptible of cure within 90 days, the obligation of Ocwen
set forth in Section 2.03(e) to cure breaches shall constitute the sole remedy
against Ocwen available to the Certificateholders, the Depositor or the Trustee
on behalf of the Certificateholders and the Certificate Insurer respecting a
breach of the representations, warranties and covenants contained in this
Section 2.05.

            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 the Custodian on its behalf of the Mortgage Loan Documents,
subject to the provisions of Section 2.01 and Section 2.02 hereof and Section 2
of the Custodial Agreement, together with the assignment to it of all other
assets included in REMIC I, the receipt of which is hereby acknowledged. 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 Holders of the Class R-I Interest and REMIC I (as holder of the
REMIC I Regular Interests) to receive distributions from the proceeds of REMIC I
in respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, 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.

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<PAGE>

            SECTION 2.07. Conveyance of the REMIC I Regular Interests;
Acceptance of REMIC I 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-II Interest 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 same in trust for the exclusive use and benefit of all present and
future Holders of the Class R-II Interest and REMIC II (as holder of the REMIC I
Regular Interests). The rights of the Holder of the Class R-II Interest 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-II Interest and Regular
Certificate, respectively, and all ownership interests evidenced or constituted
by the Class R-II Interest and the Regular Certificates, shall be as set forth
in this Agreement. The Class R-II Interest and the Regular Certificates shall
constitute the entire beneficial ownership interest in REMIC II.

            SECTION 2.08. Issuance of Residual 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
Securities Administrator has executed and authenticated and the Trustee has
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations. The Class R Certificates evidence ownership in the
Class R-I Interest and the Class R-II Interest.

            SECTION 2.09. Establishment of the Trust.

            The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust to be known, for convenience, as "ACE Securities Corp., Home Equity Loan
Trust, Series 2004-HE4" and does hereby appoint HSBC Bank USA, National
Association as Trustee in accordance with the provisions of this Agreement.

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<PAGE>

                                  ARTICLE III

                          ADMINISTRATION AND SERVICING
                      OF THE OCWEN MORTGAGE LOANS; ACCOUNTS

            SECTION 3.01. Ocwen to Act as a Servicer.

            From and after the Closing Date to the related Servicing Transfer
Date, the Fremont Mortgage Loans will be serviced and administered by Fremont
pursuant to the Fremont Servicing Agreement, and Ocwen will have no
responsibility to service or administer the Fremont Mortgage Loans or have any
other obligation with respect to the Fremont Mortgage Loans during that period.
In addition, Ocwen shall have no responsibility to service or administer the
Select Portfolio Mortgage Loans or have any other obligation with respect to the
Select Portfolio Mortgage Loans. On and after the Closing Date or the related
Servicing Transfer Date (if applicable), Ocwen shall service and administer the
Ocwen Mortgage Loans on behalf of the Trust Fund and in the best interests of
and for the benefit of the Certificateholders (as determined by Ocwen in its
reasonable judgment) in accordance with the terms of this Agreement and the
respective Ocwen Mortgage Loans and all applicable law and regulations 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 prudent mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:

                  (i) any relationship that Ocwen or any Affiliate of Ocwen may
      have with the related Mortgagor;

                  (ii) the ownership of any Certificate by Ocwen or any
      Affiliate of the Servicer;

                  (iii) Ocwen's obligation to make P&I Advances or Servicing
      Advances; or

                  (iv) Ocwen's right to receive compensation for its services
      hereunder.

            To the extent consistent with the foregoing, Ocwen shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes related to the Ocwen Mortgage Loans and 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 such waiver is related to a default or reasonably foreseeable
default and would, in the reasonable judgment of Ocwen, maximize recovery of
total proceeds taking into account the value of such Prepayment Charge and the
related the Ocwen Mortgage Loan and, if such waiver is made in connection with a
refinancing of the related the Ocwen Mortgage Loan, such refinancing is related
to a default or a reasonably foreseeable default, (ii) such Prepayment Charge is
unenforceable in accordance with applicable law or the collection of such
related Prepayment Charge would otherwise violate applicable law or (iii) the
collection of such Prepayment Charge would be considered "predatory" pursuant to
written guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters.. Notwithstanding any provision

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<PAGE>

in this Agreement to the contrary, in the event the Prepayment Charge payable
under the terms of the Mortgage Note related to a Ocwen Mortgage Loan is less
than the amount of the Prepayment Charge set forth in the Prepayment Charge
Schedule or other information provided to Ocwen, Ocwen shall not have any
liability or obligation with respect to such difference, and in addition shall
not have any liability or obligation to pay the amount of any uncollected
Prepayment Charge if the failure to collect such amount is the direct result of
inaccurate or incomplete information on the Prepayment Charge Schedule.

            Subject only to the above-described servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
respective Ocwen Mortgage Loans, Ocwen shall have full power and authority, 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 with the goal of
maximizing proceeds of the Mortgage Loan. Without limiting the generality of the
foregoing, Ocwen in its own name is hereby authorized and empowered by the
Trustee when Ocwen believes it appropriate in its best judgment, 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 or
subordination, and all other comparable instruments, with respect to the Ocwen
Mortgage Loans and the related 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, for the benefit of the Trust Fund and the
Certificateholders. Ocwen shall service and administer the Ocwen 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. Ocwen 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 3.14, the Trustee shall execute, at the written request of Ocwen, and
furnish to Ocwen a power of attorney in the form of Exhibit D hereto and other
documents necessary or appropriate to enable Ocwen to carry out its servicing
and administrative duties hereunder and furnished to the Trustee by Ocwen, and
the Trustee shall not be liable for the actions of Ocwen under such powers of
attorney and shall be indemnified by Ocwen for any cost, liability or expense
incurred by the Trustee in connection with Ocwen's use or misuse of any such
power of attorney.

            In accordance with Accepted Servicing Practices, Ocwen shall make or
cause to be made Servicing Advances as necessary for the purpose of effecting
the payment of taxes and assessments on the Mortgaged Properties related to the
Ocwen Mortgage Loans, which Servicing Advances shall be reimbursable in the
first instance from related collections from the related Mortgagors pursuant to
Section 3.07, and further as provided in Section 3.09; provided, however, Ocwen
shall only make such Servicing Advance if the related Mortgagor has not made
such payment and if the failure to make such Servicing Advance would result in
the loss of the related Mortgaged Property due to a tax sale or foreclosure as
result of a tax lien. Any cost incurred by Ocwen in effecting the payment of
taxes and assessments on a Mortgaged Property related to an Ocwen Mortgage Loan
shall not, for the purpose of calculating the Stated Principal Balance of such
Ocwen Mortgage Loan or distributions to Certificateholders, be added to the
unpaid principal balance of the related Ocwen Mortgage Loan, notwithstanding
that the terms of such Ocwen Mortgage Loan so permit. The parties to this
Agreement acknowledge that Servicing Advances shall be reimbursable pursuant to
Section 3.09 of this Agreement, and agree that no

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<PAGE>

Servicing Advance shall be rejected or disallowed by any party unless it has
been shown that such Servicing Advance was not made in accordance with the terms
of this Agreement.

            Notwithstanding anything in this Agreement to the contrary, Ocwen
may not make any future advances with respect to an Ocwen Mortgage Loan and
Ocwen shall not permit any modification with respect to any related Ocwen
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 related Ocwen Mortgage Loan
(unless, as provided in Section 3.06, the related Mortgagor is in default with
respect to the related Ocwen Mortgage Loan or such default is, in the judgment
of Ocwen, reasonably foreseeable) or any modification, waiver or amendment of
any term of any Ocwen Mortgage Loan that would both (A) effect an exchange or
reissuance of such Ocwen Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
any Trust REMIC created hereunder 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.

            In the event that the Mortgage Loan Documents relating to any Ocwen
Mortgage Loan contain provisions requiring the related Mortgagor to arbitrate
disputes (at the option of the Trustee, on behalf of the Trust), the Trustee
hereby authorizes Ocwen to waive the Trustee's right or option to arbitrate
disputes and to send written notice of such waiver to the Mortgagor, although
the Mortgagor may still require arbitration at its option.

            From and after the Servicing Transfer Date, Ocwen will 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.

            SECTION 3.02. Sub-Servicing Agreements Between Ocwen and
Sub-Servicers.

            Ocwen may arrange for the subservicing of any Ocwen Mortgage Loan by
a Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that such
sub-servicing arrangement and the terms of the related Sub-Servicing Agreement
must provide for the servicing of such Ocwen Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. 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. Notwithstanding the provisions of
any Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between Ocwen or a Sub-Servicer or reference to
actions taken through Ocwen or otherwise, Ocwen shall remain obligated and
liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such 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 Ocwen alone were servicing and administering the
Mortgage Loans. Every Sub-Servicing Agreement entered into by Ocwen shall
contain a provision giving the successor

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Servicer the option to terminate such agreement in the event a successor
Servicer is appointed. All actions of each Sub-Servicer performed pursuant to
the related Sub-Servicing Agreement shall be performed as an agent of Ocwen with
the same force and effect as if performed directly by Ocwen.

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

            SECTION 3.03. Successor Sub-Servicers.

            Any Sub-Servicing Agreement shall provide that Ocwen shall be
entitled to terminate any Sub-Servicing Agreement and to either itself directly
service the related Ocwen Mortgage Loans or 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 any successor to Ocwen (which may be the Trustee or
the Master Servicer) without fee, in accordance with the terms of this
Agreement, in the event that Ocwen (or any successor to Ocwen) shall, for any
reason, no longer be the Servicer of the Ocwen Mortgage Loans (including
termination due to a Servicer Event of Default).

            SECTION 3.04. No Contractual Relationship Between Sub-Servicer,
Trustee or the Certificateholders.

            Any Sub-Servicing Agreement and any other transactions or services
relating to the Ocwen Mortgage Loans involving a Sub-Servicer shall be deemed to
be between the Sub-Servicer and Ocwen alone and the Master Servicer, Trustee and
the Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to any
Sub-Servicer except as set forth in Section 3.05.

            SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement
by Successor Servicer.

            In connection with the assumption of the responsibilities, duties
and liabilities and of the authority, power and rights of Ocwen hereunder by a
successor Servicer (which may be the Trustee or the Master Servicer) pursuant to
Section 8.02, it is understood and agreed that Ocwen's rights and obligations
under any Sub-Servicing Agreement then in force between Ocwen and a Sub-Servicer
shall be assumed simultaneously by such successor Servicer without act or deed
on the part of such successor Servicer; provided, however, that any successor
Servicer may terminate the Sub-Servicer.

            Ocwen shall, upon the reasonable request of the Master Servicer, but
at its own expense, deliver to the assuming party documents and records relating
to each Sub-Servicing Agreement and an accounting of amounts collected and held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of the Sub-Servicing Agreements to the assuming party.

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            The Servicing Fee payable to any such successor Servicer shall be
payable from payments received on the Ocwen Mortgage Loans in the amount and in
the manner set forth in this Agreement.

            SECTION 3.06. Collection of Certain Mortgage Loan Payments.

            Ocwen shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Ocwen Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and Accepted
Servicing Practices, follow such collection procedures as it would follow with
respect to mortgage loans comparable to the Ocwen Mortgage Loans and held for
its own account. Consistent with the foregoing, Ocwen may in its discretion (i)
waive any late payment charge or, if applicable, penalty interest or (ii) extend
the due dates for the Monthly Payments due on a Mortgage Note related to an
Ocwen Mortgage Loan for a period of not greater than 180 days; provided that any
extension pursuant to this clause shall not affect the amortization schedule of
any Ocwen Mortgage Loan for purposes of any computation hereunder.
Notwithstanding the foregoing, in the event that any Ocwen Mortgage Loan is in
default or, in the judgment of Ocwen, such default is reasonably foreseeable,
Ocwen, consistent with Accepted Servicing Practices may waive, modify or vary
any term of such Ocwen Mortgage Loan (including modifications that change the
Mortgage Rate, forgive the payment of principal or interest or extend the final
maturity date of such Ocwen Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Ocwen Mortgage Loan, or consent to the postponement of
strict compliance with any such term or otherwise grant indulgence to any
Mortgagor if in Ocwen's determination such waiver, modification, postponement or
indulgence is not materially adverse to the interests of the Certificateholders
or the Certificate Insurer (taking into account any estimated Realized Loss that
might result absent such action).

            SECTION 3.07. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.

            To the extent the terms of a Mortgage related to an Ocwen Mortgage
Loan provide for Escrow Payments, Ocwen shall establish and maintain 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, fire, flood, and 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. Ocwen 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 Ocwen's receipt
thereof, all Escrow Payments collected on account of the Ocwen Mortgage Loans
and shall thereafter deposit such Escrow Payments in the Servicing Accounts, in
no event later than the second Business Day after the deposit of good funds into
the clearing account, and retain therein, all Escrow Payments collected on
account of the Ocwen 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
timely payment of taxes, assessments, fire, flood, and hazard insurance
premiums, and comparable items; (ii) reimburse itself out of related collections
for any Servicing Advances made pursuant to Section 3.01 (with respect to taxes
and assessments) and Section 3.11 (with respect to fire, flood and hazard
insurance); (iii) refund to Mortgagors any

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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 Ocwen's
obligations and responsibilities in respect of the Ocwen Mortgage Loans under
this Agreement in accordance with Article X. As part of its servicing duties,
Ocwen shall pay to the Mortgagors interest on funds in 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. Notwithstanding the foregoing,
Ocwen shall not be obligated to collect Escrow Payments if the related Ocwen
Mortgage Loan does not require such payments but Ocwen shall nevertheless be
obligated to make Servicing Advances as provided in Section 3.01 and Section
3.11. In the event Ocwen shall deposit in the Servicing Accounts any amount not
required to be deposited therein, it may at any time withdraw such amount from
the Servicing Accounts, any provision to the contrary notwithstanding.

            To the extent that a Mortgage related to an Ocwen Mortgage Loan does
not provide for Escrow Payments, Ocwen (i) shall determine whether any such
payments are made by the Mortgagor in a manner and at a time that is necessary
to avoid the loss of the Mortgaged Property due to a tax sale or the foreclosure
as a result of a tax lien and (ii) shall ensure that all insurance required to
be maintained on the Mortgaged Property pursuant to this Agreement is
maintained. If any such payment has not been made and Ocwen receives notice of a
tax lien with respect to the Ocwen Mortgage Loan being imposed, Ocwen shall,
promptly and to the extent required to avoid loss of the Mortgaged Property,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property unless Ocwen determines the advance to be nonrecoverable.
Ocwen assumes full responsibility for the payment of all such bills and shall
effect payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make Servicing Advances to effect such payments subject to its
determination of recoverability.

            SECTION 3.08. Collection Account and Distribution Account.

            (a) On behalf of the Trust Fund, Ocwen shall establish and maintain
one or more "Collection Accounts", held in trust for the benefit of the Trustee
and the Certificateholders. On behalf of the Trust Fund, Ocwen 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 Ocwen's receipt thereof, and shall thereafter deposit in the related
Collection Account, in no event later than two Business Days after the deposit
of good funds into the clearing account, as and when received or as otherwise
required hereunder, the following payments and collections received or made by
it on or subsequent to the Cut-off Date other than amounts attributable to a Due
Date on or prior to the Cut-off Date:

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

                  (ii) all payments on account of interest (net of the related
      Servicing Fee and any Prepayment Interest Excess) on each Ocwen Mortgage
      Loan;

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                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
      than proceeds collected in respect of any particular REO Property) and all
      Subsequent Recoveries with respect to the Ocwen Mortgage Loans;

                  (iv) any amounts required to be deposited by Ocwen pursuant to
      Section 3.10 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 Ocwen pursuant to
      the second paragraph of Section 3.11(a) in respect of any blanket policy
      deductibles;

                  (vi) any Purchase Price or Substitution Shortfall Amount
      delivered to Ocwen and all proceeds (net of amounts payable or
      reimbursable to Ocwen, the Master Servicer, the Trustee, the Custodian or
      the Securities Administrator) of Ocwen Mortgage Loans purchased in
      accordance with Section 2.03, Section 3.13 or Section 10.01; and

                  (vii) any Prepayment Charges collected by Ocwen in connection
      with the Principal Prepayment of any of the Ocwen Mortgage Loans or
      amounts required to be deposited by Ocwen in connection with a breach of
      its obligations under Section 2.05.

            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,
assumption fees or other similar fees need not be deposited by Ocwen in the
Collection Account and may be retained by Ocwen as additional compensation. In
the event Ocwen 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 Securities Administrator 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 and the Certificateholders. On behalf of the Trust Fund, Ocwen shall
deliver to the Securities Administrator in immediately available funds for
deposit in the Distribution Account on or before 12:00 noon New York time on the
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 Ocwen in connection with the
Principal Prepayment of any of the Ocwen Mortgage Loans then on deposit in the
Collection Account relating to the Ocwen Mortgage Loans and the amount of any
funds reimbursable to an Advance Financing Person pursuant to Section 3.25. If
the balance on deposit in the Collection Account exceeds $100,000 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," Ocwen shall, on or before 5:00 p.m. New York time on such
Business Day, withdraw from the Collection Account any and all amounts payable
or reimbursable to the Depositor, Ocwen, the Trustee, the Master Servicer, the
Securities Administrator or the Seller pursuant to Section 3.09 and shall pay
such amounts to the Persons entitled thereto.

            With respect to any remittance received by the Securities
Administrator on or after the first Business Day following the Business Day on
which such payment was due, the

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Securities Administrator shall send written notice thereof to the related
Servicer. Ocwen shall pay to the Securities Administrator interest on any such
late payment by Ocwen at an annual rate equal to Prime Rate (as defined in The
Wall Street Journal) plus one percentage point, but in no event greater than the
maximum amount permitted by applicable law. Such interest shall be paid by Ocwen
to the Securities Administrator on the date such late payment is made and shall
cover the period commencing with the day following such first Business Day and
ending with the Business Day on which such payment is made, both inclusive. The
payment by Ocwen of any such interest, or the failure of the Securities
Administrator to notify Ocwen of such interest, shall not be deemed an extension
of time for payment or a waiver of any Event of Default by Ocwen.

            (c) Funds in the Collection Account maintained by Ocwen and funds in
the Distribution Account may be invested in Permitted Investments in accordance
with the provisions set forth in Section 3.10. Ocwen shall give notice to the
Trustee, the Securities Administrator and the Master Servicer of the location of
the Collection Account maintained by it when established and prior to any change
thereof. The Securities Administrator shall give notice to Ocwen and the
Depositor of the location of the Distribution Account when established and prior
to any change thereof.

            (d) Funds held in the Collection Account maintained by Ocwen at any
time may be delivered by Ocwen in immediately available funds to the Securities
Administrator for deposit in the Distribution Account. In the event Ocwen shall
deliver to the Securities Administrator for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Securities Administrator withdraw such amount from the Distribution Account
and remit to it any such amount, any provision herein to the contrary
notwithstanding. In no event shall the Securities Administrator incur liability
as a result of withdrawals from the Distribution Account at the direction of
Ocwen in accordance with the immediately preceding sentence. In addition, Ocwen
shall deliver to the Securities Administrator no later than the Servicer
Remittance Date the amounts set forth in clauses (i) through (iv) below:

                  (i) any P&I Advances, as required pursuant to Section 5.03;

                  (ii) any amounts required to be deposited pursuant to Section
      3.21(d) or 3.21(f) in connection with any REO Property related to an Ocwen
      Mortgage Loan;

                  (iii) any amounts to be paid in connection with a purchase of
      Ocwen Mortgage Loans and REO Properties pursuant to Section 10.01; and

                  (iv) any amounts required to be deposited pursuant to Section
      3.22 in connection with any Prepayment Interest Shortfalls with respect to
      an Ocwen Mortgage Loan.

            SECTION 3.09. Withdrawals from the Collection Account and
Distribution Account.

            (a) Ocwen shall, from time to time, make withdrawals from the
related Collection Account for any of the following purposes or as described in
Section 5.03:

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                  (i) to remit to the Securities Administrator for deposit in
      the Distribution Account the amounts required to be so remitted pursuant
      to Section 3.08(b) or permitted to be so remitted pursuant to the first
      sentence of Section 3.08(d);

                  (ii) subject to Section 3.13(d), to reimburse itself
      (including any successor Servicer) for P&I Advances made by it, but only
      to the extent of amounts received which represent Late Collections (net of
      the related Servicing Fees) of Monthly Payments on related Ocwen Mortgage
      Loans with respect to which such P&I Advances were made in accordance with
      the provisions of Section 5.03;

                  (iii) subject to Section 3.13(d), to pay itself any unpaid
      Servicing Fees and reimburse itself any unreimbursed Servicing Advances
      with respect to each Ocwen Mortgage Loan, but only to the extent of any
      Liquidation Proceeds and Insurance Proceeds received with respect to such
      related Ocwen Mortgage Loan;

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

                  (v) to pay to itself or the Seller, as the case may be, with
      respect to each related Ocwen Mortgage Loan that has previously been
      purchased or replaced pursuant to Section 2.03 or Section 3.13(c) all
      amounts received thereon not included in the Purchase Price or the
      Substitution Shortfall Amount;

                  (vi) to reimburse itself (including any successor to Ocwen)
      for

                  (A) any P&I Advance or Servicing Advance previously made by it
            which Ocwen has determined to be a Nonrecoverable P&I Advance or a
            Nonrecoverable Servicing Advance in accordance with the provisions
            of Section 5.03 provided however, that Ocwen shall not be entitled
            to reimbursement for any Servicing Advance made prior to the Cut-off
            Date if Ocwen determines that such Servicing Advance constitutes a
            Nonrecoverable Servicing Advance; or

                  (B) any unpaid Servicing Fees to the extent not recoverable
            from Liquidation Proceeds, Insurance Proceeds or other amounts
            received with respect to the related Ocwen Mortgage Loan under
            Section 3.06(a)(iii);

                  (vii) to reimburse itself or the Depositor for expenses
      incurred by or reimbursable to itself or the Depositor, as the case may
      be, pursuant to Section 3.01 or Section 7.03;

                  (viii) to reimburse itself or the Trustee, as the case may be,
      for expenses reasonably incurred in respect of the breach or defect giving
      rise to the purchase obligation under Section 2.03 of this Agreement that
      were included in the Purchase Price of the related Ocwen Mortgage Loan,
      including any expenses arising out of the enforcement of the purchase
      obligation;

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                  (ix) to pay, or to reimburse itself for advances in respect
      of, expenses incurred in connection with any Ocwen Mortgage Loan pursuant
      to Section 3.13(b);

                  (x) to pay to itself any Prepayment Interest Excess on the
      Ocwen Mortgage Loans to the extent not retained pursuant to Section
      3.08(a)(ii)); and

                  (xi) to clear and terminate the Collection Account pursuant to
      Section 10.01.

                  Ocwen 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), (v), (vi), (vii), (viii), (ix)
      and (x) above.

                  (b) The Securities Administrator 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 5.01;

                  (ii) to pay to itself, the Custodian and the Master Servicer
      amounts to which it is entitled pursuant to Section 9.05 or any other
      provision of this Agreement and any Extraordinary Trust Fund Expenses;

                  (iii) to reimburse itself or the Master Servicer pursuant to
      Section 8.02;

                  (iv) to pay to an Advance Financing Person reimbursements for
      P&I Advances and/or Servicing Advances pursuant to Section 3.25;

                  (v) to pay any amounts in respect of taxes pursuant to Section
      11.01(g)(v);

                  (vi) to pay the Master Servicing Fee to the Master Servicer;

                  (vii) to pay the Credit Risk Management Fee to the Credit Risk
      Manager; and

                  (viii) to clear and terminate the Distribution Account
      pursuant to Section 10.01.

            SECTION 3.10. Investment of Funds in the Investment Accounts.

            (a) Ocwen may direct, by means of written directions (which may be
standing directions), any depository institution maintaining the related
Collection Account to invest the funds in such Collection Account (for purposes
of this Section 3.10, an "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 Securities Administrator is the obligor
thereon, and (ii) no later than the

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date on which such funds are required to be withdrawn from such account pursuant
to this Agreement, if the Securities Administrator is the obligor on such
Permitted Investment. Amounts in the Distribution Account may be invested in
Permitted Investments as directed in writing by the Master Servicer 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
Securities Administrator 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 Agreement, if the Securities Administrator is the obligor thereon. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds shall be made in the name of the Trustee (in its capacity as
such) or in the name of a nominee of the Trustee. The Securities Administrator
shall be entitled to sole possession over each such investment in the
Distribution Account and, subject to subsection (b) below, the income thereon,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Securities Administrator 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 the Collection
Account maintained by Ocwen 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
            receipt by such party of written notice from Ocwen 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 held by or on behalf of Ocwen, shall be for
the benefit of Ocwen and shall be subject to its withdrawal in accordance with
Section 3.09. Ocwen shall deposit in the Collection Account maintained by Ocwen
the amount of any loss incurred in respect of any such Permitted Investment made
with funds in such account immediately upon realization of such loss. All
earnings and gain realized from the investment of funds deposited in the
Distribution Account shall be for the benefit of the Master Servicer. The Master
Servicer 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.

            (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 9.01 and Section 9.02(a)(v),
shall, at the written direction of the Servicer, take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.

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            (d) The Trustee, the Master Servicer or their respective Affiliates
are permitted to receive additional compensation that could be deemed to be in
the Trustee's or the Master Servicer'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 shall
not be considered an amount that is reimbursable or payable to the Trustee or
the Master Servicer pursuant to Section 3.09 or 3.10 or otherwise payable in
respect of Extraordinary Trust Fund Expenses. Such additional compensation shall
not be an expense of the Trust Fund.

            SECTION 3.11. Maintenance of Hazard Insurance, Errors and Omissions
and Fidelity Coverage and Primary Mortgage Insurance.

            (a) The terms of each Mortgage Note require the related Mortgagor to
maintain fire, flood and hazard insurance policies. To the extent such policies
are not maintained, Ocwen shall cause to be maintained for each Mortgaged
Property that is related to an Ocwen Mortgage Loan fire and hazard insurance
with extended coverage as is customary in the area where the Mortgaged Property
is located in an amount which is at least equal to the lesser of the current
principal balance of such Ocwen Mortgage Loan and the amount necessary to
compensate fully for any damage or loss to the improvements which 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. Ocwen shall also cause
to be maintained fire and hazard insurance on each REO Property with extended
coverage as is customary in the area where the Mortgaged Property is located 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 Ocwen Mortgage Loan at the time it
became an REO Property. Ocwen 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 Ocwen 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 Accepted Servicing Practices, subject to the terms and conditions of the
related Mortgage and Mortgage Note) shall be deposited in the related Collection
Account, subject to withdrawal pursuant to Section 3.09, if received in respect
of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to
Section 3.21, if received in respect of an REO Property. Any cost incurred by
Ocwen 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 Ocwen Mortgage Loan, notwithstanding that the
terms of such Ocwen 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, Ocwen 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 Ocwen 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).

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            In the event that Ocwen shall obtain and maintain a blanket policy
with an insurer having a General Policy Rating of B:VI or better in Best's Key
Rating Guide or otherwise acceptable to Fannie Mae or Freddie Mac insuring
against hazard losses on all of the Ocwen Mortgage Loans, it shall conclusively
be deemed to have satisfied its obligations to cause fire and hazard insurance
to be maintained on the Mortgaged Properties, it being understood and agreed
that such policy may contain a deductible clause, in which case Ocwen 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 3.11, and there shall have been one or more losses which would have been
covered by such policy, deposit to the related 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 Ocwen Mortgage Loans, Ocwen agrees to prepare and present, on
behalf of itself, the Trustee, the Trust Fund, the Certificateholders and the
Certificate Insurer, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.

            (b) Ocwen 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 its respective 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 Ocwen Mortgage Loans,
unless Ocwen, has obtained a waiver of such requirements from Fannie Mae or
Freddie Mac. Ocwen shall also maintain a fidelity bond in the form and amount
that would meet the requirements of Fannie Mae or Freddie Mac, unless Ocwen, has
obtained a waiver of such requirements from Fannie Mae or Freddie Mac. Ocwen
shall be deemed to have complied with this provision if an Affiliate of Ocwen,
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 Ocwen. 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.

            (c) Ocwen shall not take any action that would result in noncoverage
under any applicable primary mortgage insurance policy of any loss which, but
for the actions of Ocwen would have been covered thereunder. Ocwen shall use its
best efforts to keep in force and effect any applicable primary mortgage
insurance policy and, to the extent that the related Ocwen Mortgage Loan
requires the Mortgagor to maintain such insurance, any other primary mortgage
insurance applicable to any Ocwen Mortgage Loan. Except as required by
applicable law or the related Mortgage Loan Documents, Ocwen shall not cancel or
refuse to renew any such primary mortgage insurance policy that is in effect at
the date of the initial issuance of the related Mortgage Note and is required to
be kept in force hereunder.

            Ocwen agrees to present on behalf of the Trustee and the
Certificateholders claims to the applicable insurer under any primary mortgage
insurance policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any primary mortgage insurance policies
respecting defaulted Ocwen Mortgage Loans. Pursuant to Section 3.08, any amounts
collected by Ocwen under any primary mortgage insurance policies shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.09. Notwithstanding any provision to the contrary, Ocwen shall not have any
responsibility with respect to a primary mortgage insurance policy unless Ocwen
has been made aware of such policy, as reflected on the Mortgage Loan Schedule
or otherwise and have been provided with adequate information to administer such
policy.

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            SECTION 3.12. Enforcement of Due-on-Sale Clauses; Assumption
Agreements

            Ocwen shall, to the extent it has knowledge of any conveyance of any
Mortgaged Property related to an Ocwen Mortgage Loan by any related 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 Ocwen Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that Ocwen shall not exercise any such rights if prohibited by law from
doing so. If Ocwen reasonably believes that 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, Ocwen shall 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. Ocwen 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 then current underwriting criteria of Ocwen for mortgage loans
similar to the Ocwen Mortgage Loans. In connection with any assumption or
substitution, Ocwen shall apply such 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. Ocwen 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 Ocwen in respect of
an assumption or substitution of liability agreement will be retained by Ocwen
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. Ocwen shall notify
the Trustee (or the Custodian) that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the executed original
of such substitution 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, Ocwen shall not be deemed to be in default, breach or any other
violation of its obligations hereunder by reason of any assumption of an Ocwen
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which Ocwen may be restricted by law from preventing, for any reason
whatever. For purposes of this Section 3.12, 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 3.13. Realization Upon Defaulted Mortgage Loans.

            (a) Ocwen shall use its best efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert the
ownership of properties

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securing such of the Ocwen 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 3.06. Ocwen 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 Ocwen
as contemplated in Sections 3.09 and 3.21. The foregoing is subject to the
provision that, in any case in which a Mortgaged Property shall have suffered
damage from an Uninsured Cause, Ocwen 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 Ocwen Mortgage Loan after reimbursement to itself for such expenses.

            (b) Notwithstanding the foregoing provisions of this Section 3.13 or
any other provision of this Agreement, with respect to any Ocwen Mortgage Loan
as to which Ocwen has received actual notice of, or has actual knowledge of, the
presence of any toxic or hazardous substance on the related Mortgaged Property,
Ocwen 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 Trust Fund, the
Trustee 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 Ocwen has also previously determined, based on its
reasonable judgment and a prudent 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 3.13 shall be advanced by Ocwen, subject to Ocwen's right to be
reimbursed therefor from the related Collection Account as provided in Section
3.09(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the related Collection Account
received in respect of the affected Ocwen Mortgage Loan or other Ocwen Mortgage
Loans.

            If Ocwen 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

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containment, clean-up or remediation of hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials affecting any such
Mortgaged Property, then Ocwen shall take such action as it deems to be in the
best economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by Ocwen, subject to
Ocwen's right to be reimbursed therefor from the related Collection Account as
provided in Sections 3.09(a)(iii) or 3.09(a)(ix), such right of reimbursement
being prior to the rights of Certificateholders to receive any amount in the
related Collection Account received in respect of the affected Ocwen Mortgage
Loan or other Ocwen Mortgage Loans.

            (c) Ocwen shall have the right to purchase from REMIC I any
defaulted Mortgage Loan that is 90 days or more delinquent, which Ocwen
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 Ocwen and the Trustee prior to
purchase), at a price equal to the Purchase Price. The Purchase Price for any
Ocwen Mortgage Loan purchased hereunder shall be deposited in the related
Collection Account, and the Trustee, upon receipt of written certification from
Ocwen of such deposit, shall release or cause to be released to Ocwen the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, representation or
warranty, as Ocwen shall furnish and as shall be necessary to vest in Ocwen
title to any Ocwen Mortgage Loan 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 Ocwen Mortgage
Loan, will be applied in the following order of priority: first, to reimburse
Ocwen for any related unreimbursed Servicing Advances and P&I Advances, pursuant
to Section 3.09(a)(ii) or (a)(iii); second, to accrued and unpaid interest on
the Ocwen 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 Ocwen 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 Ocwen Mortgage Loan, the amount of such recovery
will be allocated by Ocwen 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 Ocwen
pursuant to Section 3.09(a)(iii). The portion of the recovery allocated to
interest (net of unpaid Servicing Fees) and the portion of the recovery
allocated to principal of the Ocwen Mortgage Loan shall be applied as follows:
first, to reimburse Ocwen for any related unreimbursed Servicing or P&I Advances
in accordance with Section 3.09(a)(ii) and any other amounts reimbursable to
Ocwen pursuant to Section 3.09, and second, as part of the amounts to be
transferred to the Distribution Account in accordance with Section 3.08(b).

            SECTION 3.14. Trustee to Cooperate; Release of Mortgage Files.

            (a) Upon becoming aware of the payment in full of any Mortgage Loan,
or the receipt by the related Servicer of a notification that payment in full
has been escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the related Servicer will
promptly furnish to the Custodian, on behalf of the Trustee, two copies of a
request for release substantially in the form attached to the Custodial
Agreement signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a

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signature on its face, originate from a Servicing Officer (which certification
shall include a statement to the effect that all amounts received in connection
with such payment that are required to be deposited in the related Collection
Account have been or will be so deposited) and shall request that the Custodian,
on behalf of the Trustee, deliver to the related Servicer the related Mortgage
File. Upon receipt of such certification and request, the Custodian, on behalf
of the Trustee, shall within five (5) Business Days release the related Mortgage
File to the related Servicer and the Trustee and Custodian shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
the related Servicer is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction or
assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
related Collection Account.

            (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trustee shall execute such documents as
shall be prepared and furnished to the Trustee by the related Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian, on behalf of the Trustee, shall, upon the
request of the related Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a request for release signed by a Servicing Officer
substantially in the form attached to the Custodial Agreement (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer), release within five (5) Business Days the
related Mortgage File held in its possession or control to the related Servicer.
Such trust receipt shall obligate the related Servicer to return the Mortgage
File to the Custodian on behalf of the Trustee, when the need therefor by the
related Servicer no longer exists unless the Mortgage Loan shall be liquidated,
in which case, upon receipt of a certificate of a Servicing Officer similar to
that hereinabove specified, the Mortgage File shall be released by the
Custodian, on behalf of the Trustee, to the related Servicer.

            Notwithstanding the foregoing, in connection with a Principal
Prepayment in full of any Mortgage Loan, the Master Servicer may request release
of the related Mortgage File from the Custodian, in accordance with the
provisions of the Custodial Agreement, in the event the related Servicer fails
to do so.

            Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the related Servicer, any court pleadings, requests for
trustee's sale or other documents prepared and delivered to the Trustee and
reasonably acceptable to it and 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 Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale. So long as no Servicer Event of Default shall have occurred and
be continuing, the related Servicer shall have

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the right to execute any and all such court pleadings, requests and other
documents as attorney-in-fact for, and on behalf of the Trustee.

            SECTION 3.15. Servicing Compensation.

            As compensation for the activities of Ocwen, hereunder, Ocwen shall
be entitled to the Servicing Fee with respect to each Ocwen Mortgage Loan
payable solely from payments of interest in respect of such Ocwen Mortgage Loan,
subject to Section 3.22. In addition, Ocwen shall be entitled to recover unpaid
Servicing Fees out of Insurance Proceeds or Liquidation Proceeds to the extent
permitted by Section 3.09(a)(iii) and out of amounts derived from the operation
and sale of an REO Property to the extent permitted by Section 3.21. 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 Ocwen's responsibilities and
obligations under this Agreement to the extent permitted herein.

            Additional servicing compensation in the form of assumption fees,
late payment charges and other miscellaneous fees (other than Prepayment
Charges) shall be retained by Ocwen only to the extent such fees or charges are
received by Ocwen. Ocwen shall also be entitled pursuant to Section 3.09(a)(iv)
to withdraw from the related Collection Account and pursuant to Section 3.21(b)
to withdraw from any REO Account, as additional servicing compensation, interest
or other income earned on deposits therein, subject to Section 3.10. In
addition, Ocwen shall be entitled to retain or withdraw from the related
Collection Account, pursuant to Section 3.09(a)(x), any Prepayment Interest
Excess with respect to the Ocwen Mortgage Loans as additional servicing
compensation. Ocwen shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided herein.

            SECTION 3.16. Collection Account Statements.

            Not later than fifteen days after each Distribution Date, Ocwen
shall forward to the Master Servicer, the Securities Administrator, the Trustee
and the Depositor a statement prepared by the institution at which the related
Collection Account is maintained setting forth the status of the related
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the related Collection Account of each
category of deposit specified in Section 3.08(a) and each category of withdrawal
specified in Section 3.09. Copies of such statement and any similar statements
provided by Select Portfolio shall be provided by the Securities Administrator
to any Certificateholder and to any Person identified to the Securities
Administrator as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
related Servicer to the Securities Administrator.

            SECTION 3.17. Statement as to Compliance.

            Not later than March 15th of each calendar year commencing in 2005,
Ocwen shall deliver to the Trustee, the Master Servicer and the Depositor an
Officers' Certificate in a form acceptable for filing with the Securities and
Exchange Commission as an exhibit to Form 8-K or other required form (upon which
the Master Servicer can conclusively rely in connection with its obligations
under Section 5.06) stating, as to each signatory thereof, that (i) a review of

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the activities of Ocwen during the preceding year and of performance under this
Agreement has been made under such officers' supervision and (ii) to the best of
such officer's knowledge, based on such review, Ocwen has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of any such
statement shall be provided by the Trustee to the Certificate Insurer and any
Certificateholder, upon request at the expense of the requesting party, provided
such statement is delivered by Ocwen to the Trustee.

            SECTION 3.18. Independent Public Accountants' Servicing Report.

            Not later than March 15th of each calendar year commencing in 2005,
Ocwen, at its expense, shall cause a nationally recognized firm of independent
certified public accountants to furnish to Ocwen a report in a form acceptable
for filing with the Securities and Exchange Commission as an exhibit to Form
10-K or other required form stating that (i) it has obtained a letter of
representation regarding certain matters from the management of Ocwen which
includes an assertion that Ocwen 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 fiscal 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
and such firm has determined that Ocwen has complied in all material respects,
subject to such exceptions and other qualifications that may be appropriate.
Immediately upon receipt of such report, Ocwen shall furnish a copy of such
report to the Master Servicer, the Trustee and each Rating Agency. Copies of
such statement shall be provided by the Trustee to any Certificateholder and the
Certificate Insurer upon request at the expense of the requesting party,
provided that such statement is delivered by Ocwen to the Trustee.

            SECTION 3.19. Annual Certification.

            (a) Ocwen shall deliver to the Master Servicer, on or before March
15th of each calendar year beginning in 2005 (or, if any such day is not a
Business Day, the immediately preceding Business Day) or such alternative date
reasonably specified by the Master Servicer which shall occur not later than 15
days prior to the date any Form 10-K is required to be filed with the Commission
in connection with the transactions contemplated by this Agreement, a
certification in the form attached hereto as Exhibit C. Such certification shall
be signed by the senior officer in charge of servicing of Ocwen. In addition,
Ocwen shall provide such other information with respect to the Ocwen Mortgage
Loans and the servicing and administration thereof within the control of Ocwen
which shall be required to enable the Master Servicer to comply with the
reporting requirements of the Securities and Exchange Act of 1934, as amended,
pursuant to Section 5.06 hereof.

            (b) Ocwen shall indemnify and hold harmless the Master Servicer, the
Securities Administrator, the Trustee, the Depositor and their respective
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
Ocwen or any of its officers, directors, agents or affiliates of its

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obligations under this Section 3.19 or Ocwen's negligence, bad faith or willful
misconduct in connection therewith. Such indemnity shall survive the termination
or resignation of the parties hereto or the termination of this Agreement. If
the indemnification provided for herein is unavailable or insufficient to hold
harmless the Master Servicer, the Securities Administrator, the Trustee and the
Depositor, then Ocwen agrees that it shall contribute to the amount paid or
payable by the Master Servicer, the Securities Administrator, the Trustee and
the Depositor as a result of the losses, claims, damages or liabilities of the
Master Servicer, the Securities Administrator, the Trustee and the Depositor in
such proportion as is appropriate to reflect the relative fault of the Master
Servicer, the Securities Administrator, the Trustee and the Depositor on the one
hand and Ocwen on the other in connection with a breach of Ocwen's obligations
under this Section 3.19.

            SECTION 3.20. Access to Certain Documentation.

            Ocwen 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 Certificate Owner, access to the documentation
regarding the Ocwen 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 Ocwen designated by it.
Nothing in this Section 3.20 shall limit the obligation of Ocwen to comply with
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of Ocwen to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section. Nothing in this Section 3.20 shall require Ocwen to collect, create,
collate or otherwise generate any information that it does not generate in its
usual course of business. Ocwen shall not be required to make copies of or ship
documents to any Person unless provisions have been made for the reimbursement
of the costs thereof.

            SECTION 3.21. Title, Management and Disposition of REO Property.

            (a) The deed or certificate of sale of any REO Property related to
an Ocwen Mortgage Loan shall be taken in the name of the Trustee, or its
nominee, on behalf of the Trust Fund and for the benefit of the
Certificateholders. Ocwen, on behalf of REMIC I, shall either sell any REO
Property by the close of the third calendar year following the calendar year in
which REMIC I acquires ownership of such REO Property for purposes of Section
860(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 Ocwen had delivered
to the Trustee an Opinion of Counsel, addressed to the Trustee and the
Depositor, 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 created hereunder of taxes on "prohibited
transactions" thereof, as defined in Section 860F of the Code, or cause any
Trust REMIC hereunder to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. Ocwen 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
created hereunder 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.

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

            (c) Ocwen 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 related to an Ocwen Mortgage Loan as
are consistent with the manner in which Ocwen manages and operates similar
property owned by it or any of its Affiliates, all on such terms and for such
period as Ocwen deems to be in the best interests of Certificateholders. In
connection therewith, Ocwen 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 Ocwen's receipt
thereof, and shall thereafter deposit in the REO Account, in no event more than
two Business Days after the deposit of good funds into the clearing account, all
revenues received by it with respect to an REO Property related to an Ocwen
Mortgage Loan 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, Ocwen shall
advance from its own funds such amount as is necessary for such purposes if, but
only if, Ocwen would make such advances if Ocwen owned the REO Property and if
in Ocwen's judgment, the payment of such amounts will be recoverable from the
rental or sale of the REO Property.

            Subject to compliance with applicable laws and regulations as shall
at any time be in force, and notwithstanding the foregoing, Ocwen, on behalf of
the Trust Fund, shall not:

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

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                  (iii) authorize or permit 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 Ocwen Mortgage Loan became imminent, all within the meaning of
      Section 856(e)(4)(B) of the Code; or

                  (iv) allow 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, Ocwen has obtained an Opinion of Counsel, provided to
Ocwen and the Trustee, 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 Ocwen may take such actions as are specified in such Opinion of Counsel.

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

                  (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 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 3.21(c) relating
      to any such contract or to actions taken through any such Independent
      Contractor shall be deemed to relieve Ocwen of any of its duties and
      obligations to the Trustee on behalf of the Trust Fund and for the benefit
      of the Certificateholders with respect to the operation and management of
      any such REO Property; and

                  (iv) Ocwen 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.

            Ocwen 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 Ocwen by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. Ocwen shall be solely liable for all fees owed by it to
any such Independent Contractor, irrespective of whether Ocwen's compensation
pursuant to Section 3.15 is sufficient to pay such fees. Any such agreement
shall include a provision that such agreement may be immediately terminated by
the Trustee (as successor Servicer) or any other successor Servicer (including
the Master Servicer) without fee, in the event Ocwen shall for any reason, no
longer be the Servicer of the Ocwen Mortgage Loans (including termination due to
a Servicer Event of Default).

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            (d) In addition to the withdrawals permitted under Section 3.21(c),
Ocwen may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself unpaid Servicing Fees in respect of the related
Ocwen Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer for
unreimbursed Servicing Advances and Advances made in respect of such REO
Property or the related Ocwen Mortgage Loan. On the Servicer Remittance Date,
Ocwen shall withdraw from each REO Account maintained by it and deposit into the
Distribution Account in accordance with Section 3.08(d)(ii), for distribution on
the related Distribution Date in accordance with Section 5.01, the income from
the related REO Property received during the prior calendar month, net of any
withdrawals made pursuant to Section 3.21(c) or this Section 3.21(d).

            (e) Subject to the time constraints set forth in Section 3.21(a),
each REO Disposition shall be carried out by Ocwen at such price and upon such
terms and conditions as Ocwen shall deem necessary or advisable, as shall be
normal and usual in accordance with Accepted Servicing Practices.

            (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Ocwen Mortgage
Loan and net of any payment or reimbursement to Ocwen as provided above, shall
be deposited in the Distribution Account in accordance with Section 3.08(d)(ii)
on the Servicer Remittance Date in the month following the receipt thereof for
distribution on the related Distribution Date in accordance with Section 5.01.
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) Ocwen shall file information returns (and shall provide a
certification of a Servicing Officer to the Master Servicer that such filings
have been made) 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 3.22. Obligations of Ocwen in Respect of Prepayment Interest
Shortfalls; Relief Act Interest Shortfalls.

            Ocwen shall deliver to the Securities Administrator for deposit into
the Distribution Account on or before 12:00 noon New York time on the Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate amount of the Prepayment Interest Shortfalls attributable to
prepayments in full on the Ocwen Mortgage Loans for the related Distribution
Date resulting solely from voluntary Principal Prepayments received by Ocwen
during the related Prepayment Period and (ii) the aggregate amount of the
related Servicing Fees payable to Ocwen on such Distribution Date with respect
to the Ocwen Mortgage Loans. Ocwen shall not have the right to reimbursement for
any amounts remitted to the Securities Administrator in respect of this Section
3.22. Ocwen shall not be obligated to pay the amounts set forth in this Section
3.22 with respect to shortfalls resulting from the application of the Relief
Act.

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            SECTION 3.23. Obligations of Ocwen in Respect of Mortgage Rates and
Monthly Payments.

            In the event that a shortfall in any collection on or liability with
respect to any Ocwen Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by Ocwen in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, Ocwen, upon discovery or receipt of notice
thereof, immediately shall deliver to the Securities Administrator 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
Securities Administrator, the Master Servicer, the Depositor and any successor
Servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement. Notwithstanding the foregoing, this
Section 3.23 shall not limit the ability of Ocwen to seek recovery of any such
amounts from the related Mortgagor under the terms of the related Mortgage Note
and Mortgage, to the extent permitted by applicable law.

            SECTION 3.24. Reserve Fund.

            (a) No later than the Closing Date, the Securities Administrator
shall establish and maintain a separate, segregated trust account entitled,
"Reserve Fund, Wells Fargo Bank, N.A., in trust for the registered holders of
ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE4, Asset Backed
Pass-Through Certificates." On the Closing Date, the Depositor will deposit, or
cause to be deposited, into the Reserve Fund $1,000. In addition, the amount
deposited in the Reserve Fund shall be increased by any payments received by the
Securities Administrator under the Group I Cap Contract and deposited into
Reserve Fund for the benefit of the Class A-1 Certificates, Mezzanine
Certificates and the Class B Certificates and under the Group II Cap Contract
and deposited in the Reserve Fund for the benefit of the Class A-2 Certificates,
the Mezzanine Certificates and the Class B Certificates.

            (b) On each Distribution Date, the Securities Administrator shall
deposit into the Reserve Fund the amounts described in Section 5.01(a)(7)(vi),
rather than distributing such amounts to the Class CE Certificateholders, and
Section 5.01(a)(7)(vii). On each such Distribution Date, the Securities
Administrator 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 5.01(a). If no Net WAC Rate Carryover Amounts
are payable on a Distribution Date, the Securities Administrator shall deposit,
into the Reserve Fund 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 Reserve Fund, 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 Reserve Fund and all
amounts deposited into the Reserve Fund (other than the initial deposit therein
of $1,000) and any amounts paid to the Reserve Fund from the Cap Contracts 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

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remaining on deposit in the Reserve Fund will be released by the Trust Fund and
distributed to the Class CE Certificateholders or their designees. The Reserve
Fund will be part of the Trust Fund but not part of any REMIC and any payments
to the Holders of the Class A Certificates, the Mezzanine Certificates or the
Class B 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 that the Securities Administrator will deposit
into the Reserve Fund the amounts described above on each Distribution Date
rather than distributing such amounts to the Class CE Certificateholders. By
accepting a Class CE Certificate, each Class CE Certificateholder further agrees
that its agreement to such action by the Securities Administrator 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 Securities Administrator shall direct
any depository institution maintaining the Reserve Fund 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 Securities Administrator 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 Securities Administrator or
an Affiliate manages or advises such investment. All income and gain earned upon
such investment shall be deposited into the Reserve Fund. In no event shall the
Securities Administrator be liable for any investments made pursuant to this
clause (e). If the Holders of a majority in Percentage Interest in the Class CE
Certificates fail to provide investment instructions, funds on deposit in the
Reserve Fund shall be held uninvested by the Securities Administrator without
liability for interest or compensation.

            (f) For federal tax return and information reporting, the right of
the Class A Certificateholders, the Mezzanine Certificateholders and Class B
Certificateholders to receive payments from the Reserve Fund in respect of any
Net WAC Rate Carryover Amount shall be assigned a value of $58,000 with respect
to Certificates covered by the Group I Cap Contract and $55,000 with respect to
Certificates covered by the Group II Cap Contract.

            SECTION 3.25. Advance Facility.

            (a) Notwithstanding anything to the contrary contained herein, (i)
Ocwen is hereby authorized to enter into an advance facility ("Advance
Facility") but no more than two Advance Facilities without the prior written
consent of the Trustee, which consent shall not be unreasonably withheld, under
which (A) Ocwen sells, assigns or pledges to an advancing person (an "Advance
Financing Person") Ocwen's rights under this Agreement to be reimbursed for any
P&I Advances or Servicing Advances and/or (B) an Advance Financing Person agrees
to finance some or all P&I Advances or Servicing Advances required to be made by
Ocwen pursuant to this Agreement and (ii) Ocwen is hereby authorized to assign
its rights to the Servicing Fee (which rights shall terminate upon the
resignation, termination or removal of Ocwen pursuant to the terms of this
Agreement); it being understood that neither the Trust Fund nor any party hereto

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shall have a right or claim (including without limitation any right of offset)
to any amounts for reimbursement of P&I Advances or Servicing Advances so
assigned or to the portion of the Servicing Fee so assigned. Subject to the
provisions of the first sentence of this Section 3.25(a), no consent of the
Depositor, Trustee, Master Servicer, Certificateholders or any other party is
required before Ocwen may enter into an Advance Facility, but Ocwen shall
provide notice to the Depositor, Master Servicer and the Trustee of the
existence of any such Advance Facility promptly upon the consummation thereof
stating (a) the identity of the Advance Financing Person and (b) the identity of
any Person ("Servicer's Assignee") who has the right to receive amounts in
reimbursement of previously unreimbursed P&I Advances or Servicing Advances.
Notwithstanding the existence of any Advance Facility under which an advancing
person agrees to finance P&I Advances and/or Servicing Advances on Ocwen's
behalf, Ocwen shall remain obligated pursuant to this Agreement to make P&I
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility.

            (b) Reimbursement amounts ("Advance Reimbursement Amounts") shall
consist solely of amounts in respect of P&I Advances and/or Servicing Advances
made with respect to the Ocwen Mortgage Loans for which Ocwen would be permitted
to reimburse itself in accordance with this Agreement, assuming Ocwen had made
the related P&I Advance(s) and/or Servicing Advance(s).

            (c) Ocwen shall maintain and provide to any successor Servicer
(with, upon request, a copy to the Trustee) a detailed accounting on a
loan-by-loan basis as to amounts advanced by, pledged or assigned to, and
reimbursed to any advancing person. The successor Servicer shall be entitled to
rely on any such information provided by the predecessor Servicer, and the
successor Servicer shall not be liable for any errors in such information.

            (d) Reimbursement amounts distributed with respect to each Ocwen
Mortgage Loan shall be allocated to outstanding unreimbursed P&I Advances or
Servicing Advances (as the case may be) made with respect to that Ocwen Mortgage
Loan on a "first-in, first out" (FIFO) basis. The documentation establishing any
Advance Facility shall require Ocwen to provide to the related advancing person
or its designee loan-by-loan information with respect to each such reimbursement
amount distributed to such advancing person or Advance Facility trustee on each
Distribution Date, to enable the advancing person or Advance Facility trustee to
make the FIFO allocation of each such reimbursement amount with respect to each
Ocwen Mortgage Loan. Ocwen shall remain entitled to be reimbursed by the
advancing person or Advance Facility trustee for all P&I Advances and Servicing
Advances funded by Ocwen to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an advancing person.

            (e) Any amendment to this Section 3.25 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 3.25, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, and Ocwen without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement,
provided, that the Trustee has been provided an Opinion of Counsel that such
amendment is authorized hereunder and has no material adverse effect on the
Certificateholders or the Certificate Insurer, which opinion shall be an expense
of the party requesting such opinion but in

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any case shall not be an expense of the Trustee or the Trust Fund; provided,
further, that the amendment shall not be deemed to adversely affect in any
material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency (instead of
obtaining an Opinion of Counsel to such effect) stating that the amendment would
not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
rating letter in and of itself will not represent a determination as to the
materiality of any such amendment and will represent a determination only as to
the credit issues affecting any such rating. Prior to entering into an Advance
Facility, Ocwen shall notify the lender under such facility in writing that: (a)
the P&I Advances and/or Servicing Advances financed by and/or pledged to the
lender are obligations owed to Ocwen on a non-recourse basis payable only from
the cash flows and proceeds received under this Agreement for reimbursement of
P&I Advances and/or Servicing Advances only to the extent provided herein, and
neither the Master Servicer, the Securities Administrator, the Trustee nor the
Trust are otherwise obligated or liable to repay any P&I Advances and/or
Servicing Advances financed by the lender; (b) Ocwen will be responsible for
remitting to the lender the applicable amounts collected by it as Servicing Fees
and as reimbursement for P&I Advances and/or Servicing Advances funded by the
lender, as applicable, subject to the restrictions and priorities created in
this Agreement; and (c) neither the Master Servicer, the Securities
Administrator nor the Trustee shall have any responsibility to calculate any
amount payable under an Advance Facility or to track or monitor the
administration of the financing arrangement between Ocwen and the lender or the
payment of any amount under an Advance Facility.

            (f) Ocwen shall indemnify the Master Servicer, the Securities
Administrator, the Trustee and the Trust Fund for any cost, liability or expense
relating to the Advance Facility including, without limitation, a claim, pending
or threatened, by an Advance Financing Person.

            SECTION 3.26. The Servicer Indemnification.

            Ocwen agrees to indemnify the Certificate Insurer, Trustee, Master
Servicer and the Securities Administrator, from, and hold the Trustee, Master
Servicer and the Securities Administrator harmless against, any loss, liability
or expense (including reasonable attorney's fees and expenses) incurred by any
such Person by reason of Ocwen's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Agreement or by reason of
Ocwen's reckless disregard of its obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Certificate Insurer, Ocwen, the Trustee, the
Master Servicer and the Securities Administrator. Any payment hereunder made by
Ocwen to any such Person shall be from Ocwen's own funds, without reimbursement
from REMIC I therefor.

            SECTION 3.27. Certificate Insurer Access

            Upon the occurrence of a Trigger Event, Ocwen shall afford the
Certificate Insurer access to its books and records concerning the servicing of
the Mortgage Loans, and shall make servicing officers available to the
Certificate Insurer to discuss the servicing of the Ocwen Mortgage Loans, upon
reasonable prior notice to Ocwen, and during Ocwen's normal business hours.

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                                   ARTICLE IV

                       ADMINISTRATION AND MASTER SERVICING
                  OF THE MORTGAGE LOANS BY THE MASTER SERVICER

            SECTION 4.01. Master Servicer.

            The Master Servicer shall, from and after the Closing Date, in the
case of Select Portfolio and Fremont. supervise, monitor and oversee the
obligations of Ocwen under this Agreement and Fremont and Select Portfolio under
the related Servicing Agreement to service and administer the related Mortgage
Loans in accordance with the terms of this Agreement and the Servicing
Agreements and shall have full power and authority to do any and all things
which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with the
Servicers and Fremont as necessary from time-to-time to carry out the Master
Servicer's obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by the
Servicers and Fremont and shall cause the Servicers and Fremont to perform and
observe the covenants, obligations and conditions to be performed or observed by
Ocwen under this Agreement or Fremont and Select Portfolio under the Servicing
Agreements. The Master Servicer shall independently and separately monitor the
Servicers' and Fremont's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' or Fremont's and Master Servicer's records, and
based on such reconciled and corrected information, prepare the statements
specified in Section 5.03 and any other information and statements required to
be provided by the Master Servicer hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Servicers or Fremont to the Distribution Account pursuant to
the terms hereof based on information provided to the Master Servicer by the
Servicers and Fremont. Notwithstanding anything to the contrary herein, the
Master Servicer shall have no obligation to supervise, monitor or oversee the
performance of Fremont under the Fremont Servicing Agreement on or after the
related Servicing Transfer Date.

            The Trustee shall furnish the related Servicer, Fremont and the
Master Servicer with any limited powers of attorney and other documents in form
as provided to it necessary or appropriate to enable the related Servicer,
Fremont and the Master Servicer to service and administer the related Mortgage
Loans and REO Property. The Trustee shall have no responsibility for any action
of the Master Servicer, the related Servicer or Fremont pursuant to any such
limited power of attorney and shall be indemnified by the Master Servicer, the
related Servicer or Fremont, as applicable, for any cost, liability or expense
incurred by the Trustee in connection with such Person's misuse of any such
power of attorney.

            The Trustee, the Custodian and the Securities Administrator shall
provide access to the records and documentation in possession of the Trustee,
the Custodian or the Securities Administrator regarding the related Mortgage
Loans and REO Property and the servicing thereof to the Certificateholders, the
FDIC, and the supervisory agents and examiners of the FDIC, such access being
afforded only upon reasonable prior written request and during normal business
hours at the office of the Trustee, the Custodian or the Securities
Administrator; provided,

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however, that, unless otherwise required by law, none of the Trustee, the
Custodian or the Securities Administrator shall be required to provide access to
such records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Trustee, the Custodian and the Securities
Administrator shall allow representatives of the above entities to photocopy any
of the records and documentation and shall provide equipment for that purpose at
a charge that covers the Trustee's, the Custodian's or the Securities
Administrator's actual costs.

            The Trustee shall execute and deliver to the related Servicer,
Fremont or the Master Servicer upon request any court pleadings, requests for
trustee's sale or other documents necessary or desirable to (i) the foreclosure
or trustee's sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or any
other Mortgage Loan Document; (iii) obtain a deficiency judgment against the
Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage
Note or any other Mortgage Loan Document or otherwise available at law or
equity.

            SECTION 4.02. REMIC-Related Covenants.

            For as long as each REMIC shall exist, the Trustee and the
Securities Administrator shall act in accordance herewith to treat such REMIC as
a REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the related Servicer, Fremont or the Master Servicer
to assure such continuing treatment. In particular, the Trustee shall not (a)
sell or permit the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received a REMIC Opinion prepared at the expense of the Trust Fund; and (b)
other than with respect to a substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.03 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a Opinion of
Counsel stating that such contribution will not result in an Adverse REMIC Event
as defined in Section 11.01(f).

            SECTION 4.03. Monitoring of Servicer.

            (a) The Master Servicer shall be responsible for monitoring the
compliance by Ocwen with its duties under this Agreement and Fremont and Select
Portfolio with their respective duties under the Servicing Agreements. In the
review of the related Servicer's or Fremont's activities, the Master Servicer
may rely upon an officer's certificate of the related Servicer or Fremont with
regard to such Servicer's or Fremont's compliance with the terms of this
Agreement or the related Servicing Agreement, as applicable. In the event that
the Master Servicer, in its judgment, determines that the related Servicer or
Fremont should be terminated in accordance with the terms hereof or the terms of
the related Servicing Agreement or that a notice should be sent pursuant to the
terms hereof or the terms of the related Servicing Agreement with respect to the
occurrence of an event that, unless cured, would constitute a Servicer Event of
Default, or an event of default under the related Servicing Agreement, the
Master Servicer shall notify the related Servicer, Fremont, the Seller and the
Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate.

            (b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of Ocwen under this Agreement
and Fremont and Select Portfolio under the Servicing Agreements and shall, in
the event that Ocwen fails to

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perform its obligations in accordance with this Agreement, subject to this
Section and Article VIII, the Trustee shall terminate the rights and obligations
of Ocwen hereunder in accordance with the provisions of Article VIII. In the
event that Fremont or Select Portfolio fails to perform its obligations in
accordance with the related Servicing Agreement, the Master Servicer shall
terminate the rights and obligations of Fremont or Select Portfolio, as
applicable, as servicer in accordance with the related Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims and
the pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.

            (c) The Master Servicer shall be entitled to be reimbursed by the
related Servicer or Fremont, as applicable (or from amounts on deposit in the
Distribution Account if the related Servicer or Fremont is unable to fulfill its
obligations hereunder or under the related Servicing Agreement) for all
reasonable out-of-pocket or third party costs associated with the transfer of
servicing from the predecessor Servicer (or if the predecessor Servicer is the
Master Servicer, from the Servicer immediately preceding the Master Servicer) or
Fremont, including without limitation, any reasonable out-of-pocket or third
party 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 Master Servicer to correct any errors or insufficiencies
in the servicing data or otherwise to enable the Master Servicer to service the
related Mortgage Loans properly and effectively, upon presentation of reasonable
documentation of such costs and expenses.

            (d) The Master Servicer shall require the Servicers and Fremont to
comply with the remittance requirements and other obligations set forth in this
Agreement and the related Servicing Agreements.

            (e) If the Master Servicer acts as successor to a Servicer or
Fremont, it will not assume liability for the representations and warranties of
the terminated Servicer or Fremont.

            SECTION 4.04. Fidelity Bond.

            The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, employees and other Persons
acting on such Master Servicer's behalf, and covering errors and omissions in
the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.

            SECTION 4.05. Power to Act; Procedures.

            The Master Servicer shall master service the Mortgage Loans and
shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article XI, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority

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(i) to execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 4.03, shall not permit the related Servicer or Fremont to)
knowingly or intentionally take any action, or fail to take (or fail to cause to
be taken) any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause REMIC I or REMIC II to fail to qualify as
a REMIC or 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) unless the Master Servicer has received an Opinion
of Counsel (but not at the expense of the Master Servicer) to the effect that
the contemplated action will not cause REMIC I or REMIC II to fail to qualify as
a REMIC or result in the imposition of a tax upon REMIC I or REMIC II, as the
case may be. The Trustee shall furnish the Master Servicer, upon written request
from a Servicing Officer, with any powers of attorney prepared and delivered to
it and reasonably acceptable to it by empowering the Master Servicer, the
related Servicer or Fremont to execute and deliver instruments of satisfaction
or cancellation, or of partial or full release or discharge, and to foreclose
upon or otherwise liquidate Mortgaged Property, and to appeal, prosecute or
defend in any court action relating to the Mortgage Loans or the Mortgaged
Property, in accordance with this Agreement or the related Servicing Agreement,
and the Trustee shall execute and deliver such other documents prepared and
delivered to it and reasonably acceptable to it, as the Master Servicer, the
related Servicer or Fremont may request, to enable the Master Servicer to master
service and administer the related Mortgage Loans and carry out its duties
hereunder, in each case in accordance with Accepted Master Servicing Practices
(and the Trustee shall have no liability for misuse of any such powers of
attorney by the Master Servicer, the related Servicer or Fremont and shall be
indemnified by the Master Servicer, the related Servicer or Fremont, as
applicable, for any cost, liability or expense incurred by the Trustee in
connection with such Person's use or misuse of any such power of attorney). If
the Master Servicer or the Trustee has been advised that it is likely that the
laws of the state in which action is to be taken prohibit such action if taken
in the name of the Trustee or that the Trustee would be adversely affected under
the "doing business" or tax laws of such state if such action is taken in its
name, the Master Servicer shall join with the Trustee in the appointment of a
co-trustee pursuant to Section 9.10. In the performance of its duties hereunder,
the Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.

            SECTION 4.06. Due-on-Sale Clauses; Assumption Agreements.

            To the extent Mortgage Loans contain enforceable due-on-sale
clauses, the Master Servicer shall cause the related Servicer or Fremont, as
applicable, to enforce such clauses in accordance with this Agreement or the
related Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
this Agreement or the related Servicing Agreement and, as a consequence, a

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Mortgage Loan is assumed, the original Mortgagor may be released from liability
in accordance with this Agreement or the related Servicing Agreement.

            SECTION 4.07. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.

            (a) The Master Servicer shall transmit to the Trustee or Custodian
such documents and instruments coming into the possession of the Master Servicer
from time to time as are required by the terms hereof to be delivered to the
Trustee or Custodian. Any funds received by the Master Servicer in respect of
any Mortgage Loan or which otherwise are collected by the Master Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall
be remitted to the Securities Administrator for deposit in the Distribution
Account. The Master Servicer shall, and, subject to Section 3.20 of this
Agreement or, to the extent provided therein, the related Servicing Agreement,
shall cause the related Servicer or Fremont to, provide access to information
and documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable request in writing and during normal business hours at the offices of
the Master Servicer designated by it. In fulfilling such a request the Master
Servicer shall not be responsible for determining the sufficiency of such
information.

            (b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be remitted to the Trustee for deposit in the
Distribution Account.

            SECTION 4.08. Standard Hazard Insurance and Flood Insurance
Policies.

            For each Mortgage Loan, the Master Servicer shall enforce the
obligation of Ocwen under this Agreement or Fremont or Select Portfolio under
the applicable Servicing Agreement to maintain or cause to be maintained
standard fire and casualty insurance and, where applicable, flood insurance, all
in accordance with the provisions of this Agreement or the related Servicing
Agreement. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in Section 3.11 of the
Agreement or the eligibility requirements set forth in the related Servicing
Agreement and that no earthquake or other additional insurance is to be required
of any Mortgagor or to be maintained on property acquired in respect of a
defaulted loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.

            SECTION 4.09. Presentment of Claims and Collection of Proceeds.

            The Master Servicer shall enforce Ocwen's obligations under this
Agreement or Fremont or Select Portfolio under the applicable Servicing
Agreement to prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's

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claim) as shall be necessary to realize recovery under such policies. Any
proceeds disbursed to the Master Servicer in respect of such policies, bonds or
contracts shall be promptly remitted to the Trustee for deposit in the
Distribution Account upon receipt, except that any amounts realized that are to
be applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable insurance policy need not be so or remitted.

            SECTION 4.10. Maintenance of Primary Mortgage Insurance Policies.

            (a) The Master Servicer shall not take, or permit the related
Servicer or Fremont to take (to the extent such action is prohibited by this
Agreement or the related Servicing Agreement), any action that would result in
noncoverage under any primary mortgage insurance policy of any loss which, but
for the actions of the Master Servicer, the related Servicer or Fremont, as
applicable, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause the related Servicer or Fremont to keep in
force and effect (to the extent that the Mortgage Loan requires the Mortgagor to
maintain such insurance), primary mortgage insurance applicable to each Mortgage
Loan in accordance with the provisions of this Agreement or the related
Servicing Agreement. The Master Servicer shall not, and shall not permit the
related Servicer or Fremont to, cancel or refuse to renew any primary mortgage
insurance policy that is in effect at the date of the initial issuance of the
Mortgage Note and is required to be kept in force hereunder except in accordance
with the provisions of this Agreement or the related Servicing Agreement.

            (b) The Master Servicer agrees to cause the related Servicer or
Fremont to present, on behalf of the Trustee and the Certificateholders, claims
to the insurer under any primary mortgage insurance policies and, in this
regard, to take such reasonable action as shall be necessary to permit recovery
under any primary mortgage insurance policies respecting defaulted Mortgage
Loans.

            SECTION 4.11. Trustee to Retain Possession of Certain Insurance
Policies and Documents.

            The Trustee or the applicable Custodian, shall retain possession and
custody of the originals (to the extent available) of any primary mortgage
insurance policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer and the
related Servicer and Fremont have otherwise fulfilled their respective
obligations under this Agreement and the Servicing Agreements the Trustee or the
Custodian shall also retain possession and custody of each Mortgage File in
accordance with and subject to the terms and conditions of this Agreement and
the Custodial Agreement. The Master Servicer shall promptly deliver or cause to
be delivered to the Trustee or the Custodian, upon the execution or receipt
thereof the originals of any primary mortgage insurance policies, any
certificates of renewal, and such other documents or instruments that constitute
Mortgage Loan Documents that come into the possession of the Master Servicer
from time to time.

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            SECTION 4.12. Realization Upon Defaulted Mortgage Loans.

            The Master Servicer shall cause the related Servicer or Fremont to
foreclose upon, repossess or otherwise comparably convert the ownership of
Mortgaged 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, all in accordance with this Agreement or the
related Servicing Agreement.

            SECTION 4.13. Compensation for the Master Servicer.

            As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Master Servicing Fee and the income
from investment of or earnings on the funds from time to time in the
Distribution Account, as provided in Section 3.10. The Master Servicing Fee
payable to the Master Servicer in respect of any Distribution Date shall be
reduced in accordance with Section 4.18. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.

            SECTION 4.14. REO Property.

            (a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall cause the related Servicer or
Fremont to sell, any REO Property as expeditiously as possible and in accordance
with the provisions of this Agreement or the related Servicing Agreement.
Further, the Master Servicer shall cause the related Servicer or Fremont to sell
any REO Property prior to three years after the end of the calendar year of its
acquisition by REMIC I unless (i) the Trustee shall have been supplied by the
related Servicer or Fremont with an Opinion of Counsel to the effect that the
holding by the Trust Fund of such REO Property subsequent to such three-year
period will not result in the imposition of taxes on "prohibited transactions"
of any REMIC hereunder as defined in section 860F of the Code or cause any REMIC
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel) or
(ii) the related Servicer or Fremont shall have applied for, prior to the
expiration of such three-year period, an extension of such three-year period in
the manner contemplated by Section 856(e)(3) of the Code, in which case the
three-year period shall be extended by the applicable extension period. The
Master Servicer shall cause the related Servicer or Fremont to protect and
conserve, such REO Property in the manner and to the extent required by this
Agreement or the related Servicing Agreement in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

            (b) The Master Servicer shall cause the related Servicer or Fremont
to deposit all funds collected and received in connection with the operation of
any REO Property in the REO Account or in the account delegated for such amounts
under the related Servicing Agreement.

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            SECTION 4.15. Annual Officer's Certificate as to Compliance.

            (a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 15 of each year, commencing on March 15, 2005, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that the Master Servicer has
failed to perform any of its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
material default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.

            (b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at the
Master Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).

            SECTION 4.16. Annual Independent Accountant's Servicing Report.

            If the Master Servicer has, during the course of any calendar year,
directly serviced any of the Mortgage Loans, then the Master Servicer at its
expense shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Seller on or before March 15 of each year, commencing on March 15, 2005 to the
effect that, with respect to the most recently ended fiscal year, such firm has
examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
Freddie Mac or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been conducted
in compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac
requires it to report. Copies of such statements shall be provided to any
Certificateholder upon request by the Master Servicer, or by the Trustee at the
expense of the Master Servicer if the Master Servicer shall fail to provide such
copies (unless (i) the Master Servicer shall have failed to provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement). If such report discloses
exceptions that are material, the Master Servicer shall advise the Trustee
whether such exceptions have been or are susceptible of cure, and will take
prompt action to do so.

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            SECTION 4.17. UCC.

            The Depositor agrees to file continuation statements for any Uniform
Commercial Code financing statements which the Seller has informed the Depositor
were filed on the Closing Date in connection with the Trust. The Depositor shall
file any financing statements or amendments thereto required by any change in
the Uniform Commercial Code.

            SECTION 4.18. Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls.

            In the event of any Prepayment Interest Shortfalls, the Master
Servicer shall deposit into the Distribution Account not later than the related
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the related Servicer or Fremont with respect to
Prepayment Interest Shortfalls attributable to Principal Prepayments in full on
the Mortgage Loans for the related Distribution Date, and not so paid by the
related Servicer or Fremont and (ii) the aggregate amount of the related Master
Servicing Fees for such Distribution Date, without reimbursement therefor.

            SECTION 4.19. Prepayment Penalty Verification.

            On or prior to each Servicer Remittance Date, Ocwen shall provide in
an electronic format acceptable to the Master Servicer the data necessary for
the Master Servicer to perform its verification duties set forth in this Section
4.19. The Master Servicer or a third party reasonably acceptable to the Master
Servicer and the Depositor (the "Verification Agent") will perform such
verification duties and will use its best efforts to issue its findings in a
report (the "Verification Report") delivered to the Master Servicer and the
Depositor within ten (10) Business Days following the related Distribution Date;
provided, however, that if the Verification Agent is unable to issue the
Verification Report within ten (10) Business Days following the Distribution
Date, the Verification Agent may issue and deliver to the Master Servicer and
the Depositor the Verification Report upon the completion of its verification
duties. The Master Servicer shall forward the Verification Report to Ocwen and
shall notify Ocwen if the Master Servicer has determined that Ocwen did not
deliver the appropriate Prepayment Charge to the Securities Administrator in
accordance with this Agreement. Such written notification from the Master
Servicer shall include the loan number, prepayment penalty code and prepayment
penalty amount as calculated by the Master Servicer or the Verification Agent,
as applicable, of each Mortgage Loan for which there is a discrepancy. If Ocwen
agrees with the verified amounts, Ocwen shall adjust the immediately succeeding
Servicer Report and the amount remitted to the Trustee with respect to
prepayments accordingly. If Ocwen disagrees with the determination of the Master
Servicer, Ocwen shall, within five (5) Business Days of its receipt of the
Verification Report, notify the Master Servicer of such disagreement and provide
the Master Servicer with detailed information to support its position. Ocwen and
the Master Servicer shall cooperate to resolve any discrepancy on or prior to
the immediately succeeding Servicer Remittance Date, and Ocwen will indicate the
effect of such resolution on the related Servicer Report and shall adjust the
amount remitted with respect to prepayments on such Servicer Remittance Date
accordingly.

            During such time as Ocwen and the Master Servicer are resolving
discrepancies with respect to the Prepayment Charges, no payments in respect of
any disputed Prepayment Charges will be remitted to the Securities Administrator
for deposit in the Distribution Account

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and the Master Servicer shall not be obligated to deposit such payments, unless
otherwise required pursuant to Section 8.01 hereof. In connection with such
duties, the Master Servicer shall be able to rely solely on the information
provided to it by Ocwen in accordance with this Section. The Master Servicer
shall not be responsible for verifying the accuracy of any of the information
provided to it by the related Servicer or Fremont.

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                                   ARTICLE V

                         PAYMENTS TO CERTIFICATEHOLDERS

            SECTION 5.01. Distributions.

            (a) (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 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-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-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
      Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
      Interest I-LTM10, REMIC I Regular Interest I-LTM11, REMIC I Regular
      Interest I-LTB, REMIC I Regular Interest I-LTZZ and REMIC I Regular
      Interest I-LTP, pro rata, 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 REMIC I Overcollateralization Amount is less
      than the REMIC I Required Overcollateralization Amount, by the lesser of
      (x) the amount of such difference and (y) the Maximum I-LTZZ
      Uncertificated Interest Deferral Amount and such amount will be payable to
      the Holders of REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
      I-LTA2, 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-LTM6, REMIC I Regular
      Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
      I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I Regular Interest I-LTM11
      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;

                  (ii) to 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, pro rata,
      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 funds for such Distribution Date after the distributions
      made pursuant to clause (i) above, allocated as follows:

                  (A) 98.00% of such remainder to the Holders of REMIC I Regular
            Interest I-LTAA, until the Uncertificated Balance of such
            Uncertificated REMIC I Regular Interest is reduced to zero;

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                  (B) 2.00% of such remainder, first, to the Holders of REMIC I
            Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, 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-LTM6, REMIC I
            Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I
            Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I
            Regular Interest I-LTM11 and REMIC I Regular Interest I-LTB, 1 % of
            and 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 and second to the
            Holders of REMIC I Regular Interest I-LTZZ, until the Uncertificated
            Balance of such REMIC I Regular Interest is reduced to zero;

                  (C) to the Holders of REMIC I Regular Interest I-LTP, all
            Prepayment Charges and 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; then

                  (D) any remaining amount to the Holders of the Class R-I
            Interest, in respect 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.

                  (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
      available funds for such Distribution Date after the distributions made
      pursuant to clause (ii) 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 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 principal shall be distributed to
      such REMIC I Regular Interests such that the REMIC I Subordinated Balance
      Ratio is maintained); and third, any remaining principal to REMIC I
      Regular Interest I-LTXX.

                  (v) Notwithstanding the distributions described in Section
      5.01(a)(1), distributions of funds shall be made to Certificateholders
      only in accordance with Section 5.01(2) through (7) and Section 5.01(b).

            (2) On each Distribution Date, the Securities Administrator shall
      withdraw from the Distribution Account to the extent on deposit therein an
      amount equal to the Group I Interest Remittance Amount and make the
      following disbursements and transfers

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      in the order of priority described below, in each case to the extent of
      the Group I Interest Remittance Amount remaining for such Distribution
      Date:

            first, to the Certificate Insurer, the Premium Amount multiplied by
            a fraction, the numerator of which is the Certificate Principal
            Balance of the Class A-1 Certificates prior to such Distribution
            Date, and the denominator of which is the aggregate Certificate
            Principal Balance of the Insured Certificates prior to such
            Distribution Date;

            second, to the Holders of the Class A-1 Certificates, the Senior
            Interest Distribution Amount allocable to the Class A-1
            Certificates;

            third, to the Holders of the Class A-2 Certificates, the Senior
            Interest Distribution Amount allocable to the Class A-2
            Certificates, to the extent remaining unpaid after the distribution
            of the Group II Interest Remittance Amount as set forth in Section
            5.01(a)(3) below; and

            fourth, to the Certificate Insurer, any Reimbursement Amounts and
            any Premium Amount allocable to the Class A-2 Certificates remaining
            unpaid pursuant to Section 5.01(a)(3) below.

            (3) On each Distribution Date, the Securities Administrator shall
      withdraw from the Distribution Account to the extent on deposit therein an
      amount equal to the Group II Interest Remittance Amount and make the
      following disbursements and transfers in the order of priority described
      below, in each case to the extent of the Group II Interest Remittance
      Amount remaining for such Distribution Date:

            first, to the Certificate Insurer, the Premium Amount by a fraction,
            the numerator of which is the Certificate Principal Balance of the
            Class A-2 Certificates prior to such Distribution Date, and the
            denominator of which is the aggregate Certificate Principal Balance
            of the Insured Certificates prior to such Distribution Date;

            second, to the Holders of the Class A-2 Certificates, the Senior
            Interest Distribution Amount allocable to the Class A-2
            Certificates;

            third, to the Holders of the Class A-1 Certificates the Senior
            Interest Distribution Amount allocable to the Class A-1
            Certificates, to the extent remaining unpaid after the distribution
            of the Group I Interest Remittance Amount as set forth in Section
            5.01(a)(2) above; and

            fourth, to the Certificate Insurer, any Reimbursement Amounts and
            any Premium Amount allocable to the Class A-1 Certificates remaining
            unpaid pursuant to Section 5.01(a)(2) above.

            (4) On each Distribution Date, the Securities Administrator shall
      withdraw from the Distribution Account to the extent on deposit therein an
      amount equal to the Group I Interest Remittance Amount, and the Group II
      Interest Remittance Amount remaining after the distributions required by
      clauses (2) and (3) above and make the following disbursements and
      transfers in the order of priority described below, in each

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      case to the extent of the Group I Interest Remittance Amount and Group II
      Interest Remittance Amount remaining for such Distribution Date:

            sequentially, to the Holders of the Class M-1, Class M-2, Class M-3,
            Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9,
            Class M-10, Class M-11 and Class B Certificates, in that order, the
            Interest Distribution Amount allocable to each such Class.

            (5) On each Distribution Date (a) prior to the Stepdown Date or (b)
      on which a Trigger Event is in effect, the Securities Administrator shall
      withdraw from the Distribution Account to the extent on deposit therein an
      amount equal to the Group I Principal Distribution Amount and the Group II
      Principal Distribution Amount and distribute to the Certificateholders the
      following amounts, in the following order of priority:

                  (i) The Group I Principal Distribution Amount shall be
      distributed in the following order of priority:

            first, to the Holders of the Class A-1 Certificates, until the
            Certificate Principal Balance of the Class A-1 Certificates has been
            reduced to zero;

            second, to the Holders of the Class A-2 Certificates, after taking
            into account the distribution of the Group II Principal Distribution
            Amount as described in Section 5.01(a)(5)(ii) below, until the
            Certificate Principal Balance of the Class A-2 Certificates has been
            reduced to zero; and

            third, to the Certificate Insurer, the amount of all Reimbursement
            Amounts not repaid pursuant to Section 5.01(a)(2) and (a)(3) above.

                  (ii) The Group II Principal Distribution Amount shall be
      distributed in the following order of priority:

            first, to the Holders of the Class A-2 Certificates, until the
            Certificate Principal Balance of the Class A-2 Certificates has been
            reduced to zero;

            second, to the Holders of the Class A-1 Certificates after taking
            into account the distribution of the Group I Principal Distribution
            Amount as described above in Section 5.01(a)(5)(i) above, until the
            Certificate Principal Balance of the Class A-1 Certificates has been
            reduced to zero; and

            third, to the Certificate Insurer, the amount of all Reimbursement
            Amounts not repaid pursuant to Section 5.01(a)(2) and (a)(3) above.

                  (iii) The Group I Principal Distribution Amount and Group II
      Principal Distribution Amount remaining after distributions pursuant to
      Sections 5.01(a)(5)(i) and (ii) above shall be distributed in the
      following order of priority:

            sequentially, to the Holders of the Class M-1, Class M-2, Class M-3,
            Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9,
            Class M-10, Class M-11

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<PAGE>

            and Class B Certificates, in that order, until the Certificate
            Principal Balance of each such Class has been reduced to zero.

            (6) On each Distribution Date (a) on or after the Stepdown Date and
      (b) on which a Trigger Event is not in effect, the Securities
      Administrator shall withdraw from the Distribution Account to the extent
      on deposit therein an amount equal to the Group I Principal Distribution
      Amount and the Group II Principal Distribution Amount and distribute to
      the Certificateholders the following amounts, in the following order of
      priority:

                  (i) The Group I Principal Distribution Amount shall be
      distributed in the following order of priority:

            first, to the Holders of the Class A-1 Certificates, the Class A-1
            Principal Distribution Amount, until the Certificate Principal
            Balance of Class A-1 Certificates has been reduced to zero;

            second, to the Holders of the Class A-2 Certificates, after taking
            into account the distribution of the Group II Principal Distribution
            Amount pursuant to Section 5.01(a)(6)(ii) below, up to an amount
            equal to the amount, if any, of the Class A-2 Principal Distribution
            Amount remaining unpaid on such Distribution Date, until the
            Certificate Principal Balance of the Class A-2 Certificates has been
            reduced to zero; and

            third, to the Certificate Insurer, the amount of all Reimbursement
            Amounts not repaid pursuant to Section 5.01(a)(2) and (a)(3) above.

                  (ii) The Group II Principal Distribution Amount shall be
      distributed in the following order of priority:

            first, to the Holders of the Class A-2 Certificates, the Class A-2
            Principal Distribution Amount, until the Certificate Principal
            Balance of the Class A-2 Certificates has been reduced to zero;

            second, to the Holders of the Class A-1 Certificates, after taking
            into account the distribution of the Group I Principal Distribution
            Amount pursuant to Section 5.01(a)(6)(i) above, up to an amount
            equal to the amount, if any, of the Class A-1 Principal Distribution
            Amount remaining unpaid on such Distribution Date, until the
            Certificate Principal Balance of the Class A-1 Certificates has been
            reduced to zero;

            third, to the Certificate Insurer, the amount of all Reimbursement
            Amounts not repaid pursuant to Section 5.01(a)(2) and (a)(3) above.

                  (iii) The Principal Distribution Amount remaining after
      distributions pursuant to Sections 5.01(a)(6)(i) and (ii) above shall be
      distributed in the following order of priority:

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<PAGE>

            first, to the Holders of the Class M-1 Certificates, the lesser of
            (x) the remaining Principal Distribution Amount and (y) the Class
            M-1 Principal Distribution Amount, until the Certificate Principal
            Balance of the Class M-1 Certificates has been reduced to zero;

            second, to the Holders of the Class M-2 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the amounts distributed to the Holders of the Class M-1
            Certificates under clause first above, and (y) the Class M-2
            Principal Distribution Amount, until the Certificate Principal
            Balance of the Class M-2 Certificates has been reduced to zero;

            third, to the Holders of the Class M-3 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above and to the Holders
            of the Class M-2 Certificates under clause second above, and (y) the
            Class M-3 Principal Distribution Amount, until the Certificate
            Principal Balance of the Class M-3 Certificates has been reduced to
            zero;

            fourth, to the Holders of the Class M-4 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M-2 Certificates under clause second above and to the
            Holders of the Class M-3 Certificates under clause third above, and
            (y) the Class M-4 Principal Distribution Amount, until the
            Certificate Principal Balance of the Class M-4 Certificates has been
            reduced to zero;

            fifth, to the Holders of the Class M-5 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M-2 Certificates under clause second above, to the Holders
            of the Class M-3 Certificates under clause third above and to the
            Holders of the Class M-4 Certificates under clause fourth above, and
            (y) the Class M-5 Principal Distribution Amount, until the
            Certificate Principal Balance of the Class M-5 Certificates has been
            reduced to zero;

            sixth, to the Holders of the Class M-6 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M 2 Certificates under clause second above, to the Holders
            of the Class M-3 Certificates under clause third above, to the
            Holders of the Class M-4 Certificates under clause fourth above and
            to the Holders of the Class M-5 Certificates under clause fifth
            above, and (y) the Class M-6 Principal Distribution Amount, until
            the Certificate Principal Balance of the Class M-6 Certificates has
            been reduced to zero;

            seventh, to the Holders of the Class M-7 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M 2 Certificates under clause second above, to

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<PAGE>

            the Holders of the Class M-3 Certificates under clause third
            above, to the Holders of the Class M-4 Certificates under clause
            fourth above, to the Holders of the Class M-5 Certificates under
            clause fifth above and to the Holders of the Class M-6 Certificates
            under clause sixth above, and (y) the Class M-7 Principal
            Distribution Amount, until the Certificate Principal Balance of the
            Class M-7 Certificates has been reduced to zero;

            eighth, to the Holders of the Class M-8 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M 2 Certificates under clause second above, to the Holders
            of the Class M-3 Certificates under clause third above, to the
            Holders of the Class M-4 Certificates under clause fourth above, to
            the Holders of the Class M-5 Certificates under clause fifth above,
            to the Holders of the Class M-6 Certificates under clause sixth
            above and to the Holders of the Class M-7 Certificates under clause
            seventh above, and (y) the Class M-8 Principal Distribution Amount,
            until the Certificate Principal Balance of the Class M-8
            Certificates has been reduced to zero;

            ninth, to the Holders of the Class M-9 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M 2 Certificates under clause second above, to the Holders
            of the Class M-3 Certificates under clause third above, to the
            Holders of the Class M-4 Certificates under clause fourth above, to
            the Holders of the Class M-5 Certificates under clause fifth above,
            to the Holders of the Class M-6 Certificates under clause sixth
            above, to the Holders of the Class M-7 Certificates under clause
            seventh above and to the Holders of the Class M-8 Certificates under
            clause eighth above, and (y) the Class M-9 Principal Distribution
            Amount, until the Certificate Principal Balance of the Class M-9
            Certificates has been reduced to zero;

            tenth, to the Holders of the Class M-10 Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M 2 Certificates under clause second above, to the Holders
            of the Class M-3 Certificates under clause third above, to the
            Holders of the Class M-4 Certificates under clause fourth above, to
            the Holders of the Class M-5 Certificates under clause fifth above,
            to the Holders of the Class M-6 Certificates under clause sixth
            above, to the Holders of the Class M-7 Certificates under clause
            seventh above, to the Holders of the Class M-8 Certificates under
            clause eighth above and to the Holders of the Class M-9 Certificates
            under clause ninth above, and (y) the Class M-10 Principal
            Distribution Amount, until the Certificate Principal Balance of the
            Class M-10 Certificates has been reduced to zero;

            eleventh, to the Holders of the Class M-11 Certificates, the lesser
            of (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the

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<PAGE>

            amounts distributed to the Holders of the Class M-1 Certificates
            under clause first above, to the Holders of the Class M 2
            Certificates under clause second above, to the Holders of the Class
            M-3 Certificates under clause third above, to the Holders of the
            Class M-4 Certificates under clause fourth above, to the Holders of
            the Class M-5 Certificates under clause fifth above, to the Holders
            of the Class M-6 Certificates under clause sixth above, to the
            Holders of the Class M-7 Certificates under clause seventh above, to
            the Holders of the Class M-8 Certificates under clause eighth above,
            to the Holders of the Class M-9 Certificates under clause ninth
            above and to the Holders of the Class M-10 Certificates under clause
            tenth above, and (y) the Class M-11 Principal Distribution Amount,
            until the Certificate Principal Balance of the Class M-11
            Certificates has been reduced to zero; and

            twelfth, to the Holders of the Class B Certificates, the lesser of
            (x) the excess of (i) the remaining Principal Distribution Amount
            over (ii) the sum of the amounts distributed to the Holders of the
            Class M-1 Certificates under clause first above, to the Holders of
            the Class M 2 Certificates under clause second above, to the Holders
            of the Class M-3 Certificates under clause third above, to the
            Holders of the Class M-4 Certificates under clause fourth above, to
            the Holders of the Class M-5 Certificates under clause fifth above,
            to the Holders of the Class M-6 Certificates under clause sixth
            above, to the Holders of the Class M-7 Certificates under clause
            seventh above, to the Holders of the Class M-8 Certificates under
            clause eighth above, to the Holders of the Class M-9 Certificates
            under clause ninth above, to the Holders of the Class M-10
            Certificates under clause tenth above and to the Holders of the
            Class M-11 Certificates under clause eleventh above and (y) the
            Class B Principal Distribution Amount, until the Certificate
            Principal Balance of the Class B Certificates has been reduced to
            zero.

            (7) On each Distribution Date, the Net Monthly Excess Cashflow (or,
      in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive
      of any Overcollateralization Reduction Amount) shall be distributed as
      follows:

                  (i) to the Holders of the Class or Classes of Certificates
      then entitled to receive distributions in respect of principal, in an
      amount equal to any Extra Principal Distribution Amount, payable to such
      Holders in accordance with the priorities set forth in Section 5.01(b)
      below;

                  (ii) sequentially, to the Holders of the Class M-1, Class M-2,
      Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
      M-9, Class M-10, Class M-11 and Class B Certificates, in that order, in an
      amount equal to the Interest Carry Forward Amount allocable to each such
      Class;

                  (iii) sequentially, to the Holders of the Class M-1, Class
      M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
      Class M-9, Class M-10, Class M-11 and Class B Certificates, in that order,
      in an amount equal to the Allocated Realized Loss Amount allocable to each
      such Class;

                  (iv) concurrently, to the Holders of the Class A Certificates,
      in an amount equal to such Certificates' allocated share of any Prepayment
      Interest Shortfalls on the related Mortgage Loans to the extent not
      covered by payments pursuant to Section

                                      120
<PAGE>

      3.22 or 4.18 of this Agreement or pursuant to the related Servicing
      Agreement and any shortfalls resulting from the application of the Relief
      Act or similar state or local law or the bankruptcy code with respect to
      the related Mortgage Loans to the extent not previously reimbursed
      pursuant to Section 1.02;

                  (v) sequentially, to the Holders of the Class M-1, Class M-2,
      Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
      M-9, Class M-10, Class M-11 and Class B Certificates, in that order, in an
      amount equal to such certificates' share of any Prepayment Interest
      Shortfalls on the Mortgage Loans to the extent not covered by payments
      pursuant to Sections 3.22 or Section 4.18 of this Agreement or pursuant to
      the related Servicing Agreement and any Relief Act Interest Shortfall, in
      each case that were allocated to such Class for such Distribution Date and
      for any prior Distribution Date, to the extent not previously reimbursed
      pursuant to Section 1.02;

                  (vi) to the Reserve Fund from amounts otherwise payable to the
      Class CE Certificates, and then from the Reserve Fund to the Class A,
      Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
      M-7, Class M-8, Class M-9, Class M-10, Class M-11 and Class B Certificates
      in that order, in an amount equal to the unpaid amount of any Net WAC Rate
      Carryover Amount for each such Class for such Distribution Date;

                  (vii) to the Reserve Fund, the amount required to be deposited
      therein pursuant to Section 3.24(b), after taking into account amounts
      received under the Cap Contracts;

                  (viii) to the Holders of the Class CE Certificates the
      Interest Distribution Amount and any Overcollateralization Reduction
      Amount for such Distribution Date; and

                  (ix) to the Holders of the Class R Certificates, in respect of
      the Class R-II Interest, any remaining amounts; provided that if such
      Distribution Date is the Distribution Date immediately following the
      expiration of the latest Prepayment Charge term 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.

            The Class CE Certificates are intended to receive all principal and
interest received by the Trust on the Mortgage Loans that is not otherwise
distributable to any other Class of Regular Certificates or REMIC Regular
Interests. If the Securities Administrator determines that the Residual
Certificates are entitled to any distributions on any Distribution Date other
than the final Distribution Date, the Securities Administrator, prior to any
such distribution to any Residual Certificate, shall notify the Depositor of
such impending distribution. Upon such notification, the Depositor will prepare
and request that the other parties hereto enter into an amendment to the Pooling
and Servicing Agreement pursuant to Section 12.01, to revise such mistake in the
distribution provisions.

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<PAGE>

            On each Distribution Date, after making the distributions of the
Available Distribution Amount as set forth above, the Securities Administrator
will first, withdraw from the Reserve Fund all income from the investment of
funds in the Reserve Fund and distribute such amount to the Holders of the Class
CE Certificates, and second, withdraw from the Reserve Fund, to the extent of
amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover
Amount for such Distribution Date and distribute such amount first, concurrently
to the Class A Certificates, on a pro rata basis; second, to the Class M-1
Certificates, third, to the Class M-2 Certificates, fourth, to the Class M-3
Certificates, fifth, to the Class M-4 Certificates, sixth, to the Class M-5
Certificates, seventh, to the Class M-6 Certificates, eighth, to the Class M-7
Certificates, ninth, to the Class M-8 Certificates, tenth, to the Class M-9
Certificates, eleventh, to the Class M-10 Certificates, twelfth, to the Class
M-11 Certificates and thirteenth, to the Class B Certificates, in each case to
the extent to the extent any Net WAC Rate Carryover Amount is allocable to each
such Class.

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

            first, concurrently to the Holders of the Class A Certificates, on a
            pro rata basis, based on the Certificate Principal Balance of each
            such Class, until the Certificate Principal Balance of each such
            Class has been reduced to zero; and

            second, sequentially, to the Holders of the Class M-1, Class M-2,
            Class M 3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
            Class M-9, Class M-10, Class M-11 and Class B Certificates, in that
            order, until the Certificate Principal Balance of each such Class
            has been reduced to zero.

                  (ii) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions of
principal to the extent of the Extra Principal Distribution Amount shall be
distributed in the following order of priority:

            first, (a) the lesser of (x) the Group I Principal Distribution
            Amount and (y) the Class A-1 Principal Distribution Amount, shall be
            distributed to the Holders of the Class A-1 Certificates until the
            Certificate Principal Balance of the Class A-1 Certificates has been
            reduced to zero and (b) the lesser of (x) the Group II Principal
            Distribution Amount and (y) the Class A-2 Principal Distribution
            Amount, shall be distributed to the Holders of the Class A-2
            Certificates until the Certificate Principal Balance of the Class
            A-2 Certificates has been reduced to zero;

            second, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the amount distributed to the Holders
            of the Class A Certificates pursuant to clause first of this Section
            5.01(b)(ii) and (y) the Class M-1 Principal Distribution Amount,
            shall be distributed to the Holders of the Class M-1 Certificates,
            until the Certificate Principal Balance of such Class has been
            reduced to zero;

            third, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii) and to the Holders of the Class

                                      122
<PAGE>

            M-1 Certificates pursuant to clause second of this Section
            5.01(b)(ii) and (y) the Class M-2 Principal Distribution Amount,
            shall be distributed to the Holders of the Class M-2 Certificates,
            until the Certificate Principal Balance of such Class has been
            reduced to zero;

            fourth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii)
            and to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii) and (y) the Class M-3 Principal
            Distribution Amount, shall be distributed to the Holders of the
            Class M-3 Certificates, until the Certificate Principal Balance of
            such Class has been reduced to zero;

            fifth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii) and to the Holders of the Class
            M-3 Certificates pursuant to clause fourth of this Section
            5.01(b)(ii) and (y) the Class M-4 Principal Distribution Amount,
            shall be distributed to the Holders of the Class M-4 Certificates,
            until the Certificate Principal Balance of such Class has been
            reduced to zero;

            sixth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii)
            and to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii) and (y) the Class M-5 Principal
            Distribution Amount, shall be distributed to the Holders of the
            Class M-5 Certificates, until the Certificate Principal Balance of
            such Class has been reduced to zero;

            seventh, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii),
            to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii) and to the Holders of the Class
            M-5 Certificates pursuant to clause sixth of this Section
            5.01(b)(ii) and (y) the Class M-6 Principal Distribution Amount,
            shall be distributed to the Holders of the Class M-6 Certificates,
            until the Certificate Principal Balance of such Class has been
            reduced to zero;

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<PAGE>

            eighth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii),
            to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii), to the Holders of the Class M-5
            Certificates pursuant to clause sixth of this Section 5.01(b)(ii)
            and to the Holders of the Class M-6 Certificates pursuant to clause
            seventh of this Section 5.01(b)(ii) and (y) the Class M-7 Principal
            Distribution Amount, shall be distributed to the Holders of the
            Class M-7 Certificates, until the Certificate Principal Balance of
            such Class has been reduced to zero;

            ninth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii),
            to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii), to the Holders of the Class M-5
            Certificates pursuant to clause sixth of this Section 5.01(b)(ii),
            to the Holders of the Class M-6 Certificates pursuant to clause
            seventh of this Section 5.01(b)(ii) and to the Holders of the Class
            M-7 Certificates pursuant to clause eighth of this Section
            5.01(b)(ii) and (y) the Class M-8 Principal Distribution Amount,
            shall be distributed to the Holders of the Class M-8 Certificates,
            until the Certificate Principal Balance of such Class has been
            reduced to zero;

            tenth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii),
            to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii), to the Holders of the Class M-5
            Certificates pursuant to clause sixth of this Section 5.01(b)(ii),
            to the Holders of the Class M-6 Certificates pursuant to clause
            seventh of this Section 5.01(b)(ii), to the Holders of the Class M-7
            Certificates pursuant to clause eighth of this Section 5.01(b)(ii)
            and to the Holders of the Class M-8 Certificates pursuant to clause
            ninth of this Section 5.01(b)(ii) and (y) the Class M-9 Principal
            Distribution Amount, shall be distributed to the Holders of the
            Class M-9 Certificates, until the Certificate Principal Balance of
            such Class has been reduced to zero;

            eleventh, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1

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<PAGE>

            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii),
            to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii), to the Holders of the Class M-5
            Certificates pursuant to clause sixth of this Section 5.01(b)(ii),
            to the Holders of the Class M-6 Certificates pursuant to clause
            seventh of this Section 5.01(b)(ii), to the Holders of the Class M-7
            Certificates pursuant to clause eighth of this Section 5.01(b)(ii),
            to the Holders of the Class M-8 Certificates pursuant to clause
            ninth of this Section 5.01(b)(ii) and to the Holders of the Class
            M-9 Certificates pursuant to clause tenth of this Section
            5.01(b)(ii) and (y) the Class M-10 Principal Distribution Amount,
            shall be distributed to the Holders of the Class M-10 Certificates,
            until the Certificate Principal Balance of such Class has been
            reduced to zero;

            twelfth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii),
            to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii), to the Holders of the Class M-5
            Certificates pursuant to clause sixth of this Section 5.01(b)(ii),
            to the Holders of the Class M-6 Certificates pursuant to clause
            seventh of this Section 5.01(b)(ii), to the Holders of the Class M-7
            Certificates pursuant to clause eighth of this Section 5.01(b)(ii),
            to the Holders of the Class M-8 Certificates pursuant to clause
            ninth of this Section 5.01(b)(ii), to the Holders of the Class M-9
            Certificates pursuant to clause tenth of this Section 5.01(b)(ii)
            and to the Holders of the Class M-10 Certificates pursuant to clause
            eleventh of this Section 5.01(b)(ii) and (y) the Class M-11
            Principal Distribution Amount, shall be distributed to the Holders
            of the Class M-11 Certificates, until the Certificate Principal
            Balance of such Class has been reduced to zero; and

            thirteenth, the lesser of (x) the excess of (i) the Principal
            Distribution Amount over (ii) the sum of the amounts distributed to
            the Holders of the Class A Certificates pursuant to clause first of
            this Section 5.01(b)(ii), to the Holders of the Class M-1
            Certificates pursuant to clause second of this Section 5.01(b)(ii),
            to the Holders of the Class M-2 Certificates pursuant to clause
            third of this Section 5.01(b)(ii), to the Holders of the Class M-3
            Certificates pursuant to clause fourth of this Section 5.01(b)(ii),
            to the Holders of the Class M-4 Certificates pursuant to clause
            fifth of this Section 5.01(b)(ii), to the Holders of the Class M-5
            Certificates pursuant to clause sixth of this Section 5.01(b)(ii),
            to the Holders of the Class M-6 Certificates pursuant to clause
            seventh of this Section 5.01(b)(ii), to the Holders of the Class M-7
            Certificates pursuant to clause eighth of this Section 5.01(b)(ii),
            to the Holders of the Class M-8 Certificates pursuant to clause
            ninth of this Section 5.01(b)(ii), to the Holders of the Class M-9
            Certificates pursuant to clause tenth of this Section 5.01(b)(ii),
            to the Holders of the Class M-10 Certificates

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            pursuant to clause eleventh of this Section 5.01(b)(ii) and to the
            Holders of the Class M-11 Certificates pursuant to clause twelfth of
            this Section 5.01(b)(ii) and (y) the Class B Principal Distribution
            Amount, shall be distributed to the Holders of the Class B
            Certificates until the Certificate Principal Balance of such Class
            has been reduced to zero.

            (c) On each Distribution Date, the Securities Administrator shall
withdraw any amounts then on deposit in the Distribution Account that represent
Prepayment Charges and shall distribute such amounts to the Class P
Certificateholders as described above.

            (d) 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 will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 5.01(f) or
Section 10.01 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 Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Certificates having an
initial aggregate Certificate Principal Balance that is in excess of the lesser
of (i) $5,000,000 or (ii) two-thirds of the initial Certificate Principal
Balance of such Class of Certificates, 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 will be made in like manner, but only
upon presentment and surrender of such Certificate at the Corporate Trust Office
of the Securities Administrator 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 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, the Servicer, the Securities Administrator or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.

            (e) 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, the Servicer, the Securities
Administrator 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.

            (f) Except as otherwise provided in Section 10.01, whenever the
Securities Administrator expects that the final distribution with respect to any
Class of Certificates will be

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made on the next Distribution Date, the Securities Administrator shall, no later
than three (3) days before the related Distribution Date, mail to each Holder on
such date of such Class of Certificates a notice to the effect that:

                  (i) the Securities Administrator 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
                  Securities Administrator 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 Securities Administrator 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 5.01(f) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Securities Administrator 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 Securities Administrator 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.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, any amounts which were paid by the
Certificate Insurer under the Certificate Insurance Policy and are being held
for non-tendering Certificateholders shall be reimbursed to the Certificate
Insurer. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
such trust fund. If within one year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Securities Administrator
shall pay to the Depositor all such amounts, 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 Securities Administrator as a result of such Certificateholder's failure
to surrender its Certificate(s) on the final Distribution Date for final payment
thereof in accordance with this Section 5.01(f). Any such amounts held in trust
by the Securities Administrator shall be held uninvested in an Eligible Account.

            (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 5.04 and (b) distributed to the Holder of such
Certificate in reduction of the Certificate Principal Balance thereof pursuant
to this Section 5.01 from Net Monthly Excess Cashflow and (ii) in no event shall
the Uncertificated Balance of a REMIC Regular Interest be reduced more than once
in respect of any particular amount both (a) allocated to such REMIC Regular
Interest in respect of Realized Losses

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pursuant to Section 5.04 and (b) distributed on such REMIC Regular Interest in
reduction of the Uncertificated Balance thereof pursuant to this Section 5.01.

            SECTION 5.02. Statements to Certificateholders.

            On each Distribution Date, the Securities Administrator (based on
the information set forth in the Servicer Reports for such Distribution Date and
information provided by the Trustee or the counterparty to the Cap Contracts
with respect to payments made pursuant to the Cap Contracts) shall make
available to each Holder of the 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 Servicers
      and Fremont and Master Servicing Fee received by the Master Servicer
      during the related Due Period;

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

                  (v) Reserved;

                  (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;

                  (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 Scheduled Principal
      Balance of such Mortgage Loan;

                  (ix) if available, 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;

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                  (x) the aggregate amount of Principal Prepayments made during
      the related Prepayment Period and the aggregate amount of any Prepayment
      Charges received in respect thereof;

                  (xi) the aggregate amount of Realized Losses incurred during
      the related Prepayment Period and the aggregate amount of Realized Losses
      incurred since the Closing Date;

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

                  (xiii) the aggregate Certificate Principal Balance 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 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 and the Class B Certificates separately identifying
      any reduction thereof due to allocations of Realized Losses, Prepayment
      Interest Shortfalls, Relief Act Interest Shortfalls and Net WAC Rate
      Carryover Amounts;

                  (xvi) the aggregate amount of any Prepayment Interest
      Shortfall for such Distribution Date, to the extent not covered by
      payments by Ocwen pursuant to Section 3.22 of this Agreement or the Master
      Servicer pursuant to Section 4.18 of this Agreement or Fremont or Select
      Portfolio pursuant to the applicable Servicing Agreement;

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

                  (xviii) the Required Overcollateralization 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 Net WAC Rate Carryover Amount, if any, for such
      Distribution Date;

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                  (xxii) the Net WAC Rate Carryover Amount, if any, outstanding
      after reimbursements therefor on such Distribution Date and any amounts
      received under the Cap Contracts;

                  (xxiii) 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;

                  (xxiv) the amount of any deposit to the Reserve Fund
      contemplated by Section 3.24(b);

                  (xxv) the balance of the Reserve Fund prior to the deposit or
      withdrawal of any amounts on such Distribution Date;

                  (xxvi) the amount of any deposit to the Reserve Fund pursuant
      to Section 5.01(a)(7)(vi);

                  (xxvii) the balance of the Reserve Fund after all deposits and
      withdrawals on such Distribution Date;

                  (xxviii) the Loss Severity Percentage with respect to each
      Mortgage Loan;

                  (xxix) the Aggregate Loss Severity Percentage;

                  (xxx) the Insured Certificate Deficiency Amount and the Policy
      Payment for such Distribution Date; and

                  (xxxi) 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 Securities Administrator will make such statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to the Certificateholders, the Certificate Insurer
and the Rating Agencies via the Securities Administrator's internet website. The
Securities Administrator's internet website shall initially be located at
http:\\www.ctslink.com and assistance in using the website can be obtained by
calling the Securities Administrator's customer service desk at 1-301-815-6600.
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 Securities Administrator 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
Securities Administrator shall provide timely and adequate notification to all
above parties regarding any such changes.

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

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            Within a reasonable period of time after the end of each calendar
year, the Securities Administrator shall furnish upon request 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 Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator 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 Securities Administrator shall furnish upon request 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 Securities Administrator 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, as applicable, 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.

            On each Distribution Date the Securities Administrator 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 Securities Administrator and Bloomberg.

            SECTION 5.03. Servicer Reports; P&I Advances.

            (a) On or before 12:00 noon New York time on the 18th calendar day
of each month, and if the 18th calendar day is not a Business Day, the
immediately following Business Day, Ocwen shall deliver to the Master Servicer
and the Securities Administrator by telecopy or electronic mail (or by such
other means as Ocwen, the Master Servicer and the Securities Administrator may
agree from time to time) a remittance report containing such information with
respect to the Ocwen Mortgage Loans and the related Distribution Date as is
reasonably available to Ocwen as the Master Servicer or the Securities
Administrator may reasonably require so as to enable the Master Servicer to
master service the Ocwen Mortgage Loans and oversee the servicing by Ocwen and
the Securities Administrator to fulfill its obligations hereunder with respect
to securities and tax reporting.

            (b) The amount of P&I Advances to be made by the related Servicer or
Fremont on any Distribution Date shall equal, subject to Section 5.03(d), (i)
the aggregate amount of Monthly Payments (net of the related Servicing Fees),
due during the related Due Period in respect of the Mortgage Loans serviced by
such Servicer or Fremont, 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 was acquired during or prior to the related Prepayment Period
and as to which 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 deposited in

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the related Collection Account or Custodial Acount pursuant to Section 3.21 of
this Agreement or pursuant the related Servicing Agreement for distribution on
such Distribution Date; provided, however, neither Servicer nor Fremont shall be
required to make P&I Advances with respect to Relief Act Interest Shortfalls, or
with respect to Prepayment Interest Shortfalls in excess of its obligations
under Section 3.22 or under the related Servicing Agreement. For purposes of the
preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a
delinquent Balloon Payment is equal to the assumed monthly payment that would
have been due on the related Due Date based on the original principal
amortization schedule for such Balloon Mortgage Loan.

            By 12:00 noon New York time on the Servicer Remittance Date, Ocwen
shall remit in immediately available funds to the Securities Administrator 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 Ocwen Mortgage Loans for the
related Distribution Date either (i) from its own funds or (ii) from the related
Collection Account, to the extent of any Amounts Held For Future Distribution on
deposit therein (in which case it will cause to be made an appropriate entry in
the records of the related Collection Account that Amounts Held For Future
Distribution have been, as permitted by this Section 5.03, used by Ocwen 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 Ocwen
with respect to the Ocwen Mortgage Loans. In addition, Ocwen shall have the
right to reimburse itself for any outstanding P&I Advance made from its own
funds from Amounts Held for Future Distribution. Any Amounts Held For Future
Distribution used by Ocwen to make P&I Advances or to reimburse itself for
outstanding P&I Advances shall be appropriately reflected in Ocwen's records and
replaced by Ocwen by deposit in the related Collection Account no later than the
close of business on the Servicer Remittance Date immediately following the Due
Period or Prepayment Period for which such amounts relate. The Securities
Administrator will notify Ocwen and the Master Servicer by the close of business
on the Business Day prior to the Distribution Date in the event that the amount
remitted by Ocwen to the Securities Administrator on such date is less than the
P&I Advances required to be made by Ocwen for the related Distribution Date.

            (c) The obligation of Ocwen 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 or under the related
Servicing Agreement by the related Servicer or Fremont if such P&I Advance or
Servicing Advance would, if made, constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively. The determination by the related
Servicer or Fremont 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 a
certification of a Servicing Officer delivered to the Master Servicer.

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            (e) Subject to and in accordance with the provisions of Article
VIII, in the event Ocwen fails to make any required P&I Advance, then the Master
Servicer (in its capacity as successor servicer) or any other successor Servicer
shall be required to make such P&I Advance on the Distribution Date on which
Ocwen was required to make such Advance, subject to its determination of
recoverability. In addition, in the event that Fremont or Select Portfolio fails
to make a required P&I Advance under the related Servicing Agreement, the Master
Servicer will be required to make such P&I Advance, subject to its determination
of recoverability.

            SECTION 5.04. Allocation of Realized Losses.

            (a) Prior to the Determination Date, each Servicer and Fremont shall
determine as to each Mortgage Loan serviced by such Servicer or Fremont and any
related REO Property and include in the monthly remittance report provided to
the Master Servicer and the Securities Administrator (substantially in the form
of Schedule 4 hereto) such information as is reasonably available to the
Servicers and Fremont as the Master Servicer or the Securities Administrator may
reasonably require so as to enable the Master Servicer to master service the
Mortgage Loans and oversee the servicing by the Servicers and Fremont and the
Securities Administrator to fulfill its obligations hereunder with respect to
securities and tax reporting, which shall include, but not be limited to: (i)
the total amount of Realized Losses, if any, incurred in connection with any
Final Recovery Determinations made during the related Prepayment Period; and
(ii) the respective portions of such Realized Losses allocable to interest and
allocable to principal. Prior to each Determination Date, each Servicer and
Fremont 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.

            (b) All Realized Losses on the Mortgage Loans allocated to any REMIC
I Regular Interest pursuant to Section 5.04(c) on the Mortgage Loans shall be
allocated by the Securities Administrator on each Distribution Date as follows:
first, to Net Monthly Excess Cashflow; second, to the Class CE Certificates;
third, to the Class B Certificates until the Certificate Principal Balance of
the Class B Certificates has been reduced to zero, fourth, to the Class M-11
Certificates until the Certificate Principal Balance of the Class M-11
Certificates has been reduced to zero, fifth, to the Class M-10 Certificates,
until the Certificate Principal Balance of the Class M-10 Certificates has been
reduced to zero; sixth, to the Class M-9 Certificates, until the Certificate
Principal Balance of the Class M-9 Certificates has been reduced to zero;
seventh, to the Class M-8 Certificates, until the Certificate Principal Balance
of the Class M-8 Certificates has been reduced to zero; eighth, to the Class M-7
Certificates, until the Certificate Principal Balance of the Class M-7
Certificates has been reduced to zero; ninth, to the Class M-6 Certificates,
until the Certificate Principal Balance of the Class M-6 Certificates has been
reduced to zero; tenth, to the Class M-5 Certificates, until the Certificate
Principal Balance of the Class M-5 Certificates has been reduced to zero;
eleventh, to the Class M-4 Certificates, until the Certificate Principal Balance
of the Class M-4 Certificates has been reduced to zero; twelfth, to the Class
M-3 Certificates, until the Certificate Principal Balance of the Class M-3
Certificates has been reduced to zero; thirteenth, to the Class M-2
Certificates, until the Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero; and fourteenth, to the Class M-1
Certificates, until the Certificate Principal Balance of the Class M-1
Certificates has been

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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 Mezzanine Certificate or
Class B Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated; any allocation
of Realized Losses to a Class CE Certificates shall be made by reducing the
amount otherwise payable in respect thereof pursuant to Section
5.01(a)(7)(viii). No allocations of any Realized Losses shall be made to the
Certificate Principal Balances of the Class A Certificates or 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.

            In addition, in the event that Ocwen receives any Subsequent
Recoveries with respect to an Ocwen Mortgage Loan, Ocwen shall deposit such
funds into the related Collection Account pursuant to Section 3.08. If, after
taking into account such Subsequent Recoveries and any Subsequent Recoveries
received by Fremont and Select Portfolio, the amount of a Realized Loss is
reduced, the amount of such Subsequent Recoveries will be applied to increase
the Certificate Principal Balance of the Class of Subordinate Certificates with
the highest payment priority to which Realized Losses have been allocated, but
not by more than the amount of Realized Losses previously allocated to that
Class of Subordinate Certificates pursuant to this Section 5.04 and not
previously reimbursed to such Class of Subordinate Certificates with Net Monthly
Excess Cashflow pursuant to Section 5.01(a)(7). The amount of any remaining
Subsequent Recoveries will be applied to sequentially increase the Certificate
Principal Balance of the Subordinate Certificates, beginning with the Class of
Subordinate Certificates with the next highest payment priority, up to the
amount of such Realized Losses previously allocated to such Class of Subordinate
Certificates pursuant to this Section 5.04 and not previously reimbursed to such
Class of Subordinate Certificates with Net Monthly Excess Cashflow pursuant to
Section 5.01(a)(7)(iii). Holders of such Certificates will not be entitled to
any payment in respect of current interest on the amount of such increases for
any Interest Accrual Period preceding the Distribution Date on which such
increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Subordinate Certificate of such Class in accordance
with its respective Percentage Interest.

            (c) (i) The REMIC I Marker Percentage of all Realized Losses on the
Mortgage Loans shall be allocated by the Trustee, based solely on the
instructions of the Securities Administrator, 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, 98.00% and 2.00%, 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

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to the REMIC I Principal Loss Allocation Amount, 98.00% and 2.00%, 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, 98.00%, 1.00% and
1.00%, respectively, until the Uncertificated Balance 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-LTM11 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM11 has been reduced to
zero; fifth, to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM10 and REMIC I Regular Interest I-LTZZ, 98.00%,
1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC I
Regular Interest I-LTM10 has been reduced to zero; sixth, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM9 and
REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Balance of REMIC I Regular Interest I-LTM9 has been reduced
to zero; seventh, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM8 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM8 has been reduced to zero; eighth, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM7 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM7 has been reduced to zero; ninth, to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM6 and REMIC I Regular
Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM6 has been reduced to zero; tenth, to
the Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM5 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM5 has been reduced to zero; eleventh, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM4 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM4 has been reduced to
zero; twelfth, to the Uncertificated Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest I-LTZZ,
98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM3 has been reduced to zero; thirteenth, to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero; and fourteenth, to the Uncertificated Balances
of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest I-LTZZ, 98.00%, 1.00% and 1.00%, 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 Uncertificated Balance of each such

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      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 5.05. Compliance with Withholding Requirements.

            Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator 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 Securities Administrator does withhold any amount
from interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Securities
Administrator shall indicate the amount withheld to such Certificateholders.

            SECTION 5.06. Reports Filed with Securities and Exchange Commission.

            The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Within 15 days after each Distribution Date, the
Securities Administrator shall, in accordance with industry standards, file with
the Commission via the Electronic Data Gathering and Retrieval System ("EDGAR"),
a Form 8-K (or other comparable Form containing the same or comparable
information or other information mutually agreed upon) with a copy of the
statement to be furnished to the Certificateholders for such Distribution Date
as an exhibit thereto. Prior to January 30, 2005, the Securities Administrator
shall, in accordance with industry standards, file a Form 15 Suspension Notice
with respect to the Trust Fund, if applicable. Prior to (i) March 20, 2005 and
(ii) unless and until a Form 15 Suspension Notice shall have been filed, prior
to March 20th of each year thereafter, the Master Servicer shall provide the
Securities Administrator with a Master Servicer Certification, together with a
copy of the annual independent accountant's servicing report and annual
statement of compliance of the Servicer to be delivered pursuant to this
Agreement and, if applicable, the annual independent accountant's servicing
report and annual statement of compliance to be delivered by the Master Servicer
pursuant to Sections 4.15 and 4.16. Prior to (i) March 31, 2005 and (ii) unless
and until a Form 15 Suspension Notice shall have been filed, March 31 of each
year thereafter, the Securities Administrator shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust. Such Form
10-K shall include the Master Servicer Certification and other documentation
provided by the Master Servicer pursuant to the second preceding sentence. The
Depositor hereby grants to the Securities Administrator a limited power of
attorney to execute and file each such document on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Securities
Administrator reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Securities

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Administrator shall have no responsibility to file any items other than those
specified in this Section 5.06; provided, however, the Securities Administrator
will cooperate with the Depositor in connection with any additional filings with
respect to the Trust Fund as the Depositor deems necessary under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Fees and expenses
incurred by the Securities Administrator in connection with this Section 5.06
shall not be reimbursable from the Trust Fund.

            SECTION 5.07. The Certificate Insurance Policy.

            (a) The Trustee hereby appoints the Securities Administrator as its
agent in connection with the receipt and distribution of all amounts required to
be paid by the Certificate Insurer under the Certificate Insurance Policy and
the providing of any notices required to be provided thereunder. The Securities
Administrator shall establish a separate non-interest bearing trust account
which shall be an Eligible Account for the benefit of Holders of the Insured
Certificates and the Certificate Insurer referred to herein as the "Policy
Payment Account" over which the Securities Administrator shall have exclusive
control and sole right of withdrawal. The Securities Administrator shall deposit
upon receipt any amount paid under the Certificate Insurance Policy in the
Policy Payment Account and distribute such amount only for purposes of payment
to the Insured Certificates of the Policy Payment 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 Trustee or the Trust Fund or to pay any other Class of
Certificates. Amounts paid under the Certificate Insurance Policy, to the extent
needed to pay any Insured Certificate Deficiency Amount, shall be transferred to
the Distribution Account on the related Distribution Date, and the portion
thereof representing the Insured Certificate Deficiency Amount shall be
disbursed by the Securities Administrator to the Holders of the Class A-1
Certificates or Class A-2 Certificates, as appropriate, in each case as if it
were a distribution to the Holders of such Certificates pursuant to Section
5.01. 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 Class A-1 Certificateholders or Class A-2
Certificateholders, as applicable, 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 Policy Payment
Account shall be noted as provided in paragraph (d) below and in the statement
to be furnished to Holders of the related Class of Certificates pursuant to
Section 5.02. Funds held in the Policy Payment Account shall not be invested.
Any funds remaining in the Policy Payment 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.

            (b) If the Securities Administrator has determined that an Insured
Certificate Deficiency Amount is required to be paid under the Certificate
Insurance Policy with respect to such Distribution Date, it shall deliver a
Notice of Claim (in the form attached as Exhibit A to the Certificate Insurance
Policy) to the Certificate Insurer no later than noon, New York, New York time
on the second Business Day preceding such Distribution Date and shall provide a
copy thereof to the Master Servicer at or prior to the time such Notice of Claim
is received by the Certificate Insurer. The Notice of Claim shall constitute a
claim therefor pursuant to the Certificate Insurance Policy.

            (c) If the Securities Administrator receives a certified copy of a
final order of the appropriate court exercising jurisdiction in an Insolvency
Proceeding with respect to which

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the appeal period as expired without an appeal having been filed (an "Order")
that any prior distribution made on the Insured Certificates constitutes an
Avoided Payment and must be returned by the Certificate Owner, the Securities
Administrator shall so notify the Certificate Insurer, shall comply with the
provisions of the Certificate Insurance Policy to obtain payment by the
Certificate Insurer of such Avoided Payment and shall, at the time it provides
notice to the Certificate Insurer, notify each holder of the affected Insured
Certificates by mail that (i) subject to the terms of the Certificate Insurance
Policy, the Certificate Insurer will disburse the Avoided Payment directly to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy named
in the Order on the Business Day following such Certificateholder's making
timely delivery to the Securities Administrator of (a) a certified copy of the
Order of such Certificateholder that such Order has been entered and is not
subject to any stay, (b) an assignment duly executed and delivered by such
Certificate Owner, in such form as is reasonably required by the Certificate
Insurer and provided to such Certificateholder by the Certificate Insurer,
irrevocably assigning to the Certificate Insurer all rights and claims of such
Certificate Owner relating to or arising under the affected Insured Certificates
against the debtor that made a payment of such Avoided Payment, or otherwise
with respect to such payment and (c) a payment notice in the form required by
the Certificate Insurance Policy, appropriately completed and executed by the
Securities Administrator, provided that if such documents are received after
10:00 a.m., New York time, on such Business Day, they will be deemed to be
received on the following Business Day. A copy of the Certificate Insurance
Policy shall be made available to each affected Certificateholder through the
Trustee, and the Securities Administrator shall furnish to the Certificate
Insurer or its fiscal agent, if any, a copy of its records evidencing the
payments that have been made by the Securities Administrator and subsequently
recovered from Certificateholders and the dates on which such payments were
made.

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

            (e) The Holders of the Insured Certificates are not entitled to
institute proceedings directly against the Certificate Insurer. Each Holder of
the Insured Certificates, by its purchase of Insured Certificates hereby agrees
that the Certificate Insurer may at any time during the continuation of any
proceeding relating to an Avoided Payment, direct all matters relating to such
Avoided Payment on their behalf, including, without limitation, the direction of
any appeal of any order relating to such preference claim and the posting of any
surety, supersedeas or performance bond pending any such appeal.

            (f) Any payments to the Certificate Insurer shall be made by wire
transfer of immediately available funds to the following Federal Reserve Account
(unless and until the Certificate Insurer notifies the Securities Administrator
of a change in such account information in writing):

                Fleet Bank, N.A.
                777 Main Street
                Hartford, CT  06115-2001
                ABA Number: 04900571

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<PAGE>

                For the Account of: XL Capital Assurance Inc.
                1221 Avenue of the Americas, 31st Floor
                New York, NY 10020-1001
                Account #: 942-783-5841
                Reference: Policy Number CA01177A

            (g) The Securities Administrator shall, upon retirement of each
Class of Insured Certificates, furnish to the Certificate Insurer and the
Trustee a notice of such retirement, and, after retirement of both Classes of
Insured Certificates and the expiration of the term of the Certificate Insurance
Policy, and the Trustee shall surrender the Certificate Insurance Policy to the
Certificate Insurer for cancellation.

            (h) The Trustee shall hold the Certificate Insurance 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 Certificate
Insurance Policy nor the amounts paid on the Certificate Insurance Policy shall
constitute part of the Trust Fund created by this Agreement. Each Holder of
Class A-1 Certificate or Class A-2 Certificate, by accepting its Class A-1
Certificate or Class A-2 Certificate, appoints the Securities Administrator as
attorney-in-fact for the purpose of making claims on the Certificate Insurance
Policy.

            SECTION 5.08. Effect of Payments by the Certificate Insurer;
Subrogation.

            Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Class A-1 Certificates or Class A-2
Certificates which is made with moneys received pursuant to the terms of the
Certificate Insurance Policy shall not be considered payment of the Class A-1
Certificates or Class A-2 Certificates from the Trust Fund. The Depositor, the
Master Servicer and the Trustee acknowledge, and each Holder by its acceptance
of a Class A-1 Certificate or Class A-2 Certificate agrees, that without the
need for any further action on the part of the Certificate Insurer, the
Depositor, the Master Servicer, the Trustee or the Certificate Registrar (a) to
the extent the Certificate Insurer makes payments, directly or indirectly, on
account of principal of or interest on the Class A-1 Certificates to the Holders
of such Class of Certificates, the Certificate Insurer shall be fully subrogated
to, and each such Certificateholder, 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 (in
the manner and order of priority in relation to other Classes of Certificates as
is set forth in this Agreement) from the Trust Fund, 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 until
full reimbursement of all Insured Payments (together with interest thereon at
the applicable Pass-Through Rate from the date paid by the Certificate Insurer
until the date of reimbursement thereof). 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 of the Insured Certificates as otherwise set forth
herein.

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                                   ARTICLE VI

                                THE CERTIFICATES

            SECTION 6.01. 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 REMIC I.

            The Certificates will be substantially in the forms annexed hereto
as Exhibits A-1 through A-6. 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 and
authenticated by the Securities Administrator and delivered by the Trustee to
and upon the written order of the Depositor. The Certificates shall be executed
by manual or facsimile signature on behalf of the Trust by the Securities
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Securities Administrator shall bind the Trust, 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 Securities Administrator 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
Securities Administrator 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 Securities Administrator
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 Servicer
and, if the Trustee is not the Book-Entry Custodian, the Trustee, any other
transfer agent (including the

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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 Securities
Administrator resigns or is removed in accordance with the terms hereof, the
successor Securities Administrator 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.

            (c) The Class B Certificates initially offered and sold in offshore
transactions in reliance on Regulation S shall be issued in the form of a
temporary global certificate in definitive, fully registered form (each, a
"Regulation S Temporary Global Certificate"), which shall be deposited with the
Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository for the account of designated agents holding on behalf of
Euroclear or Clearstream. Beneficial interests in each Regulation S Temporary
Global Certificate may be held only through Euroclear or Clearstream; provided,
however, that such interests may be exchanged for interests in a Definitive
Certificate in accordance with the requirements described in Section 6.02. After
the expiration of the Release Date, a beneficial interest in a Regulation S
Temporary Global Certificate may be exchanged for a beneficial interest in the
related permanent global certificate of the same Class (each, a "Regulation S
Permanent Global Certificate"), in accordance with the procedures set forth in
Section 6.02. Each Regulation S Permanent Global Certificate shall be deposited
with the Securities Administrator or an agent of the Securities Administrator as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.

            The Class B Certificates offered and sold to Qualified Institutional
Buyers ("QIBs") in reliance on Rule 144A under the Securities Act ("Rule 144A")
or institutional investors that are accredited investors within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
("Institutional Accredited Investors") will be issued in the form of Definitive
Certificates.

            (d) The Class CE Certificates and Class P Certificates offered and
sold to Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under
the Securities Act ("Rule 144A") will be issued in the form of Definitive
Certificates.

            (e) The Trustee, the Servicer, the Securities Administrator, the
Master Servicer and the Depositor may for all purposes (including the making of
payments due on the Book-Entry Certificates and Global Certificates) deal with
the Depository as the authorized representative of the Certificate Owners with
respect to the Book-Entry Certificates and Global Certificates for the purposes
of exercising the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the Book-Entry Certificates and Global
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 and Global
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Securities

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Administrator 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 Depositor advises the Securities Administrator in
writing that the Depository is no longer willing 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 advises the Securities
Administrator in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a 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 Securities
Administrator 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 Securities Administrator 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. With respect to a Global Certificate, the related
Certificate Owner (other than a Holder of a Regulation S Temporary Global
Certificate) may request that its interest in a Global Certificate be exchanged
for a Definitive Certificate. Upon surrender to the Securities Administrator of
the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, or the Global Certificates by the Depository accompanied by
registration instructions from the Depository for registration of transfer, the
Securities Administrator shall cause the Definitive Certificates to be issued.
Such Definitive Certificates will be issued in minimum denominations of $10,000
except that any beneficial ownership that was represented by a Book-Entry
Certificate, or a Global Certificate, as applicable in an amount less than
$10,000 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 or a Global Certificate, as applicable. None of the
Depositor, the Servicer, the Master Servicer, the Securities Administrator 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 Securities Administrator, to the extent
applicable with respect to such Definitive Certificates, and the Securities
Administrator shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

            SECTION 6.02. Registration of Transfer and Exchange of Certificates.

            (a) The Securities Administrator shall cause to be kept at one of
the offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 9.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator 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 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 Class B Certificate, Class CE Certificate, Class
P Certificate or Residual Certificate is to be made without registration or
qualification (other than in connection with the initial

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transfer of any such Certificate by the Depositor), the Securities Administrator
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 form attached
hereto as Exhibit B-1; (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the form attached
hereto as Exhibit B-2; (iii) if such transfer is purportedly being made in
reliance on Regulation S, a written certification from the prospective
transferee, substantially in the form attached hereto as Exhibit B-1 and (iv) in
all other cases, an Opinion of Counsel satisfactory to the Securities
Administrator 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, the Master Servicer, the Securities
Administrator or the 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 of the Depositor nor the Securities
Administrator 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, the Master Servicer, the Securities Administrator
and the 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.

            A holder of a beneficial interest in a Regulation S Temporary Global
Certificate must provide Euroclear or Clearstream, as the case may be, with a
certificate in the form of Annex A to Exhibit B-1 hereto certifying that the
beneficial owner of the interest in such Global Certificate is not a U.S. Person
(as defined in Regulation S), and Euroclear or Clearstream, as the case may be,
must provide to the Trustee and Securities Administrator a certificate in the
form of Exhibit B-1 hereto prior to (i) the payment of interest or principal
with respect to such holder's beneficial interest in the Regulation S Temporary
Global Certificate and (ii) any exchange of such beneficial interest for a
beneficial interest in a Regulation S Permanent Global Certificate.

            (c) No transfer of a Class CE Certificate, Class P Certificate or a
Residual 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") unless the Securities
Administrator is provided with an Opinion of Counsel on which the Depositor, the
Master Servicer, the Securities Administrator, the Trustee and the Servicer may
rely, which establishes to the satisfaction of the Securities Administrator that
the purchase of such Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Servicer, the Trustee, the
Master Servicer, the Securities Administrator 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 Servicer,
the Trustee, the Master Servicer, the Securities Administrator, the Trust Fund.
An Opinion of Counsel will not 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

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any affiliate thereof shall have deemed to have represented that such affiliate
is not a Plan or a Person investing Plan Assets) and the Securities
Administrator shall be entitled to conclusively rely upon a representation
(which, upon the request of the Securities Administrator, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.

            Each Transferee of a Mezzanine Certificate or Class B Certificate
will be deemed to have represented by virtue of its purchase or holding of such
Certificate (or interest therein) that either (a) such Transferee is not a Plan
or purchasing such Certificate with Plan Assets, (b) in the case of a Mezzanine
Certificate, it has acquired and is holding such Certificate in reliance on
Prohibited Transaction Exemption ("PTE") 94-84 or FAN 97-03E, as amended by PTE
97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE 2000-58, 65 Fed. Reg. 67765
(November 13, 2000) and PTE 2002-41, 67 Fed. Reg. 54487 (August 22, 2002) (the
"Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency and in the case of a Class B Certificate that it will obtain a
representation from any transferee that such transferee is an accredited
investor so long as it is required to obtain a representation regarding
compliance with the Securities Act or (c) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in PTCE 95-60, and (iii) the conditions set
forth in Sections I and III of PTCE 95-60 have been satisfied.

            If any Certificate or any interest therein is acquired or held in
violation of the conditions described in this Section 6.02(c), 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 certificate or interest therein was effected in violation of the conditions
described in this Section 6.02(c) shall indemnify and hold harmless the
Depositor, the Trustee, the Servicer, the Master Servicer, the Securities
Administrator 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 Securities Administrator 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 Securities Administrator 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

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            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 B-3) from the
            proposed Transferee, in form and substance satisfactory to the
            Securities Administrator, 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 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 6.02(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 an
            authorized officer of the Securities Administrator 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 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 B-2) to the Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator as a condition to such
      registration. In addition, no Transfer of a Residual Certificate shall be
      made unless the Securities Administrator 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
      6.02(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 Securities Administrator shall be under no liability to
      any

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      Person for any registration of Transfer of a Residual Certificate that is
      in fact not permitted by this Section 6.02(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 6.02(d) and to the extent that the retroactive restoration
            of the rights of the holder of such Residual Certificate as
            described in clause (iii)(A) above shall be invalid, illegal or
            unenforceable, then the Securities Administrator shall have the
            right, without notice to the holder or any prior holder of such
            Residual Certificate, to sell such Residual Certificate to a
            purchaser selected by the Securities Administrator on such terms as
            the Securities Administrator may choose. Such purported Transferee
            shall promptly endorse and deliver each Residual Certificate in
            accordance with the instructions of the Securities Administrator.
            Such purchaser may be the Securities Administrator itself or any
            Affiliate of the Securities Administrator. The proceeds of such
            sale, net of the commissions (which may include commissions payable
            to the Securities Administrator or its Affiliates), expenses and
            taxes due, if any, will be remitted by the Securities Administrator
            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 Securities Administrator, and the Securities
            Administrator 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 Securities Administrator 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 charged or collected by
      the Securities Administrator.

                  (v) The provisions of this Section 6.02(d) set forth prior to
      this subsection (v) may be modified, added to or eliminated, provided that
      there shall have been delivered to the Securities Administrator 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 with respect to the
            Insured Certificates, without regard to the Certificate Insurance
            Policy); and

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                  (B) an Opinion of Counsel, in form and substance satisfactory
            to the Securities Administrator, 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, as the case may be, 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
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the 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 Securities Administrator maintained
for such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator 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 Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing.

            (g) No service charge to the Certificateholders shall be made for
any transfer or exchange of Certificates, but the Securities Administrator 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 Securities Administrator in accordance with its
customary procedures.

            SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.

            If (i) any mutilated Certificate is surrendered to the Securities
Administrator, or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof, and (ii) there is delivered to Securities Administrator such
security or indemnity as may be required by it to save it harmless, then, in the
absence of actual knowledge by the Securities Administrator that such
Certificate has been acquired by a protected purchaser, the Securities
Administrator, 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 Securities
Administrator 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 Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC

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created hereunder, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

            SECTION 6.04. Persons Deemed Owners.

            The Depositor, the Servicer, the Trustee, the Master Servicer, the
Securities Administrator 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, and none of the Depositor, the Servicer, the Trustee,
the Master Servicer, the Securities Administrator or any agent of any of them
shall be affected by notice to the contrary.

            SECTION 6.05. Certain Available Information.

            On or prior to the date of the first sale of any Class B
Certificate, Class CE Certificate, Class P Certificate or Residual Certificate
to an Independent third party, the Depositor shall provide to the Securities
Administrator ten copies of any private placement memorandum or other disclosure
document used by the Depositor in connection with the offer and sale of such
Certificate. 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 Securities Administrator, the Depositor promptly shall inform the
Securities Administrator of such event and shall deliver to the Securities
Administrator ten copies of the private placement memorandum or disclosure
document, as revised, amended or supplemented. The Securities Administrator
shall maintain at its office as set forth in Section 12.05 hereof and shall make
available free of charge during normal business hours for review by any Holder
of a Certificate or any Person identified to the Securities Administrator as a
prospective transferee of a Certificate, originals or copies of the following
items: (i) in the case of a Holder or prospective transferee of a Class B
Certificate, Class CE Certificate, Class P Certificate or Residual Certificate,
the related private placement memorandum or other disclosure document relating
to such Class of Certificates, in the form most recently provided to the
Securities Administrator; 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 and (C) any
copies of all Officers' Certificates of the Servicer since the Closing Date
delivered to the Master Servicer to evidence such Person'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. Copies and mailing of any and
all of the foregoing items will be available from the Securities Administrator
upon request at the expense of the Person requesting the same.

            SECTION 6.06. Rights of the Certificate Insurer to Exercise Rights
of Holders of Insured Certificates.

            (a) By accepting its 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 such Insured Certificate
for all purposes (other than with respect to the receipt of payment on such
Classes of Certificates except payments with respect to which the Certificate
Insurer has subrogation rights as set forth herein) and shall have the right to
exercise all rights of

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such Certificateholders under this Agreement and under the Insured Certificates
without any further consent of any such Certificateholder.

            (b) All notices, statement reports, certificates or opinions
required by this Agreement to be sent to any Holder of an Insured Certificate
shall also be sent to the Certificate Insurer.

            (c) On the Distribution Date immediately after the expiration of the
Term of the Certificate Insurance Policy (as such term is defined in the
Certificate Insurance Policy) or (y) during the occurrence of a Certificate
Insurer Default (until such time as it has been cured), the rights, consents and
notifications granted to the Certificate Insurer in this Agreement shall be
extinguished.

            SECTION 6.07. Certificate Insurer Default.

            Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if (i) a Certificate Insurer Default exists and is
continuing or (ii) if and to the extent the Certificate Insurer has delivered
its written renunciation of all of its rights under this Agreement, all
provisions of this Agreement which (a) permit the Certificate Insurer to
exercise rights of the Holders of the Insured Certificates, (b) restrict the
ability of the Certificateholders, the Master Servicer or the Trustee to act
without the consent or approval of the Certificate Insurer, (c) provide that a
particular act or thing must be acceptable to the Certificate Insurer, (d)
permit the Certificate Insurer to direct (or otherwise to require) the actions
of the Trustee, the Master Servicer or the Certificateholders, (e) provide that
any action or omission taken with the consent, approval or authorization of the
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) have a
similar effect, shall be of no further force and effect and the Trustee shall
administer the Trust Fund and perform its obligations hereunder solely for the
benefit of the Holders of the Certificates. Nothing in the foregoing sentence,
nor any action taken pursuant thereto or in compliance therewith, shall be
deemed (x) to have released the Certificate Insurer from any obligation or
liability it may have to any party or to the Holders of the Insured Certificates
hereunder, under any other agreement, instrument or document (including, without
limitation, the Certificate Insurance Policy) or under applicable law or (y) to
have terminated (1) the Certificate Insurer's right to receive Reimbursement
Amounts under this Agreement or its subrogation to the rights of the Holders of
the Insured Certificates under this Agreement or the Certificate Insurance
Policy, (2) the Certificate Insurer's right to receive reports and distributions
as described in this Agreement or (3) the requirement that the Certificate
Insurer approve any amendments to this Agreement that would adversely affect the
aforementioned rights. At such time as the Insured Certificates are no longer
outstanding hereunder, and no amounts owed to the Certificate Insurer hereunder
with respect to the Insured Certificates remain unpaid, the Certificate
Insurer's rights hereunder shall terminate.

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                                  ARTICLE VII

                  THE DEPOSITOR, OCWEN AND THE MASTER SERVICER

            SECTION 7.01. Liability of the Depositor, Ocwen and the Master
Servicer.

            The Depositor, Ocwen 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, a
Servicer and Master Servicer and undertaken hereunder by the Depositor, Ocwen
and the Master Servicer herein.

            SECTION 7.02. Merger or Consolidation of the Depositor, Ocwen 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, Ocwen
will keep in full effect its existence, rights and franchises as a federally
chartered savings bank. Subject to the following paragraph, the Master Servicer
will keep in full effect its existence, rights and franchises as a national
banking association. The Depositor, Ocwen 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, Ocwen 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, Ocwen or the Master Servicer shall be a
party, or any Person succeeding to the business of the Depositor, Ocwen or the
Master Servicer, shall be the successor of the Depositor, Ocwen 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 any successor to
Ocwen or the Master Servicer shall meet the eligibility requirements set forth
in clauses (i) and (iii) of the last paragraph of Section 8.02(a) or Section
7.06, as applicable.

            SECTION 7.03. Limitation on Liability of the Depositor, Ocwen, the
Master Servicer and Others.

            None of the Depositor, Ocwen, the Securities Administrator, the
Master Servicer or any of the directors, officers, employees or agents of the
Depositor, Ocwen 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, Ocwen, the Securities Administrator, the Master Servicer or any such
person against any breach of warranties, representations or covenants made
herein or against any specific liability imposed on any such Person pursuant
hereto or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Depositor, Ocwen, the Securities Administrator, the Master Servicer and any
director, officer, employee or agent of the Depositor, Ocwen, the Securities
Administrator and 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, Ocwen, the

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Securities Administrator, the Master Servicer and any director, officer,
employee or agent of the Depositor, Ocwen, the Securities Administrator 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, the Certificates or any Credit Risk Management
Agreement or any loss, liability or expense incurred other than by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, Ocwen, the Securities Administrator or 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 and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor, Ocwen, the Securities
Administrator 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 gross 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, Ocwen, the Securities Administrator and the
Master Servicer shall be entitled to be reimbursed therefor from the Collection
Account or the Distribution Account as and to the extent provided in Article III
and Article IV, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the related Collection Account and
the Distribution Account.

            Notwithstanding anything to the contrary contained herein, Ocwen
shall not be liable for any actions or inactions prior to the Cut-off Date of
any prior servicer of the Ocwen Mortgage Loans and the Master Servicer shall not
be liable for any action or inaction of either Servicer or Fremont, except to
the extent expressly provided herein, or the Credit Risk Management Agreement.

            SECTION 7.04. Limitation on Resignation of Ocwen.

            (a) Except as expressly provided herein, Ocwen shall neither assign
all or substantially all of its rights under this Agreement or the servicing
hereunder nor delegate all or substantially all of its duties hereunder nor sell
or otherwise dispose of all or substantially all of its property or assets
without, in each case, the prior written consent of the Master Servicer and the
Certificate Insurer, which consent shall not be unreasonably withheld; provided,
that in each case, there must be delivered to the Trustee and the Master
Servicer a letter from each Rating Agency to the effect that such transfer of
servicing or sale or disposition of assets will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Certificates
(and with respect to the Insured Certificates, without regard to the Certificate
Insurance Policy). Notwithstanding the foregoing, Ocwen, without the consent of
the Trustee or the Master Servicer, may retain third-party contractors to
perform certain servicing and loan administration functions, including without
limitation hazard insurance administration, tax payment and administration,
flood certification and administration, collection services and similar
functions,

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<PAGE>

provided, however, that the retention of such contractors by Ocwen shall not
limit the obligation of Ocwen to service the Ocwen Mortgage Loans pursuant to
the terms and conditions of this Agreement. Ocwen shall not resign from the
obligations and duties hereby imposed on it except by consent of the Master
Servicer or upon determination that its duties hereunder are no longer
permissible under applicable law or as provided in Section 7.04(c). Any such
determination pursuant to the preceding sentence permitting the resignation
(other than pursuant to Section 7.04(c)) of Ocwen shall be evidenced by an
Opinion of Counsel to such effect obtained at the expense of Ocwen and delivered
to the Trustee and the Rating Agencies. No resignation of Ocwen shall become
effective until the Master Servicer or a successor Servicer shall have assumed
Ocwen's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.

            (b) Except as expressly provided herein, Ocwen 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
Ocwen hereunder. The foregoing prohibition on assignment shall not prohibit
Ocwen from designating a Sub-Servicer as payee of any indemnification amount
payable to Ocwen hereunder; provided, however, that as provided in Section 3.02,
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.

            (c) Notwithstanding anything to the contrary herein, Ocwen may
pledge or assign as collateral all its rights, title and interest under this
Agreement to a lender (the "Lender"), provided, that:

            (1) upon a Servicer Event of Default and receipt of a notice of
            termination by Ocwen, the Lender may direct Ocwen or its designee to
            appoint a successor Servicer pursuant to the provisions, and subject
            to the conditions, set forth in Section 8.02 regarding Ocwen's
            appointment of a successor Servicer;

            (2) the Lender's rights are subject to this Agreement; and

            (3) Ocwen shall remain subject to termination as servicer under this
            Agreement pursuant to the terms hereof.

            SECTION 7.05. 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 Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor Master Servicer meeting the criteria specified in Section 7.06 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.

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            SECTION 7.06. Assignment of Master Servicing.

            The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accept in writing such
assignment and delegation and assume the obligations of the Master Servicer
hereunder (a) shall have a net worth of not less than $15,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (b)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee) and the Certificate Insurer; and (c) shall execute and
deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by it as master servicer under this Agreement, any
custodial agreement from and after the effective date of such agreement; (ii)
each Rating Agency shall be given prior written notice of the identity of the
proposed successor to the Master Servicer and each Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded, qualified or withdrawn as a result of such assignment,
sale and delegation, as evidenced by a letter to such effect delivered to the
Master Servicer and the Trustee; and (iii) the Master Servicer assigning and
selling the master servicing shall deliver to the Trustee an officer's
certificate and an Opinion of Independent counsel, each stating that all
conditions precedent to such action under this Agreement have been completed and
such action is permitted by and complies with the terms of this Agreement. No
such assignment or delegation shall affect any liability of the Master Servicer
arising out of acts or omissions prior to the effective date thereof.

            SECTION 7.07. Rights of the Depositor in Respect of Ocwen and the
Master Servicer.

            Each of the Master Servicer and Ocwen shall afford (and any
Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford) the
Depositor and the Trustee, upon reasonable notice, during normal business hours,
access to all records maintained by the Master Servicer or Ocwen (and any such
Sub-Servicer) in respect of Ocwen's rights and obligations hereunder and access
to officers of the Master Servicer or Ocwen (and those of any such Sub-Servicer)
responsible for such obligations, and the Master Servicer shall have access to
all such records maintained by Ocwen and any Sub-Servicers. Upon request, each
of the Master Servicer and Ocwen shall furnish to the Depositor and the Trustee
its (and any such Sub-Servicer's) most recent financial statements and such
other information relating to the Master Servicer's or Ocwens 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 or Ocwen's written consent, except as required pursuant to this
Agreement or to the extent that it is appropriate to do so (i) to its legal
counsel, auditors, taxing authorities or other governmental agencies and the
Certificateholders, (ii) pursuant to any law, rule, regulation, order, judgment,
writ, injunction or decree of any court or governmental authority having
jurisdiction over the Depositor and the Trustee or the Trust Fund, and in any
case, the Depositor or the Trustee, (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, Ocwen 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

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circular, registration statement or contract or other document pertaining to the
transactions contemplated by the Agreement approved in advance by the Depositor,
Ocwen 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. Nothing in
this Section 7.07 shall limit the obligation of Ocwen to comply with any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of Ocwen to provide access as provided in this Section 7.07 as a
result of such obligation shall not constitute a breach of this Section. Nothing
in this Section 7.07 shall require Ocwen to collect, create, collate or
otherwise generate any information that it does not generate in its usual course
of business. Ocwen shall not be required to make copies of or ship documents to
any party unless provisions have been made for the reimbursement of the costs
thereof. The Depositor may, but is not obligated to, enforce the obligations of
the Master Servicer and Ocwen under this Agreement and may, but is not obligated
to, perform, or cause a designee to perform, any defaulted obligation of the
Master Servicer or Ocwen under this Agreement or exercise the rights of the
Master Servicer or Ocwen under this Agreement; provided that neither the Master
Servicer nor Ocwen shall 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 or Ocwen and is not obligated to supervise
the performance of the Master Servicer or Ocwen under this Agreement or
otherwise.

            SECTION 7.08. Duties of the Credit Risk Manager.

            For and on behalf of the Depositor, the Credit Risk Manager will
provide reports and recommendations concerning certain delinquent and defaulted
Mortgage Loans, and as to the collection of any Prepayment Charges with respect
to the Mortgage Loans. Such reports and recommendations will be based upon
information provided to the Credit Risk Manager pursuant to the Credit Risk
Management Agreements, and the Credit Risk Manager shall look solely to the
Servicers and/or Master Servicer for all information and data (including loss
and delinquency information and data) relating to the servicing of the related
Mortgage Loans. Upon any termination of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Depositor shall give written
notice thereof to the Servicers, the Master Servicer, the Securities
Administrator, the Trustee, and each Rating Agency. Notwithstanding the
foregoing, the termination of the Credit Risk Manager pursuant to this Section
shall not become effective until the appointment of a successor Credit Risk
Manager.

            SECTION 7.09. Limitation Upon Liability of the Credit Risk Manager.

            Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer under the related Credit Risk
Management Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Credit Risk Manager or any such person against
liability that would otherwise be imposed by reason of willful malfeasance or
bad faith in its performance of its duties. The Credit Risk Manager and any
director, officer, employee, or agent of the Credit Risk Manager may rely in
good faith on any document of any kind prima facie properly executed and
submitted

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by any Person respecting any matters arising hereunder, and may rely in good
faith upon the accuracy of information furnished by the Servicer pursuant to the
related Credit Risk Management Agreement in the performance of its duties
thereunder and hereunder.

            SECTION 7.10. Removal of the Credit Risk Manager.

            The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders holding not less than 66 2/3% of the Voting Rights in the
Trust Fund, in the exercise of its or their sole discretion. The
Certificateholders shall provide written notice of the Credit Risk Manager's
removal to the Trustee. Upon receipt of such notice, the Trustee shall provide
written notice to the Credit Risk Manager of its removal, which shall be
effective upon receipt of such notice by the Credit Risk Manager, with a copy to
the Securities Administrator and the Master Servicer.

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                                  ARTICLE VIII

                                     DEFAULT

            SECTION 8.01. Servicer Events of Default.

            (a) "Servicer Event of Default," wherever used herein, means any one
of the following events:

                  (i) any failure by Ocwen to remit to the Securities
      Administrator for distribution to the Certificateholders any payment
      (other than a P&I Advance required to be made from its own funds on any
      Servicer Remittance Date pursuant to Section 5.03) required to be made by
      Ocwen 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 Ocwen by the Depositor or the Trustee (in which
      case notice shall be provided by telecopy), or to Ocwen, the Depositor,
      the Trustee and by the Holders of Certificates entitled to at least 25% of
      the Voting Rights; or

                  (ii) any failure on the part of Ocwen duly to observe or
      perform in any material respect any other of the covenants or agreements
      on the part of Ocwen contained in this Agreement, or the material breach
      by Ocwen of any representation and warranty contained in Section 2.05,
      which continues unremedied for a period of 30 days after the date on which
      written notice of such failure, requiring the same to be remedied, shall
      have been given to Ocwen by the Depositor or the Trustee or to Ocwen, the
      Depositor and the Trustee by the Holders of Certificates entitled to at
      least 25% of the Voting Rights; provided, however, that in the case of a
      failure that cannot be cured within thirty (30) days, the cure period may
      be extended for an additional thirty (30) days if Ocwen can demonstrate to
      the reasonable satisfaction of the Trustee that the Servicer is diligently
      pursuing remedial action; 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 Ocwen and such decree or order shall have
      remained in force undischarged or unstayed for a period of 90 days; or

                  (iv) Ocwen 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

                  (v) Ocwen 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;

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                  (vi) failure by Ocwen to duly perform, within the required
      time period, its obligations under Section 3.17, 3.18 or 3.19 which
      failure continues unremedied for a period of ten (10) days after the date
      on which written notice of such failure, requiring the same to be
      remedied, shall have been given to Ocwen by any party to this Agreement;
      or

                  (vii) any failure of Ocwen to make any P&I Advance on any
      Servicer Remittance Date required to be made from its own funds pursuant
      to Section 5.03 which continues unremedied until 3:00 p.m. New York time
      on the Business Day immediately following the Servicer Remittance Date.

            If a 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
such Servicer Event of Default shall not have been remedied, the Depositor or
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 Ocwen (and to the Depositor if given by the Trustee or to the Trustee
if given by the Depositor) with a copy to the Master Servicer and each Rating
Agency, terminate all of the rights and obligations of Ocwen in its capacity as
a Servicer under this Agreement, to the extent permitted by law, and in and to
the Ocwen Mortgage Loans and the proceeds thereof. If a Servicer Event of
Default described in clause (vii) hereof shall occur, the Trustee shall, by
notice in writing to Ocwen, the Depositor and the Master Servicer, terminate all
of the rights and obligations of Ocwen in its capacity as a Servicer under this
Agreement and in and to the Ocwen Mortgage Loans and the proceeds thereof.
Subject to Section 8.02, on or after the receipt by Ocwen of such written
notice, all authority and power of Ocwen under this Agreement, whether with
respect to the Certificates (other than as a Holder of any Certificate) or the
Ocwen Mortgage Loans or otherwise, shall pass to and be vested in the Master
Servicer pursuant to and under this Section, and, without limitation, the Master
Servicer is hereby authorized and empowered, as attorney-in-fact or otherwise,
to execute and deliver, on behalf of and at the expense of Ocwen, 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 Ocwen
Mortgage Loans and related documents, or otherwise. Ocwen agrees promptly (and
in any event no later than ten Business Days subsequent to such notice) to
provide the Master Servicer with all documents and records requested by it to
enable it to assume Ocwen's functions under this Agreement, and to cooperate
with the Master Servicer in effecting the termination of Ocwen's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Master Servicer for administration
by it of all cash amounts which at the time shall be or should have been
credited by Ocwen to the related Collection Account held by or on behalf of
Ocwen or thereafter be received with respect to the Ocwen Mortgage Loans or any
related REO Property (provided, however, that Ocwen 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, accrued and unpaid Servicing Fees or otherwise, and shall
continue to be entitled to the benefits of Section 7.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
For purposes of this Section 8.01(a), the Trustee shall not be deemed to have
knowledge of a 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 Servicer Event of Default is received by the Trustee at its Corporate
Trust Office

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and such notice references the Certificates, the Trust or this Agreement. The
Trustee shall promptly notify the Master Servicer and the Rating Agencies of the
occurrence of a Servicer Event of Default of which it has knowledge as provided
above.

            The Master Servicer shall be entitled to be reimbursed by Ocwen (or
from amounts on deposit in the Distribution Account if Ocwen is unable to
fulfill its obligations hereunder) for all reasonable out-of-pocket or third
party costs associated with the transfer of servicing from Ocwen, including
without limitation, any reasonable out-of-pocket or third party 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 Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Master Servicer to service the Ocwen Mortgage
Loans properly and effectively, upon presentation of reasonable documentation of
such costs and expenses.

            (b) "Master Servicer Event of Default," wherever used herein, means
any one of the following events:

                  (i) 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 2.04, which continues unremedied for a period of 30
      days after the date on which written notice of such failure, requiring the
      same to be remedied, shall have been given to the Master Servicer by the
      Depositor or 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; or

                  (ii) 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

                  (iii) 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

                  (iv) 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.

            If a Master Servicer Event of Default shall occur, then, and in each
and every such case, so long as such Master Servicer Event of Default shall not
have been remedied, the Depositor or 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 (and to
the Depositor if given by the Trustee or to the Trustee if given by the
Depositor) with a

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copy to each Rating Agency, 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. 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 including, without limitation, the compensation
payable to the Master Servicer under this Agreement, 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 (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 and shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 8.01(b), the Trustee shall not
be deemed to have 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 or this
Agreement. The Trustee shall promptly notify the Rating Agencies of the
occurrence of a Master Servicer Event of Default of which it has knowledge as
provided above.

            To the extent that the costs and expenses of the Trustee related to
the termination of the Master Servicer, appointment of a successor Master
Servicer or the transfer and assumption of the master servicing by the Trustee
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of the Master Servicer as a result of a Master Servicer Event of
Default and (ii) all costs and expenses associated with the complete transfer of
the master servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor Master Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
Master Servicer to master service the Mortgage Loans in accordance with this
Agreement) are not fully and timely reimbursed by the terminated Master
Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Distribution Account.

            SECTION 8.02. Master Servicer to Act; Appointment of Successor.

            (a) On and after the time Ocwen receives a notice of termination,
the Master Servicer shall be the successor in all respects to Ocwen in its
capacity as a 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 Master Servicer
(except for any representations or warranties of Ocwen under this Agreement, the

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responsibilities, duties and liabilities contained in Section 2.03 and the
obligation to deposit amounts in respect of losses pursuant to Section 3.10(b))
by the terms and provisions hereof including, without limitation, Ocwen's
obligations to make P&I Advances pursuant to Section 5.03 of this Agreement;
provided, however, that if the Master Servicer is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Master Servicer shall not be obligated to make P&I Advances
pursuant to Section 5.03 of this Agreement; and provided further, that any
failure to perform such duties or responsibilities caused by Ocwen's failure to
provide information required by Section 8.01 shall not be considered a default
by the Master Servicer as successor to Ocwen hereunder; provided, however, that
(1) it is understood and acknowledged by the parties hereto that there will be a
period of transition (not to exceed 120 days) before the actual servicing
functions can be fully transferred to the Master Servicer or any successor
Servicer appointed in accordance with the following provisions and (2) any
failure to perform such duties or responsibilities caused by Ocwen's failure to
provide information required by Section 8.01 of this Agreement shall not be
considered a default by the Master Servicer as successor to Ocwen. As
compensation therefor, the Master Servicer shall be entitled to the Servicing
Fee and all funds relating to the Ocwen Mortgage Loans to which Ocwen would have
been entitled if it had continued to act hereunder. Notwithstanding the above
and subject to the immediately following paragraph, the Master Servicer may, if
it shall be unwilling to so act, or shall, if it is unable to so act promptly
appoint or petition a court of competent jurisdiction to appoint, a Person that
satisfies the eligibility criteria set forth below as the successor to Ocwen
under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of Ocwen under this Agreement.

            Notwithstanding any provision in this Agreement to the contrary, for
a period of 30 days following the date on which Ocwen shall have received a
notice of termination pursuant to Section 8.01 of this Agreement, Ocwen or its
designee may appoint a successor Servicer that satisfies the eligibility
criteria of a successor Servicer set forth below, which appointment shall be
subject to the consent of the Depositor, the Seller, the Master Servicer, and
the Trustee, which consent shall not be unreasonably withheld or delayed;
provided that such successor Servicer agrees to fully effect the servicing
transfer within 120 days following the termination of Ocwen and to make all P&I
Advances that would otherwise be made by the Master Servicer under Section 8.01
as of the date of such appointment, and to reimburse Ocwen and/or the Master
Servicer for any unreimbursed P&I Advances they have made and any reimbursable
expenses that they may have incurred in connection with this Section 8.02. Any
proceeds received in connection with the appointment of such successor Servicer
shall be the property of Ocwen or its designee. This 30-day period shall
terminate immediately (i) at the close of business on the second Business Day of
such 30-day period if (A) Ocwen was terminated because of an Event of Default
described in Section 8.01(a)(vii) for failing to make a required P&I Advance,
and (B) Ocwen shall have failed to make (or cause to be made) such P&I Advance,
or shall fail to reimburse (or cause to be reimbursed) the Master Servicer for a
P&I Advance made by the Master Servicer, by the close of business on such second
Business Day, or (ii) at the close of business on the second Business Day
following the date (if any) during such 30-day period on which a P&I Advance is
due to be made, if Ocwen shall have failed to make (or caused to be made) such
P&I Advance, or Ocwen shall have failed to reimburse (or cause to be reimbursed)
the Master Servicer for such P&I Advance, by the close of business on such
second Business Day.

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            Notwithstanding anything herein to the contrary, in no event shall
the Trustee or the Master Servicer be liable for any Servicing Fee or for any
differential in the amount of the Servicing Fee paid hereunder and the amount
necessary to induce any successor Servicer to act as successor Servicer under
this Agreement and the transactions set forth or provided for herein.

            Any successor Servicer appointed under this Agreement must (i) be an
established mortgage loan servicing institution that is a Fannie Mae and Freddie
Mac approved seller/servicer, (ii) be approved by each Rating Agency by a
written confirmation from each Rating Agency that the appointment of such
successor Servicer would not result in the reduction or withdrawal of the then
current ratings of any outstanding Class of Certificates (without regard to the
Certificate Insurance Policy), (iii) have a net worth of not less than
$15,000,000, (iv) be reasonably acceptable to the Certificate Insurer and (v)
assume all the responsibilities, duties or liabilities of the related Servicer
(other than liabilities of the related Servicer hereunder incurred prior to
termination of such Servicer under Section 8.01 herein) under this Agreement as
if originally named as a party to this Agreement.

            (b) (1) All servicing transfer costs (including, without limitation,
servicing transfer costs of the type described in Section 8.02(a) and incurred
by the Trustee, the Master Servicer and any successor Servicer under paragraph
(b)(2) below) shall be paid by Ocwen upon presentation of reasonable
documentation of such costs, and if such predecessor or initial Servicer, as
applicable, defaults in its obligation to pay such costs, the successor
Servicer, the Master Servicer and the Trustee shall be entitled to reimbursement
therefor from the assets of the Trust Fund.

            (2) No appointment of a successor to a Servicer under this Agreement
shall be effective until the assumption by the successor of all of such
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and 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 related 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 related Servicer under
this Agreement, the Master Servicer shall act in such capacity as hereinabove
provided.

            SECTION 8.03. Notification to Certificateholders.

            (a) Upon any termination of the related Servicer or the Master
Servicer pursuant to Section 8.01(a) or (b) or any appointment of a successor to
such Servicer or the Master Servicer pursuant to Section 8.02, the Trustee shall
give prompt written notice thereof to 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 Servicer Event of Default or 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 all Holders
of Certificates notice of each such occurrence, unless such default or Servicer
Event of Default or Master Servicer Event of Default shall have been cured or
waived.

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            SECTION 8.04. Waiver of Servicer Events of Default.

            The Holders representing at least 66% of the Voting Rights evidenced
by all Classes of Certificates affected by any default, Servicer Event of
Default or Master Servicer Event of Default hereunder may waive such default,
Servicer Event of Default or Master Servicer Event of Default; provided,
however, that a Servicer Event of Default under clause (i) or (vii) of Section
8.01(a) may be waived only by all of the Holders of the Regular Certificates.
Upon any such waiver of a default, Servicer Event of Default or Master Servicer
Event of Default, such default, Servicer Event of 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, Servicer Event of Default or Master Servicer Event of Default or
impair any right consequent thereon except to the extent expressly so waived.

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                                   ARTICLE IX

             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

            SECTION 9.01. Duties of Trustee and Securities Administrator.

            The Trustee, prior to the occurrence of a Master Servicer Event of
Default and after the curing or waiver of all Master Servicer Events of Default
which may have occurred, and the Securities Administrator each undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement as duties of the Trustee and the Securities Administrator,
respectively. During the continuance of 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 its 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.

            Each of the Trustee and the Securities Administrator, upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to it, which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee or the Securities Administrator, as the case may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.

            The Trustee shall promptly remit to the related Servicer any
complaint, claim, demand, notice or other document (collectively, the "Notices")
delivered to the Trustee as a consequence of the assignment of any Mortgage Loan
hereunder and relating to the servicing of the Mortgage Loans; provided than any
such notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.

            No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator 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 or waiver of all such Master Servicer Events
      of Default which may have occurred with respect to the Trustee and at all
      times with respect to the Securities Administrator, the duties and
      obligations of the Trustee shall be determined solely by the express
      provisions of this Agreement, neither the Trustee nor the Securities
      Administrator shall 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 or the Securities Administrator and, in the

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      absence of bad faith on the part of the Trustee or the Securities
      Administrator, respectively, the Trustee or the Securities Administrator,
      respectively, 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 or the Securities Administrator,
      respectively, that conform to the requirements of this Agreement;

                  (ii) Neither the Trustee nor the Securities Administrator
      shall be liable for an error of judgment made in good faith by a
      Responsible Officer or Responsible Officers of the Trustee or an officer
      or officers of the Securities Administrator, respectively, unless it shall
      be proved that the Trustee or the Securities Administrator, respectively,
      was negligent in ascertaining the pertinent facts; and

                  (iii) Neither the Trustee nor the Securities Administrator
      shall be liable with respect to any action taken, suffered or omitted to
      be taken by it in good faith in accordance with the direction of the
      Holders of Certificates entitled to at least 25% of the Voting Rights
      relating to the time, method and place of conducting any proceeding for
      any remedy available to the Trustee or the Securities Administrator or
      exercising any trust or power conferred upon the Trustee or the Securities
      Administrator under this Agreement.

            SECTION 9.02. Certain Matters Affecting Trustee and Securities
      Administrator.

            (a) Except as otherwise provided in Section 9.01:

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

                  (ii) The Trustee and the Securities Administrator may consult
      with counsel of its selection and any advice of such counsel or any
      Opinion of Counsel shall be full and complete authorization and protection
      in respect of any action taken or suffered or omitted by it hereunder in
      good faith and in accordance with such advice or Opinion of Counsel;

                  (iii) Neither the Trustee nor the Securities Administrator
      shall 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 or the Securities Administrator, as the case may be, reasonable
      security or indemnity 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

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      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) Neither the Trustee nor the Securities Administrator
      shall be liable for any action taken, suffered or omitted by it in good
      faith and believed by it to be authorized or within the discretion or
      rights or powers conferred upon it by this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
      Default hereunder and after the curing or waiver of all Master Servicer
      Events of Default which may have occurred with respect to the Trustee and
      at all times with respect to the Securities Administrator, neither the
      Trustee nor the Securities Administrator shall 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 or the Securities Administrator 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 or the
      Securities Administrator, as applicable, not reasonably assured to the
      Trustee or the Securities Administrator by such Certificateholders, the
      Trustee or the Securities Administrator, as applicable, may require
      reasonable indemnity satisfactory to it 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 or attorneys and the Trustee shall not be responsible for any
      misconduct or negligence on the part of any agent or attorney appointed
      with due care by it hereunder;

                  (vii) The Trustee shall not be liable for any loss resulting
      from the investment of funds held in the Collection Account, for any loss
      resulting from the investment of funds held in the Reserve Fund or for any
      loss resulting from the redemption or sale of any such investment as
      therein authorized;

                  (viii) The Trustee shall not be deemed to have notice of any
      default, Master Servicer Event of Default or Servicer Event of Default
      unless a Responsible Officer of the Trustee has actual knowledge thereof
      or unless written notice of any event which is in fact such a default is
      received by a Responsible Officer of the Trustee at the Corporate Trust
      Office of the Trustee, and such notice references the Certificates and
      this Agreement; and

                  (ix) The rights, privileges, protections, immunities and
      benefits given to the Trustee, including, without limitation, its right to
      be indemnified, are extended to, and shall be enforceable by, each agent,
      custodian and other Person employed to act hereunder.

            (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

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such suit, action or proceeding instituted by the Trustee shall be brought in
its name 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 the
Cap Contracts on behalf of the Trust Fund in the form presented to it by the
Depositor and shall have no responsibility for the contents of the Cap
Contracts, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Trustee under the Cap Contracts at
closing shall be paid by the Depositor. Notwithstanding anything to the contrary
contained herein or in the Cap Contracts, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contracts.

            (d) None of the Securities Administrator, the Master Servicer, the
Servicer, the Seller, the Depositor, the Custodian or the Trustee shall be
responsible for the acts or omissions of the others, it being understood that
this Agreement shall not be construed to render those partners joint venturers
or agents of one another.

            SECTION 9.03. Trustee and Securities Administrator not Liable for
Certificates or Mortgage Loans.

            The recitals contained herein and in the Certificates (other than
the signature of the Securities Administrator, the authentication of the
Securities Administrator on the Certificates, the acknowledgments of the Trustee
contained in Article II and the representations and warranties of the Trustee in
Section 9.12) shall be taken as the statements of the Depositor and neither the
Trustee nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12) or of the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan or related document. The Trustee and the Securities Administrator
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 any Collection Account
by the related Servicer, other than with respect to the Securities Administrator
any funds held by it or on behalf of the Trustee in accordance with Section 3.23
and 3.24.

            SECTION 9.04. Trustee and Securities Administrator May Own
Certificates.

            Each of the Trustee and the Securities Administrator in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates and may transact business with other interested parties and their
Affiliates with the same rights it would have if it were not Trustee or the
Securities Administrator.

            SECTION 9.05. Fees and Expenses of Trustee and Securities
Administrator.

            The fees of the Trustee and the Securities Administrator hereunder
and of Wells Fargo under the Custodial Agreement shall be paid in accordance
with a side letter agreement with the Master Servicer and at the sole expense of
the Master Servicer. In addition, the Trustee, the Securities Administrator, the
Custodian and any director, officer, employee or agent of the

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Trustee, the Securities Administrator and the Custodian shall be indemnified by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator in connection with any 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 respective obligations and duties
under this Agreement, including the Cap Contracts and any and all other
agreements related hereto, other than any loss, liability or expense (i) for
which the Trustee is indemnified by the Master Servicer or any Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator pursuant to Section 11.01(g) or (iii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. In
addition, the Seller agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the last paragraph of Section 2.01,
including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. The indemnities in this Section 9.05 shall survive
the termination or discharge of this Agreement and the resignation or removal of
the Master Servicer, the Trustee, the Securities Administrator or the Custodian.
Any payment hereunder made by the Master Servicer to the Trustee shall be from
the Master Servicer's own funds, without reimbursement from REMIC I therefor.

            SECTION 9.06. Eligibility Requirements for Trustee and Securities
Administrator.

            The Trustee and the Securities Administrator 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 (or a member of a bank holding company whose capital and
surplus is at least $50,000,000) and 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 conditions so published. In case at any time the Trustee or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 9.07.

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            SECTION 9.07. Resignation and Removal of Trustee and Securities
Administrator.

            The Trustee and the Securities Administrator may at any time resign
and be discharged from the trust hereby created by giving written notice thereof
to the Depositor, to the Master Servicer, to the Securities Administrator (or
the Trustee, if the Securities Administrator resigns) and to the
Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor trustee or successor securities administrator
by written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee or Securities Administrator, as applicable, and to the
successor trustee or successor securities administrator, as applicable. A copy
of such instrument shall be delivered to the Certificateholders, the Trustee,
the Securities Administrator and the Master Servicer by the Depositor. If no
successor trustee or successor securities administrator shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee or Securities Administrator, as the
case may be, may, at the expense of the Trust Fund, petition any court of
competent jurisdiction for the appointment of a successor trustee, successor
securities administrator, Trustee or Securities Administrator, as applicable.

            If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 9.06 and shall
fail to resign after written request therefor by the Depositor, or if at any
time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or the Securities Administrator or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.

            The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee or the Securities Administrator and
appoint a successor trustee or successor securities administrator 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 or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.

            Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 8.08.

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            Notwithstanding anything to the contrary contained herein, the
Master Servicer and the Securities Administrator shall at all times be the same
Person.

            SECTION 9.08. Successor Trustee or Securities Administrator.

            Any successor trustee or successor securities administrator
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Depositor and its predecessor trustee or predecessor securities
administrator an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator 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 or
securities administrator herein. The predecessor trustee or predecessor
securities administrator shall deliver to the successor trustee or successor
securities administrator all Mortgage Loan Documents and related documents and
statements to the extent held by it hereunder, as well as all moneys, held by it
hereunder, and the Depositor and the predecessor trustee or predecessor
securities administrator 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 or successor securities administrator
all such rights, powers, duties and obligations.

            No successor trustee or successor securities administrator shall
accept appointment as provided in this Section unless at the time of such
acceptance such successor trustee or successor securities administrator shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor trustee or successor securities administrator shall not result in a
downgrading of any Class of Certificates by any Rating Agency, as evidenced by a
letter from each Rating Agency.

            Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section, the Depositor shall mail
notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.

            SECTION 9.09. Merger or Consolidation of Trustee or Securities
Administrator.

            Any corporation or association into which the Trustee or the
Securities Administrator 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 or the Securities Administrator
shall be a party, or any corporation or association succeeding to the business
of the Trustee or the Securities Administrator shall be the successor of the
Trustee or the Securities Administrator 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.

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            SECTION 9.10. 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 the REMIC I or property securing the same may at the time be located, the
Trustee shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 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 9.10 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 a defaulting 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 IX. 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.

            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 or co-trustee.

            SECTION 9.11. Appointment of Office or Agency.

            The Certificates may be surrendered for registration of transfer or
exchange at the Securities Administrator's office located at Sixth and
Marquette, Minneapolis, Minnesota 55479, and presented for final distribution at
the Corporate Trust Office of the Securities Administrator

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where notices and demands to or upon the Securities Administrator in respect of
the Certificates and this Agreement may be served.

            SECTION 9.12. Representations and Warranties.

            The Trustee hereby represents and warrants to the Master Servicer,
the Securities Administrator, the Servicer and the Depositor as applicable, as
of the Closing Date, that:

                  (i) It is a banking corporation duly organized, validly
      existing and in good standing under the laws of the State of New York.

                  (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 articles of association or bylaws or constitute a
      default (or an event which, with notice or lapse of time, or both, would
      constitute a default) under, or result in the breach of, any material
      agreement or other instrument to which it is a party or which is
      applicable to it or any of its assets.

                  (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.

                  (v) It is not in violation of, and its execution and delivery
      of this Agreement and its performance and compliance with the terms of
      this Agreement will not constitute a violation of, any law, any order or
      decree of any court or arbiter, or any order, regulation or demand of any
      federal, state or local governmental or regulatory authority, which
      violation, in its good faith and reasonable judgment, is likely to affect
      materially and adversely either the ability of it to perform its
      obligations under this Agreement or its financial condition.

                  (vi) No litigation is pending or, to the best of its
      knowledge, threatened against it, which would prohibit it from entering
      into this Agreement or, in its good faith reasonable judgment, is likely
      to materially and adversely affect either the ability of it to perform its
      obligations under this Agreement or its financial condition.

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                                   ARTICLE X

                                   TERMINATION

            SECTION 10.01. Termination Upon Repurchase or Liquidation of All
      Mortgage Loans.

            (a) Subject to Section 10.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator, the Servicer and the Trustee (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05 and
of the Servicer to make remittances to the Securities Administrator and the
Securities Administrator to make payments in respect of the REMIC I Regular
Interests, REMIC I Regular Interests or 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. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to the sum of (i) the greater of (A) the aggregate Purchase Price
of all the Mortgage Loans included in REMIC I, plus the appraised value of each
REO Property, if any, included in REMIC I, such appraisal to be conducted by an
appraiser mutually agreed upon by the Terminator and the Trustee in their
reasonable discretion and (B) the aggregate fair market value of all of the
assets of REMIC I (as determined by the Terminator and the Trustee, as of the
close of business on the third Business Day next preceding the date upon which
notice of any such termination is furnished to Certificateholders pursuant to
the third paragraph of this Section 10.01) plus (ii) any amounts due the
Servicer and the Master Servicer in respect of unpaid Servicing Fees, Master
Servicing Fees and outstanding P&I Advances and Servicing Advances plus (iii)
any Premium Amounts and Reimbursement Amounts owed to the Certificate Insurer
under this Agreement. If a termination pursuant to this Section 10.01(a) or
Section 10.01(b) will result in a claim under the Certificate Insurance Policy
or if any amount owed to the Certificate Insurer will not be fully reimbursed
after such termination, the consent of the Certificate Insurer shall be required
prior to the Terminator exercising such option.

            (b) The Master Servicer or, if the Master Servicer fails to exercise
such optional termination right, Ocwen (either the Master Servicer or Ocwen, the
"Terminator") shall have the right 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) above
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

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Certificates, the Holder of the Residual Certificates agrees, in connection with
any termination hereunder, to assign and transfer any portion of the Termination
Price 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. Notwithstanding the foregoing, the optional termination right may
only be exercised by Ocwen if (i) it receives written notification from the
Master Servicer that it will not exercise such optional termination right, (ii)
it provides written notice to the Authorized Officers of the Seller that it
intends to exercise such optional termination right and (iii) it receives
written authorization from the Authorized Officers of the Seller to exercise
such optional termination right.

            (c) Notice of the liquidation of the Certificates shall be given
promptly by the Securities Administrator by letter to the Certificateholders
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,
REMIC I Regular Interests or the Certificates will be made upon presentation and
surrender of the related Certificates at the office of the Securities
Administrator therein designated, (ii) the amount of any such final payment,
(iii) that no interest shall accrue in respect of the REMIC I Regular Interests,
REMIC I Regular Interests or 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 Securities Administrator. 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
Securities Administrator for deposit in the Distribution Account not later than
the Business Day prior to the Distribution Date on which the final distribution
on the Certificates an amount in immediately available funds equal to the
above-described Termination Price. The Securities Administrator shall remit to
the Servicer, the Master Servicer, the Trustee and the Custodian from such funds
deposited in the Distribution Account (i) any amounts which the Servicer would
be permitted to withdraw and retain from the Collection Account pursuant to
Section 3.09 as if such funds had been deposited therein (including all unpaid
Servicing Fees and all outstanding P&I Advances and Servicing Advances) and (ii)
any other amounts otherwise payable by the Securities Administrator to the
Master Servicer, the Trustee, the Custodian and the Servicer from amounts on
deposit in the Distribution Account pursuant to the terms of this Agreement
prior to making any final distributions pursuant to Section 10.01(d) below. Upon
certification to the Trustee by the Securities Administrator of the making of
such final deposit, the Trustee shall promptly release or cause to be released
to the Terminator the Mortgage Files for the remaining Mortgage Loans, and
Trustee shall execute all assignments, endorsements and other instruments
delivered to it and necessary to effectuate such transfer.

            (d) Upon presentation of the Certificates by the Certificateholders
on the final Distribution Date, the Securities Administrator shall distribute to
each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 5.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on

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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
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
10.01 shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Securities Administrator 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 Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. 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 funds. If within one year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Securities Administrator
shall pay to the Depositor all such amounts, 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 Securities Administrator as a result of such Certificateholder's failure
to surrender its Certificate(s) on the final Distribution Date for final payment
thereof in accordance with this Section 10.01. Any such amounts held in trust by
the Securities Administrator shall be held uninvested in an Eligible Account.

            SECTION 10.02. Additional Termination Requirements.

            (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
10.01, 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 by and 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 Securities Administrator 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 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 10.01, at the expense of the Trust Fund), the
Terminator shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each Trust REMIC
pursuant to this Section 10.02.

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            (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.

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                                   ARTICLE XI

                                REMIC PROVISIONS

            SECTION 11.01. 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 Securities Administrator 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 Interests in REMIC I. The Class A Certificates, the Mezzanine
Certificates, the Class B Certificates, the Class P Certificates and the Class
CE Certificates (exclusive of any right to receive payments from the Reserve
Fund) shall be designated as the Regular Interests in REMIC II and the Class
R-II Interest shall be designated as the Residual Interests in REMIC II. The
Trustee shall not permit the creation of any "interests" in each 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 Securities Administrator 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 each Trust REMIC that involve the Internal Revenue Service or state
tax authorities), including the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Securities Administrator, 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 related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.

            (d) The Securities Administrator shall prepare and file and the
Trustee shall sign all of the Tax Returns in respect of each REMIC created
hereunder. The expenses of preparing and filing such returns shall be borne by
the Securities Administrator without any right of reimbursement therefor.

            (e) The Securities Administrator 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
taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Securities Administrator

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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 upon
receipt of additional reasonable compensation, (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 Securities Administrator,
within ten (10) days after the Closing Date, all information or data that the
Securities Administrator 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) To the extent in the control of the Trustee or the Securities
Administrator, each such Person (i) 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, (ii) shall
not take any action, 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 (A) endanger the status of each Trust
REMIC as a REMIC or (B) 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 such action or inaction is permitted under this Agreement or the Trustee
and the Securities Administrator have received an Opinion of Counsel, addressed
to the them (at the expense of the party seeking to take such action but in no
event at the expense of the Trustee or the Securities Administrator) 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 (iii) shall
the Securities Administrator 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 Securities
Administrator 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 Securities
Administrator 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 Securities Administrator 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. The
Trustee may consult with counsel to make such written advice, and the cost of
same shall be home 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.

            (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

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tax laws, such tax shall be charged (i) to the Trustee pursuant to Section
11.03, if such tax arises out of or results from a breach by the Trustee of any
of its obligations under this Article XI, (ii) to the Securities Administrator
pursuant to Section 11.03, if such tax arises out of or results from a breach by
the Securities Administrator of any of its obligations under this Article XI,
(iii) to the Master Servicer pursuant to Section 11.03, if such tax arises out
of or results from a breach by the Master Servicer of any of its obligations
under Article IV or under this Article XI, (iv) to the Servicer pursuant to
Section 11.03, if such tax arises out of or results from a breach by the
Servicer of any of its obligations under Article III or under this Article XI,
or (v) in all other cases, against amounts on deposit in the Distribution
Account and shall be paid by withdrawal therefrom.

            (h) The Securities Administrator 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.

            (i) Following the Startup Day, neither the Securities Administrator
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.

            (j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any Trust REMIC will receive a fee
or other compensation for services nor 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.

            (k) The Securities Administrator shall apply for an employer
identification number with the Internal Revenue Service via a Form SS-4 or other
comparable method for each REMIC. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.

            SECTION 11.02. Prohibited Transactions and Activities.

            None of the Depositor, the Servicer, the Securities Administrator,
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 X of this
Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a
purchase of Mortgage Loans pursuant to Article II of this Agreement), nor
acquire any assets for any Trust REMIC (other than REO Property acquired in
respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in
the Collection Account or the Distribution Account for gain, nor 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 and the Securities
Administrator (at the expense of

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the party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) 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 11.03. Indemnification.

            (a) The Trustee agrees to be liable for any taxes and costs incurred
by the Trust Fund, the Depositor, the Master Servicer, the Securities
Administrator or the Servicers including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator or the Servicers as a result of
the Trustee's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Trustee set forth in this Agreement.

            (b) Ocwen agrees to indemnify the Trust Fund, the Depositor, the
Master Servicer, the Securities Administrator and the Trustee for any taxes and
costs including any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor, the Master Servicer, the Securities Administrator or
the Trustee, as a result of Ocwen's failure to perform its covenants set forth
in Article III in accordance with the standard of care of Ocwen set forth in
this Agreement.

            (c) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, Ocwen and the Trustee for any taxes and costs including any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor, Ocwen or the Trustee, as a result of the Master Servicer's failure to
perform its covenants set forth in Article IV in accordance with the standard of
care of the Master Servicer set forth in this Agreement.

            (d) The Securities Administrator agrees to be liable for any taxes
and costs incurred by the Trust Fund, the Depositor, Ocwen or the Trustee
including any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor, Ocwen or the Trustee as a result of the Securities
Administrator's failure to perform its covenants set forth in this Article XI in
accordance with the standard of care of the Securities Administrator set forth
in this Agreement.

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                                  ARTICLE XII

                            MISCELLANEOUS PROVISIONS

            SECTION 12.01. Amendment.

            This Agreement may be amended from time to time by the Depositor,
Ocwen, the Master Servicer, the Securities Administrator and the Trustee, but
without the consent of any of the Certificateholders, (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 Certificate Insurance Policy which shall not be
inconsistent with the provisions of this Agreement, provided that the prior
consent of the Certificate Insurer shall be required for any amendment that
affects its rights, duties or obligations and that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect in
any material respect the interests of any Certificateholder or the Certificate
Insurer; provided that any such amendment shall be deemed not to adversely
affect in any material respect the interests of the Certificateholders and no
such Opinion of Counsel shall be required if the Person requesting such
amendment obtains a letter from each Rating Agency stating that such amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates (without regard to the Certificate Insurance
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 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, Ocwen, the Master Servicer, the Securities Administrator and the
Trustee with the consent of the Holders of Certificates entitled to at least 66%
of the Voting Rights for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of 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 or the Certificate Insurer 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 12.01, Certificates registered in the name of the Depositor or a
Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates. Without limiting the generality
of the foregoing, any amendment to this Agreement required in connection with
the compliance with or the clarification of any reporting obligations described
in Section 5.06 hereof shall not require the consent of any Certificateholder
and without the need for any Opinion of Counsel or Rating Agency confirmation.

            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

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Counsel to the effect that such amendment is permitted hereunder and 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 that such amendment is authorized or
permitted by this Agreement.

            Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.

            It shall not be necessary for the consent of Certificateholders
under this Section 12.01 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 12.01 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 .

            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 12.02. 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
Depositor at the expense of the Certificateholders, but only upon direction of
the Trustee accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of 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.

            SECTION 12.03. 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

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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 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 12.04. 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 regard to
conflicts of laws principles thereof.

            SECTION 12.05. Notices.

            All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when received if sent by facsimile,
receipt confirmed, 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 (a) in the case of the Depositor, ACE Securities Corp.,
AMACAR GROUP, 6525 Morrison Boulevard, Suite 318, Charlotte, North Carolina
28211, Attention: Juliana Johnson (telecopy number:(704) 365-1362), or such
other address or telecopy number as may hereafter be furnished to the Servicers,
the Master Servicer, the Securities Administrator and the Trustee in writing by
the Depositor, (b) in the case of Ocwen, Ocwen Federal Bank FSB, 1675 Palm Beach
Lakes Boulevard, Suite 10A, West Palm Beach, Florida 33401, Attention: Secretary
(telecopy number: (561) 682-8177), or such other address or telecopy number as
may hereafter be furnished to the Trustee, the Master Servicer, the Securities
Administrator and the Depositor in writing by Ocwen, (c) in the case of the
Master Servicer and the Securities Administrator, P.O. Box 98, Columbia,
Maryland 21046 and for overnight delivery to 9062 Old Annapolis Road, Columbia,
Maryland 21045, Attention: Ace Securities Corp., 2004-HE4 (telecopy number:
(410) 715-2380), or such other address or telecopy number as may hereafter be
furnished to the Trustee, the Depositor and the Servicers in writing by the
Master Servicer or the Securities Administrator and (d) in the case of the
Trustee,

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at the Corporate Trust Office or such other address or telecopy number as the
Trustee may hereafter be furnish to the Servicers, the Master Servicer, the
Securities Administrator and the Depositor in writing by the Trustee. 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 12.06. Severability of Provisions.

            If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

            SECTION 12.07. Notice to Rating Agencies.

            The Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies with respect to each of the following of which a Responsible
Officer has actual knowledge:

            1. Any material change or amendment to this Agreement;

            2. The occurrence of any Servicer Event of Default or Master
      Servicer Event of Default that has not been cured or waived;

            3. The resignation or termination of the Servicer, 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;

            6. Any change in the location of the Distribution Account; and

            7. Any event that would result in the inability of the Trustee as
      successor Servicer to make advances regarding delinquent Mortgage Loans.

            In addition, the Securities Administrator shall promptly make
available to each Rating Agency copies of each report to Certificateholders
described in Section 5.02.

            The Servicer shall make available to each Rating Agency copies of
the following:

            8. Each annual statement as to compliance described in Section 3.17;
      and

            9. Each annual independent public accountants' servicing report
      described in Section 3.18.

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            Any such notice pursuant to this Section 12.07 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 Standard
& Poor's, a division of the McGraw-Hill Companies, Inc., 55 Water Street, New
York, New York 10041; to DBRS, [ADDRESS]; and to Moody's Investors Service,
Inc., 99 Church Street, New York, New York 10007 or such other addresses as the
Rating Agencies may designate in writing to the parties hereto.

            SECTION 12.08. 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 12.09. 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, on behalf of the Trust
and for the benefit of the Certificateholders, 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, on behalf of the Trust and for the benefit of the
Certificateholders, 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 shall be deemed to be a grant by the Depositor to the Trustee, on
behalf of the Trust and for the benefit of the Certificateholders, 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 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, on behalf of the Trust and for the
benefit of the Certificateholders, 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, on behalf of the
Trust and for the benefit of the Certificateholders.

                                      184
<PAGE>

            SECTION 12.10. Survival of Indemnification.

            Any and all indemnities to be provided by any party to this
Agreement shall survive the termination and resignation of any party hereto and
the termination of this Agreement.

            SECTION 12.11. Servicing Agreements.

            With respect to the Fremont Mortgage Loans and Select Portfolio
Mortgage Loans, in the event of any conflict between the provisions of this
Agreement and the provisions of the related Servicing Agreement, the provisions
of the related Servicing Agreement shall control.

                                      185
<PAGE>

                  IN WITNESS WHEREOF, the Depositor, the Servicer, the Master
Servicer, the Securities Administrator 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.

                                 ACE SECURITIES CORP.,
                                 as Depositor

                                 By: /s/ Douglas K. Johnson
                                    -----------------------------------------
                                 Name: Douglas K. Johnson
                                 Title: President

                                 By: /s/ Evelyn Echevarria
                                    -----------------------------------------
                                 Name: Evelyn Echevarria
                                 Title: Vice President

                                 OCWEN FEDERAL BANK FSB
                                 as Servicer

                                 By: /s/ Richard Delgado
                                    -----------------------------------------
                                 Name: Richard Delgado
                                 Title: Vice President

                                 HSBC BANK USA, NATIONAL ASSOCIATION
                                 not in its individual capacity but solely as
                                 Trustee

                                 By: /s/ Susie Moy
                                    -----------------------------------------
                                 Name: Susie Moy
                                 Title: Vice President

                                 WELLS FARGO BANK, N.A.
                                 as Master Servicer and Securities Administrator

                                 By: /s/ Stacey Taylor
                                    -----------------------------------------
                                 Name: Stacey Taylor
                                 Title: Assistant Vice President

<PAGE>

                                 ACKNOWLEDGED AND AGREED FOR PURPOSES OF
                                 SECTION 9.05:

                                 DB STRUCTURED PRODUCTS, INC

                                 By: /s/ Susan Valenti
                                    -----------------------------------------
                                 Name: Susan Valenti
                                 Title: Vice President

                                 By: /s/ Peter J. Cerwin
                                    -----------------------------------------
                                 Name: Peter J. Cerwin
                                 Title: Director

<PAGE>

                                 ACKNOWLEDGED AND AGREED FOR PURPOSES OF
                                 SECTION 7.08 AND 7.09:

                                 THE MURRAYHILL COMPANY

                                 By: /s/ Kevin Kanouff
                                    -----------------------------------------
                                 Name: Kevin Kanouff
                                 Title: President and General Counsel

                                        Acknowledged and Agreed for purposes of
                                        Section 7.08 and 7.09:

                                        THE MURRAYHILL COMPANY

                                         By:/s/
                                            ------------------------------------
                                         Name:
                                         Title:

<PAGE>

STATE OF              )
                      ) ss.:
COUNTY OF             )

            On the ___ day of November 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., 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]                        My commission expires

<PAGE>

STATE OF              )
                      ) ss.:
COUNTY OF             )

            On the ___ day of November 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of ACE Securities Corp., 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]                        My commission expires

<PAGE>

STATE OF        )
                ) ss.:
COUNTY OF       )

            On the ___ day of November 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Ocwen Federal Bank FSB, one of the federal chartered
savings banks that executed the within instrument, and also known to me to be
the person who executed it on behalf of said federally chartered savings bank,
and acknowledged to me that such federally chartered savings bank 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]                        My commission expires

<PAGE>

STATE OF           )
                   ) ss.:
COUNTY OF          )

            On the ___ day of November 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of Wells Fargo Bank, N.A., 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]                        My commission expires

<PAGE>

STATE OF         )
                 ) ss.:
COUNTY OF        )

            On the ___ day of November 2004, before me, a notary public in and
for said State, personally appeared _____________________ known to me to be a
_____________________ of HSBC Bank USA, National Association, 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]                        My commission expires

<PAGE>

                                   EXHIBIT A-1

                       FORM OF CLASS A-[1][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").

      UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
      THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
      IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
      AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY
      PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
      REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

<PAGE>

<TABLE>
<S>                                                  <C>
Series 2004-HE4, Class A-[1][2]                      Aggregate Certificate Principal Balance of the Class
                                                     A-[1][2]Certificates as of the Issue Date:
                                                     $

Pass-Through Rate: Variable                          Denomination:  $

Date of Pooling and  Servicing  Agreement            Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date:  November 1, 2004

First Distribution Date: December 25, 2004           Trustee: HSBC Bank USA, National Association

No.__                                                Issue Date: November 29, 2004
                                                     CUSIP:________________
</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-1-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE4
                      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, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
      SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
      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 ________________ 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-[1][2]Certificates
as of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-[1][2] Certificates in REMIC II created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among ACE
Securities Corp., as depositor (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), Wells Fargo Bank, N.A. as
master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), Ocwen Federal Bank FSB, as servicer (the
"Servicer") and HSBC Bank USA, National Association as trustee (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 such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (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-[1][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 Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A-[1][2] Certificates the aggregate initial Certificate Principal Balance of
which is in excess of the lesser

                                     A-1-3
<PAGE>

of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-[1][2] Certificates, 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 Securities Administrator of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Securities Administrator 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 be a
rate per annum equal to the lesser of (i) One-Month LIBOR plus [_____]%, 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 [_____]%, in the case of any Distribution Date
thereafter and (ii) the applicable 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 Certificate 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 and payments received
pursuant to the Cap Contracts, 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, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer 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 Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an

                                     A-1-4
<PAGE>

assignment in the form below or other written instrument of transfer in form
satisfactory to the Securities Administrator 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 Securities Administrator 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, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer 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, the
Securities Administrator, the Servicer 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 Securities Administrator 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 neither the Trustee nor the Securities Administrator assumes any
responsibility for their correctness.

            Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-1-5
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Class A-[1][2] Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                     Authorized Signatory

<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
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties
                                                             -------------------
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

    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 Certificate 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 or the Securities Administrator 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

<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.

<PAGE>

                                   EXHIBIT A-2

         FORM OF CLASS M-[1][2][3][4][5][6][7][8][9][10][11] 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").

      UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
      THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
      IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
      AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY
      PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
      REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

      THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES [[,/AND] CLASS
      M-1 CERTIFICATES [,/AND] CLASS M-2 CERTIFICATES[,/AND] CLASS M-3
      CERTIFICATES [,/AND] CLASS M-4 CERTIFICATES [,/AND] CLASS M-5
      CERTIFICATES] [,/AND] CLASS M-6 CERTIFICATES] [,/AND] CLASS M-7
      CERTIFICATES] [,/AND] CLASS M-8 CERTIFICATES] [,/AND] CLASS M-9
      CERTIFICATES] [,/AND] CLASS M-10 CERTIFICATES]TO THE EXTENT DESCRIBED IN
      THE AGREEMENT REFERRED TO HEREIN.

      ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
      REPRESENTATIONS SET FORTH IN SECTION 6.02(c) OF THE AGREEMENT REFERRED TO
      HEREIN.

      THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY
      THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO AS
      DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE
      INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF
      THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW.
      ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL
      BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR NAMED HEREIN.

<PAGE>

<TABLE>
<S>                                                <C>
Series 2004-HE4, Class                             Aggregate Certificate Principal Balance of the
M-[1][2][3][4][5][6][7][8][9][10][11]              Class M-[1][2][3][4][5][6][7][8][9][10][11]
                                                   Certificates as of the Issue Date: $______________

Pass-Through Rate: Variable                        Denomination: $______________

Date of Pooling and Servicing Agreement            Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: November 1, 2004

First Distribution Date: December 25, 2004         Trustee: HSBC Bank USA, National Association

No.___                                             Issue Date: November 29, 2004

                                                   CUSIP:_________________
</TABLE>

                                     A-2-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE4
                      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, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
      SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
      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 _____________________ 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][2][3][4][5][6][7][8][9][10][11] Certificates as of the Issue Date) in that
certain beneficial ownership interest evidenced by all the Class
M-[1][2][3][4][5][6][7][8][9][10][11] Certificates in REMIC II created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among ACE Securities Corp., as depositor (hereinafter called the
"Depositor", which term includes any successor entity under the Agreement),
Wells Fargo Bank, N.A. as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), Ocwen Federal Bank FSB as
servicer (the "Servicer") and HSBC Bank USA, National Association, as trustee
(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 such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the Business Day immediately
preceding such Distribution Date (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][2][3][4][5][6][7][8][9][10][11] 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 Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date

                                     A-2-3
<PAGE>

immediately prior to such Distribution Date and is the registered owner of Class
M-[1][2][3][4][5][6][7][8][9][10][11] Certificates the aggregate initial
Certificate Principal Balance of which is in excess of the lesser of (i)
$5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal
Balance of the Class M-[1][2][3][4][5][6][7][8][9][10][11] Certificates, 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 Securities Administrator of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Securities Administrator 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 [____]% , 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 [____]%, in the case of any Distribution Date
thereafter and (ii) the applicable 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 Certificate 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 and payments received
pursuant to the Cap Contracts, 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, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer 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.

                                     A-2-4
<PAGE>

            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 Securities Administrator 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 Securities Administrator 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.

            Any transferee of this Certificate shall be deemed to make the
representations set forth in Section 6.02(c) of the Agreement.

            No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Securities Administrator 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, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer 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, the
Securities Administrator, the Servicer 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 Securities Administrator 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.

                                     A-2-5
<PAGE>

            The recitals contained herein shall be taken as statements of the
Depositor and neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

            Unless the certificate of authentication hereon has been executed by
the Securities Administrator by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-2-6
<PAGE>

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

Dated:

                                       WELLS FARGO BANK, N.A.
                                       as Securities Administrator

                                       By:
                                          --------------------------------------
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Class M-[1][2][3][4][5][6][7][8][9][10][11]
Certificates referred to in the within-mentioned Agreement.

                                       WELLS FARGO BANK, N.A.
                                       as Securities Administrator

                                       By:
                                          --------------------------------------
                                                    Authorized Signatory

<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
                                                             ------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties
                                                             ------------------
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     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 Certificate 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 Securities Administrator 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

<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.

<PAGE>

                                   EXHIBIT A-3

                          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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
      CERTIFICATES AND THE MEZZANINE CERTIFICATES, AS DESCRIBED IN THE AGREEMENT
      REFERRED TO HEREIN.

      THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY
      THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO AS
      DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, FOLLOWING THE
      INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF
      THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW.
      ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL
      BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR NAMED HEREIN.

      THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
      SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
      THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
      TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
      APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE MEANING OF
      AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT ("REGULATION S"), OR (2)
      WITHIN THE UNITED STATES TO (A) "QUALIFIED INSTITUTIONAL BUYERS" WITHIN
      THE MEANING OF AND IN COMPLIANCE WITH RULE 144A UNDER THE ACT ("RULE
      144A") OR (B) TO INSTITUTIONAL INVESTORS THAT ARE "ACCREDITED INVESTORS"
      WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF "REGULATION D"
      UNDER THE ACT.

      [THIS CERTIFICATE IS A REGULATION S TEMPORARY GLOBAL CERTIFICATE FOR
      PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933,
      AS AMENDED (THE "SECURITIES ACT"). PRIOR TO THE DATE THAT IS 40 DAYS AFTER
      THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF THE OFFERED
      CERTIFICATES AND (II) THE CLOSING DATE, THIS

<PAGE>

      CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
      THE UNITED STATES OR TO A U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM
      THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]

      [NO BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE
      SHALL BE ENTITLED TO RECEIVE PAYMENTS OF PRINCIPAL OR INTEREST HEREIN
      UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE
      TERMS OF THE AGREEMENT (AS DEFINED HEREIN).]

      [THE HOLDER OF THIS REGULATION S PERMANENT GLOBAL CERTIFICATE BY ITS
      ACCEPTANCE HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
      CERTIFICATE WITHIN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN
      REGULATION S UNDER THE SECURITIES ACT) PRIOR TO THE DATE WHICH IS THE
      LATER OF (I) 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND (II) THE DATE
      ON WHICH THE REQUISITE CERTIFICATIONS ARE DUE TO AND PROVIDED TO THE
      TRUSTEE AND SECURITIES ADMINISTRATOR PURSUANT TO THE AGREEMENT (AS DEFINED
      BELOW), EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
      OF THE SECURITIES ACT.]

      NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
      TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE
      AGREEMENT.

                                     A-3-2
<PAGE>

<TABLE>
<S>                                                    <C>
Series ACE 2004-HE4, Class B                           Aggregate Certificate Principal Balance of
                                                       the Class B Certificates as of the Issue
                                                       Date: $

Pass-Through Rate: Variable                            Denomination: $

Date of Pooling and Servicing Agreement                Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: November 1, 2004

First Distribution Date: December 25, 2004             Trustee: HSBC Bank USA, National Association

No. ______                                             Issue Date: November 29, 2004
                                                       CUSIP:
</TABLE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE4
                      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, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
      SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
      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 _______________ 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 ACE Securities
Corp., as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Wells Fargo Bank, N.A., as master
servicer (the "Master Servicer"), and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB, as servicer (the "Servicer") and HSBC
Bank USA, National Association, as trustee (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.

                                     A-3-3
<PAGE>

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following such 25th day (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (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 Securities Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B Certificates
the aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B Certificates, 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
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator 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 _____%, 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 _____%, in the case of any Distribution Date thereafter and
(ii) the applicable 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
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 and payments received pursuant to
the Cap Contracts, 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.

                                     A-3-4
<PAGE>

      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, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer 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 Securities Administrator 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 Securities
Administrator 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 Securities Administrator 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.

      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 Securities Administrator shall require
receipt of (i) if such transfer is purportedly being made in reliance upon Rule
144A or Regulation S 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 B-1, (ii) if such transfer is purportedly being made in reliance upon
Rule 501(a) 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 form attached to the Agreement as Exhibit B-2
and (iii) 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

                                     A-3-5
<PAGE>

the Trust Fund or of the Depositor, the Trustee, the Master Servicer or the
Securities Administrator 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. None of the Depositor, the Trustee or the
Securities Administrator 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, the Master Servicer
and the Securities Administrator against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

      No transfer of this Certificate shall be made to any person unless the
Transferee provides a certification pursuant to Section 6.02(d) of the
Agreement.

      The Depositor, the Master Servicer, the Trustee, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer 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, the
Securities Administrator, the Servicer 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 Securities Administrator 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 neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the
Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-3-6
<PAGE>

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

Dated:
                                        WELLS FARGO BANK, N.A.
                                        as Securities Administrator

                                        By:
                                           -------------------------------------
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Class B Certificates referred to in the
within-mentioned Agreement.

                                        WELLS FARGO BANK, N.A.
                                        as Securities Administrator

                                        By:
                                           -------------------------------------
                                                   Authorized Signatory

<PAGE>

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

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

Dated:

                                           -------------------------------------
                                           Signature by or on behalf of assignor

                                           -------------------------------------
                                           Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

            The assignee should include the following for purposes of
distribution:

            Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
for the account of ____________________________________________________________,
account number ____________________, or, if mailed by check, to ________________
_____________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
_____________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or _______________________________________, as its
agent.

<PAGE>

                                   EXHIBIT A-4

                       FORM OF CLASS CE-[1][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
      MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED
      TO HEREIN.

      THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
      SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
      THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
      TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
      APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE MEANING OF
      AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT ("REGULATION S"), OR (2)
      WITHIN THE UNITED STATES TO (A) "QUALIFIED INSTITUTIONAL BUYERS" WITHIN
      THE MEANING OF AND IN COMPLIANCE WITH RULE 144A UNDER THE ACT ("RULE
      144A") OR (B) TO INSTITUTIONAL INVESTORS THAT ARE "ACCREDITED INVESTORS"
      WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF "REGULATION D"
      UNDER THE ACT.

      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.

      NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
      TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE
      AGREEMENT.

<PAGE>

<TABLE>
<S>                                             <C>
Series 2004-HE4, Class CE-[1][2]                Aggregate Certificate Principal Balance of the
                                                Class CE-[1][2] Certificates as of the Issue
                                                Date: $______________

Pass-Through Rate: Variable                     Denomination: $_________________

Cut-off Date and date of Pooling and            Master Servicer: Wells Fargo Bank, N.A.
Servicing Agreement: November 1, 2004

First Distribution Date: December 25, 2004      Trustee: HSBC Bank USA, National Association

No. __                                          Issue Date: November 29, 2004
</TABLE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE4
                      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, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
      SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
      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 ________________ 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-[1][2]
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class CE-[1][2] Certificates in REMIC II created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among ACE Securities Corp., as depositor (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Wells Fargo Bank, N.A., as master servicer (the "Master Servicer") and
securities administrator (the "Securities Administrator"), Ocwen Federal Bank
FSB, as servicer (the "Servicer") and HSBC Bank USA, National Association, as
trustee (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

                                     A-4-2
<PAGE>

the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

            Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (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-[1][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 Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
CE-[1][2] Certificates the aggregate initial Certificate Principal Balance of
which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the
aggregate initial Certificate Principal Balance of the Class CE-[1][2]
Certificates, 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 Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
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 Certificate 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, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer 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

                                     A-4-3
<PAGE>

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 Securities Administrator 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 Securities Administrator 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 Securities Administrator 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 B-1,
(ii) if such transfer is purportedly being made in reliance upon Rule 501(a)
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 form attached to the Agreement as Exhibit B-2 and (iii) 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, the
Master Servicer or the Securities Administrator 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. None of the Depositor,
the Trustee or the Securities Administrator 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, the Master Servicer
and the Securities Administrator 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 6.02(c) of the Agreement.

                                     A-4-4
<PAGE>

            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 Securities Administrator 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, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer 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, the
Securities Administrator, the Servicer 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 Securities Administrator 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 neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

            Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-4-5
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                       Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Class CE-[1][2] Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                       Authorized Officer

<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
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties
                                                             -------------------
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

    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 Certificate 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 Securities Administrator 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

<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.

<PAGE>

                                   EXHIBIT A-5

                               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 (THE "ACT"), OR UNDER ANY STATE
      SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
      THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
      TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
      APPLICABLE LAWS AND (1) OUTSIDE OF THE UNITED STATES WITHIN THE MEANING OF
      AND IN COMPLIANCE WITH REGULATION S UNDER THE ACT ("REGULATION S"), OR (2)
      WITHIN THE UNITED STATES TO (A) "QUALIFIED INSTITUTIONAL BUYERS" WITHIN
      THE MEANING OF AND IN COMPLIANCE WITH RULE 144A UNDER THE ACT ("RULE
      144A") OR (B) TO INSTITUTIONAL INVESTORS THAT ARE "ACCREDITED INVESTORS"
      WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF "REGULATION D"
      UNDER THE ACT.

      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.

      NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
      TRANSFEREE PROVIDES A CERTIFICATION PURSUANT TO SECTION 6.02(c) OF THE
      AGREEMENT.

<PAGE>

<TABLE>
<S>                                              <C>
Series 2004-HE4, Class P                         Aggregate Certificate Principal Balance
                                                 of the Class P Certificates as of the
                                                 Issue Date: $100.00

Cut-off Date and date of Pooling and             Denomination: $100.00
Servicing Agreement: November 1, 2004

First Distribution Date: December 25, 2004       Master Servicer: Wells Fargo Bank, N.A.

No. __                                           Trustee: HSBC Bank USA, National
                                                 Association

                                                 Issue Date: November 29, 2004
</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-5-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE4
                      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, fixed and
adjustable-rate, first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
      SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
      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____________________ 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 ACE Securities
Corp., as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Wells Fargo Bank, N.A., as master
servicer (the "Master Servicer"), and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB, as servicer (the "Servicer") and HSBC
Bank USA, National Association, as trustee (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 such 25th day (a "Distribution Date"),
commencing on the First Distribution Date specified above, to the Person in
whose name this Certificate is registered on the last Business Day of the
calendar month immediately preceding the month in which the related Distribution
Date occurs (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 Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
P Certificates

                                     A-5-3
<PAGE>

the aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class P Certificates, 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
Securities Administrator of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator 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 Certificate 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, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer 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 Securities Administrator 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 Securities Administrator 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

                                     A-5-4
<PAGE>

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 Securities
Administrator 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 B-1, (ii) if such transfer is purportedly being made in
reliance upon Rule 501(a) 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 form attached to the Agreement as
Exhibit B-2 and (iii) 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, the Master Servicer or the Securities Administrator 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. None of the Depositor, the Trustee or the Securities
Administrator 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, the Master Servicer and the Securities Administrator
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 6.02(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 or exchange
of Certificates, but the Securities Administrator 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, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer 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, the
Securities Administrator, the Servicer nor any such agent shall be affected by
notice to the contrary.

                                     A-5-5
<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 Securities Administrator 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 neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

            Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-5-6
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                       Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                       Authorized Officer

<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
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties
                                                             -------------------
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     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 Certificate 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 Securities Administrator 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

<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.

<PAGE>

                                   EXHIBIT A-6

                           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 REPRESENTS
      THE SOLE "RESIDUAL INTEREST" IN EACH "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 6.02 OF THE 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 6.02 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
      SECURITIES ADMINISTRATOR 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

<PAGE>

      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 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 6.02(d) OF THE AGREEMENT
      REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
      PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<S>                                                 <C>
Series 2004-HE4, Class R                            Aggregate Percentage Interest of the Class R
                                                    Certificates as of the Issue Date: 100.00%

Date of Pooling and Servicing Agreement             Master Servicer: Wells Fargo Bank, N.A.
and Cut-off Date: November 1, 2004

First Distribution Date: December 25, 2004          Trustee: HSBC Bank USA, National Association

No __                                               Issue Date: November 29, 2004
</TABLE>

                                     A-6-2
<PAGE>

          ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2004-HE4
                      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, fixed and
adjustable-rate first and second lien mortgage loans (the "Mortgage Loans")
formed and sold by

                              ACE SECURITIES CORP.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ACE
      SECURITIES CORP., THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
      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.

                                     A-6-3
<PAGE>

            This certifies that _______________ 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 R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among ACE Securities
Corp., as depositor (hereinafter called the "Depositor", which term includes any
successor entity under the Agreement), Wells Fargo Bank, N.A., as master
servicer (the "Master Servicer") and securities administrator (the "Securities
Administrator"), Ocwen Federal Bank FSB, as the servicer (the "Servicer") and
HSBC Bank USA, National Association, as trustee (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 Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
R Certificates, 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 Securities Administrator of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
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 Certificate 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

                                     A-6-4
<PAGE>

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, the Securities Administrator, the
Servicer and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Servicer 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 Securities Administrator 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 Securities Administrator 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, 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 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 Securities Administrator 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 B-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, the Master Servicer or the Securities Administrator 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. None of the
Depositor, the Trustee or the Securities

                                     A-6-5
<PAGE>

Administrator 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, the Master Servicer and the Securities Administrator
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 6.02 of the Agreement.

            Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Securities
Administrator (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
representing the beneficial ownership of the residual interests in each of REMIC
I and REMIC II, (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 6.02 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 any portion of the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon any
REMIC.

            No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Securities Administrator 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, the Securities
Administrator, the Servicer and any agent of the Depositor, the Master Servicer,
the Trustee, the Securities Administrator or the Servicer 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,

                                     A-6-6
<PAGE>

the Securities Administrator, the Servicer 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 Securities Administrator 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 neither the Trustee nor the Securities Administrator assume any
responsibility for their correctness.

            Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-6-7
<PAGE>

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

Dated:
                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                       Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Class R Certificates referred to in the
within-mentioned Agreement.

                                           WELLS FARGO BANK, N.A.
                                           as Securities Administrator

                                           By:
                                              ----------------------------------
                                                     Authorized Signatory

<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
                                                             -------------------
                                                               (Cust) (Minor)
                                                             under Uniform Gifts
                                                                to Minors Act
TEN ENT - as tenants by the entireties
                                                             -------------------
                                                                   (State)
JT TEN  - as joint tenants with right
          if survivorship and not as
          tenants in common

     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 Certificate 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 Securities Administrator 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

                                     B-1-2
<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.

                                     B-1-3
<PAGE>

                                   EXHIBIT B-1
                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                     [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE4

      Re:   ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE4
            Asset Backed Pass-Through Certificates
            Class B, Class CE-1, Class CE-2, Class P and Class R Certificates

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
November 1, 2004, among ACE Securities Corp. as Depositor, Ocwen Federal Bank
FSB as Servicer, Wells Fargo Bank, N.A. as Master Servicer and Securities
Administrator and HSBC Bank USA, National Association as trustee (the "Pooling
and Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.

                                     B-1-4
<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:

                                     B-1-5
<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                        [Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE4

            Re:   ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE4
                  Asset Backed Pass-Through Certificates
                  Class B, Class CE-1, Class CE-2, Class P and Class R
                  Certificates

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.

3. The Transferee: (a) is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") (each, a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. ss.12510.3-101 or (b) [[for Class CE-1, Class CE-2,
Class P and Class R] has provided the Securities Administrator with an opinion
of counsel on which the Trustee, the Depositor, the Master Servicer, the
Securities Administrator and the Servicer may rely, acceptable to and in

                                     B-1-6
<PAGE>

form and substance satisfactory to the Trustee to the effect that the purchase
of Certificates is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under ERISA or Section 4975 of
the Code and will not subject the Trust Fund, the Trustee, the Depositor, the
Master Servicer, the Securities Administrator or the Servicer to any obligation
or liability (including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in the Pooling and Servicing
Agreement.] [[for Class B] represents and warrants that it has acquired and is
holding such certificate in reliance on Prohibited Transaction Exemption ("PTE")
2002-41, and that it understands that there are certain conditions to the
availability of PTE 2002-41, including that such certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch or
Moody's Investors Service, Inc., and such certificate is so rated, and that it
is an "accredited investor" as defined in Rule 501(a)(1) of Regulation D issued
under the Securities Act and will obtain a representation from any transferee
that such transferee is an accredited investor so long as it is required to
obtain a representation regarding compliance with the Securities Act or (c)(i)
it is an insurance company, (ii) 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 (iii) the conditions in Sections I and III of PTCE 95-60 have been
satisfied.

            In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 3 above.

            All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of November 1, 2004, among ACE Securities Corp. as Depositor, Wells
Fargo Bank, N.A. as Master Servicer and Securities Administrator, Ocwen Federal
Bank FSB as Servicer and HSBC Bank USA, National Association as Trustee,
pursuant to which the Certificates were issued.

                                            [TRANSFEREE]

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

                                     B-1-7
<PAGE>

                                                          ANNEX 1 TO EXHIBIT B-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 Wells Fargo Bank, N.A., as Securities Administrator, with
respect to the asset backed 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 $25,000,000 as demonstrated in its latest annual financial
            statements, a copy of which is attached hereto.

----------
(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.

                                     B-1-8
<PAGE>

      ___   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.

      ___   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

                                     B-1-9
<PAGE>

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

                                     B-1-10
<PAGE>

                                                          ANNEX 2 TO EXHIBIT B-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 Wells Fargo Bank, N.A., as Securities Administrator, with
respect to the asset backed 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.

                                     B-1-11
<PAGE>

            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.

Dated:

                                       -----------------------------------------
                                       Print Name of Transferee or Advisor

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

                                       IF AN ADVISER:

                                       -----------------------------------------
                                       Print Name of Transferee

                                     B-1-12
<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: (Signature) ________________________________________________________________

Name of Signatory ______________________________________________________________

Title __________________________________________________________________________

Date of this certificate _______________________________________________________

Date of information provided in paragraph 3 ____________________________________

                                     B-1-13
<PAGE>

                                    EXHIBIT C

                    FORM OF REGULATION S TRANSFER CERTIFICATE

[Date]

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE4

            Re:   ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE4
                  Asset Backed Pass-Through Certificates, Class B Certificates

Ladies and Gentlemen:

            Reference is hereby made to the Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 2004, among ACE Securities Corp. (the
"Depositor"), Wells Fargo Bank, N.A., as master servicer and securities
administrator (the "Master Servicer"), Ocwen Federal Bank FSB, as servicer (the
"Servicer") and HSBC Bank USA, National Association, as trustee (the "Trustee").
Capitalized terms used herein but not defined herein shall have the meanings
assigned thereto in the Agreement.

            This letter relates to U.S. $[__________] Certificate Principal
Balance of Class B Certificates (the "Certificates") which are held in the name
of [name of transferor] (the "Transferor") to effect the transfer of the
Certificates to a person who wishes to take delivery thereof in the form of an
equivalent beneficial interest [name of transferee] (the "Transferee").

            In connection with such request, the Transferor hereby certifies
that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement and the private placement memorandum
dated November __, 2004 relating to the Certificates and that the following
additional requirements (if applicable) were satisfied:

            (a) the offer of the Certificates was not made to a person in the
United States;

            (b) at the time the buy order was originated, the Transferee was
outside the United States or the Transferor and any person acting on its behalf
reasonably believed that the Transferee was outside the United States;

            (c) no directed selling efforts were made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;

            (d) the transfer or exchange is not part of a plan or scheme to
evade the registration requirements of the Securities Act;

                                     B-1-14
<PAGE>

            (e) the Transferee is not a U.S. Person, as defined in Regulation S
under the Securities Act;

            (f) the transfer was made in accordance with the applicable
provisions of Rule 903(b)(2) or (3) or Rule 904(b)(1), as the case may be; and

            (g) the Transferee understands that the Certificates have not been
and will not be registered under the Securities Act, that any offers, sales or
deliveries of the Certificates purchased by the Transferee in the United States
or to U.S. persons prior to the date that is 40 days after the later of (i) the
commencement of the offering of the Certificates and (ii) the Closing Date, may
constitute a violation of United States law, and that (x) distributions of
principal and interest and (y) the exchange of beneficial interests in a
Temporary Regulation S Global Certificate for beneficial interests in the
related Permanent Regulation S Global Certificate, in each case, will be made in
respect of such Certificates only following the delivery by the Holder of a
certification of non-U.S. beneficial ownership, at the times and in the manner
set forth in the Agreement.

                                     B-1-15
<PAGE>

            You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

                                             [Name of Transferor]

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

                                     B-1-16
<PAGE>

                                   EXHIBIT B-2

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                ____________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE4

            Re:   ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE4
                  Asset Backed Pass-Through Certificates,
                  Class B, Class CE-1, Class CE-2, Class P and Class R
                  Certificates

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 Seller 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, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act'), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act, in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.

                                        Very truly yours,

                                        ----------------------------------------
                                        (Transferor)

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

<PAGE>

                            FORM OF TRANSFEREE LETTER

                                                _______________, 20__

Wells Fargo Bank, N.A.
Sixth and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Corporate Trust ACE 2004-HE4

            Re:   ACE Securities Corp. Home Equity Loan Trust, Series 2004-HE4
                  Asset Backed Pass-Through Certificates,
                  Class B, Class CE-1, Class CE-2, Class P and Class R
                  Certificates

Ladies and Gentlemen:

            In connection with the transfer by ______________________ (the
"Transferor") to __________________________ (the "Transferee") of the captioned
mortgage pass-through certificates (the "Certificates"), the Transferee hereby
certifies as follows:

            1. The Transferee understands that (a) the Certificates have not
      been and will not be registered or qualified under the Securities Act of
      1933, as amended (the "Act") or any state securities law, (b) the
      Depositor is not required to so register or qualify the Certificates, (c)
      the Certificates may be resold only if registered and qualified pursuant
      to the provisions of the Act or any state securities law, or if an
      exemption from such registration and qualification is available, (d) the
      Pooling and Servicing Agreement contains restrictions regarding the
      transfer of the Certificates and (e) the Certificates will bear a legend
      to the foregoing effect.

            2. The Transferee is acquiring the Certificates for its own account
      for investment only and not with a view to or for sale in connection with
      any distribution thereof in any manner that would violate the Act or any
      applicable state securities laws.

            3. The Transferee is (a) a substantial, sophisticated institutional
      investor having such knowledge and experience in financial and business
      matters, and, in particular, in such matters related to securities similar
      to the Certificates, such that it is capable of evaluating the merits and
      risks of investment in the Certificates, (b) able to bear the economic
      risks of such an investment and (c) an "accredited investor" within the
      meaning of Rule 501(a) promulgated pursuant to the Act.

            4. The Transferee has been furnished with, and has had an
      opportunity to review (a) a copy of the Pooling and Servicing Agreement
      and (b) such other information concerning the Certificates, the Mortgage
      Loans and the Depositor as has been requested by the Transferee from the
      Depositor or the Transferor and is relevant to the Transferee's decision
      to purchase the Certificates. The Transferee has had any questions arising
      from such review answered by the Depositor or the Transferor to the
      satisfaction of the Transferee.

                                     B-2-2
<PAGE>

            5. The Transferee has not and will not nor has it authorized or will
      it authorize any person to (a) offer, pledge, sell, dispose of or
      otherwise transfer any Certificate, any interest in any Certificate or any
      other similar security to any person in any manner, (b) solicit any offer
      to buy or to accept a pledge, disposition of other transfer of any
      Certificate, any interest in any Certificate or any other similar security
      from any person in any manner, (c) otherwise approach or negotiate with
      respect to any Certificate, any interest in any Certificate or any other
      similar security with any person in any manner, (d) make any general
      solicitation by means of general advertising or in any other manner or (e)
      take any other action, that (as to any of (a) through (e) above) would
      constitute a distribution of any Certificate under the Act, that would
      render the disposition of any Certificate a violation of Section 5 of the
      1933 Act or any state securities law, or that would require registration
      or qualification pursuant thereto. The Transferee will not sell or
      otherwise transfer any of the Certificates, except in compliance with the
      provisions of the Pooling and Servicing Agreement.

            6. The Transferee: (a) is not an employee benefit or other plan
      subject to the prohibited transaction provisions of the Employee
      Retirement Income Security Act of 1974, as amended ("ERISA"), or Section
      4975 of the Internal Revenue Code of 1986, as amended (the "Code") (each,
      a "Plan"), or any other person (including an investment manager, a named
      fiduciary or a trustee of any Plan) acting, directly or indirectly, on
      behalf of or purchasing any Certificate with "plan assets" of any Plan
      within the meaning of the Department of Labor ("DOL") regulation at 29
      C.F.R. ss.12510.3-101 or (b) [[for Class CE-1, Class CE-2, Class P and
      Class R] has provided the Trustee with an opinion of counsel on which the
      Depositor, the Master Servicer, the Securities Administrator, the Trustee
      and the Servicer may rely, acceptable to and in form and substance
      satisfactory to the Trustee to the effect that the purchase of
      Certificates is permissible under applicable law, will not constitute or
      result in any non-exempt prohibited transaction under ERISA or Section
      4975 of the Code and will not subject the Trust Fund, the Trustee, the
      Master Servicer, the Securities Administrator, the Depositor or the
      Servicer to any obligation or liability (including obligations or
      liabilities under ERISA or Section 4975 of the Code) in addition to those
      undertaken in the Pooling and Servicing Agreement.] [[for Class B]
      represents and warrants that it has acquired and is holding such
      certificate in reliance on Prohibited Transaction Exemption ("PTE")
      2002-41, and that it understands that there are certain conditions to the
      availability of PTE 2002-41, including that such certificate must be
      rated, at the time of purchase, not lower than "BBB-" (or its equivalent)
      by S&P, Fitch or Moody's Investors Service, Inc., and such certificate is
      so rated, and that it is an "accredited investor" as defined in Rule
      501(a)(1) of Regulation D issued under the Securities Act and will obtain
      a representation from any transferee that such transferee is an accredited
      investor so long as it is required to obtain a representation regarding
      compliance with the Securities Act or (c)(i) it is an insurance company,
      (ii) 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
      (iii) the conditions in Sections I and III of PTCE 95-60 have been
      satisfied.]

                                     B-2-3
<PAGE>

            In addition, the Transferee hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee, the Securities
Administrator, the Master Servicer and the Servicer that the Transferee will not
transfer such Certificates to any Plan or person unless such Plan or person
meets the requirements set forth in paragraph 6 above.

                                         Very truly yours,

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

                                   EXHIBIT B-3

                        TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK      )
                       ss.:
COUNTY OF NEW YORK     )

      ___________________________ 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 ACE Securities Corp.
            Home Equity Loan Trust, Series 2004-HE4 Asset Backed Pass-Through
            Certificates, 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
            ____________________. ____ and (ii) is acquiring the Class R
            Certificates for its own account or for the account of another Owner
            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 real electric or telephone
            cooperative, or any organization (other than certain farmers'

                                     B-2-4
<PAGE>

            cooperatives) that is generally exempt from federal income tax
            unless such organization is subject to the tax on unrelated business
            taxable income.

      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 April 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.)

      5.    The Owner is aware that the Securities Administrator will not
            register the transfer of any Class R Certificate unless the
            transferee, or the transferee's agent, delivers to the Securities
            Administrator, 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 6.02(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
            6.02(d) which authorize the Securities Administrator to deliver
            payments to a person other than the Owner and negotiate a mandatory
            sale by the Securities Administrator in the event that the Owner
            holds such Certificate in violation of Section 6.02(d)); and that
            the Owner

                                     B-3-2
<PAGE>

            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 6.02(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 Securities Administrator 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".

      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

                                     B-3-3
<PAGE>

            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 10.01 thereof, the
            undersigned shall assign and transfer to the Holders of the Class
            CE-1, Class CE-2 and the Class P Certificates any amounts in excess
            of par received in connection with such termination. Accordingly, in
            the event of such termination, the Securities Administrator 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-1, Class
            CE-2 and the Class P 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.

                                     B-3-4
<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
_________________, _____.

                                         [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
__________, ____.

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

                                        County of
                                                  -------------------
                                        State of
                                                  -------------------

                                        My Commission expires:

                                     B-3-5
<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK       )
                        : ss.:
COUNTY OF NEW YORK      )

            _________________________, 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 or a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit B-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.

                                     B-3-6
<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
________________, ____.

                                        [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 _____________,
____.

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

                                        County of
                                                  -------------------
                                        State of
                                                  -------------------

                                        My Commission expires:

<PAGE>

                                    EXHIBIT C

                         FORM OF SERVICER CERTIFICATION

Re: __________ (the "Trust")

      Mortgage Pass-Through Certificates, Series 2004-HE4

I, [identify the certifying individual], certify to ACE Securities Corp. (the
"Depositor"), HSBC Bank USA, National Association (the "Trustee") and Wells
Fargo Bank, National Association (the "Master Servicer"), and their respective
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:

      1.    Based on my knowledge, the information in the Annual Statement of
            Compliance, the Annual Independent Public Accountant's Servicing
            Report and all servicing reports, officer's certificates and other
            information relating to the servicing of the Mortgage Loans
            submitted to the Master Servicer taken as a whole, does not contain
            any untrue statement of a material fact or omit to state a material
            fact (constituting information required to be provided by Ocwen
            Federal Bank FSB (the "Servicer") under the Agreement) necessary to
            make the statements made, in light of the circumstances under which
            such statements were made, not misleading as of the date of this
            certification.

      2.    Based on my knowledge, the servicing information required to be
            provided to Master Servicer by the Servicer under the Agreement has
            been provided to the Master Servicer.

      3.    I am responsible for reviewing the activities performed by the
            Servicer under the Agreement and based upon my knowledge and the
            review required by the Agreement, and except as disclosed in the
            Annual Statement of Compliance or the Annual Independent Public
            Accountant's Servicing Report submitted to the Master Servicer, the
            Servicer has fulfilled its obligations under the Agreement; and

      4.    I have disclosed to the Master Servicer all significant deficiencies
            relating to the servicer's compliance with the minimum servicing
            standards in accordance with a review conducted in compliance with
            the Uniform Single Attestation Program for Mortgage Bankers or
            similar standard as set forth in the pooling and servicing
            agreement.

Capitalized terms used and not otherwise defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement, dated as of November 1,
2004, among ACE Securities Corp., Ocwen Federal Bank FSB, Wells Fargo Bank, N.A.
and HSBC Bank USA, National Association

                                      C-1
<PAGE>

Date:
     --------------------------------

-------------------------------------
[Signature]

-------------------------------------
[Title]

                                      C-2
<PAGE>

                                    EXHIBIT D

                            FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
Ocwen Federal Bank FSB
1675 Palm Lakes Boulevard, Suite 10A
West Palm Beach, Florida 33401
Attn: _________________________________

                            LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that _______________________, having its
principal place of business at __________________________, as Trustee (the
"Trustee") pursuant to that Pooling and Servicing Agreement among
_____________________________ (the "Depositor"), Ocwen Federal Bank FSB (the
"Servicer"), and the Trustee, dated as of November 1, 2004 (the "Pooling and
Servicing Agreement"), hereby constitutes and appoints the Servicer, by and
through the Servicer's officers, the Trustee's true and lawful Attorney-in-Fact,
in the Trustee's name, place and stead and for the Trustee's benefit, in
connection with all mortgage loans serviced by the Servicer pursuant to the
Pooling and Servicing Agreement for the purpose of performing all acts and
executing all documents in the name of the Trustee as may be customarily and
reasonably necessary and appropriate to effectuate the following enumerated
transactions in respect of any of the mortgages or deeds of trust (the
"Mortgages" and the "Deeds of Trust", respectively) and promissory notes secured
thereby (the "Mortgage Notes") for which the undersigned is acting as Trustee
for various certificateholders (whether the undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) and for which the
Servicer is acting as servicer, all subject to the terms of the Pooling and
Servicing Agreement.

This appointment shall apply to the following enumerated transactions only:

1.    The modification or re-recording of a Mortgage or Deed of Trust, where
      said modification or re-recordings is for the purpose of correcting the
      Mortgage or Deed of Trust to conform same to the original intent of the
      parties thereto or to correct title errors discovered after such title
      insurance was issued and said modification or re-recording, in either
      instance, does not adversely affect the lien of the Mortgage or Deed of
      Trust as insured.

2.    The subordination of the lien of a Mortgage or Deed of Trust to an
      easement in favor of a public utility company of a government agency or
      unit with powers of eminent domain; this section shall include, without
      limitation, the execution of partial

                                      C-3
<PAGE>

      satisfactions/releases, partial reconveyances or the execution or requests
      to trustees to accomplish same.

3.    The conveyance of the properties to the mortgage insurer, or the closing
      of the title to the property to be acquired as real estate owned, or
      conveyance of title to real estate owned.

4.    The completion of loan assumption agreements.

5.    The full satisfaction/release of a Mortgage or Deed of Trust or full
      conveyance upon payment and discharge of all sums secured thereby,
      including, without limitation, cancellation of the related Mortgage Note.

6.    The assignment of any Mortgage or Deed of Trust and the related Mortgage
      Note, in connection with the repurchase of the mortgage loan secured and
      evidenced thereby.

7.    The full assignment of a Mortgage or Deed of Trust upon payment and
      discharge of all sums secured thereby in conjunction with the refinancing
      thereof, including, without limitation, the assignment of the related
      Mortgage Note.

8.    With respect to a Mortgage or Deed of Trust, the foreclosure, the taking
      of a deed in lieu of foreclosure, or the completion of judicial or
      non-judicial foreclosure or termination, cancellation or rescission of any
      such foreclosure, including, without limitation, any and all of the
      following acts:

      a.    the substitution of trustee(s) serving under a Deed of Trust, in
            accordance with state law and the Deed of Trust;

      b.    the preparation and issuance of statements of breach or
            non-performance;

      c.    the preparation and filing of notices of default and/or notices of
            sale;

      d.    the cancellation/rescission of notices of default and/or notices of
            sale;

      e.    the taking of a deed in lieu of foreclosure; and

      f.    the preparation and execution of such other documents and
            performance of such other actions as may be necessary under the
            terms of the Mortgage, Deed of Trust or state law to expeditiously
            complete said transactions in paragraphs 8.a. through 8.e., above.

The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.

                                      C-4
<PAGE>

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.

IN WITNESS WHEREOF, _________________ as Trustee pursuant to that Pooling and
Servicing Agreement among the Depositor, the Servicer, and the Trustee, dated as
of _______________ 1, 200__ (______________________ Mortgage Loan Asset Backed
Certificates, Series 200__-___), has caused its corporate seal to be hereto
affixed and these presents to be signed and acknowledged in its name and behalf
by _______________________ its duly elected and authorized Vice President this
______________ day of _________________, 200__.

                                        ________________________________________
                                        as Trustee for _____ Mortgage Loan Asset
                                           Backed Certificates, Series 200__-___

                                    By _________________________________________

STATE OF ________

COUNTY OF _______

On ___________, 200__, before me, the undersigned, a Notary Public in and for
said state, personally appeared __________, Vice President of ____________ as
Trustee for _____________ Mortgage Loan Asset Backed Certificates, Series
200__-___, personally known to me to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed that same in
his/her authorized capacity, and that by his/her signature on the instrument the
entity upon behalf of which the person acted and executed the instrument.

WITESS my hand and official seal.
         (SEAL)
                                        ________________________________________
                                                                   Notary Public

                                  My Commission Expires ________________________

                                      C-5
<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                      C-6
<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                                      C-1
<PAGE>

                                   SCHEDULE 3

                                   [RESERVED]

                                      C-1
<PAGE>

                                   SCHEDULE 4

                   STANDARD FILE LAYOUT- DELINQUENCY REPORTING

Exhibit 1: Standard File Layout - Delinquency Reporting

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Format
Column/Header Name                                            Description                           Decimal       Comment
------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                                              <C>        <C>
SERVICER_LOAN_NBR                    A unique number assigned to a loan by the Servicer.
                                     This may be different than the LOAN_NBR
------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR                             A unique identifier assigned to each loan by the originator.
------------------------------------------------------------------------------------------------------------------------------
CLIENT_NBR                           Servicer Client Number
------------------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR                    Contains a unique number as assigned by an external
                                     servicer to identify a group of loans in their
                                     system.
------------------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME                  First Name of the Borrower.
------------------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME                   Last name of the borrower.
------------------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS                         Street Name and Number of Property
------------------------------------------------------------------------------------------------------------------------------
PROP_STATE                           The state where the  property located.
------------------------------------------------------------------------------------------------------------------------------
PROP_ZIP                             Zip code where the property is located.
------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE               The date that the borrower's next payment is due to                        MM/DD/YYYY
                                     the servicer at the end of processing cycle, as
                                     reported by Servicer.
------------------------------------------------------------------------------------------------------------------------------
LOAN_TYPE                            Loan Type (i.e. FHA, VA, Conv)
------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE                The date a particular bankruptcy claim was filed.                          MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE              The chapter under which the bankruptcy was filed.
------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR                  The case number assigned by the court to the
                                     bankruptcy filing.
------------------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE               The payment due date once the bankruptcy has been                          MM/DD/YYYY
                                     approved by the courts
------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE           The Date The Loan Is Removed From Bankruptcy. Either                       MM/DD/YYYY
                                     by Dismissal, Discharged and/or a Motion For Relief
                                     Was Granted.
------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE                   The Date The Loss Mitigation Was Approved By The Servicer                  MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE                        The Type Of Loss Mitigation Approved For A Loan Such As;
------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE               The Date The Loss Mitigation /Plan Is Scheduled To End/Close               MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE               The Date The Loss Mitigation Is Actually Completed                         MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE                 The date DA Admin sends a letter to the servicer with                      MM/DD/YYYY
                                     instructions to begin foreclosure proceedings.
------------------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE               Date File Was Referred To Attorney to Pursue Foreclosure                   MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE                     Notice of 1st legal filed by an Attorney in a                              MM/DD/YYYY
                                     Foreclosure Action
------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE            The date by which a foreclosure sale is expected to occur.                 MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE                     The actual date of the foreclosure sale.                                   MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT                      The amount a property sold for at the foreclosure sale.            2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE                  The date the servicer initiates eviction of the borrower.                  MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE              The date the court revokes legal possession of the                         MM/DD/YYYY
                                     property from the borrower.
------------------------------------------------------------------------------------------------------------------------------
LIST_PRICE                           The price at which an REO property is marketed.                    2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
LIST_DATE                            The date an REO property is listed at a particular price.                  MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      C-1
<PAGE>

<TABLE>
<S>                                  <C>                                                              <C>        <C>
------------------------------------------------------------------------------------------------------------------------------
OFFER_AMT                            The dollar value of an offer for an REO property.                  2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME                      The date an offer is received by DA Admin or by the Servicer.              MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE                     The date the REO sale of the property is scheduled to close.               MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE              Actual Date Of REO Sale                                                    MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE                        Classification of how the property is occupied.
------------------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE                  A code that indicates the condition of the property.
------------------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE                 The date a  property inspection is performed.                              MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE                       The date the appraisal was done.                                           MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL                        The current "as is" value of the property based on                 2
                                     brokers price opinion or appraisal.
------------------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL                    The amount the property would be worth if repairs are              2
                                     completed pursuant to a broker's price opinion or
                                     appraisal.
------------------------------------------------------------------------------------------------------------------------------
If applicable:
------------------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE                   FNMA Code Describing Status of Loan
------------------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE                   The circumstances which caused a borrower to stop
                                     paying on a loan. Code indicates the reason why the
                                     loan is in default for this cycle.
------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE                  Date Mortgage Insurance Claim Was Filed With Mortgage                      MM/DD/YYYY
                                     Insurance Company.
------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT                         Amount of Mortgage Insurance Claim Filed                                   No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE                   Date Mortgage Insurance Company Disbursed Claim Payment                    MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID                    Amount Mortgage Insurance Company Paid On Claim                    2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE                Date Claim Was Filed With Pool Insurance Company                           MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT                       Amount of Claim Filed With Pool Insurance Company                  2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE                 Date Claim Was Settled and The Check Was Issued By                         MM/DD/YYYY
                                     The Pool Insurer

------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID                  Amount Paid On Claim By Pool Insurance Company                     2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE          Date FHA Part A Claim Was Filed With HUD                                   MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT                 Amount of FHA Part A Claim Filed                                   2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE           Date HUD Disbursed Part A Claim Payment                                    MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT            Amount HUD Paid on Part A Claim                                    2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
---------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE          Date FHA Part B Claim Was Filed With HUD                                   MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT                 Amount of FHA Part B Claim Filed                                   2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
---------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE           Date HUD Disbursed Part B Claim Payment                                    MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT            Amount HUD Paid on Part B Claim                                    2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
---------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE                  Date VA Claim Was Filed With the Veterans Admin                            MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE                   Date Veterans Admin. Disbursed VA Claim Payment                            MM/DD/YYYY
---------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT                    Amount Veterans Admin. Paid on VA Claim                            2       No commas(,)
                                                                                                                or dollar
                                                                                                                signs ($)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      C-2
<PAGE>

Exhibit 2: Standard File Codes - Delinquency Reporting

The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:

      o     ASUM- Approved Assumption

      o     BAP-  Borrower Assistance Program

      o     CO-   Charge Off

      o     DIL-  Deed-in-Lieu

      o     FFA-  Formal Forbearance Agreement

      o     MOD-  Loan Modification

      o     PRE-  Pre-Sale

      o     SS-   Short Sale

      o     MISC- Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Wells
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.

The Occupant Code field should show the current status of the property code as
follows:

      o     Mortgagor

      o     Tenant

      o     Unknown

      o     Vacant

The Property Condition field should show the last reported condition of the
property as follows:

      o     Damaged

      o     Excellent

      o     Fair

      o     Gone

      o     Good

      o     Poor

      o     Special Hazard

      o     Unknown

                                      C-3
<PAGE>

Exhibit 2: Standard File Codes - Delinquency Reporting, Continued

The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:

              ------------------------------------------------------------------
              Delinquency Code       Delinquency Description
              ------------------------------------------------------------------
              001                    FNMA-Death of principal mortgagor
              ------------------------------------------------------------------
              002                    FNMA-Illness of principal mortgagor
              ------------------------------------------------------------------
              003                    FNMA-Illness of mortgagor's family member
              ------------------------------------------------------------------
              004                    FNMA-Death of mortgagor's family member
              ------------------------------------------------------------------
              005                    FNMA-Marital difficulties
              ------------------------------------------------------------------
              006                    FNMA-Curtailment of income
              ------------------------------------------------------------------
              007                    FNMA-Excessive Obligation
              ------------------------------------------------------------------
              008                    FNMA-Abandonment of property
              ------------------------------------------------------------------
              009                    FNMA-Distant employee transfer
              ------------------------------------------------------------------
              011                    FNMA-Property problem
              ------------------------------------------------------------------
              012                    FNMA-Inability to sell property
              ------------------------------------------------------------------
              013                    FNMA-Inability to rent property
              ------------------------------------------------------------------
              014                    FNMA-Military Service
              ------------------------------------------------------------------
              015                    FNMA-Other
              ------------------------------------------------------------------
              016                    FNMA-Unemployment
              ------------------------------------------------------------------
              017                    FNMA-Business failure
              ------------------------------------------------------------------
              019                    FNMA-Casualty loss
              ------------------------------------------------------------------
              022                    FNMA-Energy environment costs
              ------------------------------------------------------------------
              023                    FNMA-Servicing problems
              ------------------------------------------------------------------
              026                    FNMA-Payment adjustment
              ------------------------------------------------------------------
              027                    FNMA-Payment dispute
              ------------------------------------------------------------------
              029                    FNMA-Transfer of ownership pending
              ------------------------------------------------------------------
              030                    FNMA-Fraud
              ------------------------------------------------------------------
              031                    FNMA-Unable to contact borrower
              ------------------------------------------------------------------
              INC                    FNMA-Incarceration
              ------------------------------------------------------------------

                                      C-4
<PAGE>

Exhibit 2: Standard File Codes - Delinquency Reporting, Continued

The FNMA Delinquent Status Code field should show the Status of Default as
follows:

            -----------------------------------------------------------------
               Status Code       Status Description
            -----------------------------------------------------------------
                   09            Forbearance
            -----------------------------------------------------------------
                   17            Pre-foreclosure Sale Closing Plan Accepted
            -----------------------------------------------------------------
                   24            Government Seizure
            -----------------------------------------------------------------
                   26            Refinance
            -----------------------------------------------------------------
                   27            Assumption
            -----------------------------------------------------------------
                   28            Modification
            -----------------------------------------------------------------
                   29            Charge-Off
            -----------------------------------------------------------------
                   30            Third Party Sale
            -----------------------------------------------------------------
                   31            Probate
            -----------------------------------------------------------------
                   32            Military Indulgence
            -----------------------------------------------------------------
                   43            Foreclosure Started
            -----------------------------------------------------------------
                   44            Deed-in-Lieu Started
            -----------------------------------------------------------------
                   49            Assignment Completed
            -----------------------------------------------------------------
                   61            Second Lien Considerations
            -----------------------------------------------------------------
                   62            Veteran's Affairs-No Bid
            -----------------------------------------------------------------
                   63            Veteran's Affairs-Refund
            -----------------------------------------------------------------
                   64            Veteran's Affairs-Buydown
            -----------------------------------------------------------------
                   65            Chapter 7 Bankruptcy
            -----------------------------------------------------------------
                   66            Chapter 11 Bankruptcy
            -----------------------------------------------------------------
                   67            Chapter 13 Bankruptcy
            -----------------------------------------------------------------

                                      C-5
<PAGE>

Exhibit 3: Calculation of Realized Loss/Gain Form 332- Instruction Sheet

      1.      The numbers on the form correspond with the numbers listed below.

      Liquidation and Acquisition Expenses:

      1.      The Actual Unpaid Principal Balance of the Mortgage Loan. For
              documentation, an Amortization Schedule from date of default
              through liquidation breaking out the net interest and servicing
              fees advanced is required.

      2.      The Total Interest Due less the aggregate amount of servicing fee
              that would have been earned if all delinquent payments had been
              made as agreed. For documentation, an Amortization Schedule from
              date of default through liquidation breaking out the net interest
              and servicing fees advanced is required.

      3.      Accrued Servicing Fees based upon the Scheduled Principal Balance
              of the Mortgage Loan as calculated on a monthly basis. For
              documentation, an Amortization Schedule from date of default
              through liquidation breaking out the net interest and servicing
              fees advanced is required.

      4-12.   Complete as applicable. All line entries must be supported by
              copies of appropriate statements, vouchers, receipts, bills,
              canceled checks, etc., to document the expense. Entries not
              properly documented will not be reimbursed to the Servicer.

      13.     The total of lines 1 through 12.

      2.      Credits:

      14-21.  Complete as applicable. All line entries must be supported by
              copies of the appropriate claims forms, EOBs, HUD-1 and/or other
              proceeds verification, statements, payment checks, etc. to
              document the credit. If the Mortgage Loan is subject to a
              Bankruptcy Deficiency, the difference between the Unpaid Principal
              Balance of the Note prior to the Bankruptcy Deficiency and the
              Unpaid Principal Balance as reduced by the Bankruptcy Deficiency
              should be input on line 20.

      22.     The total of lines 14 through 21.

      Please note: For HUD/VA loans, use line (15) for Part A/Initial proceeds
                   and line (16) for Part B/Supplemental proceeds.

      3.      Total Realized Loss (or Amount of Any Gain)

      23.     The total derived from subtracting line 22 from 13. If the amount
              represents a realized gain, show the amount in parenthesis ( ).

                                      C-6
<PAGE>

Exhibit 3A: Calculation of Realized Loss/Gain Form 332

                             WELLS FARGO BANK, N.A.
                        CALCULATION OF REALIZED LOSS/GAIN

Prepared by: ________________                 Date:  _______________

Phone: ______________________      Email Address:_____________________

        -------------------    ---------------------   ----------------------
         Servicer Loan No.          Servicer Name         Servicer Address

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

WELLS FARGO BANK, N.A. Loan No._____________________________

Borrower's Name:____________________________________________________

Property Address:_______________________________________________________________

Liquidation and Acquisition Expenses:

(1)  Actual Unpaid Principal Balance of Mortgage Loan    $_______________   (1)

(2)  Interest accrued at Net Rate                        ________________   (2)

(3)  Accrued Servicing Fees                              ________________   (3)

(4)  Attorney's Fees                                     ________________   (4)

(5)  Taxes                                               ________________   (5)

(6)  Property Maintenance                                ________________   (6)

(7)  MI/Hazard Insurance Premiums                        ________________   (7)

(8)  Utility Expenses                                    ________________   (8)

(9)  Appraisal/BPO                                       ________________   (9)

(10) Property Inspections                                ________________   (10)

(11) FC Costs/Other Legal Expenses                       ________________   (11)

(12) Other (itemize)                                     $_______________   (12)

         Cash for Keys________________________           ________________

         HOA/Condo Fees_______________________           ________________

         _____________________________________           ________________

         _____________________________________           ________________

         Total Expenses                                  $_______________   (13)

Credits:

(14) Escrow Balance                                      $_______________   (14)

(15) HIP Refund                                          ________________   (15)

(16) Rental Receipts                                     ________________   (16)

(17) Hazard Loss Proceeds                                ________________   (17)

(18) Primary Mortgage Insurance Proceeds                 ________________   (18)

(19) Pool Insurance Proceeds                             ________________   (19)

(20) Proceeds from Sale of Acquired Property             ________________   (20)

                                      C-7
<PAGE>

(21) Other (itemize)                                     _________________  (21)

     ______________________________________              _________________

     ______________________________________              _________________

     Total Credits                                       $________________  (22)

Total Realized Loss (or Amount of Gain)                  $________________  (23)

                                      C-8
<PAGE>

                                   SCHEDULE 5

                    STANDARD FILE LAYOUT- SCHEDULED/SCHEDULED

Exhibit 1: Standard File Layout - Scheduled/Scheduled

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
Column Name                                   Description                       Decimal   Format Comment
-------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                                                   <C>    <C>
LOAN_NBR                      Loan Number assigned by investor                             Text up to 10 digits
-------------------------------------------------------------------------------------------------------------------------------
SERVICER LOAN_NBR             Servicer Loan Number                                         Text up to 10 digits
-------------------------------------------------------------------------------------------------------------------------------
BORROWER_NAME                 Mortgagor name assigned to Note                              Max length of 30
-------------------------------------------------------------------------------------------------------------------------------
SCHED_PMT_AMT                 P&I constant                                          2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE                 Gross Interest Rate                                   4      Max length of 6
-------------------------------------------------------------------------------------------------------------------------------
NET_RATE                      Gross Interest Rate less the Service Fee Rate         4      Max length of 6
-------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE                 Service Fee Rate                                      4      Max length of 6
-------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT                   ARM loan's forecasted P&I constant                    2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE                 ARM loan's forecasted Gross Interest Rate             4      Max length of 6
-------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE                ARM loan's index Rate used                            4      Max length of 6
-------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_BAL                  Beginning Actual Balance                              2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
ACTL_END_BAL                  Ending Actual Balance                                 2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
NEXT_DUE_DATE                 Borrower's next due date                                     MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_1                    Curtailment Amount                                    2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_1                   Due date Curtailment was applied to                          MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1               Curtailment Interest if applicable                    2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_2                    Curtailment Amount 2                                  2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_2                   Due date Curtailment was applied to                          MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT2                Curtailment Interest if applicable                    2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
CURT_AMT_3                    Curtailment Amount 3                                  2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
CURT_DATE_3                   Due date Curtailment was applied to                          MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT3                 Curtailment Interest, if applicable                   2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_BAL                 Beginning Scheduled Balance                           2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
SCHED_END_BAL                 Ending Scheduled Balance                              2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT                Scheduled Principal portion of P&I                    2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT                 Scheduled Net Interest (less Service Fee)
                              portion of P&I                                        2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
LIQ_AMT                       Liquidation Principal Amt to bring balance to
                              zero                                                  2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
PIF_DATE                      Liquidation Date                                             MM/DD/YYYY
-------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE                   Either 60 for liquidation or 65 for Repurchase               Max length of 2
-------------------------------------------------------------------------------------------------------------------------------
PRIN_ADJ_AMT                  Principal Adjustments made to loan, if applicable     2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT                   Interest Adjustment made to loan, if applicable       2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT PENALTY AMT        Prepayment penalty amount, if applicable              2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
SOILDER_SAILOR ADJ AMT        Soldier and Sailor Adjustment amount, if
                              applicable                                            2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
NON ADV LOAN AMT              Non Recoverable Loan Amount, if applicable            2      No commas(,) or dollar signs ($)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>EXHIBIT 4.1

<PAGE>

                          IMPAC CMB TRUST SERIES 2005-1

                                     Issuer

                                       And

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                Indenture Trustee

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

                                    INDENTURE

                          Dated as of January 28, 2005

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

                        COLLATERALIZED ASSET-BACKED BONDS

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                       Page
-------                                                                                       ----
<S>                                                                                            <C>
                                    ARTICLE I

                                   Definitions

  Section 1.01   Definitions....................................................................7
  Section 1.02   Incorporation by Reference of Trust Indenture Act..............................7
  Section 1.03   Rules of Construction..........................................................7

                                   ARTICLE II

                           Original Issuance of Bonds

  Section 2.01   Form...........................................................................9
  Section 2.02   Execution, Authentication and Delivery.........................................9
  Section 2.03   Acceptance of Mortgage Loans by Indenture Trustee.............................10
  Section 2.04   Acceptance of Derivative Contracts by Indenture Trustee.......................11
  Section 2.05   Conveyance of the Group 1 Subsequent Mortgage Loans...........................12
  Section 2.06   Conveyance of the Group 2 Subsequent Mortgage Loans...........................14

                                   ARTICLE III

                                    Covenants

  Section 3.01   Collection of Payments with respect to the Mortgage Loans.....................18
  Section 3.02   Maintenance of Office or Agency...............................................18
  Section 3.03   Money for Payments To Be Held in Trust; Paying Agent..........................18
  Section 3.04   Existence.....................................................................19
  Section 3.05   Payment of Principal and Interest.............................................20
  Section 3.06   Protection of Trust Estate....................................................26
  Section 3.07   Opinions as to Trust Estate...................................................27
  Section 3.08   Performance of Obligations....................................................28
  Section 3.09   Negative Covenants............................................................28
  Section 3.10   Annual Statement as to Compliance.............................................29
  Section 3.11   Representations and Warranties Concerning the Mortgage Loans..................29
  Section 3.12   Amendments to Servicing Agreement.............................................29
  Section 3.13   Master Servicer as Agent and Bailee of the Indenture Trustee..................29
  Section 3.14   Investment Company Act........................................................30
  Section 3.15   Issuer May Consolidate, etc...................................................30
  Section 3.16   Successor or Transferee.......................................................32
  Section 3.17   No Other Business.............................................................32
  Section 3.18   No Borrowing..................................................................32
  Section 3.19   Guarantees, Loans, Advances and Other Liabilities.............................32
  Section 3.20   Capital Expenditures..........................................................32
  Section 3.21   Determination of Bond Interest Rate...........................................32
  Section 3.22   Restricted Payments...........................................................33
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                                                                                            <C>
  Section 3.23   Notice of Events of Default...................................................33
  Section 3.24   Further Instruments and Acts..................................................33
  Section 3.25   Statements to Bondholders.....................................................33
  Section 3.26   Certain Representations Regarding the Trust Estate............................33
  Section 3.27   Interest Coverage Accounts....................................................34
  Section 3.28   [Reserved]....................................................................36
  Section 3.29   Replacement Derivative Contracts..............................................36
  Section 3.30   Guaranty Agreement; Payments Under the Guaranty Agreement.....................36
  Section 3.31   Allocation of Realized Losses.................................................36
  Section 3.32   The Group 1 Pre-Funding Account...............................................37
  Section 3.33   The Group 2 Pre-Funding Account...............................................38
  Section 3.34   Grant of the Group 1 Subsequent Mortgage Loans................................39

                                   ARTICLE IV

               The Bonds; Satisfaction and Discharge of Indenture

  Section 4.01   The Bonds.....................................................................41
  Section 4.02   Registration of and Limitations on Transfer and Exchange of Bonds;
                 Appointment of Bond Registrar and Certificate Registrar.......................41
  Section 4.03   Mutilated, Destroyed, Lost or Stolen Bonds....................................42
  Section 4.04   Persons Deemed Owners.........................................................43
  Section 4.05   Cancellation..................................................................43
  Section 4.06   Book-Entry Bonds..............................................................43
  Section 4.07   Notices to Depository.........................................................44
  Section 4.08   Definitive Bonds..............................................................44
  Section 4.09   Tax Treatment.................................................................45
  Section 4.10   Satisfaction and Discharge of Indenture.......................................45
  Section 4.11   Application of Trust Money....................................................46
  Section 4.12   [Reserved]....................................................................46
  Section 4.13   Repayment of Monies Held by Paying Agent......................................46
  Section 4.14   Temporary Bonds...............................................................46
  Section 4.15   Representation Regarding ERISA................................................47

                                    ARTICLE V

                              Default and Remedies

  Section 5.01   Events of Default.............................................................48
  Section 5.02   Acceleration of Maturity; Rescission and Annulment............................48
  Section 5.03   Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.....49
  Section 5.04   Remedies; Priorities..........................................................51
  Section 5.05   Optional Preservation of the Trust Estate.....................................53
  Section 5.06   Limitation of Suits...........................................................53
  Section 5.07   Unconditional Rights of Bondholders To Receive Principal and Interest.........54
  Section 5.08   Restoration of Rights and Remedies............................................54
  Section 5.09   Rights and Remedies Cumulative................................................54
  Section 5.10   Delay or Omission Not a Waiver................................................55
  Section 5.11   Control By Bondholders........................................................55
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                            <C>
  Section 5.12   Waiver of Past Defaults.......................................................55
  Section 5.13   Undertaking for Costs.........................................................55
  Section 5.14   Waiver of Stay or Extension Laws..............................................56
  Section 5.15   Sale of Trust Estate..........................................................56
  Section 5.16   Action on Bonds...............................................................58
  Section 5.17   Performance and Enforcement of Certain Obligations............................58

                                   ARTICLE VI

                              The Indenture Trustee

  Section 6.01   Duties of Indenture Trustee...................................................60
  Section 6.02   Rights of Indenture Trustee...................................................61
  Section 6.03   Individual Rights of Indenture Trustee........................................62
  Section 6.04   Indenture Trustee's Disclaimer................................................62
  Section 6.05   Notice of Event of Default....................................................62
  Section 6.06   Reports by Indenture Trustee to Holders and Tax Administration................62
  Section 6.07   Compensation and Indemnity....................................................62
  Section 6.08   Replacement of Indenture Trustee..............................................63
  Section 6.09   Successor Indenture Trustee by Merger.........................................64
  Section 6.10   Appointment of Co-Indenture Trustee or Separate Indenture Trustee.............64
  Section 6.11   Eligibility; Disqualification.................................................65
  Section 6.12   Preferential Collection of Claims Against Issuer..............................66
  Section 6.13   Representations and Warranties................................................66
  Section 6.14   Directions to Indenture Trustee...............................................66
  Section 6.15   The Agents....................................................................66

                                   ARTICLE VII

                         Bondholders' Lists and Reports

  Section 7.01   Issuer To Furnish Indenture Trustee Names and Addresses of Bondholders........68
  Section 7.02   Preservation of Information; Communications to Bondholders....................68
  Section 7.03   Reports of Issuer.............................................................68
  Section 7.04   Reports by Indenture Trustee..................................................69
  Section 7.05   Statements to Bondholders.....................................................69

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

  Section 8.01   Collection of Money...........................................................72
  Section 8.02   Trust Accounts................................................................72
  Section 8.03   Officer's Certificate.........................................................72
  Section 8.04   Termination Upon Distribution to Bondholders..................................73
  Section 8.05   Release of Trust Estate.......................................................73
  Section 8.06   Surrender of Bonds Upon Final Payment.........................................73
  Section 8.07   Optional Redemption of the Bonds..............................................73
</TABLE>

                                       iii
<PAGE>

<TABLE>
<S>                                                                                            <C>
                                   ARTICLE IX

                             Supplemental Indentures

  Section 9.01   Supplemental Indentures Without Consent of Bondholders........................75
  Section 9.02   Supplemental Indentures With Consent of Bondholders...........................76
  Section 9.03   Execution of Supplemental Indentures..........................................77
  Section 9.04   Effect of Supplemental Indenture..............................................78
  Section 9.05   Conformity with Trust Indenture Act...........................................78
  Section 9.06   Reference in Bonds to Supplemental Indentures.................................78

                                    ARTICLE X

                                  Miscellaneous

  Section 10.01  Compliance Certificates and Opinions, etc.....................................79
  Section 10.02  Form of Documents Delivered to Indenture Trustee..............................80
  Section 10.03  Acts of Bondholders...........................................................81
  Section 10.04  Notices etc., to Indenture Trustee Issuer and Rating Agencies.................81
  Section 10.05  Notices to Bondholders; Waiver................................................82
  Section 10.06  Conflict with Trust Indenture Act.............................................83
  Section 10.07  Effect of Headings............................................................83
  Section 10.08  Successors and Assigns........................................................83
  Section 10.09  Separability..................................................................83
  Section 10.10  [Reserved]....................................................................83
  Section 10.11  Legal Holidays................................................................83
  Section 10.12  GOVERNING LAW.................................................................83
  Section 10.13  Counterparts..................................................................83
  Section 10.14  Recording of Indenture........................................................83
  Section 10.15  Issuer Obligation.............................................................84
  Section 10.16  No Petition...................................................................84
  Section 10.17  Inspection....................................................................84
</TABLE>

                                       iv
<PAGE>

EXHIBITS

Exhibit A-1   --    Form of Class [_-A-_] Bonds
Exhibit A-2   --    Form of Class M-[_]-[_] Bonds
Exhibit A-3   --    Form of Class B-[_] Bonds
Exhibit B     --    Mortgage Loan Schedule
Exhibit C     --    Derivative Contracts
Exhibit D     --    Form of Group [_] Subsequent Transfer Instrument
Exhibit E     --    Form of Addition Notice
Exhibit F     --    Form of Initial Certification
Exhibit G     --    Form of Final Certification
Appendix A    --    Definitions

                                        v
<PAGE>

            This Indenture, dated as of January 28, 2005, is entered into
between Impac CMB Trust Series 2005-1, a Delaware statutory trust, as Issuer
(the "Issuer"), and Deutsche Bank National Trust Company, a national banking
association, as Indenture Trustee (the "Indenture Trustee").

                                WITNESSETH THAT:

            Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
Collateralized Asset-Backed Bonds, Series 2005-1 (the "Bonds").

            GRANTING CLAUSE

            The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Holders of the Bonds, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created by (a) the Mortgage Loans, Eligible Substitute Mortgage Loans and the
proceeds thereof and all rights under the Related Documents; (b) all funds on
deposit from time to time in the Collection Account allocable to the Mortgage
Loans excluding any investment income from such funds; (c) all funds on deposit
from time to time in the Payment Account and in all proceeds thereof; (d) all
funds on deposit from time to time in each of the Group 1 Pre-Funding Account
and Group 2 Pre-Funding Account and in all proceeds thereof; (e) all rights
under (i) the Mortgage Loan Purchase Agreement as assigned to the Issuer, with
respect to the Initial Mortgage Loans, and each Group 1 Subsequent Mortgage Loan
Purchase Agreement and Group 2 Subsequent Mortgage Loan Purchase Agreement as
assigned to the Issuer, with respect to the Group 1 Subsequent Mortgage Loans
and Group 2 Subsequent Mortgage Loans, respectively, (ii) the Servicing
Agreement and any Subservicing Agreements, (iii) any title, hazard and primary
insurance policies with respect to the Mortgaged Properties, and (iv) the rights
with respect to the Derivative Contracts and the Guaranty Agreement as assigned
to the Issuer; and (f) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments on or
under, and all proceeds of every kind and nature whatsoever in respect of, any
or all of the foregoing and all payments on or under, and all proceeds of every
kind and nature whatsoever in the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the "Trust
Estate" or the "Collateral").

            The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Bonds, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.

            The Indenture Trustee, as trustee on behalf of the Holders of the
Bonds, acknowledges such Grant, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.

<PAGE>

                                    ARTICLE I

                                   Definitions

      Section 1.01 Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.

      Section 1.02 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:

            "Commission" means the Securities and Exchange Commission.

            "indenture securities" means the Bonds.

            "indenture security holder" means a Bondholder.

            "indenture to be qualified" means this Indenture.

            "indenture trustee" or "institutional trustee" means the Indenture
      Trustee.

            "obligor" on the indenture securities means the Issuer and any other
      obligor on the indenture securities.

      All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rules and
have the meanings assigned to them by such definitions.

      Section 1.03 Rules of Construction. Unless the context otherwise requires:

                  (i) a term has the meaning assigned to it;

                  (ii) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with generally accepted accounting principles
      as in effect from time to time;

                  (iii) "or" is not exclusive;

                  (iv) "including" means including without limitation;

                  (v) words in the singular include the plural and words in the
      plural include the singular; and

                  (vi) any agreement, instrument or statute defined or referred
      to herein or in any instrument or certificate delivered in connection
      herewith means such

<PAGE>

      agreement, instrument or statute as from time to time amended, modified or
      supplemented and includes (in the case of agreements or instruments)
      references to all attachments thereto and instruments incorporated
      therein; references to a Person are also to its permitted successors and
      assigns.

<PAGE>

                                   ARTICLE II

                           Original Issuance of Bonds

      Section 2.01 Form. The Class A, Class M and Class B Bonds, together with
the Indenture Trustee's certificate of authentication, shall be in substantially
the form set forth in Exhibits A-1, A-2 and A-3 to this Indenture, respectively,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture.

      The Bonds shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).

      The terms of the Bonds set forth in Exhibits A-1, A-2 and A-3 to this
Indenture are part of the terms of this Indenture.

      Section 2.02 Execution, Authentication and Delivery. The Bonds shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Bonds may be manual or
facsimile.

      Bonds bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offices at the date of such Bonds.

      The Indenture Trustee shall upon Issuer Request authenticate and deliver
the Class 1-A-1, Class 1-A-2, Class 2-A-1, Class 2-A-2, Class M-1-1, Class
M-2-1, Class M-3-1, Class M-4-1, Class M-5-1, Class M-6-1, Class M-1-2, Class
M-2-2, Class M-3-2, Class M-4-2, Class M-5-2, Class M-6-2, Class B-1 and Class
B-2 Bonds for original issue in an aggregate initial principal amount of
$1,250,000,000. The Class 1-A-1 Bonds shall be issued in an aggregate initial
principal amount of $491,420,000, the Class 1-A-2 Bonds shall be issued in an
aggregate initial principal amount of $54,602,000, the Class 2-A-1 Bonds shall
be issued in an aggregate initial principal amount of $390,682,000, the Class
2-A-2 Bonds shall be issued in an aggregate initial principal amount of
$97,671,000, the Class M-1-1 Bonds shall be issued in an aggregate initial
principal amount of $41,240,000, the Class M-2-1 Bonds shall be issued in an
aggregate initial principal amount of $29,363,000, the Class M-3-1 Bonds shall
be issued in an aggregate initial principal amount of $15,176,000, the Class
M-4-1 Bonds shall be issued in an aggregate initial principal amount of
$8,248,000, the Class M-5-1 Bonds shall be issued in an aggregate initial
principal amount of $8,248,000, the Class M-6-1 Bonds shall be issued in an
aggregate initial principal amount of $6,598,000, Class M-1-2 Bonds shall be
issued in an aggregate initial principal amount of $36,885,000, the Class M-2-2
Bonds shall be issued in an aggregate initial principal amount of $26,262,000,
the Class M-3-2 Bonds shall be issued in an aggregate initial principal amount
of $13,574,000, the Class M-4-2 Bonds shall be issued in an aggregate initial
principal amount of $7,377,000, the Class M-5-2 Bonds shall be issued in an
aggregate initial principal amount of $7,377,000, the Class M-6-2 Bonds shall be
issued in an aggregate initial principal amount of $5,902,000, the Class B-1
Bonds shall be issued in an aggregate initial principal amount of $4,950,000,
and the Class B-2 Bonds shall be issued in an aggregate initial principal amount
of $4,425,000.

<PAGE>

      The Class A-IO-1 Bonds and Class A-IO-2 Bonds will not have a Bond
Principal Balance and will not be entitled to payments of principal. The Class
A-IO-1 Bonds and Class A-IO-2 Bonds will accrue interest on the related Notional
Amount. With respect to the Class A-IO-1 Bonds immediately prior to the related
Payment Date, for the February 2005 Payment Date, the Notional Amount of the
Class A-IO-1 Bonds will be $659,845,000, for the March 2005 Payment Date,
$623,589,143, for the April 2005 Payment Date, $577,644,934, for the May 2005
Payment Date, $535,085,318, for the June 2005 Payment Date, $495,660,834, for
the July 2005 Payment Date, $459,140,659, and for each Payment Date thereafter,
$0. With respect to the Class A-IO-2 Bonds immediately prior to the related
Payment Date, for the February 2005 Payment Date, the Notional Amount of the
Class A-IO-2 Bonds will be $590,155,000, for the March 2005 Payment Date,
$563,240,128, for the April 2005 Payment Date, $521,704,239, for the May 2005
Payment Date, $483,230,792, for the June 2005 Payment Date, $447,593,963, for
the July 2005 Payment Date, $414,584,666, and for each Payment Date thereafter,
$0.

      Each of the Bonds shall be dated the date of its authentication. The Bonds
shall be issuable as registered Bonds and the Bonds shall be issuable in the
minimum initial Bond Principal Balances of $25,000 and in integral multiples of
$1 in excess thereof.

      No Bond shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Bond a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Bond shall be conclusive evidence, and the only
evidence, that such Bond has been duly authenticated and delivered hereunder.

      Section 2.03 Acceptance of Mortgage Loans by Indenture Trustee. (a) The
Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
pursuant to the procedures described below, the documents (or certified copies
thereof) referred to in Section 2.1(b) of the Mortgage Loan Purchase Agreement,
and declares that it holds and will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate as the Indenture Trustee in trust for the use and benefit of all
present and future Holders of the Bonds. No later than 45 days after the Closing
Date, with respect to the Initial Mortgage Loans, or the applicable Subsequent
Transfer Date, with respect to the related Group 1 Subsequent Mortgage Loans and
Group 2 Subsequent Mortgage Loans (or, with respect to any Eligible Substitute
Mortgage Loan, within 5 days after the receipt by the Indenture Trustee thereof
and, with respect to any documents received beyond 45 days after the Closing
Date, promptly thereafter), the Indenture Trustee agrees, for the benefit of the
Bondholders, to review each Mortgage File delivered to it and to execute and
deliver, or cause to be executed and delivered, to the Seller and the Master
Servicer an Initial Certification in the form annexed hereto as Exhibit G. In
conducting such review, the Indenture Trustee will ascertain whether all
required documents described in Section 2.1(b) of (i) the Mortgage Loan Purchase
Agreement, with respect to the Initial Mortgage Loans, and (ii) the applicable
Group 1 Subsequent Mortgage Loan Purchase Agreements and Group 2 Subsequent
Mortgage Loan Purchase Agreements, with respect to the related Group 1
Subsequent Mortgage Loans and Group 2 Subsequent Mortgage Loans, respectively,
have been executed and received and whether those documents relate, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans it has received, as identified in Exhibit B to this
Indenture, as supplemented (provided, however, that with respect to those
documents described in subclause

<PAGE>

(b)(vii) of such section, the Indenture Trustee's obligations shall extend only
to documents actually delivered pursuant to such subclause). In performing any
such review, the Indenture Trustee may conclusively rely on the purported due
execution and genuineness of any such document and on the purported genuineness
of any signature thereon. If the Indenture Trustee finds any document
constituting part of the Mortgage File not to have been executed or received, or
to be unrelated to the Mortgage Loans identified in Exhibit B to this Indenture
or to appear to be defective on its face, the Indenture Trustee shall promptly
notify the Seller of such finding and the Seller's obligation to cure such
defect or repurchase or substitute for the related Mortgage Loan. To the extent
the Indenture Trustee has not received a Mortgage File with respect to any of
the Initial Mortgage Loans by the Closing Date, or any of the related Group 1
Subsequent Mortgage Loans and Group 2 Subsequent Mortgage Loans by the
applicable Subsequent Transfer Date, the Indenture Trustee shall not require the
deposit of cash into the Payment Account or any other account to cover the
amount of that Mortgage Loan and shall solely treat such Mortgage Loan as if it
were in breach of a representation or warranty; provided that the aggregate
Stated Principal Balance of such Mortgage Loans does not exceed 1% of the sum of
the Cut-off Date Balance and the Group 1 Original Pre-Funded Amount and Group 2
Original Pre-Funded Amount.

      (b) No later than 180 days after the Closing Date (with respect to the
Initial Mortgage Loans) or the applicable Subsequent Transfer Date (with respect
to the related Group 1 Subsequent Mortgage Loans and Group 2 Subsequent Mortgage
Loans), the Indenture Trustee will review, for the benefit of the Bondholders,
the Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Seller, a Final Certification in the form annexed hereto as
Exhibit H. In conducting such review, the Indenture Trustee will ascertain
whether an original of each document described in subclauses (b)(ii)-(iv) of
Section 2.1 of (i) the Mortgage Loan Purchase Agreement, with respect to the
Initial Mortgage Loans, and (ii) any Group 1 or Group 2 Subsequent Mortgage Loan
Purchase Agreement, with respect to the related Group 1 Subsequent Mortgage
Loans and Group 2 Subsequent Mortgage Loans, required to be recorded has been
returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office. If the Indenture
Trustee finds any document constituting part of the Mortgage File has not been
received, or to be unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
Exhibit B to this Indenture or to appear defective on its face, the Indenture
Trustee shall promptly notify the Seller.

      (c) Upon deposit of the Repurchase Price in the Payment Account, the
Indenture Trustee shall release to the Seller the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by the Seller as are necessary to vest in the Seller
title to and rights under the related Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the certification of deposit of the
Repurchase Price in the Payment Account was received by the Indenture Trustee.
The Indenture Trustee shall amend the applicable Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Master Servicer and the
Rating Agencies of such amendment.

      Section 2.04 Acceptance of Derivative Contracts by Indenture Trustee. The
Indenture Trustee acknowledges receipt of the Derivative Contracts and declares
that it holds and will continue to hold these documents and any amendments,
replacements or supplements thereto and

<PAGE>

all other assets of the Trust Estate as Indenture Trustee in trust for the use
and benefit of all present and future Holders of the Bonds. The Indenture
Trustee shall enforce the Derivative Contracts in accordance with their terms.

      Section 2.05 Conveyance of the Group 1 Subsequent Mortgage Loans. (a)
Subject to the conditions set forth in paragraph (b) below and in consideration
of the Indenture Trustee's delivery on the applicable Subsequent Transfer Dates,
to or upon the written order of the Depositor, of all or a portion of the
balance of funds in the Group 1 Pre-Funding Account, the Depositor shall on any
Group 1 Subsequent Transfer Date sell, transfer, assign, set over and convey
without recourse to the Trust Estate, but subject to the other terms and
provisions of this Agreement, all of the right, title and interest of the
Depositor in and to (i) the related Group 1 Subsequent Mortgage Loans identified
on the Mortgage Loan Schedule attached to the related Group 1 Subsequent
Transfer Instrument delivered by the Depositor on such Group 1 Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date (with respect to the Group 1 Subsequent Mortgage Loans) and all
collections in respect of interest and principal due after the Subsequent
Cut-off Date and (iii) all items with respect to such Group 1 Subsequent
Mortgage Loans to be delivered pursuant to Section 2.03 and the other items in
the related Mortgage Files; provided, however, that the Depositor reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Group 1 Subsequent Mortgage Loans prior to the related
Subsequent Cut-off Date. The transfer to the Indenture Trustee for deposit in
the Trust Estate by the Depositor of the Group 1 Subsequent Mortgage Loans
identified on the Mortgage Loan Schedule shall be absolute and is intended by
the Depositor, the Master Servicer, the Indenture Trustee and the Bondholders to
constitute and to be treated as a sale of the Group 1 Subsequent Mortgage Loans
by the Depositor to the Trust Estate. The related Mortgage File for each Group 1
Subsequent Mortgage Loan shall be delivered to the Indenture Trustee at least
three (3) Business Days prior to the related Subsequent Transfer Date.

      The purchase price paid by the Indenture Trustee from amounts released
from the Group 1 Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Group 1 Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor).

      (b) The Depositor shall transfer to the Indenture Trustee for deposit in
the Trust Estate the applicable Group 1 Subsequent Mortgage Loans and the other
property and rights related thereto as described in paragraph (a) above, and the
Indenture Trustee shall release such applicable funds from the Group 1
Pre-Funding Account, only upon the satisfaction of each of the following
conditions on or prior to the related Group 1 Subsequent Transfer Date:

                  (i) the Depositor shall have provided the Indenture Trustee
      and the Rating Agencies with a timely Addition Notice and shall have
      provided any information reasonably requested by the Indenture Trustee
      with respect to the Group 1 Subsequent Mortgage Loans;

                  (ii) the Depositor shall have delivered to the Indenture
      Trustee a duly executed Group 1 Subsequent Transfer Instrument (which the
      Indenture Trustee is hereby authorized to execute), which shall include a
      Mortgage Loan Schedule listing the Group 1

<PAGE>

      Subsequent Mortgage Loans, and the Master Servicer, in its capacity as
      Originator, shall have delivered a computer file containing such Mortgage
      Loan Schedule to the Indenture Trustee at least three (3) Business Days
      prior to the related Group 1 Subsequent Transfer Date;

                  (iii) as of each Group 1 Subsequent Transfer Date, as
      evidenced by delivery of the related Group 1 Subsequent Transfer
      Instrument, substantially in the form of Exhibit E, the Depositor shall
      not be insolvent nor shall it have been rendered insolvent by such
      transfer nor shall it be aware of any pending insolvency;

                  (iv) such sale and transfer shall not result in a material
      adverse tax consequence to the Trust Estate or to the Bondholders;

                  (v) the Funding Period shall not have terminated;

                  (vi) the Depositor shall not have selected the applicable
      Group 1 Subsequent Mortgage Loans in a manner that it believed to be
      adverse to the interests of the Bondholders;

                  (vii) the Depositor shall have delivered to the Indenture
      Trustee the related Group 1 Subsequent Transfer Instrument confirming the
      satisfaction of the conditions precedent specified in this Section 2.05
      and, pursuant to such Group 1 Subsequent Transfer Instrument, assigned to
      the Indenture Trustee without recourse for the benefit of the Bondholders
      all the right, title and interest of the Depositor, in, to and under the
      applicable Group 1 Subsequent Mortgage Loan Purchase Agreement, to the
      extent of the related Group 1 Subsequent Mortgage Loans; and

                  (viii) the Depositor shall have delivered to the Indenture
      Trustee an Opinion of Counsel addressed to the Indenture Trustee and the
      Rating Agencies with respect to the transfer of the applicable Group 1
      Subsequent Mortgage Loans substantially in the form of the Opinion of
      Counsel delivered to the Indenture Trustee on the Closing Date regarding
      the validity of the conveyance and the true sale of such Group 1
      Subsequent Mortgage Loans.

      (c) The obligation of the Trust Estate to purchase a Group 1 Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such Group
1 Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Mortgage Loan may not be 30 or more days delinquent as of the
last day of the month preceding the Subsequent Cut-off Date; (ii) the original
term to stated maturity of such Mortgage Loan will be 360 months; (iii) each
Group 1 Subsequent Mortgage Loan must be an adjustable-rate mortgage loan with a
first lien on the related mortgaged property or a fixed-rate mortgage loan with
a first lien on the related mortgaged property; (iv) no Group 1 Subsequent
Mortgage Loan will have a first payment date occurring after May 1, 2005; (v)
the latest maturity date of any Group 1 Subsequent Mortgage Loan will be no
later than April 1, 2035; (vi) none of the Group 1 Subsequent Mortgage Loans
will be a buydown loan; (vii) such Mortgage Loan will have a credit score of not
less than 500;

<PAGE>

(viii) such Mortgage Loan will have a Mortgage Rate as of the applicable
Subsequent Cut-off Date ranging from approximately 2.990% per annum to
approximately 12.750% per annum; (ix) none of the Group 1 Subsequent Mortgage
loans will be a New York State "high cost" loan; and (x) such Group 1 Subsequent
Mortgage Loan shall have been underwritten in accordance with the criteria set
forth under "The Mortgage Pool--Underwriting Standards" in the Prospectus
Supplement.

      (d) In addition, following the purchase of any Group 1 Subsequent Mortgage
Loan by the Trust, the applicable Group 1 Subsequent Mortgage Loans will as of
the related Subsequent Cut-off Date: (i) have a weighted average Mortgage Rate
ranging from 4.750% to 6.500% per annum; (ii) consist of Mortgage Loans with
prepayment charges representing no less than approximately 70% of the Pool
Balance; (iii) have a weighted average credit score ranging from 675 to 720;
(iv) have no more than 75% of such Mortgage Loans concentrated in the state of
California; (v) have no less than 75% of the mortgaged properties securing Group
1 Loans be owner occupied; (vi) have no less than 65% of the mortgaged
properties securing Group 1 Loans be single family detached and de minimis
planned unit developments; (vii) have no more than 35% of the Group 1 Loans be
cash-out refinance; (viii) substantially all of the Group 1 Subsequent Mortgage
Loans with a loan-to-value ratio greater than 80% will be covered by a Primary
Insurance Policy or the PMI Insurer Policy; (ix) have no more than 74% of the
Group 1 Loans be Mortgage Loans with an interest only period; and (x) together
with the Group 1 Loans already included in the trust, have no more than 1.50% of
such Mortgage Loans (by aggregate Stated Principal Balance as of the Subsequent
Cut-off Date) secured by mortgaged properties located in any one zip code.

      (e) Notwithstanding the foregoing, any Group 1 Subsequent Mortgage Loan
may be rejected by any Rating Agency if the inclusion of any such Group 1
Subsequent Mortgage Loan would adversely affect the ratings of the Bonds. In
addition, minor variances from the characteristics stated above will be
permitted with the consent of the Rating Agencies so long as there are
compensating factors, and the consent of the Rating Agencies to any group of
Group 1 Subsequent Mortgage Loans shall mean that the representations and
warranties set forth in clauses (c) and (d) above are accurate; provided,
however, that the information furnished to the Rating Agencies in respect of
such Group 1 Subsequent Mortgage Loans is true and correct in all material
respects. At least one (1) Business Day prior to the applicable Group 1
Subsequent Transfer Date, each Rating Agency shall notify the Indenture Trustee
as to which Group 1 Subsequent Mortgage Loans, if any, shall not be included in
the transfer on such Group 1 Subsequent Transfer Date; provided, however, that
the Master Servicer, in its capacity as Originator, shall have delivered to each
Rating Agency at least three (3) Business Days prior to such Group 1 Subsequent
Transfer Date a computer file acceptable to each Rating Agency describing the
characteristics specified in paragraphs (c) and (d) above.

      Section 2.06 Conveyance of the Group 2 Subsequent Mortgage Loans. (a)
Subject to the conditions set forth in paragraph (b) below and in consideration
of the Indenture Trustee's delivery on the applicable Subsequent Transfer Dates,
to or upon the written order of the Depositor, of all or a portion of the
balance of funds in the Group 2 Pre-Funding Account, the Depositor shall on any
Group 2 Subsequent Transfer Date sell, transfer, assign, set over and convey
without recourse to the Trust Estate, but subject to the other terms and
provisions of this Agreement, all of the right, title and interest of the
Depositor in and to (i) the related Group 2

<PAGE>

Subsequent Mortgage Loans identified on the Mortgage Loan Schedule attached to
the related Group 2 Subsequent Transfer Instrument delivered by the Depositor on
such Group 2 Subsequent Transfer Date, (ii) all interest accruing thereon on and
after the Subsequent Cut-off Date (with respect to the Group 2 Subsequent
Mortgage Loans) and all collections in respect of interest and principal due
after the Subsequent Cut-off Date and (iii) all items with respect to such Group
2 Subsequent Mortgage Loans to be delivered pursuant to Section 2.03 and the
other items in the related Mortgage Files; provided, however, that the Depositor
reserves and retains all right, title and interest in and to principal received
and interest accruing on the Group 2 Subsequent Mortgage Loans prior to the
related Subsequent Cut-off Date. The transfer to the Indenture Trustee for
deposit in the Trust Estate by the Depositor of the Group 2 Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule shall be absolute and is intended
by the Depositor, the Master Servicer, the Indenture Trustee and the Bondholders
to constitute and to be treated as a sale of the Group 2 Subsequent Mortgage
Loans by the Depositor to the Trust Estate. The related Mortgage File for each
Group 2 Subsequent Mortgage Loan shall be delivered to the Indenture Trustee at
least three (3) Business Days prior to the related Subsequent Transfer Date.

      The purchase price paid by the Indenture Trustee from amounts released
from the Group 2 Pre-Funding Account shall be one-hundred percent (100%) of the
aggregate Stated Principal Balance of the Group 2 Subsequent Mortgage Loans so
transferred (as identified on the Mortgage Loan Schedule provided by the
Depositor).

      (b) The Depositor shall transfer to the Indenture Trustee for deposit in
the Trust Estate the applicable Group 2 Subsequent Mortgage Loans and the other
property and rights related thereto as described in paragraph (a) above, and the
Indenture Trustee shall release such applicable funds from the Group 2
Pre-Funding Account, only upon the satisfaction of each of the following
conditions on or prior to the related Group 2 Subsequent Transfer Date:

                  (i) the Depositor shall have provided the Indenture Trustee
      and the Rating Agencies with a timely Addition Notice and shall have
      provided any information reasonably requested by the Indenture Trustee
      with respect to the Group 2 Subsequent Mortgage Loans;

                  (ii) the Depositor shall have delivered to the Indenture
      Trustee a duly executed Group 1 Subsequent Transfer Instrument (which the
      Indenture Trustee is hereby authorized to execute), which shall include a
      Mortgage Loan Schedule listing the Group 2 Subsequent Mortgage Loans, and
      the Master Servicer, in its capacity as Originator, shall have delivered a
      computer file containing such Mortgage Loan Schedule to the Indenture
      Trustee at least three (3) Business Days prior to the related Group 2
      Subsequent Transfer Date;

                  (iii) as of each Group 2 Subsequent Transfer Date, as
      evidenced by delivery of the related Group 2 Subsequent Transfer
      Instrument, substantially in the form of Exhibit E, the Depositor shall
      not be insolvent nor shall it have been rendered insolvent by such
      transfer nor shall it be aware of any pending insolvency;

<PAGE>

                  (iv) such sale and transfer shall not result in a material
      adverse tax consequence to the Trust Estate or to the Bondholders;

                  (v) the Funding Period shall not have terminated;

                  (vi) the Depositor shall not have selected the applicable
      Group 2 Subsequent Mortgage Loans in a manner that it believed to be
      adverse to the interests of the Bondholders;

                  (vii) the Depositor shall have delivered to the Indenture
      Trustee the related Group 2 Subsequent Transfer Instrument confirming the
      satisfaction of the conditions precedent specified in this Section 2.06
      and, pursuant to such Group 2 Subsequent Transfer Instrument, assigned to
      the Indenture Trustee without recourse for the benefit of the Bondholders
      all the right, title and interest of the Depositor, in, to and under the
      applicable Group 2 Subsequent Mortgage Loan Purchase Agreement, to the
      extent of the related Group 2 Subsequent Mortgage Loans; and

                  (viii) the Depositor shall have delivered to the Indenture
      Trustee an Opinion of Counsel addressed to the Indenture Trustee and the
      Rating Agencies with respect to the transfer of the applicable Group 2
      Subsequent Mortgage Loans substantially in the form of the Opinion of
      Counsel delivered to the Indenture Trustee on the Closing Date regarding
      the validity of the conveyance and the true sale of such Group 2
      Subsequent Mortgage Loans.

      (c) The obligation of the Trust Estate to purchase a Group 2 Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such Group
2 Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Mortgage Loan may not be 30 or more days delinquent as of the
last day of the month preceding the Subsequent Cut-off Date; (ii) the original
term to stated maturity of such Mortgage Loan will be 360 months; (iii) each
Group 2 Subsequent Mortgage Loan must be an adjustable-rate mortgage loan with a
first lien on the related mortgaged property or a fixed-rate mortgage loan with
a first lien on the related mortgaged property; (iv) no Group 2 Subsequent
Mortgage Loan will have a first payment date occurring after May 1, 2005; (v)
the latest maturity date of any Group 2 Subsequent Mortgage Loan will be no
later than April 1, 2035; (vi) none of the Group 2 Subsequent Mortgage Loans
will be a buydown loan; (vii) such Mortgage Loan will have a credit score of not
less than 500; (viii) such Mortgage Loan will have a Mortgage Rate as of the
applicable Subsequent Cut-off Date ranging from approximately 2.990% per annum
to approximately 12.750% per annum; (ix) none of the Group 2 Subsequent Mortgage
loans will be a New York State "high cost" loan; and (x) such Group 2 Subsequent
Mortgage Loan shall have been underwritten in accordance with the criteria set
forth under "The Mortgage Pool--Underwriting Standards" in the Prospectus
Supplement.

      (d) In addition, following the purchase of any Group 2 Subsequent Mortgage
Loan by the Trust, the applicable Group 2 Subsequent Mortgage Loans will as of
the related Subsequent Cut-off Date: (i) have a weighted average Mortgage Rate
ranging from 5.750% to 6.750% per

<PAGE>

annum; (ii) consist of Mortgage Loans with prepayment charges representing no
less than approximately 55% of the Pool Balance; (iii) have a weighted average
credit score ranging from 675 to 720; (iv) have no more than 75% of such
Mortgage Loans concentrated in the state of California; (v) have no less than
70% of the mortgaged properties securing Group 2 Loans be owner occupied; (vi)
have no less than 65% of the mortgaged properties securing Group 2 Loans be
single family detached and de minimis planned unit developments; (vii) have no
more than 35% of the Group 2 Loans be cash-out refinance; (viii) substantially
all of the Group 1 Subsequent Mortgage Loans with a loan-to-value ratio greater
than 80% will be covered by a Primary Insurance Policy or the PMI Insurer
Policy; (ix) have no more than 74% of the Group 2 Loans be Mortgage Loans with
an interest only period; and (x) together with the Group 2 Loans already
included in the trust, have no more than 1.50% of such Mortgage Loans (by
aggregate Stated Principal Balance as of the Subsequent Cut-off Date) secured by
mortgaged properties located in any one zip code.

      (e) Notwithstanding the foregoing, any Group 2 Subsequent Mortgage Loan
may be rejected by any Rating Agency if the inclusion of any such Group 2
Subsequent Mortgage Loan would adversely affect the ratings of the Bonds. In
addition, minor variances from the characteristics stated above will be
permitted with the consent of the Rating Agencies so long as there are
compensating factors, and the consent of the Rating Agencies to any group of
Group 1 Subsequent Mortgage Loans shall mean that the representations and
warranties set forth in clauses (c) and (d) above are accurate; provided,
however, that the information furnished to the Rating Agencies in respect of
such Group 2 Subsequent Mortgage Loans is true and correct in all material
respects. At least one (1) Business Day prior to the applicable Group 2
Subsequent Transfer Date, each Rating Agency shall notify the Indenture Trustee
as to which Group 2 Subsequent Mortgage Loans, if any, shall not be included in
the transfer on such Group 2 Subsequent Transfer Date; provided, however, that
the Master Servicer, in its capacity as Originator, shall have delivered to each
Rating Agency at least three (3) Business Days prior to such Group 2 Subsequent
Transfer Date a computer file acceptable to each Rating Agency describing the
characteristics specified in paragraphs (c) and (d) above.

<PAGE>

                                   ARTICLE III

                                    Covenants

      Section 3.01 Collection of Payments with respect to the Mortgage Loans.
The Indenture Trustee shall establish and maintain an Eligible Account (the
"Payment Account") in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Master
Servicer, each remittance received by the Indenture Trustee with respect to the
Mortgage Loans. The Indenture Trustee shall make all payments of principal of
and interest on the Bonds, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Payment Account.

      Section 3.02 Maintenance of Office or Agency. The Issuer will maintain an
office or agency where, subject to satisfaction of conditions set forth herein,
Bonds may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders may be made at
the office of the Indenture Trustee located at c/o DTC Transfer Services, 55
Water Street, Jeanette Park Entrance, New York, New York, 10041, and notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.

      Section 3.03 Money for Payments To Be Held in Trust; Paying Agent. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Bonds that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Bonds shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee
as its Paying Agent.

      The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:

                  (i) hold all sums held by it for the payment of amounts due
      with respect to the Bonds in trust for the benefit of the Persons entitled
      thereto until such sums shall be paid to such Persons or otherwise
      disposed of as herein provided and pay such sums to such Persons as herein
      provided;

                  (ii) give the Indenture Trustee notice of any default by the
      Issuer of which it has actual knowledge in the making of any payment
      required to be made with respect to the Bonds;

<PAGE>

                  (iii) at any time during the continuance of any such default,
      upon the written request of the Indenture Trustee, forthwith pay to the
      Indenture Trustee all sums so held in trust by such Paying Agent;

                  (iv) immediately resign as Paying Agent and forthwith pay to
      the Indenture Trustee all sums held by it in trust for the payment of
      Bonds if at any time it ceases to meet the standards required to be met by
      a Paying Agent at the time of its appointment;

                  (v) comply with all requirements of the Code with respect to
      the withholding from any payments made by it on any Bonds of any
      applicable withholding taxes imposed thereon and with respect to any
      applicable reporting requirements in connection therewith; and

                  (vi) not commence a bankruptcy proceeding against the Issuer
      in connection with this Indenture.

      The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

      Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Bond and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Bond shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper published in the English language, notice that such
money remains unclaimed and that, after a date specified therein which shall not
be less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Indenture Trustee
may also adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Bonds have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Holder).

      Section 3.04 Existence. The Issuer will keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and

<PAGE>

franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Bonds, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.

      Section 3.05 Payment of Principal and Interest. (a) On each Payment Date
from amounts on deposit in the Payment Account in accordance with Section 8.02
hereof, the Indenture Trustee shall pay to the Persons specified below, to the
extent provided therein, the Available Funds for such Payment Date.

      (b) On each Payment Date, the Group 1 Available Funds shall be distributed
in the following order of priority, in each case to the extent of the Group 1
Available Funds remaining for such Payment Date:

                  (i) concurrently, to the Holders of the Class 1-A-1, Class
      1-A-2 and Class A-IO-1 Bonds, the related Accrued Bond Interest for such
      Class for such Payment Date;

                  (ii) to the Holders of the Class M-1-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iii) to the Holders of the Class M-2-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iv) to the Holders of the Class M-3-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (v) to the Holders of the Class M-4-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (vi) to the Holders of the Class M-5-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (vii) to the Holders of the Class M-6-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date; and

                  (viii) to the Holders of the Class B-1 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date.

      (c) On each Payment Date, the Holders of the Group 1 Bonds, other than the
Class A-IO-1 Bonds, shall be entitled to receive payments in respect of
principal equal the related Principal Distribution Amount for that Payment Date,
allocated on a pro rata basis, based on the Bond Principal Balances thereof, in
reduction of the Bond Principal Balances thereof, until the Bond Principal
Balances thereof have been reduced to zero.

      (d) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group 1 Loans shall be paid as follows:

<PAGE>

                  (i) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 1 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(c) above;

                  (ii) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 2 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(g) below;

                  (iii) if Loan Group 1 is an Undercollateralized Loan Group, to
      the Holders of the Group 1 Bonds, pro rata, an amount in respect of
      principal equal to any remaining outstanding Subordinated Transfer
      Realized Loss Amount, payable to such Holders of the Group 1 Bonds as part
      of the related Principal Distribution Amount as described under Section
      3.05(c) above, until either (a) such amount has been reduced to zero or
      (b) the Overcollateralized Amount for Loan Group 2 is equal to the Group 2
      Overcollateralization Target Amount;

                  (iv) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 1 Loans during the related Due
      Period, payable to such Holders of the Group 1 Bonds as part of the
      related Principal Distribution Amount as described under Section 3.05(c)
      above, but not greater than the amount required to increase the
      Overcollateralized Amount for Loan Group 1 to the Group 1
      Overcollateralization Target Amount;

                  (v) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 2 Loans during the related Due
      Period, to the extent unreimbursed by Net Monthly Excess Cashflow for the
      Group 2 Loans on that Payment Date, payable to such Holders of the Group 2
      Bonds as part of the related Principal Distribution Amount as described
      under Section 3.05(g) below, but not greater than the amount required to
      increase the Overcollateralized Amount for Loan Group 2 to the Group 2
      Overcollateralization Target Amount;

                  (vi) to the Holders of the Class 1-A-1 Bonds and Class 1-A-2
      Bonds and the Class M-1-1, Class M-2-1, Class M-3-1, Class M-4-1, Class
      M-5-1, Class M-6-1 and Class B-1 Bonds, pro rata, an amount equal to any
      related Overcollateralization Increase Amount, payable to such Holders as
      part of the related Principal Distribution Amount as described under
      Section 3.05(c) above;

                  (vii) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any related Overcollateralization Increase Amount resulting from
      any previously unreimbursed Realized Losses on the Group 2 Loans, to the
      extent that such Realized Losses have not been reimbursed by related and
      non-related Net Monthly Excess Cashflow on prior Payment Dates, payable to
      such Holders of the Group 2 Bonds as part of the related Principal
      Distribution Amount as described under Section 3.05(g) below;

<PAGE>

                  (viii) first, to the Holders of the Class 1-A-2 Bonds, and
      second, to the Holders of the Underlying Class M-1-1, Class M-1-2, Class
      M-2-1, Class M-2-2, Class M-3-1, Class M-3-2, Class M-4-1, Class M-4-2,
      Class M-5-1, Class M-5-2, Class M-6-1, Class M-6-2, Class B-1 and Class
      B-2 Bonds, in that order, in an amount equal to the Allocated Realized
      Loss Amount for such Classes of the Class 1-A-2 Bonds, the Underlying
      Class M Bonds and Underlying Class B Bonds, except that in the case of the
      non-related Underlying Class M Bonds or Underlying Class B Bonds, to the
      extent not covered by non-related Net Monthly Excess Cashflow;

                  (ix) first, concurrently to the Holders of the Class 1-A-1
      Bonds and Class 1-A-2 Bonds, and second, to the Underlying Class M-1-1,
      Class M-2-1, Class M-3-1, Class M-4-1, Class M-5-1, Class M-6-1 and Class
      B-1 Bonds, in that order, any Unpaid Interest Shortfall for such Bonds on
      such Payment Date, to the extent not previously reimbursed

                  (x) first, concurrently to the Holders of the Class 1-A-1
      Bonds and Class 1-A-2 Bonds, and second, sequentially to the Holders of
      the Class M-1-1, Class M-2-1, Class M-3-1, Class M-4-1, Class M-5-1, Class
      M-6-1 and Class B-1 Bonds, in that order, any related Basis Risk Shortfall
      Carry-Forward Amount for such Bonds on such Payment Date, to the extent
      not covered by the Derivative Contracts;

                  (xi) to the Indenture Trustee for amounts owed the Indenture
      Trustee hereunder remaining unpaid; and

                  (xii) any remaining amounts will be distributed to the
      Certificate Paying Agent, as designee of the Issuer, for the benefit of
      the Holders of the Owner Trust Certificates.

      (e) With respect to the Derivative Contracts and on each Payment Date, the
Net Derivative Contract Payment Amount with respect to such Payment Date shall
be distributed in the following order of priority, in each case to the extent of
amounts available:

                  (i) concurrently to the Holders of the Class 1-A-1, Class
      1-A-2, Class 2-A-1 and Class 2-A-2 Bonds, pro rata, any related Basis Risk
      Shortfall Carry-Forward Amount for such Payment Date;

                  (ii) to the Class M-1-1 Bonds and Class M-1-2 Bonds, pro rata,
      any related Basis Risk Shortfall Carry-Forward Amount for such Payment
      Date;

                  (iii) to the Class M-2-1 Bonds and Class M-2-2 Bonds, pro
      rata, any related Basis Risk Shortfall Carry-Forward Amount for such
      Payment Date;

                  (iv) to the Class M-3-1 Bonds and Class M-3-2 Bonds, pro rata,
      any related Basis Risk Shortfall Carry-Forward Amount for such Payment
      Date;

                  (v) to the Class M-4-1 Bonds and Class M-4-2 Bonds, pro rata,
      any related Basis Risk Shortfall Carry-Forward Amount for such Payment
      Date;

<PAGE>

                  (vi) to the Class M-5-1 Bonds and Class M-5-2 Bonds, pro rata,
      any related Basis Risk Shortfall Carry-Forward Amount for such Payment
      Date;

                  (vii) to the Class M-6-1 Bonds and Class M-6-2 Bonds, pro
      rata, any related Basis Risk Shortfall Carry-Forward Amount for such
      Payment Date;

                  (viii) to the Class B-1 Bonds and the Class B-2 Bonds, pro
      rata, any related Basis Risk Shortfall Carry-Forward Amount for such
      Payment Date;

                  (viii) on or after the Payment Date in February 2006, any
      remaining amounts shall be included in the Net Monthly Excess Cashflow
      for the Group 1 Loans and the Group 2 Loans, pro rata, based on the
      aggregate Stated Principal Balances of the Group 1 Loans and Group 2
      Loans, and shall be used as described in Section 3.05(d) above and Section
      3.05(h) below; and

                  (ix) any remaining amounts will be distributed to the
      Certificate Paying Agent, as designee of the Issuer, for the benefit of
      the Holders of the Owner Trust Certificates.

      (f) On each Payment Date, the Group 2 Available Funds shall be distributed
in the following order of priority, in each case to the extent of the Group 2
Available Funds remaining for such Payment Date:

                  (i) concurrently to the Holders of the Class 2-A-1, Class
      2-A-2 and Class A-IO-2 Bonds, the related Accrued Bond Interest for such
      Class for such Payment Date;

                  (ii) to the Holders of the Class M-1-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iii) to the Holders of the Class M-2-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (iv) to the Holders of the Class M-3-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (v) to the Holders of the Class M-4-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (vi) to the Holders of the Class M-5-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date;

                  (vii) to the Holders of the Class M-6-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date; and

                  (viii) to the Holders of the Class B-2 Bonds, the related
      Accrued Bond Interest for such Class for such Payment Date.

<PAGE>

      (g) On each Payment Date, the Holders of the Group 2 Bonds, other than the
Class A-IO-2 Bonds, shall be entitled to receive payments in respect of
principal equal the related Principal Distribution Amount for that Payment Date,
allocated on a pro rata basis, in reduction of the Bond Principal Balance
thereof, until the Bond Principal Balance thereof have been reduced to zero.

      (h) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group 2 Loans shall be paid as follows:

                  (i) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 2 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(g) above;

                  (ii) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any related Undercollateralized Amount, payable to such Holders
      of the Group 1 Bonds as part of the related Principal Distribution Amount
      as described under Section 3.05(c) above;

                  (iii) if Loan Group 2 is an Undercollateralized Loan Group, to
      the Holders of the Group 2 Bonds, pro rata, an amount in respect of
      principal equal to any remaining outstanding Subordinated Transfer
      Realized Loss Amount, payable to such Holders of the Group 2 Bonds as part
      of the related Principal Distribution Amount as described under Section
      3.05(g) above, until either (a) such amount has been reduced to zero or
      (b) the Overcollateralized Amount for Loan Group 1 is equal to the Group 1
      Overcollateralization Target Amount;

                  (iv) to the Holders of the Group 2 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 2 Loans during the related Due
      Period, payable to such Holders of the Group 2 Bonds as part of the
      related Principal Distribution Amount as described under Section 3.05(g)
      above, but not greater than the amount required to increase the
      Overcollateralized Amount for Loan Group 2 to the Group 2
      Overcollateralization Target Amount;

                  (v) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any Realized Losses on the Group 1 Loans during the related Due
      Period, to the extent unreimbursed by Net Monthly Excess Cashflow for the
      Group 1 Loans on that Payment Date, payable to such Holders of the Group 1
      Bonds as part of the related Principal Distribution Amount as described
      under Section 3.05(c) above, but not greater than the amount required to
      increase the Overcollateralized Amount for Loan Group 1 to the Group 1
      Overcollateralization Target Amount;

                  (vi) to the Holders of the Class 2-A-1 Bonds and Class 2-A-2
      Bonds and the Class M-1-2, Class M-2-2, Class M-3-2, Class M-4-2, Class
      M-5-2, Class M-6-2 and Class B-2 Bonds, pro rata, an amount equal to any
      related Overcollateralization Increase Amount, payable to such Holders as
      part of the related Principal Distribution Amount as described under
      Section 3.05(g) above;

<PAGE>

                  (vii) to the Holders of the Group 1 Bonds, pro rata, an amount
      equal to any related Overcollateralization Increase Amount resulting from
      any previously unreimbursed Realized Losses on the Group 1 Loans, to the
      extent that such Realized Losses have not been reimbursed by related and
      non-related Net Monthly Excess Cashflow on prior Payment Dates, payable to
      such Holders of the Group 1 Bonds as part of the related Principal
      Distribution Amount as described under Section 3.05(c) above;

                  (viii) first, to the holders of the Class 2-A-2 Bond, and
      second, to the Holders of the Class M-1-2, Class M-1-1, Class M-2-2, Class
      M-2-1, Class M-3-2, Class M-3-1, Class M-4-2, Class M-4-1, Class M-5-2,
      Class M-5-1, Class M-6-2, Class M-6-1 and Class B-2 Bonds, in that order,
      in an amount equal to the Allocated Realized Loss Amount for such classes
      of the Class 2-A-2 Bonds, Underlying Class M Bonds and Underlying Class B
      Bonds, in each case to the extent not covered by non-related Net Monthly
      Excess Cashflow for a non-related Underlying Class M Bond or Underlying
      Class B Bond;

                  (ix) first, concurrently, to the Holders of the Class 2-A-1
      Bonds and Class 2-A-2 Bonds, second, sequentially, to the Class M-1-2,
      Class M-2-2, Class M-3-2, Class M-4-2, Class M-5-2, Class M-6-2 and Class
      B-2 Bonds, in that order, any Unpaid Interest Shortfall for such Bonds on
      such Payment Date, to the extent not previously reimbursed;

                  (x) first, concurrently, to the Holders of the Class 2-A-1
      Bonds and Class 2-A-2 Bonds, and second, sequentially, to the Underlying
      Class M-1-2, Class M-2-2, Class M-3-2, Class M-4-2, Class M-5-2, Class
      M-6-2 and Class B-2 Bonds, in that order, any related Basis Risk Shortfall
      Carry-Forward Amount for such Bonds on such Payment Date, to the extent
      not covered by the Derivative Contracts, as applicable;

                  (xi) to the Indenture Trustee for amounts owed the Indenture
      Trustee hereunder remaining unpaid; and

                  (xii) any remaining amounts will be distributed to the
      Certificate Paying Agent, as designee of the Issuer, for the benefit of
      the Holders of the Owner Trust Certificates.

      (i) [reserved].

      (j) [reserved].

      (k) Each distribution with respect to a Book-Entry Bond 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 Bond
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

<PAGE>

shall be responsible for disbursing funds to the Bond Owners that it represents.
None of the Indenture Trustee, the Bond Registrar, the Paying Agent, the
Depositor or the Master Servicer shall have any responsibility therefor except
as otherwise provided by this Indenture or applicable law.

      (l) On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholders.

      (m) Any installment of interest or principal, if any, payable on any Bond
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if such Holder shall have so requested at least five
Business Days prior to the related Record Date, be paid to each Holder of record
on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder reasonably satisfactory to the Indenture Trustee as of
the preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Bondholder mailed to
such Holder's address as it appears in the Bond Register in the amount required
to be distributed to such Holder on such Payment Date pursuant to such Holder's
Bonds; provided, however, that the Indenture Trustee shall not pay to such
Holders any amount required to be withheld from a payment to such Holder by the
Code.

      (n) The principal of each Bond shall be due and payable in full on the
Final Scheduled Payment Date for such Bond as provided in the forms of Bond set
forth in Exhibits A-1, A-2 and A-3 to this Indenture. All principal payments on
the Bonds shall be made to the Bondholders entitled thereto in accordance with
the Percentage Interests represented by such Bonds. Upon notice to the Indenture
Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose
name a Bond is registered at the close of business on the Record Date preceding
the Final Scheduled Payment Date or other final Payment Date (including any
final Payment Date resulting from any redemption pursuant to Section 8.07
hereof). Such notice shall to the extent practicable be mailed no later than
five Business Days prior to such Final Scheduled Payment Date or other final
Payment Date and shall specify that payment of the principal amount and any
interest due with respect to such Bond at the Final Scheduled Payment Date or
other final Payment Date will be payable only upon presentation and surrender of
such Bond and shall specify the place where such Bond may be presented and
surrendered for such final payment. No interest shall accrue on the Bonds on or
after the Final Scheduled Payment Date or any such other final Payment Date.

      The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.05 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

      Section 3.06 Protection of Trust Estate. (a) The Issuer will from time to
time prepare, execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:

<PAGE>

                  (i) maintain or preserve the lien and security interest (and
      the priority thereof) of this Indenture or carry out more effectively the
      purposes hereof;

                  (ii) perfect, publish notice of or protect the validity of any
      Grant made or to be made by this Indenture;

                  (iii) cause the Issuer or Master Servicer to enforce any of
      the rights to the Mortgage Loans; or

                  (iv) preserve and defend title to the Trust Estate and the
      rights of the Indenture Trustee and the Bondholders in such Trust Estate
      against the claims of all Persons and parties.

      (b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.07 hereof (or from the jurisdiction in which it was held
as described in the Opinion of Counsel delivered on the Closing Date pursuant to
Section 3.07(a) hereof, or if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b) hereof, unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions).

      The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.06 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

      Section 3.07 Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and first
priority security interest in the Collateral and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and first priority security interest effective.

      (b) On or before April 15 in each calendar year, beginning in 2006, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the

<PAGE>

execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest in the Collateral until December 31 in the following calendar
year.

      Section 3.08 Performance of Obligations. (a) The Issuer will punctually
perform and observe all of its obligations and agreements contained in this
Indenture, the Basic Documents and in the instruments and agreements included in
the Trust Estate.

      (b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer.

      (c) The Issuer will not take any action or permit any action to be taken
by others which would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the Mortgage Loans or under
any instrument included in the Trust Estate, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Master Servicer is
expressly permitted to take in the Servicing Agreement. The Indenture Trustee,
as pledgee of the Mortgage Loans, shall be able to exercise the rights of the
Issuer to direct the actions of the Master Servicer pursuant to the Servicing
Agreement.

      (d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.

      Section 3.09 Negative Covenants. So long as any Bonds are Outstanding, the
Issuer shall not:

                  (i) except as expressly permitted by this Indenture, sell,
      transfer, exchange or otherwise dispose of the Trust Estate, unless
      directed to do so by the Indenture Trustee;

                  (ii) claim any credit on, or make any deduction from the
      principal or interest payable in respect of, the Bonds (other than amounts
      properly withheld from such payments under the Code) or assert any claim
      against any present or former Bondholder by reason of the payment of the
      taxes levied or assessed upon any part of the Trust Estate;

                  (iii) (A) permit the validity or effectiveness of this
      Indenture to be impaired, or permit the lien of this Indenture to be
      amended, hypothecated, subordinated, terminated or discharged, or permit
      any Person to be released from any covenants or obligations with respect
      to the Bonds under this Indenture except as may be expressly permitted
      hereby, (B) permit any lien, charge, excise, claim, security interest,
      mortgage or other encumbrance (other than the lien of this Indenture) to
      be created on or extend to or otherwise arise upon or burden the Trust
      Estate or any part thereof or any interest

<PAGE>

      therein or the proceeds thereof or (C) permit the lien of this Indenture
      not to constitute a valid first priority security interest in the Trust
      Estate; or

                  (iv) waive or impair, or fail to assert rights under, the
      Mortgage Loans, or impair or cause to be impaired the Issuer's interest in
      the Mortgage Loans, the Mortgage Loan Purchase Agreement or in any Basic
      Document, if any such action would materially and adversely affect the
      interests of the Bondholders.

      Section 3.10 Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee, by March 1 of each year commencing with the calendar year
2006, an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that:

                  (i) a review of the activities of the Issuer during the
      previous calendar year and of its performance under this Indenture has
      been made under such Authorized Officer's supervision; and

                  (ii) to the best of such Authorized Officer's knowledge, based
      on such review, the Issuer has complied with all conditions and covenants
      under this Indenture throughout such year, or, if there has been a default
      in its compliance with any such condition or covenant, specifying each
      such default known to such Authorized Officer and the nature and status
      thereof.

      Section 3.11 Representations and Warranties Concerning the Mortgage Loans.
The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
representations and warranties made by the Seller in (i) the Mortgage Loan
Purchase Agreement concerning the Seller and the Initial Mortgage Loans and (ii)
any Group 1 or Group 2 Subsequent Mortgage Loan Purchase Agreements concerning
the Seller and the Group 1 or Group 2 Subsequent Mortgage Loans to the same
extent as though such representations and warranties were made directly to the
Indenture Trustee. If a Responsible Officer of the Indenture Trustee has actual
knowledge of any breach of any representation or warranty made by the Seller in
the Mortgage Loan Purchase Agreement or in the applicable Group 1 or Group 2
Subsequent Mortgage Loan Purchase Agreements, the Indenture Trustee shall
promptly notify the Seller of such finding and the Seller's obligation to cure
such defect or repurchase or substitute for the related Mortgage Loan.

      Section 3.12 Amendments to Servicing Agreement. The Issuer covenants with
the Indenture Trustee that it will not enter into any amendment or supplement to
the Servicing Agreement without the prior written consent of the Indenture
Trustee.

      Section 3.13 Master Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Master Servicer, the Issuer and the Indenture
Trustee hereby acknowledge that the Master Servicer is acting as bailee of the
Indenture Trustee in holding amounts on deposit in the Collection Account, as
well as its bailee in holding any Related Documents released to the Master
Servicer, and any other items constituting a part of the Trust Estate which from
time to time come into the possession of the Master Servicer. It is intended
that, by the Master Servicer's acceptance of

<PAGE>

such bailee arrangement, the Indenture Trustee, as a secured party of the
Mortgage Loans, will be deemed to have possession of such Related Documents,
such monies and such other items for purposes of Section 9-305 of the Uniform
Commercial Code of the state in which such property is held by the Master
Servicer. The Indenture Trustee shall not be liable with respect to such
documents, monies or items while in possession of the Master Servicer.

      Section 3.14 Investment Company Act. The Issuer shall not become an
"investment company" or be under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section 3.14
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.

      Section 3.15 Issuer May Consolidate, etc. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:

                  (i) the Person (if other than the Issuer) formed by or
      surviving such consolidation or merger shall be a Person organized and
      existing under the laws of the United States of America or any state or
      the District of Columbia and shall expressly assume, by an indenture
      supplemental hereto, executed and delivered to the Indenture Trustee, in
      form reasonably satisfactory to the Indenture Trustee, the due and
      punctual payment of the principal of and interest on all Bonds, the
      Indenture Trustee and the Derivative Counterparty, the payment to the
      Certificate Paying Agent of all amounts due to the Certificateholders, and
      the performance or observance of every agreement and covenant of this
      Indenture on the part of the Issuer to be performed or observed, all as
      provided herein;

                  (ii) immediately after giving effect to such transaction, no
      Event of Default shall have occurred and be continuing;

                  (iii) the Rating Agencies shall have notified the Issuer that
      such transaction shall not cause the rating of the Bonds to be reduced,
      suspended or withdrawn or to be considered by either Rating Agency to be
      below investment grade;

                  (iv) the Issuer shall have received an Opinion of Counsel (and
      shall have delivered a copy thereof to the Indenture Trustee) to the
      effect that such transaction will not (A) result in a "substantial
      modification" of the Bonds under Treasury Regulation Section 1.1001-3, or
      adversely affect the status of the Bonds as indebtedness for federal
      income tax purposes, or (B) if 100% of the Certificates are not owned by
      IMH Assets Corp., cause the Trust to be subject to an entity level tax for
      federal income tax purposes;

                  (v) any action that is necessary to maintain the lien and
      security interest created by this Indenture shall have been taken; and

<PAGE>

                  (vi) the Issuer shall have delivered to the Indenture Trustee
      an Officer's Certificate and an Opinion of Counsel each stating that such
      consolidation or merger and such supplemental indenture comply with this
      Article III and that all conditions precedent herein provided for or
      relating to such transaction have been complied with (including any filing
      required by the Exchange Act), and that such supplemental indenture is
      enforceable.

      (b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:

                  (i) the Person that acquires by conveyance or transfer the
      properties and assets of the Issuer, the conveyance or transfer of which
      is hereby restricted, shall (A) be a United States citizen or a Person
      organized and existing under the laws of the United States of America or
      any state thereof, (B) expressly assume, by an indenture supplemental
      hereto, executed and delivered to the Indenture Trustee, in form
      satisfactory to the Indenture Trustee, the due and punctual payment of the
      principal of and interest on all Bonds and Derivative Counterparty and the
      performance or observance of every agreement and covenant of this
      Indenture on the part of the Issuer to be performed or observed, all as
      provided herein, (C) expressly agree by means of such supplemental
      indenture that all right, title and interest so conveyed or transferred
      shall be subject and subordinate to the rights of the Holders of the
      Bonds, (D) unless otherwise provided in such supplemental indenture,
      expressly agree to indemnify, defend and hold harmless the Issuer and the
      Indenture Trustee against and from any loss, liability or expense arising
      under or related to this Indenture and the Bonds and (E) expressly agree
      by means of such supplemental indenture that such Person (or if a group of
      Persons, then one specified Person) shall make all filings with the
      Commission (and any other appropriate Person) required by the Exchange Act
      in connection with the Bonds;

                  (ii) immediately after giving effect to such transaction, no
      Default or Event of Default shall have occurred and be continuing;

                  (iii) the Rating Agencies shall have notified the Issuer that
      such transaction shall not cause the rating of the Bonds to be reduced,
      suspended or withdrawn;

                  (iv) the Issuer shall have received an Opinion of Counsel (and
      shall have delivered a copy thereof to the Indenture Trustee) to the
      effect that such transaction will not (A) result in a "substantial
      modification" of the Bonds under Treasury Regulation section 1.1001-3, or
      adversely affect the status of the Bonds as indebtedness for federal
      income tax purposes, or (B) if 100% of the Certificates are not owned by
      IMH Assets Corp., cause the Trust to be subject to an entity level tax for
      federal income tax purposes;

                  (v) any action that is necessary to maintain the lien and
      security interest created by this Indenture shall have been taken; and

<PAGE>

                  (vi) the Issuer shall have delivered to the Indenture Trustee
      an Officer's Certificate and an Opinion of Counsel each stating that such
      conveyance or transfer and such supplemental indenture comply with this
      Article III and that all conditions precedent herein provided for relating
      to such transaction have been complied with (including any filing required
      by the Exchange Act).

      Section 3.16 Successor or Transferee. (a) Upon any consolidation or merger
of the Issuer in accordance with Section 3.15(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.

      (b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.15(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Bonds immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.

      Section 3.17 No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the Bonds and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.

      Section 3.18 No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds under this Indenture.

      Section 3.19 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.

      Section 3.20 Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

      Section 3.21 Determination of Bond Interest Rate. On each Interest
Determination Date the Indenture Trustee shall determine One-Month LIBOR and the
related Bond Interest Rate for each Class of Bonds for the following Accrual
Period and shall inform the Issuer, the Master Servicer, and the Depositor at
their respective facsimile numbers given to the Indenture Trustee in writing
thereof. The establishment of One-Month LIBOR on each Interest Determination
Date by the Indenture Trustee and the Indenture Trustee's calculation of the
rate of interest applicable to each Class of Bonds for the related Accrual
Period shall (in the absence of manifest error) be final and binding.

<PAGE>

      Section 3.22 Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that
the Issuer may make, or cause to be made, (x) distributions and payments to the
Owner Trustee, the Indenture Trustee, Bondholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under
this Indenture and the Trust Agreement and (y) payments to the Master Servicer
and the Subservicers pursuant to the terms of the Servicing Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Basic
Documents.

      Section 3.23 Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and under the Trust Agreement.

      Section 3.24 Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

      Section 3.25 Statements to Bondholders. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall make available on the
Indenture Trustee's website, https://www.tss.db.com/invr, to each Bondholder and
Certificateholder the most recent statement prepared by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement in the manner provided for
in Section 7.05 hereof.

      Section 3.26 Certain Representations Regarding the Trust Estate.

      (a) With respect to that portion of the Collateral described in clauses
(a) through (d) of the definition of Trust Estate, the Issuer represents to the
Indenture Trustee that:

                  (i) This Indenture creates a valid and continuing security
      interest (as defined in the applicable UCC) in the Collateral in favor of
      the Indenture Trustee, which security interest is prior to all other
      liens, and is enforceable as such as against creditors of and purchasers
      from the Issuer.

                  (ii) The Collateral constitutes "deposit accounts" or
      "instruments," as applicable, within the meaning of the applicable UCC.

                  (iii) The Issuer owns and has good and marketable title to the
      Collateral, free and clear of any lien, claim or encumbrance of any
      Person.

                  (iv) The Issuer has taken all steps necessary to cause the
      Indenture Trustee to become the account holder of the Collateral.

<PAGE>

                  (v) Other than the security interest granted to the Indenture
      Trustee pursuant to this Indenture, the Issuer has not pledged, assigned,
      sold, granted a security interest in, or otherwise conveyed any of the
      Collateral.

                  (vi) The Collateral is not in the name of any Person other
      than the Issuer or the Indenture Trustee. The Issuer has not consented to
      the bank maintaining the Collateral to comply with instructions of any
      Person other than the Indenture Trustee.

      (b) With respect to that portion of the Collateral described in clauses
(e) and (f), the Issuer represents to the Indenture Trustee that:

                  (i) This Indenture creates a valid and continuing security
      interest (as defined in the applicable UCC) in the Collateral in favor of
      the Indenture Trustee, which security interest is prior to all other
      liens, and is enforceable as such as against creditors of and purchasers
      from the Issuer.

                  (ii) The Collateral constitutes "general intangibles" within
      the meaning of the applicable UCC.

                  (iii) The Issuer owns and has good and marketable title to the
      Collateral, free and clear of any lien, claim or encumbrance of any
      Person.

                  (iv) Other than the security interest granted to the Indenture
      Trustee pursuant to this Indenture, the Issuer has not pledged, assigned,
      sold, granted a security interest in, or otherwise conveyed any of the
      Collateral.

      (c) With respect to any Collateral in which a security interest may be
perfected by filing, the Issuer has not authorized the filing of, and is not
aware of any financing statements against, the Issuer, that include a
description of collateral covering such Collateral, other than any financing
statement relating to the security interest granted to the Indenture Trustee
hereunder or that has been terminated. The Issuer is not aware of any judgment
or tax lien filings against the Issuer.

      (d) The Issuer has caused or will have caused, within ten days, the filing
of all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in all Collateral granted to the Indenture Trustee hereunder in which a
security interest may be perfected by filing. Any financing statement that is
filed in connection with this Section 3.26 shall contain a statement that a
purchase or security interest in any collateral described therein will violate
the rights of the secured party named in such financing statement.

      (e) The foregoing representations may not be waived and shall survive the
issuance of the Bonds.

Section 3.27 Interest Coverage Accounts.

      (a) No later than the Closing Date, the Indenture Trustee shall establish
and maintain two segregated trust accounts that are an Eligible Account, which
shall be titled "Group 1

<PAGE>

Interest Coverage Account, Deutsche Bank National Trust Company, as indenture
trustee for the registered holders of IMH Assets Corp., Collateralized
Asset-Backed Bonds, Series 2005-1" (the "Group 1 Interest Coverage Account") and
"Group 1 Interest Coverage Account, Deutsche Bank National Trust Company, as
indenture trustee for the registered holders of IMH Assets Corp., Collateralized
Asset-Backed Bonds, Series 2005-1" (the "Group 1 Interest Coverage Account" and
together with the Group 1 Interest Coverage Account, the "Interest Coverage
Accounts"). The Indenture Trustee shall, promptly upon receipt, deposit in each
Interest Coverage Account and retain therein related Interest Coverage Amount
remitted on the Closing Date to the Indenture Trustee by the Depositor. Funds
deposited in the Interest Coverage Accounts shall be held in trust by the
Indenture Trustee for the Bondholders for the uses and purposes set forth
herein.

      (b) For federal income tax purposes, the Master Servicer shall be the
owner of the Interest Coverage Accounts and shall report all items of income,
deduction, gain or loss arising therefrom. All income and gain realized from
investment of funds deposited in the Interest Coverage Accounts, which
investment shall be made solely upon the written direction of the Master
Servicer in Permitted Investments, shall be for the sole and exclusive benefit
of the Master Servicer and shall be remitted by the Indenture Trustee to the
Master Servicer at the end of the Funding Period. The Master Servicer shall
deposit in the Interest Coverage Accounts the amount of any net loss incurred in
respect of any such Permitted Investment immediately upon realization of such
loss.

      (c) On each Payment Date during the Funding Period and on the Payment Date
immediately following the end of the Funding Period, the Indenture Trustee shall
withdraw from the Interest Coverage Accounts and deposit in the Payment Account
an amount equal to 30 days' interest on the excess, if any, of the Group 1
Original Pre-Funded Amount and Group 2 Original Pre-Funded Amount, respectively,
over the aggregate Principal Balance of Group 1 Subsequent Mortgage Loans and
the Group 2 Subsequent Mortgage Loans, respectively, that (in each case) both
(i) had a Due Date during the Due Period relating to such Payment Date and (ii)
had a Subsequent Cut-off Date prior to the first day of the month in which such
Payment Date occurs, at a per annum rate equal to 1.25%. Such withdrawal and
deposit shall be treated as a contribution of cash by the Master Servicer to the
Trust Fund on the date thereof. Immediately following any such withdrawal and
deposit, and immediately following the conveyance of any Group 1 Subsequent
Mortgage Loans or Group 2 Subsequent Mortgage Loans to the Trust on any
Subsequent Transfer Date, the Indenture Trustee shall withdraw from the Group 1
Interest Coverage Account or Group 2 Subsequent Mortgage Loans and remit to the
Master Servicer or its designee an amount equal to the excess, if any, of the
amount remaining in such Group 1 Interest Coverage Account or Group 2 Interest
Coverage Account, respectively, over the amount that would be required to be
withdrawn therefrom (assuming sufficient funds therein) pursuant to the
preceding sentence on each subsequent Payment Date, if any, that will occur
during the Funding Period or that will be the Payment Date immediately following
the end of the Funding Period, if no Group 1 Subsequent Mortgage Loans or Group
2 Subsequent Mortgage Loans were acquired by the Trust Fund after the end of the
Prepayment Period relating to the current Payment Date.

      (d) Upon the earliest of (i) the Payment Date immediately following the
end of the Funding Period, (ii) the reduction of the Bond Principal Balances of
the Bonds to zero or (iii) the

<PAGE>

termination of this Agreement in accordance with Section 8.04, any amount
remaining on deposit in the Interest Coverage Accounts after distributions
pursuant to paragraph (c) above shall be withdrawn by the Indenture Trustee and
paid to the Master Servicer or its designee.

      Section 3.28 [Reserved].

      Section 3.29 Replacement Derivative Contracts. In the event of a default
by a Derivative Counterparty with respect to the related Derivative Contracts (a
"Derivative Contract Default"), the Issuer, at its expense, may, but shall not
be required to, substitute a new derivative contract for the existing Derivative
Contracts or any other form of similar coverage for basis risk shortfalls;
provided, however, that the timing and mechanism for receiving payments under
such new derivative contracts shall be reasonably acceptable to the Indenture
Trustee. It shall be a condition to substitution of any new derivative contracts
that there be delivered to the Indenture Trustee an Opinion of Counsel to the
effect that such substitution would not (a) result in a "substantial
modification" of the Bonds under Treasury Regulation section 1.1001-3, or
adversely affect the status of the Bonds as indebtedness for federal income tax
purposes, or (b) if 100% of the Certificates are not owned by IMH Assets Corp.,
cause the Trust to be subject to an entity level tax for federal income tax
purposes.

      Section 3.30 Guaranty Agreement; Payments Under the Guaranty Agreement. On
the Closing Date, the Guaranty Agreement shall be assigned to the Trust. The
Indenture Trustee shall enforce the Guaranty Agreement in accordance with its
terms. On each Determination Date, the Indenture Trustee shall calculate the
Guaranteed Amount, if any, and shall make any claim on behalf of the Issuer
under the Guaranty Agreement at least two Business Days prior to the related
Payment Date, for payment to the Indenture Trustee of the amount of any such
claim no later than the Business Day prior to the next Payment Date. Upon
receipt of such Guaranteed Amount in accordance with the terms of the Guaranty
Agreement, such payment shall be deposited by the Indenture Trustee into the
Payment Account for distribution to the Class A-IO-1 Bondholders and Class
A-IO-2 Bondholders pursuant to Section 3.05 hereof. On each Payment Date, any
payments received by the Indenture Trustee in respect of the Guaranty Agreement
shall be paid to the Holders of the Class A-IO-1 Bonds and Class A-IO-2 Bonds.

      Section 3.31 Allocation of Realized Losses. (a) Prior to each Payment
Date, the Master Servicer shall determine the total amount of Realized Losses
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officer's Certificate delivered to the Indenture
Trustee with the related Remittance Report.

      (b) On each Payment Date following the application of all amounts
distributable on such date, to the extent the aggregate Stated Principal Balance
of the Group 1 Loans is less than the aggregate Bond Principal Balances of the
Group 1 Bonds due to Realized Losses on the Group 1 Loans, the Bond Principal
Balances of the Class B-1, Class B-2, Class M-6-1, Class M-6-2, Class M-5-1,
Class M-5-2, Class M-4-1, Class M-4-2, Class M-3-1, Class M-3-2, Class M-2-1,
Class M-2-2, Class M-1-1 and Class M-1-2 Bonds, in that order, and then the Bond
Principal Balance of the Class 1-A-2 Bonds shall be reduced, in each case, until
the Bond Principal Balance thereof has been reduced to zero. On each Payment
Date following the application of all amounts distributable on such date, to the
extent the aggregate Stated Principal Balance of the Group 2 Loans is less than
the aggregate Bond Principal Balances of the Group 2

<PAGE>

Bonds due to Realized Losses on the Group 2 Loans, the Bond Principal Balances
of the of the Class B-2, Class B-1, Class M-6-2, Class M-6-1, Class M-5-2, Class
M-5-1, Class M-4-2, Class M-4-1, Class M-3-2, Class M-3-1, Class M-2-2, Class
M-2-1, Class M-1-2 and Class M-1-1, in that order, and then the Bond Principal
Balance of the Class 2-A-2 Bonds shall be reduced, in each case, until the Bond
Principal Balance thereof has been reduced to zero. All Realized Losses
allocated to a Class of Bonds will be allocated in proportion to the Percentage
Interests evidenced thereby.

      Section 3.32 The Group 1 Pre-Funding Account. (a) No later than the
Closing Date, the Indenture Trustee shall establish and maintain a segregated
trust account that is an Eligible Account, which shall be titled "Group 1
Pre-Funding Account, Deutsche Bank National Trust Company, as indenture trustee
for the registered holders of IMH Assets Corp., Collateralized Asset-Backed
Bonds, Series 2005-1" (the "Group 1 Pre-Funding Account"). The Indenture Trustee
shall, promptly upon receipt, deposit in the Group 1 Pre-Funding Account and
retain therein the Group 1 Original Pre-Funded Amount remitted on the Closing
Date to the Indenture Trustee by the Depositor. Funds deposited in the Group 1
Pre-Funding Account shall be held in trust by the Indenture Trustee for the
Bondholders for the uses and purposes set forth herein.

      (b) The Indenture Trustee will invest funds deposited in the Group 1
Pre-Funding Account, as directed by the Master Servicer in writing, in Eligible
Investments with a maturity date (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 Indenture, if a Person other than the Indenture Trustee
or an Affiliate manages or advises such investment, (ii) no later than the date
on which such funds are required to be withdrawn from such account pursuant to
this Indenture, if the Indenture Trustee or an Affiliate manages or advises such
investment or (iii) within one (1) Business Day of the Indenture Trustee's
receipt thereof. For federal income tax purposes, the Master Servicer shall be
the owner of the Group 1 Pre-Funding Account and shall report all items of
income, deduction, gain or loss arising therefrom. All income and gain realized
from investment of funds deposited in the Group 1 Pre-Funding Account shall be
included in Available Funds at the following times: (i) on the Business Day
immediately preceding each Payment Date, if a Person other than the Indenture
Trustee or an Affiliate of the Indenture Trustee manages or advises such
investment, or on each Payment Date, if the Indenture Trustee or an Affiliate of
the Indenture Trustee manages or advises such investment, (ii) on the Business
Day immediately preceding each Group 1 Subsequent Transfer Date, if a Person
other than the Indenture Trustee or an Affiliate of the Indenture Trustee
manages or advises such investment, or on each Group 1 Subsequent Transfer Date,
if the Indenture Trustee or an Affiliate of the Indenture Trustee manages or
advises such investment or (iii) within one (1) Business Day of the Indenture
Trustee's receipt thereof. The Master Servicer shall deposit in the Group 1
Pre-Funding Account the amount of any net loss incurred in respect of any such
Eligible Investment immediately upon realization of such loss without any right
of reimbursement therefor.

      (c) Amounts on deposit in the Group 1 Pre-Funding Account shall be
withdrawn by the Indenture Trustee as follows:

                  (i) On any Group 1 Subsequent Transfer Date, the Indenture
      Trustee shall withdraw from the Group 1 Pre-Funding Account an amount
      equal to 100% of the aggregate Stated Principal Balances of the related
      Group 1 Subsequent Mortgage Loans

<PAGE>

      transferred and assigned to the Indenture Trustee for deposit in the
      Mortgage Pool on such Group 1 Subsequent Transfer Date and pay such amount
      to or upon the order of the Issuer upon satisfaction of the conditions set
      forth in Section 2.05 with respect to such transfer and assignment;

                  (ii) If the amount on deposit in the Group 1 Pre-Funding
      Account has not been reduced to zero during the Funding Period, on the day
      immediately following the termination of the Funding Period, the Indenture
      Trustee shall deposit into the Payment Account any amounts remaining in
      the Group 1 Pre-Funding Account for distribution in accordance with the
      terms hereof;

                  (iii) To withdraw any amount not required to be deposited in
      the Group 1 Pre-Funding Account or deposited therein in error; and

                  (iv) To clear and terminate the Group 1 Pre-Funding Account
      upon the earlier to occur of (A) the Payment Date immediately following
      the end of the Funding Period and (B) the termination of this Indenture,
      with any amounts remaining on deposit therein being paid to the Holders of
      the Bonds then entitled to distributions in respect of principal.

      Section 3.33 The Group 2 Pre-Funding Account. (a) No later than the
Closing Date, the Indenture Trustee shall establish and maintain a segregated
trust account that is an Eligible Account, which shall be titled "Group 2
Pre-Funding Account, Deutsche Bank National Trust Company, as indenture trustee
for the registered holders of IMH Assets Corp., Collateralized Asset-Backed
Bonds, Series 2005-1" (the "Group 1 Pre-Funding Account"). The Indenture Trustee
shall, promptly upon receipt, deposit in the Group 2 Pre-Funding Account and
retain therein the Group 2 Original Pre-Funded Amount remitted on the Closing
Date to the Indenture Trustee by the Depositor. Funds deposited in the Group 2
Pre-Funding Account shall be held in trust by the Indenture Trustee for the
Bondholders for the uses and purposes set forth herein.

      (b) The Indenture Trustee will invest funds deposited in the Group 2
Pre-Funding Account, as directed by the Master Servicer in writing, in Eligible
Investments with a maturity date (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 Indenture, if a Person other than the Indenture Trustee
or an Affiliate manages or advises such investment, (ii) no later than the date
on which such funds are required to be withdrawn from such account pursuant to
this Indenture, if the Indenture Trustee or an Affiliate manages or advises such
investment or (iii) within one (1) Business Day of the Indenture Trustee's
receipt thereof. For federal income tax purposes, the Master Servicer shall be
the owner of the Group 2 Pre-Funding Account and shall report all items of
income, deduction, gain or loss arising therefrom. All income and gain realized
from investment of funds deposited in the Group 2 Pre-Funding Account shall be
included in Available Funds at the following times: (i) on the Business Day
immediately preceding each Payment Date, if a Person other than the Indenture
Trustee or an Affiliate of the Indenture Trustee manages or advises such
investment, or on each Payment Date, if the Indenture Trustee or an Affiliate of
the Indenture Trustee manages or advises such investment, (ii) on the Business
Day immediately preceding each Group 2 Subsequent Transfer Date, if a Person
other than the Indenture Trustee or an Affiliate of the Indenture Trustee
manages or advises such investment, or

<PAGE>

on each Group 2 Subsequent Transfer Date, if the Indenture Trustee or an
Affiliate of the Indenture Trustee manages or advises such investment or (iii)
within one (1) Business Day of the Indenture Trustee's receipt thereof. The
Master Servicer shall deposit in the Group 2 Pre-Funding Account the amount of
any net loss incurred in respect of any such Eligible Investment immediately
upon realization of such loss without any right of reimbursement therefor.

      (c) Amounts on deposit in the Group 2 Pre-Funding Account shall be
withdrawn by the Indenture Trustee as follows:

                  (i) On any Group 2 Subsequent Transfer Date, the Indenture
      Trustee shall withdraw from the Group 2 Pre-Funding Account an amount
      equal to 100% of the aggregate Stated Principal Balances of the related
      Group 2 Subsequent Mortgage Loans transferred and assigned to the
      Indenture Trustee for deposit in the Mortgage Pool on such Group 1
      Subsequent Transfer Date and pay such amount to or upon the order of the
      Issuer upon satisfaction of the conditions set forth in Section 2.06 with
      respect to such transfer and assignment;

                  (ii) If the amount on deposit in the Group 2 Pre-Funding
      Account has not been reduced to zero during the Funding Period, on the day
      immediately following the termination of the Funding Period, the Indenture
      Trustee shall deposit into the Payment Account any amounts remaining in
      the Group 2 Pre-Funding Account for distribution in accordance with the
      terms hereof;

                  (iii) To withdraw any amount not required to be deposited in
      the Group 2 Pre-Funding Account or deposited therein in error; and

                  (iv) To clear and terminate the Group 2 Pre-Funding Account
      upon the earlier to occur of (A) the Payment Date immediately following
      the end of the Funding Period and (B) the termination of this Indenture,
      with any amounts remaining on deposit therein being paid to the Holders of
      the Bonds then entitled to distributions in respect of principal.

      Section 3.34 Grant of the Group 1 Subsequent Mortgage Loans. In
consideration of the delivery on each Group 1 Subsequent Transfer Date to or
upon the order of the Issuer of all or a portion of the amount on deposit in the
Group 1 Pre-Funding Account, the Depositor shall, to the extent of the
availability thereof, on such Group 1 Subsequent Transfer Date during the
Funding Period, grant to the Indenture Trustee all of its rights, title and
interest in the Group 1 Subsequent Mortgage Loans and simultaneously with the
Grant of the Group 1 Subsequent Mortgage Loans, the Depositor will cause the
related Mortgage File to be delivered to the Indenture Trustee.

      Section 3.35 Grant of the Group 2 Subsequent Mortgage Loans. In
consideration of the delivery on each Group 2 Subsequent Transfer Date to or
upon the order of the Issuer of all or a portion of the amount on deposit in the
Group 2 Pre-Funding Account, the Depositor shall, to the extent of the
availability thereof, on such Group 2 Subsequent Transfer Date during the
Funding Period, grant to the Indenture Trustee all of its rights, title and
interest in the Group 2 Subsequent Mortgage Loans and simultaneously with the
Grant of the Group 2 Subsequent Mortgage Loans, the Depositor will cause the
related Mortgage File to be delivered to the Indenture Trustee.

<PAGE>

                                   ARTICLE IV

               The Bonds; Satisfaction and Discharge of Indenture

      Section 4.01 The Bonds. Each Class of Bonds shall be registered in the
name of a nominee designated by the Depository. Beneficial Owners will hold
interests in the Bonds through the book-entry facilities of the Depository in
minimum initial Bond Principal Balances of $25,000 and integral multiples of $1
in excess thereof.

      The Indenture Trustee may for all purposes (including the making of
payments due on the Bonds) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Bonds for the
purposes of exercising the rights of Holders of the Bonds hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Bonds shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates for
the Bonds as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Bonds shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Bondholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Bond may be transferred by the Depository except to a
successor Depository that agrees to hold such Bond for the account of the
Beneficial Owners.

      In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Bonds it
beneficially owns in the manner prescribed in Section 4.08.

      The Bonds shall, on original issue, be executed on behalf of the Issuer by
the Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Indenture Trustee and delivered by the Indenture Trustee to
or upon the order of the Issuer.

      Section 4.02 Registration of and Limitations on Transfer and Exchange of
Bonds; Appointment of Bond Registrar and Certificate Registrar. The Issuer shall
cause to be kept at the Corporate Trust Office a Bond Register in which, subject
to such reasonable regulations as it may prescribe, the Bond Registrar shall
provide for the registration of Bonds and of transfers and exchanges of Bonds as
herein provided.

      Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Bond at the Corporate Trust
Office, the Issuer shall execute and the Bond Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Bonds in authorized initial Bond Principal Balances evidencing the same
Class and aggregate Percentage Interests.

<PAGE>

      Subject to the foregoing, at the option of the Bondholders, Bonds may be
exchanged for other Bonds of like tenor and in authorized initial Bond Principal
Balances evidencing the same Class and aggregate Percentage Interests upon
surrender of the Bonds to be exchanged at the Corporate Trust Office of the Bond
Registrar. Whenever any Bonds are so surrendered for exchange, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver the Bonds which
the Bondholder making the exchange is entitled to receive. Each Bond presented
or surrendered for registration of transfer or exchange shall (if so required by
the Bond Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Bond Registrar
duly executed by the Holder thereof or his attorney duly authorized in writing
with such signature guaranteed by a commercial bank or trust company located or
having a correspondent located in the city of New York. Bonds delivered upon any
such transfer or exchange will evidence the same obligations, and will be
entitled to the same rights and privileges, as the Bonds surrendered.

      No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Bond Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds.

      The Issuer hereby appoints the Indenture Trustee as (i) Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement and (ii) Bond Registrar under this
Indenture. The Indenture Trustee hereby accepts such appointments.

      Section 4.03 Mutilated, Destroyed, Lost or Stolen Bonds. If (i) any
mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Bond Registrar or
the Indenture Trustee that such Bond has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Bond, a replacement Bond; provided, however, that if
any such destroyed, lost or stolen Bond, but not a mutilated Bond, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Bond, the Issuer may pay such destroyed, lost or stolen Bond when so
due or payable without surrender thereof. If, after the delivery of such
replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Bond in
lieu of which such replacement Bond was issued presents for payment such
original Bond, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Bond (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Bond from such Person to whom such
replacement Bond was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

<PAGE>

      Upon the issuance of any replacement Bond under this Section 4.03, the
Issuer may require the payment by the Holder of such Bond of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.

      Every replacement Bond issued pursuant to this Section 4.03 in replacement
of any mutilated, destroyed, lost or stolen Bond shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued hereunder.

      The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Bonds.

      Section 4.04 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Bond, the Issuer, the Indenture Trustee, the
Paying Agent and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Bond is registered (as of the day of determination) as
the owner of such Bond for the purpose of receiving payments of principal of and
interest, if any, on such Bond and for all other purposes whatsoever, whether or
not such Bond be overdue, and neither the Issuer, the Indenture Trustee, the
Paying Agent nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

      Section 4.05 Cancellation. All Bonds surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Bonds previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Bonds so delivered shall be promptly cancelled by the Indenture Trustee.
No Bonds shall be authenticated in lieu of or in exchange for any Bonds
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Bonds may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; provided, however, that such Issuer Request is
timely and the Bonds have not been previously disposed of by the Indenture
Trustee.

      Section 4.06 Book-Entry Bonds. The Bonds, upon original issuance, will be
issued in the form of typewritten Bonds representing the Book-Entry Bonds, to be
delivered to The Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. The Bonds shall initially be registered on the Bond
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Bond representing such Beneficial
Owner's interest in such Bond, except as provided in Section 4.08. With respect
to such Bonds, unless and until definitive, fully registered Bonds (the
"Definitive Bonds") have been issued to Beneficial Owners pursuant to Section
4.08:

                  (i) the provisions of this Section 4.06 shall be in full force
      and effect;

<PAGE>

                  (ii) the Bond Registrar, the Paying Agent and the Indenture
      Trustee shall be entitled to deal with the Depository for all purposes of
      this Indenture (including the payment of principal of and interest on the
      Bonds and the giving of instructions or directions hereunder) as the sole
      holder of the Bonds, and shall have no obligation to the Beneficial Owners
      of the Bonds;

                  (iii) to the extent that the provisions of this Section 4.06
      conflict with any other provisions of this Indenture, the provisions of
      this Section 4.06 shall control;

                  (iv) the rights of Beneficial Owners shall be exercised only
      through the Depository and shall be limited to those established by law
      and agreements between such Owners of Bonds and the Depository and/or the
      Depository Participants. Unless and until Definitive Bonds are issued
      pursuant to Section 4.08, the initial Depository will make book-entry
      transfers among the Depository Participants and receive and transmit
      payments of principal of and interest on the Bonds to such Depository
      Participants; and

                  (v) whenever this Indenture requires or permits actions to be
      taken based upon instructions or directions of Holders of Bonds evidencing
      a specified percentage of the Bond Principal Balances of the Bonds, the
      Depository shall be deemed to represent such percentage with respect to
      the Bonds only to the extent that it has received instructions to such
      effect from Beneficial Owners and/or Depository Participants owning or
      representing, respectively, such required percentage of the beneficial
      interest in the Bonds and has delivered such instructions to the Indenture
      Trustee.

      Section 4.07 Notices to Depository. Whenever a notice or other
communication to the Bond Holders is required under this Indenture, unless and
until Definitive Bonds shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Bonds to the
Depository, and shall have no obligation to the Beneficial Owners.

      Section 4.08 Definitive Bonds. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Bonds and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Beneficial Owners of Bonds representing beneficial interests
aggregating at least a majority of the Bond Principal Balances of the Bonds
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Beneficial
Owners, then the Depository shall notify all Beneficial Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Bonds representing the Book-Entry Bonds by
the Depository, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Bonds in
accordance with the instructions of the Depository. None of the Issuer, the Bond
Registrar or the Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in

<PAGE>

relying on, such instructions. Upon the issuance of Definitive Bonds, the
Indenture Trustee shall recognize the Holders of the Definitive Bonds as
Bondholders.

      Section 4.09 Tax Treatment. The Issuer has entered into this Indenture,
and the Bonds will be issued with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Bonds will qualify
as indebtedness. The Issuer and the Indenture Trustee (in accordance with
Section 6.06 hereof), by entering into this Indenture, and each Bondholder, by
its acceptance of its Bond (and each Beneficial Owner by its acceptance of an
interest in the applicable Book-Entry Bond), agree to treat the Bonds for
federal, state and local income, single business and franchise tax purposes as
indebtedness.

      Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Bonds except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights and immunities of the Indenture Trustee
hereunder, including under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.11, (vi) the right of the Derivative Counterparty to
receive the related Net Derivative Fee and (vii) the rights of Bondholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Bonds and shall release and deliver the Collateral to or upon the order of the
Issuer, when

            (A) either

            (1) all Bonds theretofore authenticated and delivered (other than
      (i) Bonds that have been destroyed, lost or stolen and that have been
      replaced or paid as provided in Section 4.03 hereof and (ii) Bonds for
      whose payment money has theretofore been deposited in trust or segregated
      and held in trust by the Issuer and thereafter repaid to the Issuer or
      discharged from such trust, as provided in Section 3.03) have been
      delivered to the Indenture Trustee for cancellation; or

            (2) all Bonds not theretofore delivered to the Indenture Trustee for
      cancellation

                  a.    have become due and payable,

                  b.    will become due and payable at the Final Scheduled
                        Payment Date within one year, or

                  c.    have been called for early redemption and the Trust has
                        been terminated pursuant to Section 8.07 hereof,

and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on

<PAGE>

such Bonds then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Scheduled Payment Date or other final
Payment Date and has delivered to the Indenture Trustee a verification report
from a nationally recognized accounting firm certifying that the amounts
deposited with the Indenture Trustee are sufficient to pay and discharge the
entire indebtedness of such Bonds, or, in the case of c. above, the Issuer shall
have complied with all requirements of Section 8.07 hereof,

            (B) the Issuer has paid or caused to be paid all other sums payable
      hereunder; and

            (C) the Issuer has delivered to the Indenture Trustee an Officer's
      Certificate and an Opinion of Counsel, each meeting the applicable
      requirements of Section 10.01 hereof, each stating that all conditions
      precedent herein provided for relating to the satisfaction and discharge
      of this Indenture have been complied with and, if the Opinion of Counsel
      relates to a deposit made in connection with Section 4.10(A)(2)b. above,
      such opinion shall further be to the effect that such deposit will
      constitute an "in-substance defeasance" within the meaning of Revenue
      Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuer will
      be the owner of the assets deposited in trust for federal income tax
      purposes.

      Section 4.11 Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Bonds and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer, Certificate Paying Agent as designee of the Issuer, as the Indenture
Trustee may determine, to the Holders of Securities, of all sums due and to
become due thereon for principal and interest or otherwise; but such monies need
not be segregated from other funds except to the extent required herein or
required by law.

      Section 4.12 [Reserved].

      Section 4.13 Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Bonds, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Bonds shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.

      Section 4.14 Temporary Bonds. Pending the preparation of any Definitive
Bonds, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Bonds that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Bonds in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Bonds may
determine, as evidenced by their execution of such Bonds.

      If temporary Bonds are issued, the Issuer will cause Definitive Bonds to
be prepared without unreasonable delay. After the preparation of the Definitive
Bonds, the temporary Bonds

<PAGE>

shall be exchangeable for Definitive Bonds upon surrender of the temporary Bonds
at the office of the Indenture Trustee's agent located at DTC Transfer Services,
located at 55 Water Street, Jeanette Park Entrance, New York, New York 10041,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Bonds, the Issuer shall execute and the Indenture Trustee shall
authenticate and make available for delivery, in exchange therefor, Definitive
Bonds of authorized denominations and of like tenor, class and aggregate
principal amount. Until so exchanged, such temporary Bonds shall in all respects
be entitled to the same benefits under this Indenture as Definitive Bonds.

      Section 4.15 Representation Regarding ERISA. By acquiring a Class 1-A-1,
Class 1-A-2, Class 2-A-1 or 2-A-2 Bond or interest therein, each Holder of such
Bond or Beneficial Owner of any such interest will be deemed to represent that
either (1) it is not acquiring such Bond with Plan Assets or (2) (A) the
acquisition, holding and transfer of such Bond will not give rise to a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code and (B) the Bonds are rated investment grade or better and such
purchaser agrees to treat them as indebtedness for federal income tax purposes.
Alternatively, regardless of the rating of such Bonds, such person may provide
the Indenture Trustee and the Owner Trustee with an opinion of counsel, which
opinion of counsel will not be at the expense of the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer, which opines that the acquisition, holding
and transfer of such Bond or interest therein is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller,
the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the
Master Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

<PAGE>

                                    ARTICLE V

                              Default and Remedies

      Section 5.01 Events of Default. The Issuer shall deliver to the Indenture
Trustee, within five days after learning of the occurrence of an Event of
Default, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) or (iv) of the definition of "Event of Default", its
status and what action the Issuer is taking or proposes to take with respect
thereto. The Indenture Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer has actual knowledge thereof or
unless written notice of such Event of Default is received by a Responsible
Officer and such notice references the Bonds, the Trust Estate or this
Indenture.

      Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee at the written direction of the Holders of Bonds representing
not less than a majority of the aggregate Bond Principal Balance of the Bonds
may declare the Bonds to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if such notice is given by
Bondholders), and upon any such declaration the unpaid Bond Principal Balance of
the Class A, Class M and Class B Bonds, together with accrued and unpaid
interest thereon through the date of acceleration shall become immediately due
and payable.

      At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, Holders of the Bonds representing not
less than a majority of the aggregate Bond Principal Balance of the Bonds (other
than the Class A-IO-1 Bonds and Class A-IO-2 Bonds) and not less than a majority
of the aggregate Notional Amount of the Class A-IO-1 Bonds and Class A-IO-2
Bonds, by written notice to the Issuer and the Indenture Trustee, may waive the
related Event of Default and rescind and annul such declaration and its
consequences if

                  (i) the Issuer has paid or deposited with the Indenture
      Trustee a sum sufficient to pay:

            (A) all payments of principal of and interest on the Bonds and all
      other amounts that would then be due hereunder or upon the Bonds if the
      Event of Default giving rise to such acceleration had not occurred;

            (B) all sums paid or advanced by the Indenture Trustee hereunder and
      the reasonable compensation, expenses, disbursements and advances of the
      Indenture Trustee and its agents and counsel; and

            (C) all amounts owed to the Derivative Counterparty; and

<PAGE>

                  (ii) all Events of Default, other than the nonpayment of the
      principal of the Bonds that has become due solely by such acceleration,
      have been cured or waived as provided in Section 5.12.

No such rescission shall affect any subsequent default or impair any right
consequent thereto.

      Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.

      (a) The Issuer covenants that if (i) default is made in the payment of any
interest on any Bond when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Bond when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
at the direction of the Holders of a majority of the aggregate Bond Principal
Balances of the Bonds, pay to the Indenture Trustee, for the benefit of the
Holders of Bonds, the whole amount then due and payable on the Bonds for
principal and interest, with interest at the applicable Bond Interest Rate upon
the overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

      (b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.16 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Bonds and collect in the manner provided by
law out of the property of the Issuer or other obligor the Bonds, wherever
situated, the monies adjudged or decreed to be payable.

      (c) If an Event of Default occurs and is continuing, the Indenture
Trustee, subject to the provisions of Section 10.16 hereof may, as more
particularly provided in Section 5.04 hereof, in its discretion, proceed to
protect and enforce its rights and the rights of the Bondholders, by such
appropriate Proceedings, as directed in writing by Holders of a majority of the
aggregate Bond Principal Balances of the Bonds, to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.

      (d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Bonds or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Bonds, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, as directed in writing by Holders
of a majority of the aggregate Bond Principal Balances of the Bonds,

<PAGE>

irrespective of whether the principal of any Bonds shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:

                  (i) to file and prove a claim or claims for the whole amount
      of principal and interest owing and unpaid in respect of the Bonds and to
      file such other papers or documents as may be necessary or advisable in
      order to have the claims of the Indenture Trustee (including any claim for
      reasonable compensation to the Indenture Trustee and each predecessor
      Indenture Trustee, and their respective agents, attorneys and counsel, and
      for reimbursement of all expenses and liabilities incurred, and all
      advances made, by the Indenture Trustee and each predecessor Indenture
      Trustee, except as a result of negligence or bad faith) and of the
      Bondholders allowed in such Proceedings;

                  (ii) unless prohibited by applicable law and regulations, to
      vote on behalf of the Holders of Bonds in any election of a trustee, a
      standby trustee or Person performing similar functions in any such
      Proceedings;

                  (iii) to collect and receive any monies or other property
      payable or deliverable on any such claims and to distribute all amounts
      received with respect to the claims of the Bondholders and of the
      Indenture Trustee on their behalf, and

                  (iv) to file such proofs of claim and other papers or
      documents as may be necessary or advisable in order to have the claims of
      the Indenture Trustee or the Holders of Bonds allowed in any judicial
      proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Bondholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Bondholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee.

      (e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Bondholder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Bondholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

      (f) All rights of action and of asserting claims under this Indenture, or
under any of the Bonds, may be enforced by the Indenture Trustee without the
possession of any of the Bonds or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an

<PAGE>

express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Bonds, subject to Section 5.05
hereof.

      (g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Bonds, and it shall not be necessary to
make any Bondholder a party to any such Proceedings.

      Section 5.04 Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the
provisions of Section 10.16 hereof may, and shall, at the written direction of
the Holders of a majority of the aggregate Bond Principal Balances of the Bonds,
do one or more of the following (subject to Section 5.05 hereof):

                  (i) institute Proceedings in its own name and as trustee of an
      express trust for the collection of all amounts then payable on the Bonds
      or under this Indenture with respect thereto, whether by declaration or
      otherwise enforce any judgment obtained, and collect from the Issuer and
      any other obligor upon such Bonds monies adjudged due;

                  (ii) institute Proceedings from time to time for the complete
      or partial foreclosure of this Indenture with respect to the Trust Estate;

                  (iii) exercise any remedies of a secured party under the UCC
      and take any other appropriate action to protect and enforce the rights
      and remedies of the Indenture Trustee and the Holders of the Bonds; and

                  (iv) sell the Trust Estate or any portion thereof or rights or
      interest therein, at one or more public or private sales called and
      conducted in any manner permitted by law;

provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Bond Principal Balance of the Bonds and 50% of the aggregate Notional Amount of
the Class A-IO-1 Bonds and Class A-IO-2 Bonds, (B) the proceeds of such sale or
liquidation distributable to the Holders of the Bonds are sufficient to
discharge in full all amounts then due and unpaid upon such Bonds for principal
and interest or (C) the Indenture Trustee determines that the Mortgage Loans
will not continue to provide sufficient funds for the payment of principal of
and interest on the applicable Bonds as they would have become due if the Bonds
had not been declared due and payable, and the Indenture Trustee obtains the
consent of the Holders of a majority of the aggregate Bond Principal Balance of
the Bonds and a majority of the aggregate Notional Amount of the Class A-IO-1
Bonds and Class A-IO-2 Bonds. In determining such sufficiency or insufficiency
with respect to clause (B) and (C), the Indenture Trustee may, but need not,
obtain and rely upon an opinion (obtained at the expense of the Trust) of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust

<PAGE>

Estate for such purpose. Notwithstanding the foregoing, so long as an Event of
Servicer Termination has not occurred, any Sale of the Trust Estate shall be
made subject to the continued servicing of the Mortgage Loans by the Master
Servicer as provided in the Servicing Agreement.

      (b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:

            FIRST: to the Indenture Trustee for amounts due under Section 6.07
      hereof;

            SECOND: to the Derivative Counterparty, any amounts owed under the
      Derivative Contracts, other than any Additional Derivative Counterparty
      Payment;

            THIRD: to the Bondholders for amounts due and unpaid on the Bonds
      (including Unpaid Interest Shortfalls but not including any Basis Risk
      Shortfall Carry-Forward Amounts) with respect to interest, first, to the
      Class 1-A-1, Class 1-A-2, Class A-IO-1, Class A-IO-2, Class 2-A-1 and
      Class 2-A-2 Bondholders, concurrently, second, to the Class M-1-1
      Bondholders and Class M-1-2 Bondholders, concurrently, third to the Class
      M-2-1 Bondholders and Class M-2-2 Bondholders, concurrently, fourth to the
      Class M-3-1 Bondholders and Class M-3-2 Bondholders, concurrently, fifth
      to the Class M-4-1 Bondholders and Class M-4-2 Bondholders, concurrently,
      sixth to the Class M-5-1 Bondholders and Class M-5-2 Bondholders,
      concurrently, seventh to the Class M-6-1 Bondholders and Class M-6-2
      Bondholders, concurrently, and eighth to the Class B-1 Bondholders and
      Class B-2 Bondholders, concurrently, according to the amounts due and
      payable on the Bonds for interest;

            FOURTH: to Bondholders for amounts due and unpaid on the Bonds with
      respect to principal, and to each Bondholder ratably, without preference
      or priority of any kind, according to the amounts due and payable on such
      Bonds for principal, until the Bond Principal Balance of each such Class
      is reduced to zero;

            FIFTH: to the Bondholders, first, to the Class 1-A-2 Bondholders and
      Class 2-A-2 Bondholders, concurrently, second to the Class M-1-1
      Bondholders and Class M-1-2 Bondholders, concurrently, third to the Class
      M-2-1 Bondholders and Class M-2-2 Bondholders, concurrently, fourth to the
      Class M-3-1 Bondholders and Class M-3-2 Bondholders, concurrently, fifth
      to the Class M-4-1 Bondholders and Class M-4-2 Bondholders, concurrently,
      sixth to the Class M-5-1 Bondholders and Class M-5-2 Bondholders,
      concurrently, seventh to the Class M-6-1 Bondholders and Class M-6-2
      Bondholders, concurrently, and eighth to the Class B-1 Bondholders and
      Class B-2 Bondholders, concurrently, the amount of any related Allocated
      Realized Loss Amount not previously paid;

            SIXTH: to the Bondholders for amounts due and unpaid on the Bonds
      with respect to any related Basis Risk Shortfall Carry-Forward Amounts,
      first, to the Class 1-A-1, Class 1-A-2, Class 2-A-1 and Class 2-A-1
      Bondholders, concurrently on a pro rata basis, second, to the Class M-1-1
      Bondholders and Class M-1-2 Bondholders, concurrently, third to the Class
      M-2-1 Bondholders and Class M-2-2 Bondholders, concurrently, fourth to the
      Class M-3-1 Bondholders and Class M-3-2 Bondholders,

<PAGE>

      concurrently, fifth to the Class M-4-1 Bondholders and Class M-4-2
      Bondholders, concurrently, sixth to the Class M-5-1 Bondholders and Class
      M-5-2 Bondholders, concurrently, sixth to the Class M-6-1 Bondholders and
      Class M-6-2 Bondholders, concurrently, and seventh to the Class B-1
      Bondholders and Class B-2 Bondholders, concurrently, according to the
      amounts due and payable on the Bonds with respect thereto, from amounts
      available in the Trust Estate for the Bondholders;

            SEVENTH: to the Derivative Counterparty, any remaining amounts owed
      under the Derivative Contracts; and

            EIGHTH: to the payment of the remainder, if any to the Certificate
      Paying Agent on behalf of the Issuer or to any other person legally
      entitled thereto.

      The Indenture Trustee may fix a record date and Payment Date for any
payment to Bondholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Bondholder a notice
that states the record date, the Payment Date and the amount to be paid.

      Section 5.05 Optional Preservation of the Trust Estate. If the Bonds have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Bondholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Bonds and other obligations of the Issuer and the Indenture
Trustee shall take such desire into account when determining whether or not to
take and maintain possession of the Trust Estate. In determining whether to take
and maintain possession of the Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.

      Section 5.06 Limitation of Suits. No Holder of any Bond shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.16 hereof

                  (i) such Holder has previously given written notice to the
      Indenture Trustee of a continuing Event of Default;

                  (ii) the Holders of not less than 25% of the aggregate Bond
      Principal Balances of the Bonds (for which purpose the Class A-IO-1 Bonds
      and Class A-IO-2 Bonds will be deemed to have an aggregate Bond Principal
      Balance equal to 5% of the aggregate Bond Principal Balance of the other
      Classes of Bonds) have made a written request to the Indenture Trustee to
      institute such Proceeding in respect of such Event of Default in its own
      name as Indenture Trustee hereunder;

<PAGE>

                  (iii) such Holder or Holders have offered to the Indenture
      Trustee reasonable indemnity against the costs, expenses and liabilities
      to be incurred in complying with such request;

                  (iv) the Indenture Trustee for 60 days after its receipt of
      such notice of request and offer of indemnity has failed to institute such
      Proceedings; and

                  (v) no direction inconsistent with such written request has
      been given to the Indenture Trustee during such 60-day period by the
      Holders of a majority of the Bond Principal Balances of the Bonds and a
      majority of the aggregate Notional Amount of the Class A-IO-1 Bonds and
      Class A-IO-2 Bonds.

It is understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.

      Subject to the last paragraph of Section 5.11 herein, in the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Bonds, each representing less
than a majority of the Bond Principal Balances of the Bonds, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.

      Section 5.07 Unconditional Rights of Bondholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Bond shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Bond on or after the
respective due dates thereof expressed in such Bond or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

      Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee
or any Bondholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Bondholder, then and in every such case the Issuer, the Indenture Trustee and
the Bondholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Bondholders
shall continue as though no such Proceeding had been instituted.

      Section 5.09 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Bondholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

<PAGE>

      Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Holder of any Bond to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Bondholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Bondholders, as
the case may be.

      Section 5.11 Control By Bondholders. The Holders of a majority of the
aggregate Bond Principal Balances of Bonds and a majority of the aggregate
Notional Amount of the Class A-IO-1 Bonds and Class A-IO-2 Bonds shall have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee with respect to the Bonds or
exercising any trust or power conferred on the Indenture Trustee; provided that:

                  (i) such direction shall not be in conflict with any rule of
      law or with this Indenture;

                  (ii) any direction to the Indenture Trustee to sell or
      liquidate the Trust Estate shall be by Holders of Bonds representing not
      less than 100% of the Bond Principal Balances of the Bonds (for which
      purpose the Class A-IO-1 Bonds and Class A-IO-2 Bonds will together be
      deemed to have a Bond Principal Balance equal to 5% of the aggregate Bond
      Principal Balance of the other Classes of Bonds); and

                  (iii) the Indenture Trustee may take any other action deemed
      proper by the Indenture Trustee that is not inconsistent with such
      direction of the Holders of Bonds representing a majority of the Bond
      Principal Balances of the Bonds.

Notwithstanding the rights of Bondholders set forth in this Section 5.11 the
Indenture Trustee need not take any action that it determines might involve it
in liability.

      Section 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Bonds as provided in Section 5.02 hereof,
the Holders of Bonds representing not less than a majority of the aggregate Bond
Principal Balance of the Bonds may waive any past Event of Default and its
consequences except an Event of Default (a) with respect to payment of principal
of or interest on any of the Bonds or (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Bond. In the case of any such waiver, the Issuer, the Indenture Trustee and
the Holders of the Bonds shall be restored to their former positions and rights
hereunder, respectively, but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereto.

      Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.

      Section 5.13 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Bond and each Beneficial Owner of any interest therein by
such Holder's or Beneficial Owner's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or

<PAGE>

in any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Bondholder, or group of
Bondholders, in each case holding in the aggregate more than 10% of the Bond
Principal Balances of the Bonds (for which purpose the Class A-IO-1 Bonds and
Class A-IO-2 Bonds will together be deemed to have a Bond Principal Balance
equal to 5% of the aggregate Bond Principal Balance of the other Classes of
Bonds) or (c) any suit instituted by any Bondholder for the enforcement of the
payment of principal of or interest on any Bond on or after the respective due
dates expressed in such Bond and in this Indenture.

      Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.

      Section 5.15 Sale of Trust Estate. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Bonds and under this
Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.

      (b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless

            (1) the Holders of all Bonds consent to or direct the Indenture
      Trustee to make, such Sale, or

            (2) the proceeds of such Sale would be not less than the entire
      amount which would be payable to the Bondholders under the Bonds, in full
      payment thereof in accordance with Section 5.02 hereof, on the Payment
      Date next succeeding the date of such Sale, or

            (3) the Indenture Trustee determines that the conditions for
      retention of the Trust Estate set forth in Section 5.05 hereof cannot be
      satisfied (in making any such determination, the Indenture Trustee may
      rely upon an opinion of an Independent investment banking firm obtained
      and delivered as provided in Section 5.05 hereof), the

<PAGE>

      Holders of Bonds representing at least 100% of the Bond Principal Balances
      of the Bonds (for which purpose the Class A-IO-1 Bonds and Class A-IO-2
      Bonds will together be deemed to have a Bond Principal Balance equal to 5%
      of the aggregate Bond Principal Balance of the other Classes of Bonds)
      consent to such Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).

      (c) Unless the Holders representing at least 66-2/3% of the Bond Principal
Balances of the Bonds (for which purpose the Class A-IO-1 Bonds and Class A-IO-2
Bonds will together be deemed to have a Bond Principal Balance equal to 5% of
the aggregate Bond Principal Balance of the other Classes of Bonds) have
otherwise consented or directed the Indenture Trustee, at any public Sale of all
or any portion of the Trust Estate at which a minimum bid equal to or greater
than the amount described in paragraph (2) of subsection (b) of this Section
5.15 has not been established by the Indenture Trustee and no Person bids an
amount equal to or greater than such amount, the Indenture Trustee, as trustee
for the benefit of the Holders of the Bonds, shall bid an amount at least $1.00
more than the highest other bid.

      (d) In connection with a Sale of all or any portion of the Trust Estate,

            (1) any Holder or Holders of Bonds may bid for and purchase the
      property offered for sale, and upon compliance with the terms of sale may
      hold, retain and possess and dispose of such property, without further
      accountability, and may, in paying the purchase money therefor, deliver
      any Bonds or claims for interest thereon in lieu of cash up to the amount
      which shall, upon distribution of the net proceeds of such sale, be
      payable thereon, and such Bonds, in case the amounts so payable thereon
      shall be less than the amount due thereon, shall be returned to the
      Holders thereof after being appropriately stamped to show such partial
      payment;

            (2) the Indenture Trustee, may bid for and acquire the property
      offered for Sale in connection with any Sale thereof, and, subject to any
      requirements of, and to the extent permitted by, applicable law in
      connection therewith, may purchase all or any portion of the Trust Estate
      in a private sale, and, in lieu of paying cash therefor, may make
      settlement for the purchase price by crediting the gross Sale price
      against the sum of (A) the amount which would be distributable to the
      Holders of the Bonds and Holders of Certificates as a result of such Sale
      in accordance with Section 5.04(b) hereof on the Payment Date next
      succeeding the date of such Sale and (B) the expenses of the Sale and of
      any Proceedings in connection therewith which are reimbursable to it,
      without being required to produce the Bonds in order to complete any such
      Sale or in order for the net Sale price to be credited against such Bonds,
      and any property so acquired by the Indenture Trustee shall be held and
      dealt with by it in accordance with the provisions of this Indenture;

            (3) the Indenture Trustee shall execute and deliver an appropriate
      instrument of conveyance, prepared by the Issuer and satisfactory to the
      Indenture Trustee, transferring its interest in any portion of the Trust
      Estate in connection with a Sale thereof;

<PAGE>

            (4) the Indenture Trustee is hereby irrevocably appointed the agent
      and attorney-in-fact of the Issuer to transfer and convey its interest in
      any portion of the Trust Estate in connection with a Sale thereof, and to
      take all action necessary to effect such Sale; and

            (5) no purchaser or transferee at such a Sale shall be bound to
      ascertain the Indenture Trustee's authority, inquire into the satisfaction
      of any conditions precedent or see to the application of any monies.

      Section 5.16 Action on Bonds. The Indenture Trustee's right to seek and
recover judgment on the Bonds or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Bondholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b) hereof.

      Section 5.17 Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Mortgage Loan Purchase Agreement, any Group 1 or Group 2 Subsequent Mortgage
Loan Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Mortgage Loan Purchase Agreement, any Group 1 or Group
2 Subsequent Mortgage Loan Purchase Agreement and the Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee, as pledgee of the
Mortgage Loans, including the transmission of notices of default on the part of
the Seller or the Master Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Master Servicer of each of their obligations under the Mortgage
Loan Purchase Agreement, any Group 1 or Group 2 Subsequent Mortgage Loan
Purchase Agreement and the Servicing Agreement.

      (b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and at
the direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3% of the Bond Principal
Balances of the Bonds (for which purpose the Class A-IO-1 Bonds and Class A-IO-2
Bonds will together be deemed to have a Bond Principal Balance equal to 5% of
the aggregate Bond Principal Balance of the other Classes of Bonds), shall
exercise all rights, remedies, powers, privileges and claims of the Issuer
against the Seller or the Master Servicer under or in connection with the
Mortgage Loan Purchase Agreement, any Group 1 or Group 2 Subsequent Mortgage
Loan Purchase Agreement and the Servicing Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller or the Master Servicer, as the case may be, of each of their obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Mortgage Loan Purchase Agreement, any
Group 1 or

<PAGE>

Group 2 Subsequent Mortgage Loan Purchase Agreement and the Servicing Agreement,
as the case may be, and any right of the Issuer to take such action shall not be
suspended.

<PAGE>

                                   ARTICLE VI

                              The Indenture Trustee

      Section 6.01 Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture 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.

      (b) Except during the continuance of an Event of Default:

                  (i) the Indenture Trustee undertakes to perform such duties
      and only such duties as are specifically set forth in this Indenture and
      no implied covenants or obligations shall be read into this Indenture
      against the Indenture Trustee; and

                  (ii) in the absence of bad faith on its part, the Indenture
      Trustee may conclusively rely, as to the truth of the statements and the
      correctness of the opinions expressed therein, upon certificates or
      opinions furnished to the Indenture Trustee and conforming to the
      requirements of this Indenture; however, the Indenture Trustee shall
      examine the certificates and opinions to determine whether or not they
      conform to the requirements of this Indenture.

      (c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:

            (i) this paragraph does not limit the effect of paragraph (b) of
      this Section 6.01;

            (ii) the Indenture Trustee shall not be liable for any error of
      judgment made in good faith by a Responsible Officer unless it is proved
      that the Indenture Trustee was negligent in ascertaining the pertinent
      facts; and

            (iii) the Indenture Trustee shall not be liable with respect to any
      action it takes or omits to take in good faith in accordance with a
      direction received by it from Bondholders or from the Issuer, which they
      are entitled to give under the Basic Documents.

      (d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.

      (e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.

      (f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to

<PAGE>

believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

      (g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

      (h) The Indenture Trustee shall act in accordance with Sections 6.03 and
6.04 of the Servicing Agreement and shall act as successor to the Master
Servicer or appoint a successor Master Servicer in accordance with Section 6.02
of the Servicing Agreement.

      Section 6.02 Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.

      (b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.

      (c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee.

      (d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.

      (e) The Indenture Trustee may consult with counsel, and the advice or
Opinion of Counsel with respect to legal matters relating to this Indenture and
the Bonds shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.

      (f) For the limited purpose of effecting any action to be undertaken by
the Indenture Trustee, but not specifically as a duty of the Indenture Trustee
in the Indenture, the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder, either directly or by or through
agents, attorneys, custodians or nominees appointed with due care, and shall not
be responsible for any willful misconduct or negligence on the part of any
agent, attorney, custodian or nominee so appointed.

      (g) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture 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 Eligible Investments, (ii) using Affiliates to effect transactions in
certain Eligible Investments and (iii) effecting transactions in certain
Eligible Investments. Such compensation shall not be considered an amount that
is reimbursable or

<PAGE>

payable to the Indenture Trustee (i) pursuant to Sections 3.05(d), 3.05(h),
5.04(b), 6.07 or 8.02(c) hereunder or (ii) out of Available Funds.

      (h) In order to comply with its duties under the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 ("U.S.A. Patriot Act"), the Indenture Trustee shall obtain
and verify certain information and documentation from the other party to this
Indenture, including, but not limited to, such party's name, address, and other
identifying information.

      (i) The Indenture Trustee shall have no obligations other than as
specifically stated in this Indenture or as stated in the relevant sections of
the TIA or other applicable law.

      Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Bonds
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee, subject to the requirements of the
Trust Indenture Act. Any Bond Registrar, co-registrar or co-paying agent may do
the same with like rights. However, the Indenture Trustee must comply with
Sections 6.11 and 6.12 hereof.

      Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Bonds, it shall not be accountable for the
Issuer's use of the proceeds from the Bonds, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Bonds or in the Bonds other than the Indenture
Trustee's certificate of authentication.

      Section 6.05 Notice of Event of Default. Subject to Section 5.01, the
Indenture Trustee shall promptly mail to each Bondholder notice of the Event of
Default after it is known to a Responsible Officer of the Indenture Trustee,
unless such Event of Default shall have been waived or cured. Except in the case
of an Event of Default in payment of principal of or interest on any Bond, the
Indenture Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Bondholders.

      Section 6.06 Reports by Indenture Trustee to Holders and Tax
Administration. The Indenture Trustee shall deliver to each Bondholder such
information as may be required to enable such Holder to prepare its federal and
state income tax returns.

      The Indenture Trustee shall prepare and file (or cause to be prepared and
filed), on behalf of the Owner Trustee, all tax returns (if any) and information
reports, tax elections and such annual or other reports of the Issuer as are
necessary for preparation of tax returns and information reports as provided in
Section 5.03 of the Trust Agreement, including without limitation Form 1099. All
tax returns and information reports shall be signed by the Owner Trustee as
provided in Section 5.03 of the Trust Agreement.

      Section 6.07 Compensation and Indemnity. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The amount of the

<PAGE>

Indenture Trustee's Fee shall be paid by the Master Servicer to the Indenture
Trustee on each Payment Date pursuant to Section 3.07(a)(x) of the Servicing
Agreement and all amounts owing to the Indenture Trustee hereunder (including
amounts owing from the Issuer for indemnification and otherwise) in excess of
such amount shall be paid solely as provided in Section 3.05(d), Section
3.05(h)(xi), Section 5.04(b) and Section 8.02 hereof. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to compensation for its services. Such expenses shall
include reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration
of this Trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer shall not relieve the
Issuer of its obligations hereunder. The Issuer shall defend any such claim, and
the Indenture Trustee may have separate counsel and the Issuer shall pay the
fees and expenses of such counsel. The Issuer is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.

      The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.07 shall survive the discharge of this Indenture and the termination
or resignation of the Indenture Trustee. When the Indenture Trustee incurs
expenses after the occurrence of an Event of Default with respect to the Issuer,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.

      Section 6.08 Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer. Holders of a majority of Bond
Principal Balances of the Bonds may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall, remove the Indenture Trustee if:

                  (i) the Indenture Trustee fails to comply with Section 6.11
      hereof;

                  (ii) the Indenture Trustee is adjudged a bankrupt or
      insolvent;

                  (iii) a receiver or other public officer takes charge of the
      Indenture Trustee or its property; or

                  (iv) the Indenture Trustee otherwise becomes incapable of
      acting.

      If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall, promptly appoint a successor Indenture Trustee.

<PAGE>

      A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Bondholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

      If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of Bond Principal Balances of
the Bonds may petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.

      Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

      Section 6.09 Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such transaction.

      If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Bonds shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Bonds so
authenticated; and if at that time any of the Bonds shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Bonds either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is in the Bonds or in this Indenture provided
that the certificate of the Indenture Trustee shall have.

      Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Bondholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 hereof.

<PAGE>

      (b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:

                  (i) all rights, powers, duties and obligations conferred or
      imposed upon the Indenture Trustee shall be conferred or imposed upon and
      exercised or performed by the Indenture Trustee and such separate trustee
      or co-trustee jointly (it being understood that such separate trustee or
      co-trustee is not authorized to act separately without the Indenture
      Trustee joining in such act), except to the extent that under any law of
      any jurisdiction in which any particular act or acts are to be performed
      the Indenture Trustee shall be incompetent or unqualified to perform such
      act or acts, in which event such rights, powers, duties and obligations
      (including the holding of title to the Trust Estate or any portion thereof
      in any such jurisdiction) shall be exercised and performed singly by such
      separate trustee or co-trustee, but solely at the direction of the
      Indenture Trustee;

                  (ii) no trustee hereunder shall be personally liable by reason
      of any act or omission of any other trustee hereunder; and

                  (iii) the Indenture Trustee may at any time accept the
      resignation of or remove any separate trustee or co-trustee.

      (c) Any notice, request or other writing given to the Indenture 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 Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.

      (d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

      Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of Baa3 or better by Moody's and BBB or
better by Standard & Poor's. The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence of TIA
ss. 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or

<PAGE>

indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.

      Section 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

      Section 6.13 Representations and Warranties. The Indenture Trustee hereby
represents that:

                  (i) The Indenture Trustee is duly organized and validly
      existing as an association in good standing under the laws of the United
      States with power and authority to own its properties and to conduct its
      business as such properties are currently owned and such business is
      presently conducted;

                  (ii) The Indenture Trustee has the power and authority to
      execute and deliver this Indenture and to carry out its terms; and the
      execution, delivery and performance of this Indenture have been duly
      authorized by the Indenture Trustee by all necessary corporate action;

                  (iii) The consummation of the transactions contemplated by
      this Indenture and the fulfillment of the terms hereof do not conflict
      with, result in any breach of any of the terms and provisions of, or
      constitute (with or without notice or lapse of time) a default under, the
      articles of incorporation or bylaws of the Indenture Trustee or any
      agreement or other instrument to which the Indenture Trustee is a party or
      by which it is bound; and

                  (iv) To the Indenture Trustee's knowledge, there are no
      proceedings or investigations pending or threatened before any court,
      regulatory body, administrative agency or other governmental
      instrumentality having jurisdiction over the Indenture Trustee or its
      properties: (A) asserting the invalidity of this Indenture (B) seeking to
      prevent the consummation of any of the transactions contemplated by this
      Indenture or (C) seeking any determination or ruling that might materially
      and adversely affect the performance by the Indenture Trustee of its
      obligations under, or the validity or enforceability of, this Indenture.

      Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:

      (a) to accept the pledge of the Mortgage Loans and hold the assets of the
Trust Estate in trust for the Bondholders;

      (b) to authenticate and deliver the Bonds substantially in the form
prescribed by Exhibits A-1, A-2 and A-3 to this Indenture in accordance with the
terms of this Indenture; and

      (c) to take all other actions as shall be required to be taken by the
terms of this Indenture.

<PAGE>

      Section 6.15 The Agents. The provisions of this Indenture relating to the
limitations of the Indenture Trustee's liability and to its indemnity, rights
and protections shall inure also to the Paying Agent and Bond Registrar.

      Section 6.16 Execution of Derivative Contracts. The Issuer hereby directs
the Indenture Trustee to enter into and execute the Derivative Contracts and
make all representations and warranties contained therein on behalf of the
Trust. The Indenture Trustee hereby acknowledges receipt by it of the Derivative
Contracts. Upon receipt thereof from the counterparty under the Derivative
Contracts, the Indenture Trustee shall deposit into the Payment Account an
amount equal to all amounts actually received under the Derivative Contracts and
not previously deposited into the Payment Account.

<PAGE>

                                   ARTICLE VII

                         Bondholders' Lists and Reports

      Section 7.01 Issuer To Furnish Indenture Trustee Names and Addresses of
Bondholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Bonds as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Bond Registrar, no such list shall
be required to be furnished to the Indenture Trustee.

      Section 7.02 Preservation of Information; Communications to Bondholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Bonds contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
hereof and the names and addresses of Holders of Bonds received by the Indenture
Trustee in its capacity as Bond Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.

      (b) Bondholders may communicate pursuant to TIA ss. 312(b) with other
Bondholders with respect to their rights under this Indenture or under the
Bonds.

      (c) The Issuer, the Indenture Trustee and the Bond Registrar shall have
the protection of TIA ss. 312(c).

      Section 7.03 Reports of Issuer. (a) Subject to Section 4.06 of the
Servicing Agreement (i) The Indenture Trustee shall file with the Commission on
behalf of the Issuer, with a copy to the Issuer within 15 days before the Issuer
is required to file the same with the Commission, the annual reports and the
information, documents and other reports (or such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;

                  (ii) The Indenture Trustee shall file with the Commission, on
      behalf of the Issuer, in accordance with rules and regulations prescribed
      from time to time by the Commission such additional information, documents
      and reports with respect to compliance by the Issuer with the conditions
      and covenants of this Indenture as may be required from time to time by
      such rules and regulations; and

                  (iii) The Indenture Trustee shall supply (and the Indenture
      Trustee shall transmit by mail to all Bondholders described in TIA ss.
      313(c)) such summaries of any information, documents and reports required
      to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section
      7.03(a) and by rules and regulations prescribed from time to time by the
      Commission.

<PAGE>

      (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.

      Section 7.04 Reports by Indenture Trustee. If required by TIA ss. 313(a),
within 60 days after each January 30 beginning with March 31, 2006, the
Indenture Trustee shall mail to each Bondholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b).

      A copy of each such report at the time of its mailing to Bondholders shall
be filed by the Indenture Trustee with the Commission via EDGAR and each stock
exchange, if any, on which the Bonds are listed. The Issuer shall notify the
Indenture Trustee if and when the Bonds are listed on any stock exchange.

      Section 7.05 Statements to Bondholders. (a) With respect to each Payment
Date, the Indenture Trustee shall make available via the Indenture Trustee's
website https://www.tss.db.com/invr or deliver at the recipient's option to each
Bondholder and each Certificateholder, the Derivative Counterparty, the
Depositor, the Owner Trustee, the Certificate Paying Agent and each Rating
Agency, a statement setting forth the following information as to the Bonds, to
the extent applicable:

                  (i) the aggregate amount of collections with respect to the
      Mortgage Loans;

                  (ii) the Group 1 Available Funds, Group 2 Available Funds and
      Net Monthly Excess Cash Flow, with respect to the Group 1 Loans and Group
      2 Loans, payable to each Class of Bondholders for such Payment Date, the
      Basis Risk Shortfall Carry-Forward Amount on each Class of Bonds for such
      Payment Date and the aggregate Unpaid Interest Shortfall on each Class of
      Bonds for such Payment Date;

                  (iii) (a) the amount of such distribution to each Class of
      Class 1-A-1, Class 1-A-2, Class M-1-1, Class M-2-1, Class M-3-1, Class
      M-4-1, Class M-5-1, Class M-6-1, Class B-1, Class 2-A-1, Class 2-A-2,
      Class M-1-2, Class M-2-2, Class M-3-2, Class M-4-2, Class M-5-2, Class
      M-6-2 and Class B-2 Bonds applied to reduce the Bond Principal Balance
      thereof, and (b) the aggregate amount included therein representing
      Principal Prepayments;

                  (iv) the amount of such distribution to Holders of each Class
      of Bonds allocable to interest;

                  (v) the amount of such distribution to the Certificates;

                  (vi) if the distribution to the Holders of any Class of Bonds
      is less than the full amount that would be distributable to such Holders
      if there were sufficient funds available therefor, the amount of the
      shortfall;

                  (vii) the number and the aggregate Stated Principal Balance of
      the Mortgage Loans as of the end of the related Due Period, determined in
      the aggregate and separately for Loan Group 1 and Loan Group 2;

<PAGE>

                  (viii) the aggregate Bond Principal Balance of each Class of
      Bonds, after giving effect to the amounts distributed on such Payment
      Date, separately identifying any reduction thereof due to Realized Losses
      other than pursuant to an actual distribution of principal and the
      aggregate Bond Principal Balance of all of the Class 1-A-1, Class 1-A-2,
      Class M-1-1, Class M-2-1, Class M-3-1, Class M-4-1, Class M-5-1, Class
      M-6-1, Class B-1, Class 2-A-1, Class 2-A-2, Class M-1-2, Class M-2-2,
      Class M-3-2, Class M-4-2, Class M-5-2, Class M-6-2 and Class B-2 Bonds
      after giving effect to the distribution of principal on such Payment Date;

                  (ix) the number and aggregate Stated Principal Balances of
      Mortgage Loans (a) as to which the Monthly Payment is delinquent for 31-60
      days, 61-90 days, 91 or more days, respectively, (b) in foreclosure and
      (c) that have become REO Property, in each case as of the end of the
      preceding calendar month, determined in the aggregate and separately for
      Loan Group 1 and Loan Group 2;

                  (x) the Net Derivative Contract Payment Amount;

                  (xi) the Overcollateralization Increase Amount with respect to
      each Loan Group, Overcollateralization Release Amount,
      Overcollateralization Target Amount and Overcollateralized Amount, if any,
      in each case as the end of the related Payment Date, in each case as
      determined separately for each Loan Group;

                  (xii) the amount of any Advances and Compensating Interest
      payments;

                  (xiii) the aggregate Realized Losses with respect to the
      related Payment Date and cumulative Realized Losses since the Closing
      Date;

                  (xiv) the number and aggregate Stated Principal Balance of
      Mortgage Loans repurchased pursuant to the Mortgage Loan Purchase
      Agreement for the related Payment Date and cumulatively since the Closing
      Date determined in the aggregate and separately for Loan Group 1 and Loan
      Group 2;

                  (xv) the book value of any REO Property;

                  (xvi) the amount of any Prepayment Interest Shortfalls or
      Relief Act Shortfalls for such Payment Date;

                  (xvii) the aggregate Stated Principal Balance of Mortgage
      Loans purchased pursuant to Section 3.18 of the Servicing Agreement for
      the related Payment Date and cumulatively since the Closing Date;

                  (xviii) the amount withdrawn from the Group 1 Pre-Funding
      Account and used to make payments to Bondholders on that Payment Date, the
      amount remaining on deposit following such Payment Date, and the amount
      withdrawn from the Group 1 Pre-Funding Account used to buy certain Group 1
      Subsequent Mortgage Loans prior to such Payment Date; and

<PAGE>

                  (xix) the amount withdrawn from the Group 2 Pre-Funding
      Account and used to make payments to Bondholders on that Payment Date, the
      amount remaining on deposit following such Payment Date, and the amount
      withdrawn from the Group 2 Pre-Funding Account used to buy certain Group 2
      Subsequent Mortgage Loans prior to such Payment Date.

         Items (iii) and (v) above shall be presented on the basis of a Bond
having a $1,000 denomination. In addition, by January 31 of each calendar year
following any year during which the Bonds are outstanding, the Indenture Trustee
shall furnish a report to each Bondholder of record if so requested in writing
at any time during each calendar year as to the aggregate of amounts reported
pursuant to (iii), (iv) and (v) with respect to the Bonds for such calendar
year.

         The Indenture Trustee may conclusively rely upon the Remittance Report
provided by the Master Servicer pursuant to Section 4.01 of the Servicing
Agreement and on the amount of the Net Derivative Contract Payment Amount
furnished to the Indenture Trustee pursuant to the Derivative Contracts in its
preparation of its Statement to Bondholders.

<PAGE>

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

      Section 8.01 Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

      Section 8.02 Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Bondholders and the Derivative
Counterparty, the Payment Account as provided in Section 3.01 hereof.

      (b) All monies deposited from time to time in the Payment Account and all
deposits therein pursuant to this Indenture (other than deposits of any gain or
income on investments thereof) are for the benefit of the Bondholders. Any loss
on any investment made by the Indenture Trustee with funds in the Payment
Account shall be reimbursed immediately to the Trust Estate by the Master
Servicer. All investments made with monies in the Payment Account and the
Certificate Distribution Account including all income or other gain from such
investments shall be for the benefit of and the risk of the Master Servicer.

      (c) On each Payment Date, the Indenture Trustee shall pay itself the
Indenture Trustee's Fee for such Payment Date and then shall pay the Derivative
Counterparty the Net Derivative Fee, excluding any Additional Derivative
Counterparty Payment, and then the Indenture Trustee shall distribute all
remaining amounts on deposit in the Payment Account to the Bondholders in
respect of the Bonds and to such other persons in the order of priority set
forth in Section 3.05 hereof (except as otherwise provided in Section 5.04(b)
hereof).

      (d) The Indenture Trustee shall invest any funds in the Payment Account,
but only in Eligible Investments, as directed by the Master Servicer, maturing
no later than the Business Day preceding each Payment Date and such Eligible
Investments shall not be sold or disposed of prior to their maturity.

      Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at
least seven Business Days' notice when requested by the Issuer to take any
action pursuant to Section 8.05(a) hereof, accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a
condition to such action, an Officer's Certificate, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action,

<PAGE>

outlining the steps required to complete the same, and concluding that all
conditions precedent to the taking of such action have been complied with.

      Section 8.04 Termination Upon Distribution to Bondholders. This Indenture
and the respective obligations and responsibilities of the Issuer and the
Indenture Trustee created hereby shall terminate upon the distribution to
Bondholders, the Certificate Paying Agent on behalf of the Certificateholders
and the Indenture Trustee of all amounts required to be distributed pursuant to
Article III; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof.

      Section 8.05 Release of Trust Estate. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture, including for the purposes of any repurchase by
the Master Servicer of a Mortgage Loan pursuant to Section 3.18 of the Servicing
Agreement. No party relying upon an instrument executed by the Indenture Trustee
as provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.

      (b) The Indenture Trustee shall, at such time as (i) there are no Bonds
Outstanding and (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Bonds from the lien of this Indenture.

      (c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel stating
that all applicable requirements have been satisfied.

      Section 8.06 Surrender of Bonds Upon Final Payment. By acceptance of any
Bond, the Holder thereof agrees to surrender such Bond to the Indenture Trustee
promptly, prior to such Bondholder's receipt of the final payment thereon.

Section 8.07 Optional Redemption of the Bonds. (a) The Majority
Certificateholder shall have the option to redeem the Bonds, other than the
Class A-IO-1 Bonds and Class A-IO-2 Bonds, in whole, but not in part, on any
Payment Date on or after the earlier of (i) the Payment Date on which the sum of
the aggregate Stated Principal Balance of the Mortgage Loans and the Group 1
Pre-Funded Amount and Group 2 Pre-Funded Amount is less than or equal to 20% of
the sum of the Group 1 Cut-off Date Balance and the Group 2 Cut-off Date Balance
and (ii) the Payment Date in January 2015. The aggregate redemption price for
the Bonds, other than the Class A-IO-1 Bonds and Class A-IO-2 Bonds, will be
equal to the unpaid Bond Principal Balance of the Bonds as of the Payment Date
on which the proposed redemption will take place in accordance with the
foregoing, together with accrued and unpaid interest thereon at the applicable
Bond Interest Rate through such Payment Date (including any related Unpaid
Interest

<PAGE>

Shortfall and Basis Risk Shortfall Carry-Forward Amount) and plus an amount
equal to any amounts owing to the Derivative Counterparty under the Derivative
Contracts.

      (b) In order to exercise the foregoing option, the Issuer shall provide
written notice of its exercise of such option to the Indenture Trustee, the
Owner Trustee and the Master Servicer at least 15 days prior to its exercise.
Following receipt of the notice, the Indenture Trustee shall provide notice to
the Bondholders of the final payment on the Bonds. In addition, the Issuer
shall, not less than one Business Day prior to the proposed Payment Date on
which such redemption is to be made, deposit the aggregate redemption price
specified in (a) above with the Indenture Trustee, who shall deposit the
aggregate redemption price into the Payment Account and shall, on the Payment
Date after receipt of the funds, apply such funds to make final payments of
principal and interest on the Bonds in accordance with Section 3.05(b) and (c)
hereof and payment in full to the Indenture Trustee for all amounts payable to
it under this Indenture, and this Indenture shall be discharged subject to the
provisions of Section 4.10 hereof. If for any reason the amount deposited by the
Issuer is not sufficient to make such redemption or such redemption cannot be
completed for any reason, the amount so deposited by the Issuer with the
Indenture Trustee shall be immediately returned to the Issuer in full and shall
not be used for any other purpose or be deemed to be part of the Trust Estate.

<PAGE>

                                   ARTICLE IX

                             Supplemental Indentures

      Section 9.01 Supplemental Indentures Without Consent of Bondholders. (a)
Without the consent of the Holders of any Bonds but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:

                  (i) to correct or amplify the description of any property at
      any time subject to the lien of this Indenture, or better to assure,
      convey and confirm unto the Indenture Trustee any property subject or
      required to be subjected to the lien of this Indenture, or to subject to
      the lien of this Indenture additional property;

                  (ii) to evidence the succession, in compliance with the
      applicable provisions hereof, of another person to the Issuer, and the
      assumption by any such successor of the covenants of the Issuer herein and
      in the Bonds contained;

                  (iii) to add to the covenants of the Issuer, for the benefit
      of the Holders of the Bonds, or to surrender any right or power herein
      conferred upon the Issuer;

                  (iv) to convey, transfer, assign, mortgage or pledge any
      property to or with the Indenture Trustee;

                  (v) to cure any ambiguity, to correct or supplement any
      provision herein or in any supplemental indenture that may be inconsistent
      with any other provision herein or in any supplemental indenture;

                  (vi) to make any other provisions with respect to matters or
      questions arising under this Indenture or in any supplemental indenture;
      provided, that such action shall not materially and adversely affect the
      interests of the Holders of the Bonds;

                  (vii) to evidence and provide for the acceptance of the
      appointment hereunder by a successor trustee with respect to the Bonds and
      to add to or change any of the provisions of this Indenture as shall be
      necessary to facilitate the administration of the trusts hereunder by more
      than one trustee, pursuant to the requirements of Article VI hereof; or

                  (viii) to modify, eliminate or add to the provisions of this
      Indenture to such extent as shall be necessary to effect the qualification
      of this Indenture under the TIA or under any similar federal statute
      hereafter enacted and to add to this Indenture such other provisions as
      may be expressly required by the TIA;

provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel as to the
enforceability of any such indenture supplement and to the effect that (i) such
indenture supplement is permitted hereunder and (ii)

<PAGE>

entering into such indenture supplement will not result in a "substantial
modification" of the Bonds under Treasury Regulation Section 1.1001-3 or
adversely affect the status of the Bonds as indebtedness for federal income tax
purposes.

      The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.

      (b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Bonds and
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Bonds under this
Indenture; provided, however, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect
in any material respect the interests of any Bondholder or (iii) if 100% of the
Certificates are not owned by IMH Assets Corp., cause the Issuer to be subject
to an entity level tax for federal income tax purposes.

      Section 9.02 Supplemental Indentures With Consent of Bondholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, with the consent of the
Holders of not less than a majority of the Bond Principal Balance of each Class
of Bonds affected thereby, by Act (as defined in Section 10.03 hereof) of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Bonds under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Bond affected
thereby:

                  (i) change the date of payment of any installment of principal
      of or interest on any Bond, or reduce the principal amount thereof or the
      interest rate thereon, change the provisions of this Indenture relating to
      the application of collections on, or the proceeds of the sale of, the
      Trust Estate to payment of principal of or interest on the Bonds, or
      change any place of payment where, or the coin or currency in which, any
      Bond or the interest thereon is payable, or impair the right to institute
      suit for the enforcement of the provisions of this Indenture requiring the
      application of funds available therefor, as provided in Article V, to the
      payment of any such amount due on the Bonds on or after the respective due
      dates thereof;

                  (ii) reduce the percentage of the Bond Principal Balances of
      the Bonds, the consent of the Holders of which is required for any such
      supplemental indenture, or the consent of the Holders of which is required
      for any waiver of compliance with certain provisions of this Indenture or
      certain defaults hereunder and their consequences provided for in this
      Indenture;

                  (iii) modify or alter the provisions of the proviso to the
      definition of the term "Outstanding" or modify or alter the exception in
      the definition of the term "Holder";

<PAGE>

                  (iv) reduce the percentage of the Bond Principal Balances of
      the Bonds required to direct the Indenture Trustee to direct the Issuer to
      sell or liquidate the Trust Estate pursuant to Section 5.04 hereof;

                  (v) modify any provision of this Section 9.02 except to
      increase any percentage specified herein or to provide that certain
      additional provisions of this Indenture or the Basic Documents cannot be
      modified or waived without the consent of the Holder of each Bond affected
      thereby;

                  (vi) modify any of the provisions of this Indenture in such
      manner as to affect the calculation of the amount of any payment of
      interest or principal due on any Bond on any Payment Date (including the
      calculation of any of the individual components of such calculation); or

                  (vii) permit the creation of any lien ranking prior to or on a
      parity with the lien of this Indenture with respect to any part of the
      Trust Estate or, except as otherwise permitted or contemplated herein,
      terminate the lien of this Indenture on any property at any time subject
      hereto or deprive the Holder of any Bond of the security provided by the
      lien of this Indenture;

and provided, further, that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer (if 100% of the Certificates are not owned by IMH
Assets Corp.) to be subject to an entity level tax.

      Any such action shall not adversely affect in any material respect the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture) as evidenced by an Opinion of Counsel (provided by the
Person requesting such supplemental indenture) delivered to the Indenture
Trustee.

      No supplemental indenture adverse to the interests of the Derivative
Counterparty shall be entered into without the Derivative Counterparty's written
consent.

      It shall not be necessary for any Act of Bondholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

      Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Bonds to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

      Section 9.03 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is

<PAGE>

authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.

      Section 9.04 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Bonds affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Bonds shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

      Section 9.05 Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.

      Section 9.06 Reference in Bonds to Supplemental Indentures. Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Bonds so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.

<PAGE>

                                    ARTICLE X

                                  Miscellaneous

      Section 10.01 Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.

      Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

            (1) a statement that each signatory of such certificate or opinion
      has read or has caused to be read such covenant or condition and the
      definitions herein relating thereto;

            (2) a brief statement as to the nature and scope of the examination
      or investigation upon which the statements or opinions contained in such
      certificate or opinion are based;

            (3) a statement that, in the opinion of each such signatory, such
      signatory has made such examination or investigation as is necessary to
      enable such signatory to express an informed opinion as to whether or not
      such covenant or condition has been complied with;

            (4) a statement as to whether, in the opinion of each such
      signatory, such condition or covenant has been complied with; and

            (5) if the signatory of such certificate or opinion is required to
      be Independent, the statement required by the definition of the term
      "Independent".

      (b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days prior to such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited and
a report from a nationally recognized accounting firm verifying such value.

                  (ii) Whenever the Issuer is required to furnish to the
      Indenture Trustee an Officer's Certificate certifying or stating the
      opinion of any signer thereof as to the matters described in clause (i)
      above, the Issuer shall also deliver to the Indenture Trustee

<PAGE>

      an Independent Certificate from a nationally recognized accounting firm as
      to the same matters, if the fair value of the securities to be so
      deposited and of all other such securities made the basis of any such
      withdrawal or release since the commencement of the then current fiscal
      year of the Issuer, as set forth in the certificates delivered pursuant to
      clause (i) above and this clause (ii), is 10% or more of the Bond
      Principal Balances of the Bonds, but such a certificate need not be
      furnished with respect to any securities so deposited, if the fair value
      thereof as set forth in the related Officer's Certificate is less than
      $25,000 or less than one percent of the Bond Principal Balances of the
      Bonds.

                  (iii) Whenever any property or securities are to be released
      from the lien of this Indenture, the Issuer shall also furnish to the
      Indenture Trustee an Officer's Certificate certifying or stating the
      opinion of each person signing such certificate as to the fair value
      (within 90 days prior to such release) of the property or securities
      proposed to be released and stating that in the opinion of such person the
      proposed release will not impair the security under this Indenture in
      contravention of the provisions hereof.

                  (iv) Whenever the Issuer is required to furnish to the
      Indenture Trustee an Officer's Certificate certifying or stating the
      opinion of any signer thereof as to the matters described in clause (iii)
      above, the Issuer shall also furnish to the Indenture Trustee an
      Independent Certificate as to the same matters if the fair value of the
      property or securities and of all other property or securities released
      from the lien of this Indenture since the commencement of the then-current
      calendar year, as set forth in the certificates required by clause (iii)
      above and this clause (iv), equals 10% or more of the Bond Principal
      Balances of the Bonds, but such certificate need not be furnished in the
      case of any release of property or securities if the fair value thereof as
      set forth in the related Officer's Certificate is less than $25,000 or
      less than one percent of the then Bond Principal Balances of the Bonds.

      Section 10.02 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

      Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Seller or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

<PAGE>

      Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

      Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

      Section 10.03 Acts of Bondholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Bondholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Bondholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Bondholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01
hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03 hereof.

      (b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.

      (c) The ownership of Bonds shall be proved by the Bond Registrar.

      (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Bonds shall bind the Holder of every Bond
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Bond.

      Section 10.04 Notices etc., to Indenture Trustee Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or act of Bondholders is to be made upon, given or
furnished to or filed with:

                  (i) the Indenture Trustee by any Bondholder or by the Issuer
      shall be sufficient for every purpose hereunder if made, given, furnished
      or filed in writing to or

<PAGE>

      with the Indenture Trustee at the Corporate Trust Office. The Indenture
      Trustee shall promptly transmit any notice received by it from the
      Bondholders to the Issuer; or

                  (ii) the Issuer by the Indenture Trustee or by any Bondholder
      shall be sufficient for every purpose hereunder if in writing and mailed
      first-class, postage prepaid to the Issuer addressed to: Impac CMB Trust
      Series 2005-1, in care of Wilmington Trust Company, Rodney Square North,
      1100 North Market Street, Wilmington, Delaware 19990-0001, Attention:
      Corporate Trust Administration, or at any other address previously
      furnished in writing to the Indenture Trustee by the Issuer. The Issuer
      shall promptly transmit any notice received by it from the Bondholders to
      the Indenture Trustee; or

                  (iii) the Seller by the Indenture Trustee shall be sufficient
      for every purpose hereunder if in writing and mailed, first-class postage
      pre-paid, or personally delivered or telecopied to: Impac Mortgage
      Holdings, Inc., 1401 Dove Street, Newport Beach, California 92660,
      Attention: General Counsel.

      Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class
postage pre-paid, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., Residential Mortgage Monitoring Department, 99
Church Street, New York, New York 10007, (ii) in the case of Standard & Poor's,
at the following address: Standard & Poor's, 55 Water Street, 41st Floor, New
York, New York 10041, Attention of Asset Backed Surveillance Department, and
(iii) in the case of DBRS, at the following address: Dominion Bond Rating
Service, Inc., 55 Broadway, New York, New York 10006; or as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.

      Section 10.05 Notices to Bondholders; Waiver. Where this Indenture
provides for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Bondholder affected by such
event, at such Person's address as it appears on the Bond Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Bondholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.

      Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Bondholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.

      In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Bondholders when such notice is required to be given
pursuant to any provision of this Indenture, then any

<PAGE>

manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.

      Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.

      Section 10.06 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.

      The provisions of TIA ss.ss. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

      Section 10.07 Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.

      Section 10.08 Successors and Assigns. All covenants and agreements in this
Indenture and the Bonds by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.

      Section 10.09 Separability. In case any provision in this Indenture or in
the Bonds shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

      Section 10.10 [Reserved].

      Section 10.11 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

      Section 10.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

      Section 10.13 Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

      Section 10.14 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
at its expense (which may be counsel to the

<PAGE>

Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Bondholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.

      Section 10.15 Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Bonds or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

      Section 10.16 No Petition. The Indenture Trustee, by entering into this
Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree
that they will not at any time prior to one year from the date of termination
hereof, institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Bonds, this Indenture or any
of the Basic Documents.

      Section 10.17 Inspection. The Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.

<PAGE>

      IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.

                                        IMPAC CMB TRUST SERIES 2005-1, as Issuer
                                        Wilmington Trust Company, not in its
                                        individual capacity but solely as Owner
                                        Trustee

                                        By: /s/ Heather L. Williamson
                                            -------------------------
                                        Name:  Heather L. Williamson
                                        Title: Financial Services Officer

                                        DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                        as Indenture Trustee

                                        By: /s/ Barbara Campbell
                                            --------------------
                                        Name:  Barbara Campbell
                                        Title: Assistant Vice President

                                        By: /s/ Brent Hoyler
                                            ----------------
                                        Name:  Brent Hoyler
                                        Title: Associate

<PAGE>

STATE OF DELAWARE        )
                         ) ss.:
COUNTY OF NEW CASTLE     )

      On this 24th day of January, 2005, before me personally appeared Heather
L. Williamson, to me known, who being by me duly sworn, did depose and say, that
she is a Financial Services Officer of the Owner Trustee, one of the
corporations described in and which executed the above instrument; and that she
signed her name thereto by like order.

                                                Notary Public

                                                /s/ Michelle Lauren Centrella
                                                -----------------------------
                                                NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

STATE OF CALIFORNIA    )
                       ) ss.:
COUNTY OF ORANGE       )

      On this 28th day of January, 2005, before me personally appeared Barbara
Campell, to me known, who being by me duly sworn, did depose and say, that she
is an Assistant Vice President of the Indenture Trustee, one of the entities
described in and which executed the above instrument; and that she signed her
name thereto by like order.

                                                Notary Public

                                                /s/ Curtis Hall
                                                ---------------
                                                NOTARY PUBLIC

[NOTARIAL SEAL]

STATE OF CALIFORNIA    )
                       ) ss.:
COUNTY OF ORANGE       )

      On this 28th day of January, 2005, before me personally appeared Brent
Hoyler, to me known, who being by me duly sworn, did depose and say, that he is
an Associate of the Indenture Trustee, one of the entities described in and
which executed the above instrument; and that she signed her name thereto by
like order.

                                                Notary Public

                                                /s/ Curtis Hall
                                                ---------------
                                                NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

                                   EXHIBIT A-1

                           FORM OF CLASS [_-A-_] BONDS

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

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                     A-1-1
<PAGE>

                          IMPAC CMB TRUST SERIES 2005-1
                        COLLATERALIZED ASSET-BACKED BONDS
                                  CLASS [_-A-_]

AGGREGATE [BOND PRINCIPAL                              BOND INTEREST
BALANCE][NOTIONAL AMOUNT]:                             RATE: Adjustable Rate
$[      ]
INITIAL [BOND PRINCIPAL                                BOND NO. 1
BALANCE][NOTIONAL AMOUNT] OF THIS
BOND: $[      ]

PERCENTAGE INTEREST: 100%                              CUSIP NO. [      ]

      Impac CMB Trust Series 2005-1 (the "Issuer"), a Delaware statutory trust,
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of ($_________________) in monthly installments on the
twenty-fifth day of each month or, if such day is not a Business Day, the next
succeeding Business Day (each a "Payment Date"), commencing in February 2005 and
ending on or before the Payment Date occurring in _____________ (the "Final
Scheduled Payment Date") and to pay interest on the [Bond Principal
Balance][Notional Amount] of this Bond (this "Bond") outstanding from time to
time as provided below.

      This Bond is one of a duly authorized issue of the Issuer's Collateralized
Asset-Backed Bonds, Series 2005-1 (the "Bonds"), issued under an Indenture dated
as of January 28, 2005 (the "Indenture"), between the Issuer and Deutsche Bank
National Trust Company, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

      Payments of [principal and] interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. [The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal [and
the aggregate amount of cumulative Realized Losses allocated to such Bond] on
all prior Payment Dates.][The "Notional Amount" of this Bond, immediately prior
to the related Payment Date, for the for the February 2005 Payment Date, is
$1,250,000,000, for the March 2005 Payment Date, $1,186,829,271, for the April
2005 Payment Date, $1,099,349,173, for the May 2005 Payment Date,
$1,018,316,110, for the June 2005 Payment Date, $943,254,797, for the July 2005
Payment Date, $873,725,325, and for each Payment Date thereafter, $0.][The
"Notional Amount" of this Bond, immediately prior to the related Payment Date,
for the

                                     A-1-2
<PAGE>

February 2005 Payment Date, is $[________], for the March 2005 Payment Date,
$[______], for the April 2005 Payment Date, $[________], for the May 2005
Payment Date, $[________], for the June 2005 Payment Date, $[_________], for the
July 2005 Payment Date, $[_______], and for each Payment Date thereafter, $0]

      The [principal of, and] interest on[,] this Bond [are][is] due and payable
as described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[_-A-_] Bonds as described above, and shall be applied as [between] interest
[and principal] as provided in the Indenture. [In addition, any payments
received by the Indenture Trustee in respect of the Guaranty Agreement shall be
paid to the Holders of this Bond pursuant to Section 3.30 of the Indenture.]

      All [principal and] interest accrued on the Bonds, if not previously paid,
will become finally due and payable at the Final Scheduled Payment Date.

      The Bonds, other than the Class A-IO-1 Bonds and Class A-IO-2 Bonds, are
subject to redemption in whole, but not in part, by the Majority
Certificateholder on any Payment Date on or after the earlier of (i) the Payment
Date on which the aggregate Stated Principal Balance of the Mortgage Loans as of
the end of the prior Due Period is less than or equal to 20% of the aggregate
Stated Principal Balance of the Mortgage Loans as of Cut-off Date and the
aggregate amount deposited into the Group 1 Pre-Funding Account and Group 2
Pre-Funding Account on the Closing Date and (ii) the Payment Date in January
2015.

      The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class [_-A-_] Bonds, and
each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class [_-A-_] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

      Any payment of [principal or] interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
[principal and] interest payable with respect to such Bond, which shall be
payable as provided below. Notwithstanding the foregoing, upon written request
with appropriate instructions by the Holder of this Bond delivered to the
Indenture Trustee at least five Business Days prior to the Record Date, any
payment of [principal or] interest, other than the final installment of
[principal or interest], shall be made by wire transfer to an account in the
United States designated by such Holder. All scheduled reductions in the
[principal amount][Notional

                                     A-1-3
<PAGE>

Amount] of a Bond (or one or more predecessor Bonds) effected by payments of
principal made on any Payment Date shall be binding upon all Holders of this
Bond and of any bond issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not such payment is noted on
such Bond. The final payment of this Bond shall be payable upon presentation and
surrender thereof on or after the Payment Date thereof at the Corporate Trust
Office or the office or agency of the Issuer maintained by it for such purpose
pursuant to Section 3.02 of the Indenture.

      Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid [principal and] interest that were
carried by such other Bond.

      If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the Holder of this
Bond will be equal to [the sum of the unpaid Bond Principal Balance of the
Bonds, together with] accrued and unpaid interest [thereon] [on the Notional
Amount] as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Bonds, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Bonds or otherwise shall continue to be applied to payments
of [principal of and] interest on the Bonds as if they had not been declared due
and payable.

      The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

      The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with Plan
Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give
rise to a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code and (B) the Bonds are rated investment grade or better
and such person agrees to treat them as indebtedness for federal income tax
purposes. Alternatively, regardless of the rating of such Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
any Underwriter, the Owner Trustee, the Indenture Trustee, the Depositor, the
Master Servicer or any successor servicer which opines that the acquisition,
holding and transfer of such Bond or interest therein is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the
Indenture Trustee, the Depositor, the Master Servicer or any successor servicer
to any obligation in addition to those undertaken in the Indenture.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the

                                     A-1-4
<PAGE>

office or agency designated by the Issuer pursuant to the Indenture, accompanied
by proper instruments of assignment in form satisfactory to the Indenture
Trustee, one or more new Bonds of any authorized denominations and of a like
aggregate initial [Bond Principal Balance][Notional Amount], will be issued to
the designated transferee or transferees.

      Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
and Notional Amount of the Bonds on behalf of the Holders of all the Bonds, to
waive any past Default under the Indenture and its consequences. Any such waiver
by the Holder, at the time of the giving thereof, of this Bond (or any one or
more predecessor Bonds) shall bind the Holder of every Bond issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon such Bond. The Indenture
also permits the Issuer and the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of the
Holders of the Bonds issued thereunder.

      Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial [Bond Principal Balance][Notional
Amount] of Bonds of different authorized denominations, as requested by the
Holder surrendering same.

      Unless the Certificate of Authentication hereon has been executed by the
Indenture Trustee by manual signature, this Bond shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.

      AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                     A-1-5
<PAGE>

      IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: January 28, 2005

                                        IMPAC CMB TRUST SERIES 2005-1

                                        BY: WILMINGTON TRUST COMPANY, not in its
                                        individual capacity but solely in its
                                        capacity as Owner Trustee

                                        By:
                                           -------------------------------------
                                        Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

By:
   ---------------------------------
   Authorized Signatory

                                     A-1-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
the Bond, shall be construed as though they were written out in full according
to applicable laws or regulations:

       TEN COM          --   as tenants in common

       TEN ENT          --   as tenants by the entireties

       JT TEN           --   as joint tenants with right of survivorship
                             and not as tenants in common

  UNIF GIFT MIN ACT     --   __________ Custodian
                             ___________________________________
                               (Cust)               (Minor)

                             under Uniform Gifts to Minor Act __________________
                                                                   (State)

     Additional abbreviations may also be used though not in the above list.

                                     A-1-7
<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

         PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
                                    ASSIGNEE:

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

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

       -------------------------------------------------------------------
  (Please print or typewrite name and address, including zip code, of assignee)

_______________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________ attorney to transfer said Bond on the books kept for
registration thereof, with full power of substitution in the premises.

Dated:
      --------------------         ------------------------------

Signature Guaranteed by
                        -----------------------------------------

      NOTICE: The signature(s) to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                     A-1-8
<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS M-[_]-[_] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [_-A-_] BONDS [AND
CLASS M-[_]-[_] BONDS] AS DESCRIBED IN THE INDENTURE.

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

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                     A-2-1
<PAGE>

                          IMPAC CMB TRUST SERIES 2005-1
                        COLLATERALIZED ASSET-BACKED BONDS
                                 CLASS M-[_]-[_]

AGGREGATE BOND PRINCIPAL                                BOND INTEREST
BALANCE:                                                RATE: [   %]
$[      ]
INITIAL BOND PRINCIPAL                                  BOND NO. 1
BALANCE OF THIS BOND: $[      ]

PERCENTAGE INTEREST: 100%                               CUSIP NO. [      ]

      Impac CMB Trust Series 2005-1 (the "Issuer"), a Delaware statutory trust,
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of ______________________________ ($___________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in November 2004 and ending on or before the Payment Date occurring
in _____________ (the "Final Scheduled Payment Date") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.

      This Bond is one of a duly authorized issue of the Issuer's Collateralized
Asset-Backed Bonds, Series 2005-1 (the "Bonds"), issued under an Indenture dated
as of January 28, 2005 (the "Indenture"), between the Issuer and Deutsche Bank
National Trust Company, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

      Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

      The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
M-[_]-[_] Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

                                     A-2-2
<PAGE>

      All principal and interest accrued on the Bonds, if not previously paid,
will become finally due and payable at the Final Scheduled Payment Date.

      The Bonds are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans is less than or equal to 20% of aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date and the aggregate amount deposited into the
Group 1 Pre-Funding Account and Group 2 Pre-Funding Amount on the Closing Date
and (ii) the Payment Date in January 2015.

      The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class M-[_]-[_] Bonds,
and each Holder hereof, by its acceptance of this Bond, agrees that (i) such
Bond will be limited in right of payment to amounts available from the Trust
Estate as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class M-[_]-[_] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

      Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

      Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

      If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the

                                     A-2-3
<PAGE>

Holder of this Bond will be equal to the sum of the unpaid Bond Principal
Balance of the Bonds, together with accrued and unpaid interest thereon as
described in the Indenture. The Indenture provides that, notwithstanding the
acceleration of the maturity of the Bonds, under certain circumstances specified
therein, all amounts collected as proceeds of the Trust Estate securing the
Bonds or otherwise shall continue to be applied to payments of principal of and
interest on the Bonds as if they had not been declared due and payable.

      The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

      Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive certain terms and conditions
set forth in the Indenture without the consent of the Holders of the Bonds
issued thereunder.

      Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

                                     A-2-4
<PAGE>

      Unless the Certificate of Authentication hereon has been executed by the
Indenture Trustee by manual signature, this Bond shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.

      AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                     A-2-5
<PAGE>

      IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: January 28, 2005

                                        IMPAC CMB TRUST SERIES 2005-1

                                        BY: WILMINGTON TRUST COMPANY, not in
                                            its individual capacity but solely
                                            in its capacity as Owner Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

By:
    --------------------------------------------
    Authorized Signatory

                                     A-2-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
the Bond, shall be construed as though they were written out in full according
to applicable laws or regulations:

         TEN COM           --    as tenants in common

         TEN ENT           --    as tenants by the entireties

         JT TEN            --    as joint tenants with right of survivorship
                                 and not as tenants in common

    UNIF GIFT MIN ACT      --    __________ Custodian
                                 ___________________________________
                                   (Cust)               (Minor)

                                 under Uniform Gifts to Minor Act
                                 _____________________
                                        (State)

     Additional abbreviations may also be used though not in the above list.

                                     A-2-7
<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

     PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

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

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

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

  (Please print or typewrite name and address, including zip code, of assignee)

______________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:
      ---------------------------        ---------------------------------

Signature Guaranteed by
                        --------------------------------------------------

      NOTICE: The signature(s) to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                     A-2-8
<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS M-[_]-[_] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [_-A-_] BONDS [AND
CLASS M-[_]-[_] BONDS] AS DESCRIBED IN THE INDENTURE.

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

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                     A-2-9
<PAGE>

                          IMPAC CMB TRUST SERIES 2005-1
                        COLLATERALIZED ASSET-BACKED BONDS
                                   CLASS B-[_]

AGGREGATE BOND PRINCIPAL                            BOND INTEREST
BALANCE:                                            RATE: [    %]
$[       ]
INITIAL BOND PRINCIPAL                              BOND NO. 1
BALANCE OF THIS BOND: $[       ]
PERCENTAGE INTEREST: 100%                           CUSIP NO. [       ]

      Impac CMB Trust Series 2005-1 (the "Issuer"), a Delaware statutory trust,
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of ______________________________ ($___________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in February 2004 and ending on or before the Payment Date occurring
in _____________ (the "Final Scheduled Payment Date") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.

      This Bond is one of a duly authorized issue of the Issuer's Collateralized
Asset-Backed Bonds, Series 2005-1 (the "Bonds"), issued under an Indenture dated
as of January 28, 2005 (the "Indenture"), between the Issuer and Deutsche Bank
National Trust Company, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

      Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

      The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
M-[_]-[_] Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

                                     A-2-10
<PAGE>

      All principal and interest accrued on the Bonds, if not previously paid,
will become finally due and payable at the Final Scheduled Payment Date.

      The Bonds are subject to redemption in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans is less than or equal to 20% of aggregate Stated Principal Balance of the
Mortgage Loans as of Cut-off Date and the aggregate amount deposited into the
Group 1 Pre-Funding Account and Group 2 Pre-Funding Account on the Closing Date
and (ii) the Payment Date in January 2015.

      The Issuer shall not be liable upon the indebtedness evidenced by the
Bonds except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class B-[_] Bonds, and
each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond
will be limited in right of payment to amounts available from the Trust Estate
as provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class B-[_] Bonds pursuant to the Indenture
and the rights conveyed to the Issuer under the Indenture.

      Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

      Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

      If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds, the amount payable to the

                                     A-2-11
<PAGE>

Holder of this Bond will be equal to the sum of the unpaid Bond Principal
Balance of the Bonds, together with accrued and unpaid interest thereon as
described in the Indenture. The Indenture provides that, notwithstanding the
acceleration of the maturity of the Bonds, under certain circumstances specified
therein, all amounts collected as proceeds of the Trust Estate securing the
Bonds or otherwise shall continue to be applied to payments of principal of and
interest on the Bonds as if they had not been declared due and payable.

      The failure to pay any Unpaid Interest Shortfall at any time when funds
are not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Bond may be registered on the Bond Register of
the Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

      Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or waive certain terms and conditions
set forth in the Indenture without the consent of the Holders of the Bonds
issued thereunder.

      Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

                                     A-2-12
<PAGE>

      Unless the Certificate of Authentication hereon has been executed by the
Indenture Trustee by manual signature, this Bond shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.

      AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                     A-2-13
<PAGE>

      IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: January 28, 2005

                                        IMPAC CMB TRUST SERIES 2005-1

                                        BY: WILMINGTON TRUST COMPANY, not in its
                                            individual capacity but solely in
                                            its capacity as Owner Trustee

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee

By:
    --------------------------------
    Authorized Signatory

                                     A-2-14
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
the Bond, shall be construed as though they were written out in full according
to applicable laws or regulations:

         TEN COM             --    as tenants in common

         TEN ENT             --    as tenants by the entireties

         JT TEN              --    as joint tenants with right of survivorship
                                   and not as tenants in common

    UNIF GIFT MIN ACT        --    __________ Custodian
                                   __________________________________
                                      (Cust)              (Minor)

                                   under Uniform Gifts to Minor Act
                                   _____________________
                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                     A-2-15
<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

     PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

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

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

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

  (Please print or typewrite name and address, including zip code, of assignee)

______________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:
       ---------------------------       -------------------------------

Signature Guaranteed by
                        ------------------------------------------------

      NOTICE: The signature(s) to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                     A-2-16
<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule, is
being filed in paper pursuant to a continuing hardship exemption.)

                                      B-1
<PAGE>

                                    EXHIBIT C

                              DERIVATIVE CONTRACTS

                             (Provided Upon Request)

                                      E-1
<PAGE>

                                    EXHIBIT D

                FORM OF GROUP [_] SUBSEQUENT TRANSFER INSTRUMENT

      Pursuant to this Group [_] Subsequent Transfer Instrument, dated
[_______________] (the "Instrument"), between IMH Assets Corp. as Seller (the
"Company"), and Deutsche Bank National Trust Company as indenture trustee of the
IMH Assets Corp., Collateralized Asset-Backed Bonds, Series 2005-1, as purchaser
(the "Indenture Trustee"), on behalf of Impac CMB Trust Series 2005-1 (the
"Issuer"), as purchaser, and pursuant to the Indenture, dated as of January 28,
2005 (the "Indenture"), between the Issuer and the Indenture Trustee, as
indenture trustee, the Company and the Indenture Trustee agree to the sale by
the Company and the purchase by the Indenture Trustee in trust, on behalf of the
Trust, of the Group [_] Subsequent Mortgage Loans on the attached Schedule 1 of
Mortgage Loans (the "Group [_] Subsequent Mortgage Loans").

      Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Indenture.

            Section 1. Conveyance of Group [_] Subsequent Mortgage Loans;
Acceptance of Mortgage Loans by the Indenture Trustee.

            (a) The Company does hereby sell, transfer, assign, set over and
convey to the Indenture Trustee in trust, on behalf of the Trust, without
recourse, all of its right, title and interest in and to the Group [_]
Subsequent Mortgage Loans, including all amounts due on the Group [_] Subsequent
Mortgage Loans after the related Subsequent Cut-off Date, and all items with
respect to the Group [_] Subsequent Mortgage Loans to be delivered pursuant to
Section 2.05 of the Indenture; provided, however that the Company reserves and
retains all right, title and interest in and to amounts due on the Group [_]
Subsequent Mortgage Loans on or prior to the related Subsequent Cut-off Date.
The Company, contemporaneously with the delivery of this Agreement, has
delivered or caused to be delivered to the Indenture Trustee each item set forth
in, and as provided, in Section 2.05 of the Indenture. The transfer to the
Indenture Trustee by the Company of the Group [_] Subsequent Mortgage Loans
identified on the Mortgage Loan Schedule shall be absolute and is intended by
the Company, the Master Servicer, the Indenture Trustee, the Bondholders to
constitute and to be treated as a sale by the Company to the Trust Fund.

            (b) The Company, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Indenture Trustee without recourse for the benefit of the Bondholders all the
right, title and interest of the Company, in, to and under the Group [_]
Subsequent Mortgage Loan Purchase Agreement, dated [_______________], between
the Company, as purchaser, and Impac Mortgage Holdings, Inc., as seller (the
"Purchase Agreement").

                                      E-2
<PAGE>

            (c) The Indenture Trustee acknowledges receipt of, subject to the
exceptions it notes pursuant to the procedures described in Section 2.03 of the
Indenture, the documents (or certified copies thereof) referred to in Section
2.1(b) of the Group [_] Subsequent Mortgage Loan Purchase Agreement, and
declares that it holds and will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Estate as Indenture Trustee in trust for the use and benefit of all
present and future Holders of the Bonds.

            (d) Additional terms of the sale are set forth on Attachment A
hereto.

            Section 2. Representations and Warranties; Conditions Precedent.

            (a) The Company hereby confirms that each of the conditions and the
representations and warranties set forth in Section 2.05 of the Indenture are
satisfied as of the date hereof.

            (b) All terms and conditions of the Indenture are hereby ratified
and confirmed; provided, however, that in the event of any conflict, the
provisions of this Instrument shall control over the conflicting provisions of
the Indenture.

            Section 3. Recordation of Instrument.

            To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of 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 Bondholders' expense on direction of the related Bondholders,
but only when accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the Bondholders
or is necessary for the administration or servicing of the Group [_] Subsequent
Mortgage Loans.

            Section 4. Governing Law.

            This Instrument 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 giving
effect to principles of conflicts of law.

            Section 5. Counterparts.

            This Instrument may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.

                                      E-3
<PAGE>

            Section 6. Successors and Assigns.

            This Instrument shall inure to the benefit of and be binding upon
the Company and the Indenture Trustee and their respective successors and
assigns.

                                      E-4
<PAGE>

IMH ASSETS CORP.

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

DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee for the Trust.

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

                                      E-5
<PAGE>

                                    EXHIBIT E

                             FORM OF ADDITION NOTICE

                                                          ________________, 2005

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

      RE:   Indenture, dated as of January 28, 2005, between Impac CMB Trust
            Series 2005-1, a Delaware business trust, as Issuer (the "Issuer"),
            and Deutsche Bank National Trust Company, as Indenture Trustee (the
            "Indenture Trustee"), relating to IMH Assets Corp., Collateralized
            Asset-Backed Bonds, Series 2005-1, Subsequent Transfer

Ladies and Gentlemen:

            Pursuant to Section 2.05 of the Indenture, Issuer has designated
Group 1 Subsequent Mortgage Loans to be transferred to the Indenture Trustee on
______________, 2005, with an approximate aggregate principal balance of
$________________. Capitalized terms not otherwise defined herein have the
meaning set forth in the Indenture.

            Pursuant to Section 2.06 of the Indenture, Issuer has designated
Group 2 Subsequent Mortgage Loans to be transferred to the Indenture Trustee on
______________, 2005, with an approximate aggregate principal balance of
$________________. Capitalized terms not otherwise defined herein have the
meaning set forth in the Indenture.

            Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.

                                        Very truly yours,

                                        IMPAC CMB TRUST SERIES 2004-4, as Issuer
                                        Wilmington Trust Company, not in its
                                        individual capacity but solely as Owner
                                        Trustee

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

                                      E-6
<PAGE>

ACKNOWLEDGED AND AGREED:

DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee for the Trust.

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

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

                                      E-7
<PAGE>

                                    EXHIBIT F

                          FORM OF INITIAL CERTIFICATION

                                                               ___________, 200_

[Issuer]

[Master Servicer]

Attention: Impac CMB Trust Series 2005-1

            Re:   Indenture dated as of January 28, 2005, between Impac CMB
                  Trust Series 2004-8 and Deutsche Bank National Trust Company

Ladies and Gentlemen:

            In accordance with Section 2.03(a) of the above-captioned Indenture,
and Section 2.1(b)(i)-(v) of the Mortgage Loan Purchase Agreement, dated as of
January 28, 2005 between Impac Mortgage Holdings, Inc. and Impac Funding
Corporation (the "MLPA"; and together with the Indenture, the "Agreements"), the
undersigned, as Indenture 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 exception report attached hereto) it has reviewed the
Mortgage File and the Mortgage Loan Schedule and has determined that: (i) all
documents required to be included in the Mortgage File 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 examination by it, and only
as to such documents, the information set forth in items (iii) and (v) of the
definition or description of "Mortgage Loan Schedule" is correct.

            The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Agreements. The Indenture Trustee makes no
representation that any documents specified in clause (v) of Section 2.1 (b) of
the MLPA should be included in any Mortgage File. The Indenture Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of

                                      E-8
<PAGE>

any such Mortgage Loan, or (iii) the existence of any assumption, modification,
written assurance or substitution agreement with respect to any Mortgage File if
no such documents appear in the Mortgage File delivered to the Indenture
Trustee.

            Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Indenture.

                                            DEUTSCHE BANK NATIONAL
                                            TRUST COMPANY,
                                            as Indenture Trustee

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

                                      E-9
<PAGE>

                                    EXHIBIT G

                           FORM OF FINAL CERTIFICATION

                                                             ____________, 200__

[Issuer]

[Master Servicer]

Attention: Impac CMB Trust Series 2005-1

            Re:   Indenture, dated as of January 28, 2005, between Impac CMB
                  Trust Series 2005-1 and Deutsche Bank National Trust Company

Ladies and Gentlemen:

            In accordance with Section 2.03(b) of the above-captioned Indenture,
and Section 2.1(b) of the Mortgage Loan Purchase Agreement, dated as of January
28, 2005, between Impac Mortgage Holdings, Inc. (formerly known as Imperial
Credit Mortgage Holdings, Inc.) and Impac Funding Corporation (formerly known as
ICI Funding Corporation) (the "MLPA"; and together with the Indenture, the
"Agreements"), the undersigned, as Indenture 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 exception report attached hereto) it
has received the documents set forth in Section 2.1(b) of the MLPA.

            The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Agreements. The Indenture Trustee makes no representation that
any documents specified in clause (v) of Section 2.1 (b) should be included in
any Mortgage File. The Indenture Trustee makes no representations as to and
shall not be responsible to verify: (i) the validity, legality, sufficiency,
enforceability, due authorization, recordability or genuineness of any of the
documents contained in each 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) the existence of
any assumption, modification, written assurance or substitution agreement with
respect to any Mortgage File if no such documents appear in the Mortgage File
delivered to the Indenture Trustee.

                                      G-1
<PAGE>

            Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Indenture.

                                                DEUTSCHE BANK NATIONAL
                                                TRUST COMPANY,
                                                as Indenture Trustee

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

                                      G-2
<PAGE>

                                   APPENDIX A
                                   DEFINITIONS

      Accrual Period: With respect to any Payment Date and each Class of Bonds,
the period from the preceding Payment Date (or in the case of the first Payment
Date, from the Closing Date) through the day preceding such Payment Date.

      Accrued Bond Interest: With respect to any Payment Date and each Class of
Bonds (except the Underlying Class A-IO Bonds), interest accrued during the
related Accrual Period at the then-applicable Bond Interest Rate on the related
Bond Principal Balance thereof immediately prior to such Payment Date, less such
Bonds' Unpaid Interest Shortfall for such Payment Date, plus any Accrued Bond
Interest remaining unpaid from any prior Payment Date with interest thereon at
the related Bond Interest Rate. With respect to any Payment Date and each Class
of Underlying Class A-IO Bonds, interest accrued during the related Accrual
Period at the then-applicable Bond Interest Rate on the related Notional Amount
thereof immediately prior to such Payment Date. Accrued Bond Interest for the
Bonds (other than the Underlying Class A-IO Bonds) shall be calculated on the
basis of the actual number of days in the Accrual Period and a 360 day year.
Accrued Bond Interest for the Underlying Class A-IO Bonds shall be calculated on
the basis of a 360-day year consisting of twelve 30-day months.

      Addition Notice: With respect to the transfer of Group 1 and Group 2
Subsequent Mortgage Loans to the Trust Estate pursuant to Sections 2.05 and
2.06, respectively, a notice of the Company's designation of the Group 1 and
Group 2 Subsequent Mortgage Loans to be sold to the Trust Estate and the
aggregate Stated Principal Balance of such Group 1 or Group 2 Subsequent
Mortgage Loans as of the related Subsequent Cut-off Date. The Addition Notice
shall be given not later than three Business Days prior to the related
Subsequent Transfer Date and shall be substantially in the form of Exhibit E.

      Additional Derivative Counterparty Payment: With respect to any Payment
Date, any termination payment payable to the Derivative Counterparty in
connection with (i) an Event of Default under a Derivative Contract with respect
to which the Derivative Counterparty is a Defaulting Party or (ii) a termination
event under a Derivative Contract with respect to which the Derivative Contact
Counterparty is the sole affected party.

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

      Advance: As to any Mortgage Loan, any advance made by the Master Servicer
pursuant to Section 4.04 of the Servicing Agreement or by a Subservicer in
respect of delinquent Monthly Payments of principal and interest pursuant to the
related Subservicing Agreement.

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

<PAGE>

      Allocated Realized Loss Amount: With respect to the Underlying Class B
Bonds and Underlying Class M Bonds and the Class 1-A-2 and Class 2-A-2 Bonds and
any Payment Date, an amount equal to the sum of any Realized Loss allocated to
such Bonds on that Payment Date and any Allocated Realized Loss Amount for that
Class remaining unpaid from the previous Payment Date, less the amount of any
Subsequent Recoveries added to Bond Principal Balance of such Bond. With respect
to each Grantor Trust Certificate, the Allocated Realized Loss Amount for its
corresponding Underlying Class M Bonds or Underlying Class B Bonds.

      Appraised Value: The appraised value of a Mortgaged Property based upon
the lesser of (i) the appraisal made at the time of the origination of the
related Mortgage Loan, or (ii) the sale price of such Mortgaged Property at such
time of origination. With respect to a Mortgage Loan, the proceeds of which were
used to refinance an existing Mortgage Loan, the appraised value of the
Mortgaged Property based upon the appraisal obtained at the time of refinancing.

      Assignment of Mortgage: An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, 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.

      Authorized Newspaper: A newspaper of general circulation in the Borough of
Manhattan, The City of New York, printed in the English language and customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays.

      Authorized Officer: With respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).

      Available Funds: The Group 1 Available Funds or Group 2 Available Funds,
as applicable.

      Available Funds Rate: On any Payment Date during the Funding Period and
for the Class 1-A-1 Bonds, Class 1-A-2 Bonds and the Underlying Class M-1-1,
Class M-2-1, Class M-3-1, Class M-4-1, Class M-5-1, Class M-6-1 and Class
B-1Bonds, the per annum rate equal to the product of:

      (i)   (A)   the product of:

            (1)   the weighted average of

                  (x)   the Group 1 Adjusted Net WAC Rate and

                  (y)   the amount of interest earned on amounts on deposit in
                        the Group 1 Pre-Funding Account from the prior Payment
                        Date to the current Payment Date, expressed as a
                        percentage of the Group 1

                                       2
<PAGE>

                        Pre-Funded Amount at the end of the prior Due Period and
                        converted to a per annum rate,

                  in the case of (x), weighted on the basis of the aggregate
                  Stated Principal Balance of the Group 1 Mortgage Loans as of
                  the end of the prior Due Period, and in the case of (y),
                  weighted on the basis of the Group 1 Pre-Funded Amount as of
                  the end of the related Due Period, and

            (2)   a fraction equal to

                  (x)   the sum of the aggregate Stated Principal Balance of the
                        Group 1 Loans and the Group 1 Pre-Funded Amount as of
                        the end of the prior Due Period (plus, on any
                        Subordinated Transfer Payment Date where the Group 1
                        Loans are the Undercollateralized Loan Group, the
                        Subordinated Transfer Realized Loss Amount) divided by

                  (y)   the aggregate Bond Principal Balance of the Class 1-A
                        Bonds and the Underlying Class M-1-1, Class M-2-1, Class
                        M-3-1, Class M-4-1, Class M-5-1, Class M-6-1 and Class
                        B-1 Bonds immediately prior to such Payment Date, minus

            (B)   the product of:

                  (1)   the Bond Interest Rate of the Class A-IO-1 Bonds; and

                  (2)   a fraction equal to

                        (x)   the applicable Notional Amount divided by

                        (y)   the aggregate Stated Principal Balance of the
                              Group 1 Loans immediately prior to such Payment
                              Date; and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

On any Payment Date following the Funding Period, the per annum rate equal to
the product of:

      (i)   the product of:

            (1)   (A)   Group 1 Adjusted Net WAC Rate; minus

                  (B)   the product of:

                        (1)   the Bond Interest Rate of the Class A-IO-1 Bonds;
                              and

                        (2)   a fraction equal to

                              (x)   the applicable Notional Amount divided by

                                       3
<PAGE>

                              (y)   the aggregate Bond Principal Balance of the
                                    Group 1 Bonds immediately prior to such
                                    Payment Date; and

            (2)   a fraction equal to

                  (x)   the aggregate Stated Principal Balance of the Group 1
                        Loans as of the end of the prior Due Period (plus, on
                        any Subordinated Transfer Payment Date where the Group 1
                        Loans are the Undercollateralized Loan Group, the
                        Subordinated Transfer Realized Loss Amount) divided by

                  (y)   the aggregate Bond Principal Balance of the Class 1-A
                        Bonds and the Underlying Class M-1-1, Class M-2-1, Class
                        M-3-1, Class M-4-1, Class M-5-1, Class M-6-1 and Class
                        B-1 Bonds immediately prior to such Payment Date, and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

      On any Payment Date during the Pre-Funding Period and for the Class 2-A-1
Bonds and Class 2-A-2 Bonds and the Underlying Class M-1-2, Class M-2-2, Class
M-3-2, Class M-4-2, Class M-5-2, Class M-6-2 and Class B-2 Bonds, the per annum
rate equal to the product of:

      (i)   (A)   the product of:

            (1)   the weighted average of

                  (x)   the Group 2 Adjusted Net WAC Rate and

                  (y)   the amount of interest earned on amounts on deposit in
                        the Group 2 Pre-Funding Account from the prior Payment
                        Date to the current Payment Date, expressed as a
                        percentage of the Group 2 Pre-Funded Amount at the end
                        of the prior Due Period and converted to a per annum
                        rate,

                  in the case of (x), weighted on the basis of the aggregate
                  Stated Principal Balance of the Group 2 Mortgage Loans as of
                  the end of the prior Due Period, and in the case of (y),
                  weighted on the basis of the Group 2 Pre-Funded Amount as of
                  the end of the related Due Period, and

            (2)   a fraction equal to

                  (x)   the sum of the aggregate Stated Principal Balance of the
                        Group 2 Loans and the Group 2 Pre-Funded Amount as of
                        the end of the prior Due Period (plus, on any
                        Subordinated Transfer Payment Date where the Group 2
                        Loans are the Undercollateralized Loan

                                       4
<PAGE>

                        Group, the Subordinated Transfer Realized Loss Amount)
                        divided by

                  (y)   the aggregate Bond Principal Balance of the Class 2-A
                        Bonds and the Underlying Class M-1-2, Class M-2-2, Class
                        M-3-2, Class M-4-2, Class M-5-2, Class M-6-2 and Class
                        B-2 Bonds immediately prior to such Payment Date, minus

            (B)   the product of:

                  (1)   the Bond Interest Rate of the Class A-IO-2 Bonds; and

                  (2)   a fraction equal to

                        (x)   the applicable Notional Amount divided by

                        (y)   the aggregate Stated Principal Balance of the
                              Group 2 Loans immediately prior to such Payment
                              Date; and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

On any Payment Date following the Funding Period, the per annum rate equal to
the product of:

      (i)   the product of:

            (1)   (A)   Group 2 Adjusted Net WAC Rate; minus

                  (B)   the product of:

                        (1)   the Bond Interest Rate of the Class A-IO-2 Bonds;
                              and

                        (2)   a fraction equal to

                              (x)   the applicable Notional Amount divided by

                              (y)   the aggregate Bond Principal Balance of the
                                    Group 2 Bonds immediately prior to such
                                    Payment Date; and

            (2)   a fraction equal to

                  (x)   the aggregate Stated Principal Balance of the Group 2
                        Loans as of the end of the prior Due Period (plus, on
                        any Subordinated Transfer Payment Date where the Group 2
                        Loans are the Undercollateralized Loan Group, the
                        Subordinated Transfer Realized Loss Amount) divided by

                                       5
<PAGE>

                  (y)   the aggregate Bond Principal Balance of the Class 2-A
                        Bonds and the Underlying Class M-1-2, Class M-2-2, Class
                        M-3-2, Class M-4-2, Class M-5-2, Class M-6-2 and Class
                        B-2 Bonds immediately prior to such Payment Date, and

      (ii)  a fraction equal to (x) 30 divided by (y) the number of days in the
            related Accrual Period.

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

      Basic Documents: The Trust Agreement, the Certificate of Trust, the
Indenture, the Servicing Agreement, the Mortgage Loan Purchase Agreement, the
Derivative Contracts, the Guaranty Agreement and the other documents and
certificates delivered in connection with any of the above.

      Basic Principal Distribution Amount: With respect to any Payment Date and
each Loan Group, the lesser of (a) the excess of (i) the related Available Funds
for such Payment Date over (ii) the aggregate amount of Accrued Bond Interest
for the related Bonds for such Payment Date and (b) the excess of (i) the
related Principal Remittance Amount for such Payment Date over (ii) the related
Overcollateralization Release Amount, if any, for such Payment Date.

      Basis Risk Shortfall: With respect to any Class of Bonds, on each Payment
Date where clause (iii) of the definition of "Bond Interest Rate" is less than
clauses (a)(i) or (ii) of the definition of "Bond Interest Rate", the excess, if
any, of (x) the aggregate Accrued Bond Interest thereon for such Payment Date
calculated pursuant to the lesser of clause (a)(i) or (ii) of the definition of
"Bond Interest Rate" over (y) interest accrued on the related Mortgage Loans at
the related Available Funds Rate.

      Basis Risk Shortfall Carry-Forward Amount: With respect to each Class of
Bonds and any Payment Date, as determined separately for each such Class of
Bonds, an amount equal to the aggregate amount of Basis Risk Shortfall for such
Bonds on such Payment Date, plus any unpaid Basis Risk Shortfall for such Class
of Bonds from prior Payment Dates, plus interest thereon at the Bond Interest
Rate for such Payment Date, to the extent previously unreimbursed by related Net
Monthly Excess Cashflow or the Derivative Contracts.

      Beneficial Owner: With respect to any Bond, the Person who is the
beneficial owner of such Bond as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).

      Bond: A Group 1 Bond or Group 2 Bond.

      Bond Interest Rate: With respect to each Payment Date and (a) each Class
of Bonds (other than the Class A-IO-1 and Class A-IO-2 Bonds) a floating rate
equal to the least of (i) One-Month LIBOR plus the related Bond Margin, (ii) the
Maximum Bond Rate and (iii) the related Available Funds Rate with respect to
such Payment Date and (b) the Class A-IO-1 Bonds and Class A-IO-2 Bonds, (i) for
the February 2005 Payment Date, 0.00% per annum, and (ii) for each Payment Date
thereafter through the July 2005 Payment Date, 1.50% per annum.

                                       6
<PAGE>

      Bond Margin: With respect to the Class 1-A-1 Bonds, on any Payment Date
prior to the Step-Up Date, 0.260% per annum, and on any Payment Date on and
after the Step-Up Date, 0.520% per annum. With respect to the Class 1-A-2 Bonds,
on any Payment Date prior to the Step-Up Date, 0.310% per annum, and on any
Payment Date on and after the Step-Up Date, 0.620% per annum. With respect to
the Class 2-A-1 Bonds, on any Payment Date prior to the Step-Up Date, 0.255% per
annum, and on any Payment Date on and after the Step-Up Date, 0.510% per annum.
With respect to the Class 2-A-2 Bonds, on any Payment Date prior to the Step-Up
Date, 0.310% per annum, and on any Payment Date on and after the Step-Up Date,
0.620% per annum. With respect to the Underlying Class M-1-1 Bonds and
Underlying Class M-1-2 Bonds, on any Payment Date prior to the Step-Up Date,
0.460% per annum, and on any Payment Date on and after the Step-Up Date, 0.690%
per annum. With respect to the Underlying Class M-2-1 Bonds and Underlying Class
M-2-2 Bonds, on any Payment Date prior to the Step-Up Date, 0.500% per annum,
and on any Payment Date on and after the Step-Up Date, 0.750% per annum. With
respect to the Underlying Class M-3-1 Bonds and Underlying Class M-3-2 Bonds, on
any Payment Date prior to the Step-Up Date, 0.530% per annum, and on any Payment
Date on and after the Step-Up Date, 0.795% per annum. With respect to the Class
Underlying M-4-1 Bonds and Class Underlying M-4-2 Bonds, on any Payment Date
prior to the Step-Up Date, 0.750% per annum, and on any Payment Date on and
after the Step-Up Date, 1.125% per annum. With respect to the Underlying Class
M-5-1 Bonds and Underlying Class M-5-2 Bonds, on any payment date prior to the
Step-Up Date, 0.770% per annum, and on any Payment Date on and after the Step-Up
Date, 1.155% per annum. With respect to the Underlying Class M-6-1 Bonds and
Underlying Class M-6-2 Bonds, on any Payment Date prior to the Step-Up Date,
0.820% per annum, and on any Payment Date on and after the Step-Up Date, 1.230%
per annum. With respect to the Underlying Class B-1 Bonds and Underlying Class
B-2 Bonds, on any Payment Date prior to the Step-Up Date, 1.300% per annum, and
on any Payment Date on and after the Step-Up Date, 1.950% per annum.

      Bond Owner: The Beneficial Owner of a Bond.

      Bond Principal Balance: With respect to any Bond (other than a Class
A-IO-1 Bond or Class A-IO-2 Bond) as of any date of determination, the initial
Bond Principal Balance as stated on the face thereof, minus all amounts
distributed in respect of principal with respect to such Bond and, in the case
of any Class B, Class M, Class 1-A-2 or Class 2-A-2 Bond, the aggregate amount
of any reductions in the Bond Principal Balance thereof deemed to have occurred
in connection with allocations of Realized Losses on all prior Payment Dates;
provided that, the Bond Principal Balance of any Class of Bonds, other than the
Class 1-A-1 Bonds and Class 2-A-1 Bonds, with the highest payment priority to
which Realized Losses have been allocated shall be increased by the amount of
any Subsequent Recoveries on the related Mortgage Loans not previously
allocated, but not by more than the amount of Realized Losses previously
allocated to reduce the Bond Principal Balance of that Class.

      Bond Register: The register maintained by the Bond Registrar in which the
Bond Registrar shall provide for the registration of Bonds and of transfers and
exchanges of Bonds.

      Bond Registrar: The Indenture Trustee, in its capacity as Bond Registrar,
or any successor to the Indenture Trustee in such capacity.

                                       7
<PAGE>

      Bondholder or Holder: The Person in whose name a Bond is registered in the
Bond Register, except that, any Bond registered in the name of the Depositor,
the Issuer, the Indenture Trustee, the Seller or the Master Servicer or any
Affiliate of any of them shall be deemed not to be a holder or holders, nor
shall any so owned be considered outstanding, for purposes of giving any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture or the Trust Agreement; provided that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Bonds that a
Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows
to be so owned shall be so disregarded. Owners of Bonds that have been pledged
in good faith may be regarded as Holders if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's right
so to act with respect to such Bonds and that the pledgee is not the Issuer, any
other obligor upon the Bonds or any Affiliate of any of the foregoing Persons.

      Book-Entry Bonds: Beneficial interests in the Bonds, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.

      Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the City of New York, Delaware or California or
in the city in which the corporate trust office of the Indenture Trustee is
located, are required or authorized by law to be closed.

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

      Certificate Distribution Account: The account or accounts created and
maintained pursuant to Section 3.10(c) of the Trust Agreement. The Certificate
Distribution Account shall be an Eligible Account.

      Certificate Interest Rate: With respect to the Class M-1 Certificates, the
weighted average of the Bond Interest Rates of the Class M-1-1 Bonds and the
Class M-1-2 Bonds, weighted on the basis of the Bond Principal Balances thereof
as of the end of the prior Due Period. With respect to the Class M-2
Certificates, the weighted average of the Bond Interest Rates of the Class M-2-1
Bonds and the Class M-2-2 Bonds, weighted on the basis of the Bond Principal
Balances thereof as of the end of the prior Due Period. With respect to the
Class M-3 Certificates, the weighted average of the Bond Interest Rates of the
Class M-3-1 Bonds and the Class M-3-2 Bonds, weighted on the basis of the Bond
Principal Balances thereof as of the end of the prior Due Period. With respect
to the Class M-4 Certificates, the weighted average of the Bond Interest Rates
of the Class M-4-1 Bonds and the Class M-4-2 Bonds, weighted on the basis of the
Bond Principal Balances thereof as of the end of the prior Due Period. With
respect to the

                                       8
<PAGE>

Class M-5 Certificates, the weighted average of the Bond Interest Rates of the
Class M-5-1 Bonds and the Class M-5-2 Bonds, weighted on the basis of the Bond
Principal Balances thereof as of the end of the prior Due Period. With respect
to the Class M-6 Certificates, the weighted average of the Bond Interest Rates
of the Class M-6-1 Bonds and the Class M-6-2 Bonds, weighted on the basis of the
Bond Principal Balances thereof as of the end of the prior Due Period. With
respect to the Class B Certificates, the weighted average of the Bond Interest
Rates of the Underlying Class B-1 Bonds and the Underlying Class B-2 Bonds,
weighted on the basis of the Bond Principal Balances thereof as of the end of
the prior Due Period. With respect to the Class A-IO Certificates, the weighted
average of the Bond Interest Rates of the Underlying Class A-IO-1 Bonds and the
Underlying Class A-IO-2 Bonds, weighted on the basis of the Notional Amounts
thereof as of the end of the prior Due Period.

      Certificate Paying Agent: The meaning specified in Section 3.10 of the
Trust Agreement.

      Certificate Percentage Interest: With respect to each Certificate, the
Certificate Percentage Interest stated on the face thereof.

      Certificate Principal Balance: With respect to Class M-1 Certificates as
of any date of determination, the sum of the Bond Principal Balances of the
Class M-1-1 Bonds and Class M-1-2 Bonds. With respect to Class M-2 Certificates
as of any date of determination, the sum of the Bond Principal Balances of the
Class M-2-1 Bonds and Class M-2-2 Bonds. With respect to Class M-3 Certificates
as of any date of determination, the sum of the Bond Principal Balances of the
Class M-3-1 Bonds and Class M-3-2 Bonds. With respect to Class M-4 Certificates
as of any date of determination, the sum of the Bond Principal Balances of the
Class M-4-1 Bonds and Class M-4-2 Bonds. With respect to Class M-5 Certificates
as of any date of determination, the sum of the Bond Principal Balances of the
Class M-5-1 Bonds and Class M-5-2 Bonds. With respect to Class M-6 Certificates
as of any date of determination, the sum of the Bond Principal Balances of the
Class M-6-1 Bonds and Class M-6-2 Bonds. With respect to Class B Certificates as
of any date of determination, the sum of the Bond Principal Balances of the
Class B-1 Bonds and Class B-2 Bonds.

      Certificate Register: The register maintained by the Certificate Registrar
in which the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates.

      Certificate Registrar: Initially, the Indenture Trustee, in its capacity
as Certificate Registrar, or any successor to the Indenture Trustee in such
capacity.

      Certificate of Trust: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Statutory Trust Statute.

      Certificates or Owner Trust Certificates: The Impac CMB Trust Series
2005-1 Owner Trust Certificates, Series 2005-1, evidencing the beneficial
ownership interest in the Issuer and executed by the Owner Trustee in
substantially the form set forth in Exhibit A to the Trust Agreement.

                                       9
<PAGE>

      Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register. Owners of Certificates that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may
be, the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, any other obligor upon the Certificates or any
Affiliate of any of the foregoing Persons.

      Class: Any of the Class A Bonds or Class M Bonds.

      Class 1-A Bonds: The Class 1-A-1 Bonds and Class 1-A-2 Bonds.

      Class 2-A Bonds: The Class 2-A-1 Bonds and Class 2-A-2 Bonds.

      Class A Bonds: The Class 1-A-1, Class 1-A-2, Class A-IO-1, Class A-IO-2,
Class 2-A-1 and Class 2-A-2 Bonds in the form attached as Exhibit A-1 to the
Indenture.

      Class B Bonds: The Class B-1 Bonds and Class B-2 Bonds in the form
attached as Exhibit A-3 to the Indenture.

      Class M Bonds: The Class M-1-1, Class M-1-2, Class M-2-1, Class M-2-2,
Class M-3-1, Class M-3-2, Class M-4-1, Class M-4-2, Class M-5-1, Class M-5-2,
Class M-6-1 and Class M-6-2 Bonds in the form attached as Exhibit A-2 to the
Indenture.

      Class M Certificates: Any of the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 or Class M-6 Certificates.

      Closing Date: January 28, 2005.

      Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

      Collateral: The meaning specified in the Granting Clause of the Indenture.

      Collection Account: The account or accounts created and maintained
pursuant to Section 3.06(d) of the Servicing Agreement. The Collection Account
shall be an Eligible Account.

      Collection Period: With respect to each Payment Date, the calendar month
immediately preceding the month in which such Payment Date occurs.

      Commission: The Securities and Exchange Commission.

      Compensating Interest: With respect to any Payment Date as determined
separately for each Loan Group, the amount of any Prepayment Interest Shortfalls
resulting from prepayments in full during the preceding calendar month on the
related Mortgage Loans, but only to the extent such Prepayment Interest
Shortfalls do not exceed an amount equal to the lesser of (a) one-twelfth of
0.125% of the aggregate Stated Principal Balance of the related Mortgage Loans
immediately preceding such Payment Date and (b) the sum of the Master Servicing
Fee and Subservicing Fee for such Payment Date for the related Mortgage Loans.

                                       10
<PAGE>

      Corporate Trust Office: With respect to the Indenture Trustee, Certificate
Registrar, Certificate Paying Agent and Paying Agent, the principal corporate
trust office of the Indenture Trustee and Bond Registrar at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of this instrument is located at 1761 East St.
Andrew Place, Santa Ana, California 92705, Attention: IM0501. With respect to
the Owner Trustee, the principal corporate trust office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Trust Agreement is located at
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19801, Attention: Impac CMB Trust Series 2005-1 (IM0501).

      Cumulative Losses: As to any Payment Date and the Mortgage Loans, the
cumulative aggregate amount of Realized Losses on the Mortgage Loans from the
Cut-off Date through the end of the calendar month immediately preceding such
Payment Date.

      Cut-off Date: With respect to the Initial Mortgage Loans, January 1, 2005.
With respect to the Group 1 and Group 2 Subsequent Mortgage Loans, the
applicable Subsequent Cut-off Date.

      Cut-off Date Balance: The sum of the Group 1 Cut-off Date Balance and
Group 2 Cut-off Date Balance.

      Cut-off Date Principal Balance: With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date after applying the
principal portion of Monthly Payments due on or before such date, whether or not
received, and without regard to any payments due after such date.

      DBRS: Dominion Bond Rating Service, Inc. or its successor in interest.

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

      Default: Any occurrence which is or with notice or the lapse of time or
both would become an Event of Default.

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

      Definitive Bonds: The meaning specified in Section 4.06 of the Indenture.

      Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with an
Eligible Substitute Mortgage Loan.

                                       11
<PAGE>

      Depositor: IMH Assets Corp., a California corporation, or its successor in
interest.

      Depository or Depository Agency: The Depository Trust Company or a
successor appointed by the Indenture Trustee. Any successor to the Depository
shall be an organization registered as a "clearing agency" pursuant to Section
17A of the Exchange Act and the regulations of the Securities and Exchange
Commission thereunder.

      Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.

      Derivative Contracts: The five Derivative Contracts between the Seller and
the Derivative Counterparty for the benefit of the Class 1-A-1, Class 1-A-2,
Class 2-A-1 and Class 2-A-2 Bonds, the Underlying Class M Bonds and Underlying
Class B Bonds, the Grantor Trust Certificates and the Owner Trust Certificates,
set forth in Exhibit E of the Indenture.

      Derivative Counterparty: Bear Stearns Financial Products Inc.

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

      Due Date: With respect to each Mortgage Loan, the day of the month on
which each scheduled Monthly Payment is due.

      Due Period: With respect to any Payment Date and the Mortgage Loans, the
period commencing on the second day of the month immediately preceding the month
of such Payment Date (or, with respect to the first Due Period, the day
following the Cut-off Date) and ending on the first day of the month of such
Payment Date.

      Eligible Account: An account that is any of the following: (i) a
segregated account maintained with a federal or state chartered depository
institution (A) the short-term obligations of which are rated A-1+ or better by
Standard & Poor's and P-1 by Moody's at the time of any deposit therein or (B)
fully insured to the limits established by the FDIC, provided that any deposits
not so insured shall, to the extent acceptable to each Rating Agency, as
evidenced in writing, be maintained such that (as evidenced by an Opinion of
Counsel delivered to the Indenture Trustee and each Rating Agency) the Indenture
Trustee has a claim with respect to the funds in such account or a perfected
first security interest against any collateral (which shall be limited to
Eligible Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (ii) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company
subject to regulations regarding fiduciary funds on deposit similar to Title 12
of the Code of Federal Regulations Section 9.10(b), which, in either case, has
corporate trust powers, acting in its fiduciary capacity, or (iii) in the case
of the Collection Account or Servicing Account, either (A) a trust account or
accounts maintained at the corporate trust department of the Indenture Trustee
or (B) an account or accounts maintained at the corporate trust department of
the Indenture Trustee or the Subservicer (or an affiliate thereof), as long as
their short term debt obligations are rated P-1 by Moody's and A-1 by Standard &
Poor's or better and their

                                       12
<PAGE>

long term debt obligations are rated A2 by Moody's and A by Standard & Poor's or
better, or (iv) an account or accounts of a depository institution acceptable to
each Rating Agency as evidenced in writing by each Rating Agency that use of any
such account as the Collection Account or the Payment Account will not reduce
the rating assigned to any of the Securities by such Rating Agency below
investment grade.

Eligible Investments: One or more of the following:

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

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

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

            (iv) commercial paper (having original maturities of not more than
      365 days) of any corporation incorporated under the laws of the United
      States or any state thereof which on the date of acquisition has been
      rated by Moody's and Standard & Poor's in their highest short-term ratings
      available; provided that such commercial paper shall have a remaining
      maturity of not more than 30 days;

            (v) a money market fund or a qualified investment fund rated by
      Moody's in its highest long-term ratings available and rated AAAm or
      AAAm-G by Standard & Poor's, including any such funds for which Deutsche
      Bank National Trust Company or any affiliate

                                       13
<PAGE>

      thereof serves as an investment advisor, manager, administrator,
      shareholder, servicing agent, and/or custodian or sub-custodian;

            (vi) other obligations or securities that are acceptable to each
      Rating Agency as a Permitted Investment hereunder and will not reduce the
      rating assigned to any Class of Bonds (without taking the Bond Insurance
      Policy into account) by such Rating Agency below the lower of the
      then-current rating or the rating assigned to such Bonds as of the Closing
      Date by such Rating Agency, as evidenced in writing; and

            (vii) any investment approved in writing by each of the Rating
      Agencies.

The Indenture Trustee may purchase from or sell to itself or an affiliate, as
principal or agent, the Eligible Investments listed above.

provided, however, that each such instrument shall be acquired in an arm's
length transaction and no such instrument shall be an Eligible Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations; provided further, however, that each such instrument acquired shall
not be acquired at a price in excess of par.

      Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in an Officer's Certificate delivered to the Indenture Trustee, (i)
have an outstanding principal balance, after deduction of the principal portion
of the monthly payment due in the month of substitution (or in the case of a
substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate outstanding principal balance, after such deduction), not in excess of
the outstanding principal balance of the Deleted Mortgage Loan (the amount of
any shortfall to be deposited by the Seller in the Collection Account in the
month of substitution); (ii) comply with each non-statistical representation and
warranty set forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement as
of the date of substitution; (iii) have a Mortgage Rate no lower than and not
more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage
Loan as of the date of substitution; (iv) have a Loan-to-Value Ratio at the time
of substitution no higher than that of the Deleted Mortgage Loan at the time of
substitution; (v) have a remaining term to stated maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage Loan; (vi) not be
30 days or more delinquent; (vii) be an adjustable-rate first lien mortgage
loan, if being substituted for a Group 1 Loan; and (viii) be a fixed-rate first
lien mortgage loan, if being substituted for a Group 2 Loan.

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

      Event of Default: With respect to the Indenture, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary

                                       14
<PAGE>

or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):

                  (i) a failure by the Issuer to pay (a) Accrued Bond Interest
      on any Class of Bonds or the Principal Distribution Amount with respect to
      a Payment Date on such Payment Date or (b) the Unpaid Interest Shortfall
      with respect to any Class of Bonds, but only, with respect to clause (b),
      to the extent funds are available to make such payment as provided in the
      Indenture; or

                  (ii) the failure by the Issuer on the Final Scheduled Payment
      Date to reduce the Bond Principal Balance of any of the Class A Bonds or
      the Class M Bonds to zero; or

                  (iii) there occurs a default in the observance or performance
      of any covenant or agreement of the Issuer made in the Indenture, or any
      representation or warranty of the Issuer made in the Indenture or in any
      certificate or other writing delivered pursuant hereto or in connection
      herewith proving to have been incorrect in any material respect as of the
      time when the same shall have been made, and such default shall continue
      or not be cured, or the circumstance or condition in respect of which such
      representation or warranty was incorrect shall not have been eliminated or
      otherwise cured, for a period of 30 days after there shall have been
      given, by registered or certified mail, to the Issuer by the Indenture
      Trustee or to the Issuer and the Indenture Trustee by the Holders of at
      least 25% of the aggregate Bond Principal Balance of the Outstanding Bonds
      (for which purpose the Class A-IO-1 Bonds and Class A-IO-2 Bonds will
      together be deemed to have a Bond Principal Balance equal to 5% of the
      aggregate Bond Principal Balance of the other Classes of Bonds), a written
      notice specifying such default or incorrect representation or warranty and
      requiring it to be remedied and stating that such notice is a notice of
      default hereunder; or

                  (iv) there occurs the filing of a decree or order for relief
      by a court having jurisdiction in the premises in respect of the Issuer or
      any substantial part of the Trust Estate in an involuntary case under any
      applicable federal or state bankruptcy, insolvency or other similar law
      now or hereafter in effect, or appointing a receiver, liquidator,
      assignee, custodian, trustee, sequestrator or similar official of the
      Issuer or for any substantial part of the Trust Estate, or ordering the
      winding-up or liquidation of the Issuer's affairs, and such decree or
      order shall remain unstayed and in effect for a period of 60 consecutive
      days; or

                  (v) there occurs the commencement by the Issuer of a voluntary
      case under any applicable federal or state bankruptcy, insolvency or other
      similar law now or hereafter in effect, or the consent by the Issuer to
      the entry of an order for relief in an involuntary case under any such
      law, or the consent by the Issuer to the appointment or taking possession
      by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
      similar official of the Issuer or for any substantial part of the assets
      of the Trust Estate, or the making by the Issuer of any general assignment
      for the benefit of creditors, or the

                                       15
<PAGE>

      failure by the Issuer generally to pay its debts as such debts become due,
      or the taking of any action by the Issuer in furtherance of any of the
      foregoing.

      Event of Servicer Termination: With respect to the Servicing Agreement, a
Servicing Default as defined in Section 6.01 of the Servicing Agreement.

      Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

      Expense Fee Rate: With respect to each Mortgage Loan, the sum of the
Master Servicing Fee Rate, the applicable Subservicing Fee Rate, the Owner
Trustee's Fee Rate, the PMI Insurer Fee Rate, if such Mortgage Loan is a PMI
Mortgage Loan, and the related Net Derivative Fee Rate.

      Expenses: The meaning specified in Section 7.02 of the Trust Agreement.

      Fannie Mae: Fannie Mae (formerly, the Federal National Mortgage
Association), or any successor thereto.

      FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The final certification delivered by the Custodian pursuant
to Section 2.03(b) of the Indenture in the form attached to the Custodial
Agreement.

      Final Scheduled Payment Date: With respect to each Class of Bonds, the
Payment Date in April 2035.

      Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Stated Principal Balance (plus accrued and unpaid
interest thereon at the applicable Mortgage Rate from the date interest was last
paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.

      Freddie Mac: Freddie Mac (formerly, the Federal Home Loan Mortgage
Corporation), or any successor thereto.

      Funding Period: With respect to Loan Group 1, the period from the Closing
Date until the earlier of (i) the date on which the amount on deposit in the
Group 1 Pre-Funding Account is reduced to less than $10,000 or (ii) March 31,
2005. With respect to Loan Group 2, the period from the Closing Date until the
earlier of (i) the date on which the amount on deposit in the Group 2
Pre-Funding Account is reduced to less than $10,000 or (ii) March 31, 2005.

      Grant: Pledge, bargain, sell, warrant, alienate, remise, release, convey,
assign, transfer, create, and grant a lien upon and a security interest in and
right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the

                                       16
<PAGE>

granting party thereunder, including the immediate and continuing right to claim
for, collect, receive and give receipt for principal and interest payments in
respect of such collateral or other agreement or instrument and all other moneys
payable thereunder, to give and receive notices and other communications, to
make waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.

      Grantor Trust Certificates: Any of the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B or Class A-IO Certificates.

      Gross Margin: With respect to any Group 1 Loan, the percentage set forth
as the "Gross Margin" for such Mortgage Loan on the Mortgage Loan Schedule, as
adjusted from time to time in accordance with the terms of the Servicing
Agreement.

      Group 1 Adjusted Net WAC Rate: On any Payment Date which is not a
Subordinated Transfer Payment Date, or which is a Subordinated Transfer Payment
Date but the Group 1 Loans are an Overcollateralized Loan Group, the Group 1 Net
WAC Rate. On any Subordinated Transfer Payment Date, if the Group 1 Loans are an
Undercollateralized Loan Group, the weighted average of the Group 1 Net WAC Rate
and the Group 2 Net WAC Rate, weighted on the basis of the aggregate Stated
Principal Balance of the Group 1 Loans as of the end of the prior Due Period,
and the Subordinated Transfer Realized Loss Amount, respectively.

      Group 1 Available Funds: With respect to any Payment Date, the sum of the
following, in each case with respect to the Group 1 Loans:

                  (i) each previously undistributed Monthly Payment due after
      the Cut-off Date received on or prior to the related Determination Date or
      advanced prior to such Payment Date (other than Monthly Payments due after
      the related Due Period, which shall be treated as if received during the
      Due Period they were due and other than Monthly Payments with respect to
      which the Master Servicer has made an unreimbursed Advance) on each
      outstanding Group 1 Loan (less the related Master Servicing Fees, any
      Subservicing Fees under any Subservicing Agreement and any fees or
      penalties retained by the Master Servicer or any Subservicer, the fees of
      the Owner Trustee and the Indenture Trustee and any amounts in respect of
      the premium payable to the PMI Insurer under the PMI Insurer Policy);

                  (ii) all proceeds of any Group 1 Loan repurchased during the
      related Prepayment Period (or deemed to have been so repurchased in
      accordance with the Servicing Agreement) pursuant to the Servicing
      Agreement and the amount of any shortfall deposited in the Collection
      Account in connection with the substitution of a Deleted Mortgage Loan
      pursuant to the Mortgage Loan Purchase Agreement, during the related
      Prepayment Period;

                  (iii) all other unscheduled collections (including, without
      limitation, Principal Prepayments, Insurance Proceeds, Liquidation
      Proceeds and REO Proceeds) received during the related Prepayment Period
      to the extent applied by the Master

                                       17
<PAGE>

      Servicer as recoveries of principal or interest of the related Group 1
      Loan pursuant to the Servicing Agreement; and

                  (iv) any (i) Compensating Interest payments and (ii)
      Foreclosure Profits, to the extent not payable to the Subservicers;

                  (v) amounts transferred from the Group 1 Interest Coverage
      Account and, at the end of the Funding Period, any excess amounts
      transferred from the Group 1 Pre-Funding Account;

                  (vi) interest earned on amounts on deposit in the Group 1
      Pre-Funding Account;

      minus

                  (vii) expenses incurred by and reimbursable to the Master
      Servicer or the Depositor pursuant to the Servicing Agreement or
      otherwise, or in connection with enforcing any repurchase, substitution or
      indemnification obligation of the Seller (other than an Affiliate of the
      Depositor) in respect of a Group 1 Loan;

                  (viii) amounts expended by the Master Servicer (a) pursuant to
      the Servicing Agreement in good faith in connection with the restoration
      of property related to a Group 1 Loan damaged by an Uninsured Cause, and
      (b) in connection with the liquidation of a Mortgage Loan or disposition
      of an REO Property related to a Group 1 Loan to the extent not otherwise
      reimbursed to the Master Servicer pursuant to the Servicing Agreement;

                  (ix) if the Bonds have been declared due and payable following
      an Event of Default on such Payment Date, any amounts owed to the
      Indenture Trustee pursuant to Section 6.07 of the Indenture;

                  (x) the related Net Derivative Fee; and

                  (xi) any other amounts withdrawn from the Collection Account
      by the Master Servicer pursuant to Section 3.07(a)(ii) through (xv) of the
      Servicing Agreement, not described above in clauses (vii) through (x)
      above;

provided, however, that on any Subordinated Transfer Payment Date, the Group 1
Available Funds shall be increased (if it is the Undercollateralized Loan Group)
or reduced (if it is the Overcollateralized Loan Group), by the Subordinated
Payment Transfer Fraction of the Available Funds for the Overcollateralized Loan
Group.

      Group 1 Bond: A Class 1-A-1, Class 1-A-2, Class A-IO-1, Class M-1-1, Class
M-2-1, Class M-3-1, Class M-4-1, Class M-5-1, Class M-6-1 or Class B-1 Bond.

      Group 1 Cut-off Date Balance: The sum of the aggregate Stated Principal
Balance of the Group 1 Loans as of the Cut-off Date and the Group 1 Original
Pre-Funded Amount.

                                       18
<PAGE>

      Group 1 Interest Coverage Account: An account established and maintained
pursuant to Section 3.27 of the Indenture.

      Group 1 Interest Coverage Amount: The amount to be paid by the Depositor
to the Indenture Trustee for deposit in the Group 1 Interest Coverage Account on
the Closing Date pursuant to Section 3.27 of the Indenture, which amount is $5.

      Group 1 Loan: A Mortgage Loan in Loan Group 1.

      Group 1 Net WAC Rate: For any Payment Date, the excess of (i) the weighted
average of the Net Mortgage Rates on the Group 1 Loans included in the trust as
of the end of the prior Due Period, weighted on the basis of the Stated
Principal Balances thereof as of the end of the prior Due Period over (ii) the
related Net Derivative Fee Rate for such Payment Date.

      Group 1 Original Pre-Funded Amount: $79,858,194.10, which is the amount
deposited in the Group 1 Pre-Funding Account on the Closing Date by the
Indenture Trustee with funds received from the Company.

      Group 1 Overcollateralization Target Amount: With respect to any Payment
Date (i) on or before the Payment Date occurring in July 2005, $0, or (ii) with
respect to any Payment Date thereafter, 0.40% of the Group 1 Cut-off Date
Balance; provided, that if the aggregate Bond Principal Balance of the Group 2
Bonds has been reduced to zero, the Group 1 Overcollateralization Target Amount
will be 0.40% of the sum of the Group 1 Cut-off Date Balance and the Group 2
Cut-off Date Balance.

      Group 1 Pre-Funded Amount: The amount on deposit in the Group 1
Pre-Funding Account on any date of determination.

      Group 1 Pre-Funding Account: An account established by the Indenture
Trustee for the benefit of the Bondholders and funded on the Closing Date by the
Company with the Group 1 Original Pre-Funded Amount.

      Group 1 Principal Distribution Amount: For any Payment Date and the Group
1 Loans, the sum of (a) the related Basic Principal Distribution Amount, (b) the
amount of related and non-related Net Monthly Excess Cashflow used to cover
related Realized Losses, Undercollateralized Amounts and Subordinated Transfer
Realized Loss Amounts as provided in Section 3.05(d) and Section 3.05(h) of the
Indenture and (c) the related Overcollateralization Increase Amount.

      Group 1 Subsequent Mortgage Loans: A Mortgage Loan sold by the Depositor
to the Trust Estate pursuant to Section 2.05 of the Indenture, such Mortgage
Loan being identified on the Mortgage Loan Schedule attached to a Subsequent
Transfer Instrument.

      Group 1 Subsequent Mortgage Loan Purchase Agreement: The Group 1
Subsequent Mortgage Loan Purchase Agreement, dated as of the applicable
Subsequent Transfer Date, between the Seller, as seller, and the Purchaser, as
purchaser, relating to the sale, transfer and assignment of the Group 1
Subsequent Mortgage Loans.

                                       19
<PAGE>

      Group 1 Subsequent Transfer Instrument: With respect to the Group 1
Subsequent Mortgage Loans, the subsequent transfer instrument, dated as of the
applicable Subsequent Transfer Date, between IMH Assets Corp., as Company, and
Deutsche Bank National Trust Company as indenture trustee, or such other
instrument as agreed upon by the Company and the Indenture Trustee, a form of
which is attached as Exhibit F to the Indenture.

      Group 2 Adjusted Net WAC Rate: On any Payment Date which is not a
Subordinated Transfer Payment Date, or which is a Subordinated Transfer Payment
Date but the Group 2 Loans are an Overcollateralized Loan Group, the Group 2 Net
WAC Rate. On any Subordinated Transfer Payment Date, if the Group 2 Loans are an
Undercollateralized Loan Group, the weighted average of the Group 2 Net WAC Rate
and the Group 1 Net WAC Rate, weighted on the basis of the aggregate Stated
Principal Balance of the Group 2 Loans as of the end of the prior Due Period,
and the Subordinated Transfer Realized Loss Amount, respectively.

      Group 2 Available Funds: With respect to any Payment Date, the sum of the
following, in each case with respect to the Group 2 Loans:

                  (i) each previously undistributed Monthly Payment due after
      the Cut-off Date received on or prior to the related Determination Date or
      advanced prior to such Payment Date (other than Monthly Payments due after
      the related Due Period, which shall be treated as if received during the
      Due Period they were due and other than Monthly Payments with respect to
      which the Master Servicer has made an unreimbursed Advance) on each
      outstanding Group 2 Loan (less the related Master Servicing Fees, any
      Subservicing Fees under any Subservicing Agreement and any fees or
      penalties retained by the Master Servicer or any Subservicer, the fees of
      the Owner Trustee and the Indenture Trustee);

                  (ii) all proceeds of any Group 2 Loan repurchased during the
      related Prepayment Period (or deemed to have been so repurchased in
      accordance with the Servicing Agreement) pursuant to the Servicing
      Agreement and the amount of any shortfall deposited in the Collection
      Account in connection with the substitution of a Deleted Mortgage Loan
      pursuant to the Mortgage Loan Purchase Agreement, during the related
      Prepayment Period;

                  (iii) all other unscheduled collections (including, without
      limitation, Principal Prepayments, Insurance Proceeds, Liquidation
      Proceeds and REO Proceeds) received during the related Prepayment Period
      to the extent applied by the Master Servicer as recoveries of principal or
      interest of the related Group 2 Loan pursuant to the Servicing Agreement;
      and

                  (iv) any (i) Compensating Interest payments and (ii)
      Foreclosure Profits, to the extent not payable to the Subservicers;

                  minus

                  (vii) expenses incurred by and reimbursable to the Master
      Servicer or the Depositor pursuant to the Servicing Agreement or
      otherwise, or in connection with

                                       20
<PAGE>

      enforcing any repurchase, substitution or indemnification obligation of
      the Seller (other than an Affiliate of the Depositor) in respect of a
      Group 2 Loan;

                  (viii) amounts expended by the Master Servicer (a) pursuant to
      the Servicing Agreement in good faith in connection with the restoration
      of property related to a Group 2 Loan damaged by an Uninsured Cause, and
      (b) in connection with the liquidation of a Mortgage Loan or disposition
      of an REO Property related to a Group 2 Loan to the extent not otherwise
      reimbursed to the Master Servicer pursuant to the Servicing Agreement;

                  (ix) if the Bonds have been declared due and payable following
      an Event of Default on such Payment Date, any amounts owed to the
      Indenture Trustee pursuant to Section 6.07 of the Indenture;

                  (x) the related Net Derivative Fee; amd

                  (xi) any other amounts withdrawn from the Collection Account
      by the Master Servicer pursuant to Section 3.07(a)(ii) through (xv) of the
      Servicing Agreement, not described above in clauses (vii) through (x)
      above.

provided, however, that on any Subordinated Transfer Payment Date, the Group 2
Available Funds shall be increased (if it is the Undercollateralized Loan Group)
or reduced (if it is the Overcollateralized Loan Group), by the Subordinated
Payment Transfer Fraction of the Available Funds for the Overcollateralized Loan
Group.

      Group 2 Bond: A Class 2-A-1, Class 2-A-2, Class A-IO-2, Class M-1-2, Class
M-2-2, Class M-3-2, Class M-4-2, Class M-5-2, Class M-6-2 or Class B-2 Bond.

      Group 2 Cut-off Date Balance: The sum of the aggregate Stated Principal
Balance of the Group 2 Loans as of the Cut-off Date and the Group 2 Original
Pre-Funded Amount.

      Group 2 Interest Coverage Account: An account established and maintained
pursuant to Section 3.27 of the Indenture. Group 2 Interest Coverage Amount: The
amount to be paid by the Depositor to the Indenture Trustee for deposit in the
Group 1 Interest Coverage Account on the Closing Date pursuant to Section 3.27
of the Indenture, which amount is $5.

      Group 2 Loan: A Mortgage Loan in Loan Group 2.

      Group 2 Net WAC Rate: For any Payment Date, the excess of (i) the weighted
average of the Net Mortgage Rates on the Group 2 Loans included in the trust as
of the end of the prior Due Period, weighted on the basis of the Stated
Principal Balances thereof as of the end of the prior Due Period over (ii) the
related Net Derivative Fee Rate for such Payment Date.

                                       21
<PAGE>

      Group 2 Original Pre-Funded Amount: $138,138,956.66, which is the amount
deposited in the Group 1 Pre-Funding Account on the Closing Date by the
Indenture Trustee with funds received from the Company.

      Group 2 Overcollateralization Target Amount: With respect to any Payment
Date, (i) on or before the Payment Date occurring in July 2005, $0, or (ii) with
respect to any Payment Date thereafter, 0.40% of the Group 2 Cut-off Date
Balance; provided, that if the aggregate Bond Principal Balance of the Group 1
Bonds has been reduced to zero, the Group 2 Overcollateralization Target Amount
will be 0.40% of the sum of the Group 1 Cut-off Date Balance and the Group 2
Cut-off Date Balance.

      Group 2 Pre-Funded Amount: The amount on deposit in the Group 2
Pre-Funding Account on any date of determination.

      Group 2 Pre-Funding Account: An account established by the Indenture
Trustee for the benefit of the Bondholders and funded on the Closing Date by the
Company with the Group 2 Original Pre-Funded Amount.

      Group 2 Principal Distribution Amount: For any Payment Date and the Group
2 Loans, the sum of (a) the related Basic Principal Distribution Amount, (b) the
amount of related and non-related Net Monthly Excess Cashflow used to cover
related Realized Losses, Undercollateralized Amounts and Subordinated Realized
Loss Transfer Amounts as provided in Section 3.05(d) and Section 3.05(h) of the
Indenture and (c) the related Overcollateralization Increase Amount.

      Group 2 Subsequent Mortgage Loans: A Mortgage Loan sold by the Depositor
to the Trust Estate pursuant to Section 2.06 of the Indenture, such Mortgage
Loan being identified on the Mortgage Loan Schedule attached to a Subsequent
Transfer Instrument.

      Group 2 Subsequent Mortgage Loan Purchase Agreement: The Group 2
Subsequent Mortgage Loan Purchase Agreement, dated as of the applicable
Subsequent Transfer Date, between the Seller, as seller, and the Purchaser, as
purchaser, relating to the sale, transfer and assignment of the Group 2
Subsequent Mortgage Loans.

      Group 2 Subsequent Transfer Instrument: With respect to the Group 2
Subsequent Mortgage Loans, the subsequent transfer instrument, dated as of the
applicable Subsequent Transfer Date, between IMH Assets Corp., as Company, and
Deutsche Bank National Trust Company, as indenture trustee, or such other
instrument as agreed upon by the Company and the Indenture Trustee, a form of
which is attached as Exhibit F to the Indenture.

      Guaranteed Amount: With respect to the Class A-IO-1 Bonds and Class A-IO-2
Bonds and each Payment Date, the full payment of Accrued Bond Interest on the
Class A-IO-1 Bonds and Class A-IO-2 Bonds on each Payment Date to the extent not
covered by related Available Funds on any Payment Date. Such amount shall be
unconditionally and irrevocably guaranteed to the Issuer pursuant to the
Guaranty Agreement.

      Guaranty Agreement: The guaranty agreement dated as of January 28, 2005,
among Impac Holdings, as guarantor, the Issuer and the Indenture Trustee.

                                       22
<PAGE>

      Impac Holdings: Impac Mortgage Holdings, Inc., a Maryland corporation, and
its successors and assigns.

      Indemnified Party: The meaning specified in Section 7.02 of the Trust
Agreement.

      Indenture: The indenture dated as of January 28, 2005, between the Issuer
and the Indenture Trustee, relating to the Impac CMB Trust Series 2005-1 Bonds.

      Indenture Trustee: Deutsche Bank National Trust Company, and its
successors and assigns or any successor indenture trustee appointed pursuant to
the terms of the Indenture.

      Indenture Trustee's Fee: With respect to any Payment Date, 1/12th of the
Indenture Trustee's Fee Rate multiplied by the Stated Principal Balance of each
Mortgage Loan plus amounts on deposit in the Pre-Funding Accounts, plus
investment earnings on deposits in the Payment Account.

      Indenture Trustee's Fee Rate: A rate equal to 0.0012% per annum.

      Independent: When used with respect to any specified Person, the Person
(i) is in fact independent of the Issuer, any other obligor on the Bonds, the
Seller, the Master Servicer, the Depositor and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller, the Master Servicer, the Depositor or any Affiliate of any of the
foregoing Persons and (iii) is not connected with the Issuer, any such other
obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.

      Independent Certificate: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture, made by an
independent appraiser or other expert appointed by an Issuer Request and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.

      Index: With respect to any Mortgage Loan, the index for the adjustment of
the Mortgage Rate set forth as such on the related Mortgage Note.

      Initial Bond Principal Balance: With respect to the Class 1-A-1 Bonds,
$491,420,000, with respect to the Class 1-A-2 Bonds, $54,602,000, with respect
to the Class 2-A-1 Bonds, $390,682,000, respect to the Class 2-A-2 Bonds,
$97,671,000, with respect to the Underlying Class M-1-1 Bonds, $41,240,000, with
respect to the Underlying Class M-2-1 Bonds, $29,363,000, with respect to the
Underlying Class M-3-1 Bonds, $15,176,000, with respect to the Underlying Class
M-4-1 Bonds, $8,248,000, with respect to the Underlying Class M-5-1 Bonds,
$8,248,000, with respect to the Underlying Class M-6-1 Bonds, $6,598,000, with
respect to the Underlying Class B-1 Bonds, $4,950,000, with respect to the
Underlying Class M-1-2 Bonds, $36,885,000, with respect to the Underlying Class
M-2-2 Bonds, $26,262,000, with respect to the Underlying Class M-3-2 Bonds,
$13,574,000, with respect to the Underlying Class M-4-2 Bonds, $7,377,000, with
respect to the Underlying Class M-5-2 Bonds, $7,377,000, with

                                       23
<PAGE>

respect to the Underlying Class M-6-2 Bonds, $5,902,000, with respect to the
Underlying Class B-2 Bonds, $4,425,000.

      Initial Certification: The initial certification delivered by the
Custodian pursuant to Section 2.03(a) of the Indenture in the form attached to
the Custodial Agreement.

      Initial Mortgage Loan: Any of the Mortgage Loans included in the Trust
Estate as of the Closing Date. The aggregate principal balance of the Initial
Mortgage Loans as of the Cut-off Date is equal to approximately $1,032,002,849.

      Initial Subservicers: With respect to substantially all of the Mortgage
Loans as of the Cut-off Date, Countrywide Home Loans Servicing LP, or its
successors in interest. With respect to substantially all of the adjustable-rate
Mortgage Loans as of April 1, 2005, GMAC Mortgage Corporation, or its successors
in interest.

      Insurance Proceeds: Proceeds paid by any insurer pursuant to any insurance
policy covering a Mortgage Loan which are required to be remitted to the Master
Servicer, net of any component thereof (i) covering any expenses incurred by or
on behalf of the Master Servicer in connection with obtaining such proceeds,
(ii) that is applied to the restoration or repair of the related Mortgaged
Property or (iii) released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures.

      Interest Coverage Account: Either of the Group 1 Interest Coverage Account
or Group 2 Interest Coverage Account.

      Interest Determination Date: With respect to the first Accrual Period, the
second LIBOR Business Day preceding the Closing Date, and with respect to each
Accrual Period thereafter, the second LIBOR Business Day preceding the related
Payment Date on which such Accrual Period commences.

      Interest Rate Adjustment Date: With respect to each Mortgage Loan, the
date or dates on which the Mortgage Rate is adjusted in accordance with the
related Mortgage Note.

      Interested Person: As of any date of determination, the Depositor, the
Master Servicer the Bond Insurer, the Indenture Trustee, any Mortgagor, or any
Person actually known to a Responsible Officer of the Indenture Trustee to be an
Affiliate of any of them.

      Investment Company Act: The Investment Company Act of 1940, as amended,
and any amendments thereto.

      IRS: The Internal Revenue Service.

      Issuer: Impac CMB Trust Series 2005-1, a Delaware statutory trust, or its
successor in interest.

      Issuer Request: A written order or request signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.

                                       24
<PAGE>

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

      Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.

      Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified in the Servicing Agreement, as of the end of
the related Due Period that substantially all Liquidation Proceeds which it
reasonably expects to recover with respect to the disposition of the related
Mortgaged Property or REO Property have been recovered.

      Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead) which
are incurred by or on behalf of the Master Servicer, or any Special Servicer on
the Master Servicer's behalf, in connection with the liquidation of any Mortgage
Loan and not recovered under any insurance policy, such expenses including,
without limitation, legal fees and expenses, any unreimbursed amount expended
(including, without limitation, amounts advanced to correct defaults on any
mortgage loan which is senior to such Mortgage Loan, amounts advanced to keep
current or pay off a mortgage loan that is senior to such Mortgage Loan and
Disposition Fees) respecting the related Mortgage Loan and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.

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

      Loan Group: Any of Loan Group 1 or Loan Group 2.

      Loan Group 1: The Group 1 Loans.

      Loan Group 2: The Group 2 Loans.

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

      Loan Year: With respect to any Mortgage Loan, the one-year period
commencing on the day succeeding the origination of such Mortgage Loan and
ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.

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<PAGE>

      Lost Note Affidavit: With respect to any Mortgage Loan as to which the
original Mortgage Note has been lost or destroyed and has not been replaced, an
affidavit from the Seller certifying that the original Mortgage Note has been
lost, misplaced or destroyed (together with a copy of the related Mortgage
Note).

      Majority Certificateholder: A Holder of a 50.01% or greater Certificate
Percentage Interest of the Owner Trust Certificates.

      Master Servicer: Impac Funding Corporation, a California corporation, and
its successors and assigns.

      Master Servicing Fee: With respect to each Mortgage Loan and any Payment
Date, the fee payable monthly to the Master Servicer in respect of master
servicing compensation that accrues at an annual rate equal to the Master
Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the related Due Date in the related Due Period.

      Master Servicing Fee Rate: With respect to any Mortgage Loan, 0.030% per
annum.

      Maximum Bond Rate: With respect to any Class of Bonds, 11.25% per annum.

      Maximum Mortgage Rate: With respect to each adjustable-rate Mortgage Loan,
the maximum Mortgage Rate.

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

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

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

      Minimum Mortgage Rate: With respect to each Mortgage Loan, the minimum
Mortgage Rate.

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

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

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

                                       26
<PAGE>

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

      Mortgage File: The file containing the Related Documents pertaining to a
particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to the Mortgage Loan Purchase Agreement or the
Servicing Agreement.

      Mortgage Loans: The Mortgage Loans that will be transferred and assigned
to the Trust pursuant to Section 2.03(a) of the Indenture, each Mortgage Loan so
held being identified in the Mortgage Loan Schedule. The Mortgage Loans have
been divided into two groups, Loan Group 1 and Loan Group 2.

      Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of the Closing Date, between the Seller, as seller, and the Purchaser,
as purchaser, relating to the sale, transfer and assignment of the Initial
Mortgage Loans.

      Mortgage Loan Schedule: With respect to any date, the schedule of Mortgage
Loans held by the Issuer on such date. The schedule of (i) Initial Mortgage
Loans as of the Cut-off Date is the schedule set forth in Exhibit B of the
Indenture and (ii) the applicable Group 1 or Group 2 Subsequent Mortgage Loans
as of the related Group 1 or Group 2 Subsequent Cut-off Date, respectively, is
Schedule 1 of the related Group 1 or Group 2 Subsequent Transfer Instrument,
which respective schedules set forth as to each Mortgage Loan:

                  (i) the loan number and name of the Mortgagor;

                  (ii) the street address, city, state and zip code of the
      Mortgaged Property;

                  (iii) the original Mortgage Rate;

                  (iv) the maturity date;

                  (v) the original principal balance;

                  (vi) the first Payment Date;

                  (vii) the type of Mortgaged Property;

                  (viii) the Monthly Payment in effect as of the Cut-off Date;

                  (ix) the Cut-off Date Principal Balance;

                  (x) the Index and the Gross Margin, if applicable;

                  (xi) the Adjustment Date frequency and Payment Date frequency,
      if applicable;

                  (xii) the occupancy status;

                                       27
<PAGE>

                  (xiii) the purpose of the Mortgage Loan;

                  (xiv) the Appraised Value of the Mortgaged Property;

                  (xv) (A) the original term to maturity and (B) if such
      Mortgage Loan is a Balloon Loan, the amortization term thereof;

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

                  (xvii) the Loan-to-Value Ratio;

                  (xviii) whether such Mortgage Loan is a PMI Mortgage Loan, and
      if so, the related PMI Insurer Fee Rate; and

                  (xix) whether or not the Mortgage Loan was underwritten
      pursuant to a limited documentation program.

      The Mortgage Loan Schedule shall also set forth the total of the amounts
described under (ix) above for all of the Mortgage Loans.

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

      Mortgage Rate: With respect to any Mortgage Loan, the annual rate at which
interest accrues on such Mortgage Loan.

      Mortgaged Property: The underlying property, including real property and
improvements thereon, securing a Mortgage Loan.

      Mortgagor: The obligor or obligors under a Mortgage Note.

      Net Collections: With respect to any Corrected Mortgage Loan, an amount
equal to all payments on account of interest and principal on such Mortgage
Loan.

      Net Derivative Contract Payment Amount: With respect to any Payment Date,
the amount equal to the excess, if any, of (a) the aggregate amount payable on
that Payment Date to the Issuer from the Derivative Counterparty pursuant to the
Derivative Contracts, over (b) the aggregate amount payable on that Payment Date
to the Derivative Counterparty under the Derivative Contracts. For the avoidance
of doubt, amounts payable under clause (a) or clause (b) of the preceding
sentence include, without limitation, termination payments payable under the
Derivative Contracts other than any amount which would be considered an
Additional Derivative Counterparty Payment.

      Net Derivative Fee: With respect to any Payment Date and the Group 1 Loans
and Group 2 Loans, the amount equal to the excess, if any, of (a) the aggregate
amount payable on that Payment Date to the Derivative Counterparty in respect of
the related Derivative Contracts, other than any Additional Derivative
Counterparty Payment, over (b) the aggregate amount payable on

                                       28
<PAGE>

that Payment Date to the Issuer from the Derivative Counterparty pursuant to the
Derivative Contracts.

      Net Derivative Fee Rate: With respect to any Payment Date and each of Loan
Group 1 and Loan Group 2, the fraction, expressed as a rate per annum, equal to
(x) the Net Derivative Fee on such Payment Date related to such Loan Group over
(y) the sum of the aggregate Stated Principal Balance of the Mortgage Loans and
the Group 1 Pre-Funded Amount and Group 2 Pre-Funded Amount.

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

      Net Monthly Excess Cash Flow: For any Payment Date and each Loan Group,
the sum of (a) any related Overcollateralization Release Amount and (b) the
excess of (x) the related Available Funds for such Payment Date over (y) the sum
for such Payment Date of (A) the aggregate amount of Accrued Bond Interest for
the related Bonds, (B) the related Principal Remittance Amount and (c) any
amounts payable from the Derivative Contracts pursuant to Section 3.05(e)(vii)
of the Indenture.

      Net Mortgage Rate: On any Mortgage Loan and any Payment Date, the then
applicable mortgage rate thereon for the scheduled monthly payment thereon
during the related Due Period minus the sum of (1) the Master Servicing Fee
Rate, (2) the Subservicing Fee Rate, (3) the Indenture Trustee's Fee Rate, (4)
the Owner Trustee's Fee Rate and (5) the related PMI Insurer Fee Rate, if such
Mortgage Loan is a PMI Mortgage Loan.

      Nonrecoverable Advance: Any advance (i) which was previously made or is
proposed to be made by the Master Servicer; and (ii) which, in the good faith
judgment of the Master Servicer, will not or, in the case of a proposed advance,
would not, be ultimately recoverable by the Master Servicer from Liquidation
Proceeds, Insurance Proceeds or future payments on any Mortgage Loan. The
Indenture Trustee may conclusively rely on any determination of
nonrecoverability made by the Master Servicer.

      Notional Amount: With respect to the Class A-IO Certificates immediately
prior to the related Payment Date, for the February 2005 Payment Date,
approximately $1,250,000,000, for the March 2005 Payment Date, approximately
$1,186,829,271, for the April 2005 Payment Date, approximately $1,099,349,173,
for the May 2005 Payment Date, approximately $1,018,316,110, for the June 2005
Payment Date, approximately $943,254,797, for the July 2005 Payment Date,
approximately $873,725,325 and for each Payment Date thereafter, $0.

      Officer's Certificate: With respect to the Master Servicer, a certificate
signed by the President, Managing Director, a Director, a Vice President or an
Assistant Vice President, of the Master Servicer and delivered to the Indenture
Trustee. With respect to the Issuer, a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.

                                       29
<PAGE>

      One-Month LIBOR: With respect to any Accrual Period, the rate determined
by the Indenture Trustee on the related Interest Determination Date on the basis
of the London interbank offered rate for one-month United States dollar
deposits, as such rates appear on the Telerate Screen Page 3750, as of 11:00
a.m. (London time) on such Interest Determination Date.

      In the event that on any Interest Determination Date, Telerate Screen 3750
fails to indicate the London interbank offered rate for one-month United States
dollar deposits, then One-Month LIBOR for the related Interest Accrual Period
will be established by the Indenture Trustee as follows:

                  (i) If on such Interest Determination Date two or more
      Reference Banks provide such offered quotations, One-Month LIBOR for the
      related Accrual Period shall be the arithmetic mean of such offered
      quotations (rounded upwards if necessary to the nearest whole multiple of
      1/16%).

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

      The establishment of One-Month LIBOR on each Interest Determination Date
by the Indenture Trustee and the Indenture Trustee's calculation of the rate of
interest applicable for the related Accrual Period shall (in the absence of
manifest error) be final and binding.

      Opinion of Counsel: A written opinion of counsel acceptable to the
Indenture Trustee in its reasonable discretion which counsel may be in-house
counsel for the Master Servicer if acceptable to the Indenture Trustee and the
Rating Agencies or counsel for the Depositor, as the case may be.

      Original Value: Except in the case of a refinanced Mortgage Loan, the
lesser of the Appraised Value or sales price of Mortgaged Property at the time a
Mortgage Loan is closed, and for a refinanced Mortgage Loan, the Original Value
is the value of such property set forth in an appraisal acceptable to the Master
Servicer.

      Outstanding: With respect to the Bonds, as of the date of determination,
all Bonds theretofore executed, authenticated and delivered under this Indenture
except:

                  (i) Bonds theretofore canceled by the Bond Registrar or
      delivered to the Indenture Trustee for cancellation; and

                  (ii) Bonds in exchange for or in lieu of which other Bonds
      have been executed, authenticated and delivered pursuant to the Indenture
      unless proof satisfactory to the Indenture Trustee is presented that any
      such Bonds are held by a holder in due course.

      Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan (including
an REO Property) which was not the subject of a Principal Prepayment in Full,
Cash Liquidation or REO

                                       30
<PAGE>

Disposition and which was not purchased, deleted or substituted for prior to
such Due Date pursuant to the Servicing Agreement.

      Overcollateralization Increase Amount: With respect to any Payment Date
and each Loan Group, the lesser of (i) the related Net Monthly Excess Cashflow
for such Payment Date, (ii) the excess, if any, of (a) the related
Overcollateralization Target Amount over (b) the related Overcollateralized
Amount on such Payment Date (after taking into account payments to the related
Bonds of the related Basic Principal Distribution Amount on such Payment Date)
and (iii) the amount necessary, pursuant to Section 3.05(d)(iv) of the
Indenture, with respect to the Group 1 Loans, and Section 3.05(h)(iv) of the
Indenture, with respect to the Group 2 Loans, so that the excess, if any, of (x)
the sum of the aggregate Stated Principal Balance of the related Mortgage Loans
as of the end of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period, and after reduction for Realized Losses on the
related mortgage loans incurred during the related Prepayment Period) and the
Group 1 Pre-Funded Amount and Group 2 Pre-Funded Amount, as applicable, over (y)
the aggregate Bond Principal Balance of the related Bonds (as reduced by
payments of the related Basic Principal Distribution Amount and any amounts in
respect of Net Monthly Excess Cashflow, in reduction of the Bond Principal
Balances thereof on that Payment Date prior to payment of the
Overcollateralization Increase Amount), is equal to the related
Overcollateralization Target Amount.

      Overcollateralization Release Amount: With respect to any Payment Date and
each Loan Group, the lesser of (x) the related Principal Remittance Amount for
such Payment Date and (y) the excess, if any, of (i) the related
Overcollateralized Amount for such Payment Date (assuming that 100% of the
related Principal Remittance Amount is applied as a principal payment on such
Payment Date) over (ii) the related Overcollateralization Target Amount for such
Payment Date.

      Overcollateralization Target Amount: The Group 1 Overcollateralization
Target Amount or Group 2 Overcollateralization Target Amount, as applicable.

      Overcollateralized Amount: For any Payment Date, other than a Subordinated
Transfer Payment Date, and each Loan Group, the amount, if any, by which (i) the
sum of the aggregate principal balance of the related Mortgage Loans (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or Advanced, and unscheduled collections of
principal received during the related Prepayment Period and Realized Losses
incurred during the related Prepayment Period) and the Group 1 Pre-Funded Amount
or Group 2 Pre-Funded Amount, as applicable, exceeds (ii) the aggregate Bond
Principal Balance of such related Loan Group as of such Payment Date (after
giving effect to distributions to be made on such Payment Date).

      For any Subordinated Transfer Payment Date and the Overcollateralized Loan
Group, the amount, if any, by which (i) the sum of the aggregate principal
balance of the related Mortgage Loans (after giving effect to scheduled payments
of principal due during the related Due Period, to the extent received or
advanced, and unscheduled collections of principal received during the related
Prepayment Period and Realized Losses on the related Mortgage Loans incurred
during the related Prepayment Period) and the Group 1 Pre-Funded Amount or Group
2 Pre-Funded

                                       31
<PAGE>

Amount, as applicable, exceeds (ii) the sum of (x) the aggregate Bond Principal
Balance of the Bonds related to such Loan Group as of such Payment Date (after
giving effect to distributions to be made on such Payment Date) and (y) the
Subordinated Transfer Realized Loss Amount.

      For any Subordinated Transfer Payment Date and the Undercollateralized
Loan Group, the amount, if any, by which (i) the aggregate principal balance of
the related Mortgage Loans (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period and Realized Losses on the related Mortgage Loans incurred during the
related Prepayment Period) and the Group 1 Pre-Funded Amount or Group 2
Pre-Funded Amount, as applicable, exceeds (ii) (x) the aggregate Bond Principal
Balance of the Bonds related to such Loan Group as of such Payment Date (after
giving effect to distributions to be made on such Payment Date) minus (y) the
Subordinated Transfer Realized Loss Amount.

      Overcollateralized Loan Group: For any Subordinated Transfer Payment Date,
the Loan Group which is not the Undercollateralized Loan Group.

      Owner Trust Estate: The corpus of the Issuer created by the Trust
Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.

      Owner Trustee: Wilmington Trust Company and its successors and assigns or
any successor owner trustee appointed pursuant to the terms of the Trust
Agreement.

      Owner Trustee's Fee: With respect to any Payment Date the product of (i)
the Owner Trustee's Fee Rate divided by 12 and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the first day of the related Due
Period plus the Group 1 Pre-Funded Amount and the Group 2 Pre-Funded Amount.

      Owner Trustee's Fee Rate: On each Mortgage Loan, a rate equal to 0.0017%
per annum.

      Paying Agent: Any paying agent or co-paying agent appointed pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

      Payment Account: The account established by the Indenture Trustee pursuant
to Section 3.01 of the Indenture. The Payment Account shall be an Eligible
Account.

      Payment Date: The 25th day of each month, or if such day is not a Business
Day, then the next Business Day.

      Percentage Interest: With respect to any Bond, the percentage obtained by
dividing the Bond Principal Balance of such Bond by the aggregate Bond Principal
Balances of all Bonds of that Class. With respect to any Certificate, the
percentage as stated on the face thereof.

      Periodic Rate Cap: With respect to any adjustable-rate Mortgage Loan, the
maximum rate, if any, by which the Mortgage Rate on such Mortgage Loan can
adjust on any Adjustment Date, as stated in the related Mortgage Note or
Mortgage.

                                       32
<PAGE>

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

      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.

      Plan Assets: Assets of a Plan within the meaning of Department of Labor
regulation 29 C.F.R. ss. 2510.3-101.

      PMI Insurer: Radian Guaranty, Inc., or its successors or assigns.

      PMI Insurer Fee Rate: With respect to any Mortgage Loan covered by the PMI
Insurer Policy, the rate per annum at which the premium with respect to such
policy accrues as indicated in the Mortgage Loan Schedule.

      PMI Insurer Policy: A lender-paid primary mortgage insurance policy issued
by Radian in accordance with a March 29, 2002 letter between the Seller and
Radian.

      PMI Insurer Policy Fee: With respect to each PMI Mortgage Loan and any
Payment Date, the product of (i) the PMI Insurer Fee Rate divided by 12 and (ii)
the Stated Principal Balance of such Mortgage Loan as of the first day of the
related Due Period.

      PMI Mortgage Loans: The Mortgage Loans included in the Trust Fund covered
by the PMI Insurer Policy, as indicated on the Mortgage Loan Schedule.

      Pool Balance: With respect to any date of determination, the aggregate of
the Stated Principal Balances of all Mortgage Loans as of such date.

      Prepayment Assumption: A Prepayment Assumption of 100% assumes, with
respect to the mortgage loans (other than the fixed-rate first lien mortgage
loans), 30% CPR and with respect to the fixed-rate first lien mortgage loans, a
prepayment vector which assumes 10% CPR in the first month after the origination
date of such mortgage loan and an additional 1/11th of 15% CPR in each month
thereafter, building to 25% CPR in the 12th month and remaining constant at 25%
CPR thereafter.

      Prepayment Interest Shortfall: As to any Payment Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of interest accrued during the related
Prepayment Period at the Net Mortgage Rate on the Stated Principal Balance of
such Mortgage Loan over the sum of the amount of interest (less interest at the
related Expense Fee Rate) paid by the Mortgagor for such Prepayment Period to
the date of such Principal Prepayment in Full and any Advances made by the
Master Servicer pursuant to Section 4.04 of the Servicing Agreement or (b) a
partial Principal Prepayment during the related Prepayment Period, an amount
equal to the interest at the Mortgage Rate (less the Subservicing

                                       33
<PAGE>

Fee Rate) during the related Prepayment Period on the amount of such partial
Principal Prepayment.

      Prepayment Period: With respect to each Mortgage Loan and any Payment
Date, the prior calendar month.

      Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance issued by a Qualified Insurer or any replacement policy therefor,
including the PMI Insurer Policies.

      Principal Distribution Amount: The Group 1 Principal Distribution Amount
or Group 2 Principal Distribution Amount, as applicable.

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

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

      Principal Remittance Amount: With respect to any Payment Date and each
Loan Group, the sum of the following:

                  (i) the principal portion of each previously undistributed
      Monthly Payment due after the Cut-off Date received on or prior to the
      related Determination Date or advanced prior to such Payment Date (other
      than Monthly Payments due after the related Due Period, which shall be
      treated as if received during the Due Period they were due) on each
      Outstanding Mortgage Loan;

                  (ii) the principal portion of all proceeds of any Mortgage
      Loan repurchased during the related Prepayment Period (or deemed to have
      been so repurchased in accordance with the Servicing Agreement) pursuant
      to the Servicing Agreement and the amount of any shortfall deposited in
      the Collection Account in connection with the substitution of a Deleted
      Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement during the
      related Collection Period;

                  (iii) the principal portion of all other unscheduled
      collections received during the related Prepayment Period (including,
      without limitation, Principal Prepayments, Insurance Proceeds, Liquidation
      Proceeds and REO Proceeds) to the extent applied by the Master Servicer as
      recoveries of principal of the related Mortgage Loan pursuant to the
      Servicing Agreement; and

                  (iv) any amount remaining on deposit in the related
      Pre-Funding Account at the end of the Funding Period.

provided, however, that on any Subordinated Transfer Payment Date, the Principal
Remittance Amount for the Undercollateralized Loan Group shall be increased, and
the Principal Remittance

                                       34
<PAGE>

Amount for the Overcollateralized Loan Group shall be reduced, by the
Subordinated Payment Transfer Fraction of the amounts determined pursuant to
clauses (1) through (3) above for the Overcollateralized Loan Group.

      Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.

      Prospectus: The Prospectus Supplement, dated January 26, 2005, together
with the attached Prospectus, dated September 28, 2004.

      Purchase Price: The meaning specified in Section 2.2(a) of the Mortgage
Loan Purchase Agreement.

      Purchaser: IMH Assets Corp., a California corporation, and its successors
and assigns.

      Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as an insurer
by the Master Servicer and as a Fannie Mae-approved mortgage insurer.

      Radian: Radian Guaranty, Inc., or its successors or assigns.

      Rating Agency: Any nationally recognized statistical rating organization,
or its successor, that rated the Bonds at the request of the Depositor at the
time of the initial issuance of the Bonds. Initially, Standard & Poor's, Moody's
or DBRS. If such organization or a successor is no longer in existence, "Rating
Agency" with respect to the Class A Bonds shall be such nationally recognized
statistical rating organization, or other comparable Person notice of which
designation shall be given to the Indenture Trustee. References herein to the
highest short term unsecured rating category of a Rating Agency shall mean A-1
or better in the case of Standard & Poor's and P-1 or better in the case of
Moody's and in the case of any other Rating Agency shall mean such equivalent
ratings. References herein to the highest long-term rating category of a Rating
Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa" in the case
of Moody's and in the case of any other Rating Agency, such equivalent rating.

      Realized Loss: With respect to each Mortgage Loan (or REO Property) as to
which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage Rate from the
Due Date as to which interest was last paid or advanced to Bondholders up to the
last day of the month in which the Cash Liquidation (or REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied as recoveries
of interest at the Net Mortgage Rate and to principal of the Mortgage Loan, net
of the portion thereof reimbursable to the Master Servicer or any Subservicer
with respect to

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related Advances or expenses as to which the Master Servicer or any Subservicer
is entitled to reimbursement thereunder but which have not been previously
reimbursed. 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 object of a Debt Service
Reduction, the amount of such Debt Service Reduction.

      Record Date: With respect to the Grantor Trust Certificates and any
Book-Entry Bonds (except the Underlying Class A-IO Bonds) and any Payment Date,
the close of business on the Business Day immediately preceding such Payment
Date. With respect to the Underlying Class A-IO Bonds and any Bonds that are not
Book-Entry Bonds, the close of business on the last Business Day of the calendar
month preceding such Payment Date.

      Reference Banks: Any leading banks engaged in transactions in Eurodollar
deposits in the international Eurocurrency market (i) with an established place
of business in London, (ii) whose quotations appear on the Telerate Screen Page
3750 on the Interest Determination Date in question, (iii) which have been
designated as such by the Indenture Trustee after consultation with the Master
Servicer and the Bond Insurer, and (iv) which are not Affiliates of the
Depositor or the Seller.

      Registered Holder: The Person in whose name a Bond is registered in the
Bond Register on the applicable Record Date.

      Related Documents: With respect to each Mortgage Loan, the documents
specified in Section 2.1(b) of (i) the Mortgage Loan Purchase Agreement (with
respect to the Initial Mortgage Loans) and (ii) the related Group 1 or Group 2
Subsequent Mortgage Loan Purchase Agreement (with respect to the related Group 1
or Group 2 Subsequent Mortgage Loans) and any documents required to be added to
such documents pursuant to the Mortgage Loan Purchase Agreement, the related
Group 1 or Group 2 Subsequent Mortgage Loan Purchase Agreement, the Trust
Agreement, Indenture or the Servicing Agreement.

      Relief Act: The Servicemembers Civil Relief Act, as amended.

      Relief Act Shortfall: As to any Payment Date and any Mortgage Loan (other
than a Mortgage Loan relating to an REO Property), any shortfalls relating to
the Relief Act or similar legislation or regulations.

      Remittance Report: The report prepared by the Master Servicer pursuant to
Section 4.01 of the Servicing Agreement.

      REO Acquisition: The acquisition by the Master Servicer on behalf of the
Indenture Trustee for the benefit of the Bondholders of any REO Property
pursuant to Section 3.13 of the Servicing Agreement.

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

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<PAGE>

      REO Imputed Interest: As to any REO Property, for any period, an amount
equivalent to interest (at the Net Mortgage Rate that would have been applicable
to the related Mortgage Loan had it been Outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof for such
period as such balance is reduced pursuant to Section 3.13 of the Servicing
Agreement by any income from the REO Property treated as a recovery of
principal.

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

      REO Property: A Mortgaged Property that is acquired by the Issuer by
foreclosure or by deed in lieu of foreclosure.

      Repurchase Event: With respect to any Mortgage Loan, either (i) a
discovery that, as of the Closing Date, the related Mortgage was not a valid
first lien on the related Mortgaged Property, or (ii) with respect to any
Mortgage Loan as to which the Seller delivers an affidavit certifying that the
original Mortgage Note has been lost or destroyed, a subsequent default on such
Mortgage Loan if the enforcement thereof or of the related Mortgage is
materially and adversely affected by the absence of such original Mortgage Note.

      Repurchase Price: With respect to any Mortgage Loan required to be
repurchased on any date pursuant to the Mortgage Loan Purchase Agreement or
purchased by the Master Servicer pursuant to the Servicing Agreement, an amount
equal to the sum, without duplication, of (i) 100% of the Stated Principal
Balance thereof (without reduction for any amounts charged off) and (ii) unpaid
accrued interest at the Mortgage Rate on the outstanding principal balance
thereof from the Due Date to which interest was last paid by the Mortgagor to
the first day of the month following the month of purchase plus (iii) the amount
of unreimbursed Advances or unreimbursed Servicing Advances made with respect to
such Mortgage Loan plus (iv) any other amounts owed to the Master Servicer or
any Subservicer pursuant to Section 3.07 of the Servicing Agreement and not
included in clause (iii) of this definition plus (v) any costs and damages
incurred by the trust in connection with any violation by such loan of any
predatory-lending law.

      Reserve Interest Rate: With respect to any Interest Determination Date,
the rate per annum that the Indenture Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
0.0625%) of the one-month United States dollar lending rates which New York City
banks selected by the Indenture Trustee 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 Indenture Trustee can
determine no such arithmetic mean, the lowest one-month United States dollar
lending rate which New York City banks selected by the Indenture Trustee are
quoting on such Interest Determination Date to leading European banks.

      Responsible Officer: With respect to the Indenture Trustee, any officer of
the Indenture Trustee with direct responsibility for the administration of the
Indenture and also, with respect to

                                       37
<PAGE>

a particular matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the particular subject.

      Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

      Security: Any of the Certificates or Bonds.

      Securityholder or Holder: Any Bondholder or a Certificateholder.

      Security Instrument: A written instrument creating a valid first lien or
second lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.

      Seller: Impac Mortgage Holdings, Inc., a Maryland corporation, and its
successors and assigns.

      Servicing Account: The separate trust account created and maintained by
the Master Servicer or each Subservicer with respect to the Mortgage Loans or
REO Property, which shall be an Eligible Account, for collection of taxes,
assessments, insurance premiums and comparable items as described in Section
3.08 of the Servicing Agreement.

      Servicing Advances: All customary, reasonable and necessary "out of
pocket"costs and expenses incurred in connection with a default, delinquency or
other unanticipated event in the performance by the Master Servicer or any
Subservicer of its servicing obligations, including, without duplication, but
not limited to, the cost of (i) the preservation, restoration and protection of
a Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures and any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered on the MERS(R) System, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Sections 3.10, 3.11, 3.13 of the Servicing Agreement.

      Servicing Agreement: The Servicing Agreement dated as of January 28, 2005,
among the Master Servicer, the Issuer and the Indenture Trustee.

      Servicing Certificate: A certificate completed and executed by a Servicing
Officer on behalf of the Master Servicer in accordance with Section 4.01 of the
Servicing Agreement.

      Servicing Default: The meaning assigned in Section 6.01 of the Servicing
Agreement.

      Servicing Fee: The sum of the Master Servicing Fee and the related
Subservicing Fee.

      Servicing Fee Rate: The sum of the Master Servicing Fee Rate and the
related Subservicing Fee Rate.

      Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear

                                       38
<PAGE>

on a list of servicing officers furnished to the Indenture Trustee by the Master
Servicer, as such list may be amended from time to time.

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

      Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property as of any date of determination, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date, after application of all
scheduled Monthly Payments due on or before such date, whether or not received,
minus (ii) the sum of (a) the principal portion of the Monthly Payments due with
respect to such Mortgage Loan or REO Property during each Due Period ending
prior to the most recent Payment Date which were received or with respect to
which an Advance was made, (b) all Principal Prepayments with respect to such
Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds
and REO Proceeds to the extent applied by the Master Servicer as recoveries of
principal in accordance with Section 3.13 of the Servicing Agreement with
respect to such Mortgage Loan or REO Property, which were distributed pursuant
to Section 3.05 of the Indenture on any previous Payment Date, and (c) the
principal portion of any Realized Loss with respect thereto allocated pursuant
to Section 3.31 of the Indenture for any previous Payment Date.

      Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss.ss.3801 et seq., as the same may be amended from time to time.

      Step-Up Date: The first Payment Date following the earlier of (i) the
first Payment Date for which the Issuer can cause the redemption of the Bonds
pursuant to Section 8.07 of the Indenture and (ii) the Payment Date in January
2015.

      Subordinated Payment Transfer Fraction: With respect to any Subordinated
Transfer Payment Date, a fraction equal to (x) any Subordinated Transfer
Realized Loss Amount for such Payment Date, divided by (y) the sum of the
aggregate Stated Principal Balance of the Mortgage Loans in the
Overcollateralized Loan Group as of the beginning of the related Due Period and
(with respect to the Loan Group 1 only) the Group 1 Pre-Funded Amount or Group 2
Pre-Funded Amount, as applicable.

      Subordinated Transfer Amount: With respect to any Subordinated Transfer
Payment Date, the principal portion of any amount paid from the
Overcollateralized Loan Group to the Undercollateralized Loan Group.

      Subordinated Transfer Payment Date: Any Payment Date on which a
Subordinated Transfer Realized Loss Amount exists for either loan group.

      Subordinated Transfer Realized Loss Amount: For any Payment Date, the
amount of any Realized Loss on a mortgage loan in a Loan Group which has been
allocated on a preceding Payment Date either (a) to the non-related
Overcollateralization Amount or (b) to the non-related Underlying Class M Bonds
and Underlying Class B Bonds, to the extent such Realized Loss has not been
reimbursed by related or non-related Net Monthly Excess Cashflow or by a

                                       39
<PAGE>

Subordinated Transfer Amount or otherwise by an offsetting reduction in the
Overcollateralized Amount or in the Bond Principal Balance of the Bonds of the
Undercollateralized Loan Group.

      Subsequent Cut-off Date: With respect to any Group 1 Subsequent Mortgage
Loan, the date, as designated by the Company, that is the later of (i) the first
day of the month in which the related Subsequent Transfer Date occurs and (ii)
the origination date of such Group 1 Subsequent Mortgage Loan, as the cut-off
date with respect to the related Group 1 Subsequent Mortgage Loan. With respect
to any Group 2 Subsequent Mortgage Loan, the date, as designated by the Company,
that is the later of (i) the first day of the month in which the related
Subsequent Transfer Date occurs and (ii) the origination date of such Group 2
Subsequent Mortgage Loan, as the cut-off date with respect to the related Group
2 Subsequent Mortgage Loan.

      Subsequent Recoveries: Additional recoveries, net of reimbursable
expenses, with respect to Mortgage Loans that have been previously liquidated
and that resulted in a Realized Loss.

      Subsequent Transfer Date: With respect to any Group 1 or Group 2
Subsequent Mortgage Loan, the applicable date upon which such Mortgage Loan was
purchased from the Seller with amounts on deposit in the related Pre-Funding
Account.

      Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement as a Subservicer and acceptable to the Bond Insurer,
including the Initial Subservicers.

      Subservicing Account: An Eligible Account established or maintained by a
Subservicer as provided for in Section 3.06(e) of the Servicing Agreement.

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

      Subservicing Fee: With respect to each Mortgage Loan and any Payment Date,
the fee payable monthly to the subservicer in respect of servicing compensation
that accrues at an annual rate equal to the Subservicing Fee Rate multiplied by
the Stated Principal Balance of such Mortgage Loan as of the related Due Date in
the related Due Period.

      Subservicing Fee Rate: On each Mortgage Loan (except for the fixed-rate
Mortgage Loans), a rate equal to 0.375% per annum. On each fixed-rate first lien
Mortgage Loan, a rate equal to 0.250% per annum.

      Substitution Adjustment Amount: With respect to any Eligible Substitute
Mortgage Loan, the amount as defined in Section 2.03 of the Servicing Agreement.

      Telerate Screen Page 3750: The display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks).

                                       40
<PAGE>

      Treasury Regulations: Regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury regulations or other successor Treasury
regulations.

      Trust: The Impac CMB Trust Series 2004-9 to be created pursuant to the
Trust Agreement.

      Trust Agreement: The Amended and Restated Trust Agreement dated as of
January 28, 2005, among the Owner Trustee, the Depositor and Deutsche Bank
National Trust Company, as Certificate Registrar and Certificate Paying Agent,
relating to the Trust.

      Trust Estate: The meaning specified in the Granting Clause of the
Indenture.

      Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.

      UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.

      Undercollateralized Amount: With respect to any Payment Date, other than a
Subordinated Transfer Payment Date, and either Loan Group, the excess, if any,
of (x) the aggregate Bond Principal Balance of the related Bonds (after giving
effect to distributions to such Bonds of the related Basic Principal
Distribution Amount on such Payment Date), over (y) the sum of the aggregate
Stated Principal Balance of the related Mortgage Loans (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period, and after reduction for Realized Losses on the
related Mortgage Loans incurred during the related Prepayment Period) and (with
respect to Loan Group 1 only) the Group 1 Pre-Funded Amount or Group 2
Pre-Funded Amount, as applicable.

      For any Subordinated Transfer Payment Date and the Overcollateralized Loan
Group, the amount, if any, by which (i) the sum of (x) the aggregate Bond
Principal Balance of the related Bonds (after giving effect to distributions to
such Bonds of the related Basic Principal Distribution Amount on such Payment
Date) and (y) the Subordinated Transfer Realized Loss Amount, exceeds (ii) the
sum of the aggregate Stated Principal Balance of the related Mortgage Loans
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses on the related Mortgage Loans incurred during the related
Prepayment Period) and (with respect to Loan Group 1 only) the Group 1
Pre-Funded Amount or Group 2 Pre-Funded Amount, as applicable.

      For any Subordinated Transfer Payment Date and the Undercollateralized
Loan Group, the amount, if any, by which (i)(x) the aggregate Bond Principal
Balance of the related Bonds (after giving effect to distributions to such Bonds
of the related Basic Principal Distribution Amount on such Payment Date) minus
(y) the Subordinated Transfer Realized Loss Amount, exceeds (ii) the sum of the
aggregate Stated Principal Balance of the related Mortgage Loans

                                       41
<PAGE>

(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses on the related Mortgage Loans incurred during the related
Prepayment Period) and (with respect to Loan Group 1 only) the Group 1
Pre-Funded Amount or Group 2 Pre-Funded Amount, as applicable.

      Undercollateralized Loan Group: With respect to any Payment Date, a Loan
Group which benefits from the payment of a Subordinated Transfer Realized Loss
Amount.

      Underlying Class A-IO Bond: Any Class A-IO-1 Bond or Class A-IO-2 Bond.

      Underlying Class B Bond: Any Class B-1 Bond or Class B-2 Bond

      Underlying Class M Bonds: Any of the Class M-1-1, Class M-1-2, Class
M-2-1, Class M-2-2, Class M-3-1, Class M-3-2, Class M-4-1, Class M-4-2, Class
M-5-1, Class M-5-2, Class M-6-1 or Class M-6-2 Bonds.

      Underwriters: Countrywide Securities Corporation, UBS Securities LLC and
Bear, Stearns & Co. Inc.

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

      Unpaid Interest Shortfall: For each Class of Bonds and any Payment Date,
such Bonds' pro rata share, based on the amount of Accrued Bond Interest
otherwise payable on such Bond on such Payment Date, of (a) any Prepayment
Interest Shortfalls, to the extent not covered by Compensating Interest, and (b)
any Relief Act Shortfalls, plus interest on the amount of previously allocated
Unpaid Interest Shortfall on such Class of Bonds which remains unreimbursed, at
the Bond Interest Rate for such Class for the related Accrual Period.

      USA Patriot Act: The USA Patriot Act of 2001, as amended.

                                       42

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