Document:

BEAR STEARNS ASSET BACKED SECURITIES I LLC,

                                   Depositor,

                            EMC MORTGAGE CORPORATION,

                           Seller and Master Servicer,

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,

                                     Trustee
                              ____________________

                         POOLING AND SERVICING AGREEMENT

                           Dated as of August 1, 2004
                    ________________________________________

              BEAR STEARNS ASSET BACKED SECURITIES I TRUST 2004-FR2

                   ASSET-BACKED CERTIFICATES, SERIES 2004-FR2

<PAGE>

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                                                 TABLE OF CONTENTS

                                                                                                               PAGE

                                                     ARTICLE I

                                                    DEFINITIONS
<S>                        <C>
         Section  1.01     DEFINED TERMS..........................................................................5
         Section  1.02     ALLOCATION OF CERTAIN INTEREST SHORTFALLS.............................................48

                                                    ARTICLE II

                                             CONVEYANCE OF TRUST FUND
                                          REPRESENTATIONS AND WARRANTIES
         Section  2.01     CONVEYANCE OF TRUST FUND..............................................................50
         Section  2.02     ACCEPTANCE OF THE MORTGAGE LOANS......................................................51
         Section  2.03     REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER AND THE
SELLER...........................................................................................................54
         Section  2.04     REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.......................................58
         Section  2.05     DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH SUBSTITUTIONS AND
REPURCHASES......................................................................................................60
         Section  2.06     COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.........................................60

                                                    ARTICLE III

                                ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
         Section  3.01     THE MASTER SERVICER TO ACT AS MASTER SERVICER.........................................62
         Section  3.02     DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS............................................63
         Section  3.03     SUBSERVICERS..........................................................................64
         Section  3.04     DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE MASTER SERVICER TO BE
HELD FOR TRUSTEE.................................................................................................65
         Section  3.05     MAINTENANCE OF HAZARD INSURANCE.......................................................65
         Section  3.06     PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS......................................66
         Section  3.07     MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES................................66
         Section  3.08     FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.........................................67
         Section  3.09     REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION OF EXCESS
LIQUIDATION PROCEEDS AND REALIZED LOSSES; REPURCHASES OF CERTAIN MORTGAGE LOANS..................................67
         Section  3.10     SERVICING COMPENSATION................................................................70
         Section  3.11     REO PROPERTY..........................................................................70
         Section  3.12     LIQUIDATION REPORTS...................................................................70
         Section  3.13     ANNUAL CERTIFICATE AS TO COMPLIANCE...................................................71
         Section  3.14     ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING REPORT.....................71
</TABLE>

                                                         i

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<TABLE>
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<S>      <C>
         Section  3.15     BOOKS AND RECORDS.....................................................................71
         Section  3.16     REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.................................72
         Section  3.17     UCC...................................................................................74
         Section  3.18     OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS...........................................74
         Section  3.19     OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE RATES AND
SCHEDULED PAYMENTS...............................................................................................74
         Section  3.20     RESERVE FUND..........................................................................75
         Section  3.21     ADVANCING FACILITY....................................................................76

                                                    ARTICLE IV

                                                     ACCOUNTS
         Section  4.01     COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT...............................78
         Section  4.02     PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT......................................80
         Section  4.03     COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW ACCOUNTS
..................................................................................................................82
         Section  4.04     DISTRIBUTION ACCOUNT..................................................................82
         Section  4.05     PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT.....................83
         Section  4.06     CLASS P CERTIFICATE ACCOUNT...........................................................83

                                                     ARTICLE V

                                            DISTRIBUTIONS AND ADVANCES
         Section  5.01     ADVANCES..............................................................................84
         Section  5.02     COMPENSATING INTEREST PAYMENTS........................................................84
         Section  5.03     REMIC DISTRIBUTIONS...................................................................85
         Section  5.04     DISTRIBUTIONS.........................................................................85
         Section 5.04A  ALLOCATION OF REALIZED LOSSES............................................................90
         Section  5.05     MONTHLY STATEMENTS TO CERTIFICATEHOLDERS..............................................92
         Section  5.06     REMIC DESIGNATIONS AND REMIC DISTRIBUTIONS............................................95
         Section 5.07      POLICY MATTERS.......................................................................100

                                                    ARTICLE VI

                                                 THE CERTIFICATES
         Section  6.01     THE CERTIFICATES......................................................................98
         Section  6.02     CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES
..................................................................................................................99
         Section  6.03     MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES....................................103
         Section  6.04     PERSONS DEEMED OWNERS................................................................103
         Section  6.05     ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES............................103
         Section  6.06     BOOK-ENTRY CERTIFICATES..............................................................103
</TABLE>

                                                        ii

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<TABLE>
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<S>      <C>
         Section  6.07     NOTICES TO DEPOSITORY................................................................104
         Section  6.08     DEFINITIVE CERTIFICATES..............................................................105
         Section  6.09     MAINTENANCE OF OFFICE OR AGENCY......................................................105

                                                    ARTICLE VII

                                       THE DEPOSITOR AND THE MASTER SERVICER
         Section  7.01     LIABILITIES OF THE DEPOSITOR AND THE MASTER SERVICER.................................106
         Section  7.02     MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER SERVICER......................106
         Section  7.03     INDEMNIFICATION OF THE TRUSTEE AND THE MASTER SERVICER...............................106
         Section  7.04     LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE MASTER SERVICER AND OTHERS
.................................................................................................................107
         Section  7.05     MASTER SERVICER NOT TO RESIGN........................................................108
         Section  7.06     SUCCESSOR MASTER SERVICER............................................................108
         Section  7.07     SALE AND ASSIGNMENT OF MASTER SERVICING..............................................108

                                                   ARTICLE VIII

                                      DEFAULT; TERMINATION OF MASTER SERVICER
         Section  8.01     EVENTS OF DEFAULT....................................................................110
         Section  8.02     TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.............................................112
         Section  8.03     NOTIFICATION TO CERTIFICATEHOLDERS...................................................113
         Section  8.04     WAIVER OF DEFAULTS...................................................................113

                                                    ARTICLE IX

                                              CONCERNING THE TRUSTEE
         Section  9.01     DUTIES OF TRUSTEE....................................................................114
         Section  9.02     CERTAIN MATTERS AFFECTING THE TRUSTEE................................................115
         Section  9.03     TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS................................117
         Section  9.04     TRUSTEE MAY OWN CERTIFICATES.........................................................118
         Section  9.05     TRUSTEE'S FEES AND EXPENSES..........................................................118
         Section  9.06     ELIGIBILITY REQUIREMENTS FOR TRUSTEE.................................................118
         Section  9.07     INSURANCE............................................................................119
         Section  9.08     RESIGNATION AND REMOVAL OF TRUSTEE...................................................119
         Section  9.09     SUCCESSOR TRUSTEE....................................................................120
         Section  9.10     MERGER OR CONSOLIDATION OF TRUSTEE...................................................120
         Section  9.11     APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE........................................120
         Section  9.12     TAX MATTERS..........................................................................121
</TABLE>

                                                        iii

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<S>      <C>

                                                     ARTICLE X

                                                    TERMINATION
         Section  10.01    TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL MORTGAGE LOANS.....................125
         Section  10.02    FINAL DISTRIBUTION ON THE CERTIFICATES...............................................125
         Section  10.03    ADDITIONAL TERMINATION REQUIREMENTS..................................................126

                                                    ARTICLE XI

                                             MISCELLANEOUS PROVISIONS
         Section  11.01    AMENDMENT............................................................................128
         Section  11.02    RECORDATION OF AGREEMENT; COUNTERPARTS...............................................129
         Section  11.03    GOVERNING LAW........................................................................129
         Section  11.04    INTENTION OF PARTIES.................................................................130
         Section  11.05    NOTICES..............................................................................130
         Section  11.06    SEVERABILITY OF PROVISIONS...........................................................131
         Section  11.07    ASSIGNMENT...........................................................................131
         Section  11.08    LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...........................................131
         Section  11.09    INSPECTION AND AUDIT RIGHTS..........................................................132
         Section  11.10    CERTIFICATES NONASSESSABLE AND FULLY PAID............................................132
         Section 11.11     CERTIFICATE INSURER RIGHTS...........................................................141
</TABLE>

                                                        iv

<PAGE>

EXHIBITS

Exhibit A-1            Form of Class A Certificates
Exhibit A-2            Form of Class M Certificates
Exhibit A-3            Form of Class P Certificates
Exhibit A-4            Form of Class CE Certificates
Exhibit A-5            Form of Class R Certificates
Exhibit B              Mortgage Loan Schedule
Exhibit C              [Reserved]
Exhibit D              Form of Transfer Affidavit
Exhibit E              Form of Transferor Certificate
Exhibit F              Form of Investment Letter (Non-Rule 144A)
Exhibit G              Form of Rule 144A and Related Matters Certificate
Exhibit H              Form of Request for Release
Exhibit I              DTC Letter of Representations
Exhibit J              Schedule of Mortgage Loans with Lost Notes
Exhibit K              Form of Custodial Agreement
Exhibit L              Form of Back-Up Certification
Exhibit M              Form of Mortgage Loan Purchase Agreement
Exhibit N              Form of Class II-A Policy

                                        v

<PAGE>

         POOLING AND SERVICING AGREEMENT, dated as of August 1, 2004, among BEAR
STEARNS ASSET BACKED SECURITIES I LLC, a Delaware limited liability company, as
depositor (the "Depositor"), EMC MORTGAGE CORPORATION, a Delaware corporation,
as seller (in such capacity, the "Seller") and as master servicer (in such
capacity, the "Master Servicer") and LASALLE BANK NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, but solely as
trustee (the "Trustee").

                              PRELIMINARY STATEMENT

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.

                                     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 and the Yield Maintenance
Agreements) as a REMIC for federal income tax purposes, and such segregated pool
of assets will be designated as "REMIC I". The Class R-1 Certificates 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 Uncertificated REMIC I Pass- Through Rate, the initial
Uncertificated Principal 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.

<TABLE>
<CAPTION>

                                  Uncertificated
                                      REMIC I                Initial Uncertificated            Latest Possible
        Designation              Pass-Through Rate             Principal Balance              Maturity Date (1)
        -----------              -----------------             -----------------              -----------------
<S>                                 <C>                        <C>                              <C>
      AA                            Variable(2)                $   229,999,153.13               June 25, 2034
      I-A-1                         Variable(2)                $       484,445.00               June 25, 2034
      I-A-2                         Variable(2)                $       161,815.00               June 25, 2034
      II-A                          Variable(2)                $     1,219,550.00               June 25, 2034
      M-1                           Variable(2)                $       151,380.00               June 25, 2034
      M-2                           Variable(2)                $        41,070.00               June 25, 2034
      M-3                           Variable(2)                $        82,140.00               June 25, 2034
      M-4                           Variable(2)                $        35,205.00               June 25, 2034
      M-5                           Variable(2)                $        29,335.00               June 25, 2034
      M-6                           Variable(2)                $        29,335.00               June 25, 2034
      M-7                           Variable(2)                $        23,470.00               June 25, 2034
      M-8A                          Variable(2)                $        23,470.00               June 25, 2034
      M-8B                          Variable(2)                $        23,470.00               June 25, 2034
      ZZ                            Variable(2)                $     2,389,175.27               June 25, 2034
</TABLE>

                                       -1-

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<TABLE>
<CAPTION>

<S>                                 <C>                        <C>                              <C>
P                                  0.00%(2)                    $           100.00               June 25, 2034
1A                                 Variable(2)                 $         3,332.93               June 25, 2034
1B                                 Variable(2)                 $        16,258.13               June 25, 2034
2A                                 Variable(2)                 $         6,289.47               June 25, 2034
2B                                 Variable(2)                 $        30,680.47               June 25, 2034
XX                                 Variable(2)                 $   234,636,452.39               June 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 "Uncertificated REMIC I
         Pass-Through Rate" herein.

                                    REMIC II
                                    --------

         As provided herein, the Trustee will make an election 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-2 Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.

         The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC II
created hereunder.

<TABLE>
<CAPTION>

                                                          Initial Certificate Principal        Latest Possible
        Designation              Pass-Through Rate                   Balance                   Maturity Date(1)
        -----------              -----------------                   -------                   ----------------
<S>                                 <C>                        <C>                               <C>
          I-A-1                     Variable(2)                $    96,889,000.00                June 25, 2034
          I-A-2                     Variable(2)                $    32,363,000.00                June 25, 2034
          II-A                      Variable(2)                $   243,910,000.00                June 25, 2034
           M-1                      Variable(2)                $    30,276,000.00                June 25, 2034
           M-2                      Variable(2)                $     8,214,000.00                June 25, 2034
           M-3                      Variable(2)                $    16,428,000.00                June 25, 2034
           M-4                      Variable(2)                $     7,041,000.00                June 25, 2034
           M-5                      Variable(2)                $     5,867,000.00                June 25, 2034
           M-6                      Variable(2)                $     5,867,000.00                June 25, 2034
           M-7                      Variable(2)                $     4,694,000.00                June 25, 2034
          M-8A                      Variable(2)                $     4,694,000.00                June 25, 2034
          M-8B                      Variable(2)                $     4,694,000.00                June 25, 2034
    Class CE Interest               Variable(2)                $     8,449,026.79                June 25, 2034
    Class P Interest                0.00%(2)(4)                $           100.00                June 25, 2034
</TABLE>
___________________
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month 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 II
         Regular Interest.

                                       -2-

<PAGE>

(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class CE Interest will accrue interest at its variable Pass-Through
         Rate on the Uncertificated Notional Balance of the Class CE Interest
         outstanding from time to time which shall equal the Uncertificated
         Principal Balance of the REMIC I Regular Interests (other than REMIC I
         Regular Interest P). The Class CE Interest will not accrue interest on
         its Certificate Principal Balance.
(4)      The Class P Interest is not entitled to distributions in respect of
         interest.

                                    REMIC III
                                    ---------

         As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class CE Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC III." The Class R-3 Interest represents the sole class of
"residual interests" in REMIC III for purposes of the REMIC Provisions.

         The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for the indicated
Class of Certificates that represents a "regular interest" in REMIC III created
hereunder:

<TABLE>
<CAPTION>

                                                                Initial Aggregate
                                                              Certificate Principal              Latest Possible
      Class Designation           Pass-Through Rate                  Balance                    Maturity Date(1)
      -----------------           -----------------                  -------                    ----------------
<S>                                  <C>                          <C>                             <C>
    Class CE Certificates            Variable(2)                  $8,449,026.79                   June 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 the Class CE Certificates.
(2)  The Class CE Certificates will receive 100% of amounts received in respect
     of the Class CE Interest.

                                    REMIC IV
                                    --------

         As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class P Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC IV." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC IV for purposes of the REMIC Provisions.

         The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for the indicated
Class of Certificates that represents a "regular interest" in REMIC IV created
hereunder:

<TABLE>
<CAPTION>
                                                                  Initial Aggregate
                                                                Certificate Principal            Latest Possible
      Class Designation             Pass-Through Rate                  Balance                  Maturity Date(1)
      -----------------             -----------------                  -------                  ----------------
<S>                                     <C>                           <C>                         <C>
    Class P Certificates                0.00%(2)                      $ 100.00                    June 25, 2034
</TABLE>
_______________

                                       -3-

<PAGE>

(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 the Class P
         Certificates.
(2)      The Class P Certificates will receive 100% of amounts received in
         respect of the Class P Interest.

         The Trust Fund shall be named, and may be referred to as, the "Bear
Stearns Asset Backed Securities I Trust 2004-FR2." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates, Series 2004-FR2"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).

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

                                       -4-

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Section  1.01     DEFINED TERMS.

         In addition to those terms defined in Section 1.02, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:

         ACCEPTED SERVICING PRACTICES: With respect to each Mortgage Loan, those
mortgage servicing practices (including collection procedures) that are in
accordance with all applicable statutes, regulations and prudent mortgage
banking practices for similar mortgage loans.

         ACCOUNT: The Distribution Account, the Reserve Account, the Class P
Certificate Account, the Class II-A Policy Payments Account and the Protected
Account.

         ACCRUAL PERIOD: With respect to the Certificates (other than the Class
CE, Class P and the Residual Certificates) and any Distribution Date, the period
from and including the immediately preceding Distribution Date (or with respect
to the first Accrual Period, the Closing Date) to and including the day prior to
such Distribution Date. With respect to the Class CE Certificates and any
Distribution Date, the calendar month immediately preceding such Distribution
Date. All calculations of interest on the Certificates (other than the Class CE,
Class P and the Residual Certificates) will be made on the basis of the actual
number of days elapsed in the related Accrual Period. All calculations of
interest on the Class CE Certificates will be made on the basis of a 360-day
year consisting of twelve 30-day months.

         ACCRUAL RATE: The rate set forth in the Insurance Agreement. The
Accrual Rate shall be computed on the basis of the actual number of days elapsed
over the actual number of days in the current calendar year. In no event shall
the Accrual Rate exceed the maximum rate permissible under law applicable to
this Agreement limiting interest rates.

         ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Master Servicer as
provided in Section 5.01 hereof.

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

         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.

         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.

                                       -5-

<PAGE>

         AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution Date, the
aggregate amount held in the Protected Account at the close of business on the
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Period and (ii) Principal Prepayments, Liquidation Proceeds,
Subsequent Recoveries and Insurance Proceeds received in respect of such
Mortgage Loans after the last day of the related Prepayment Period.

         APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date and
a Class of Class A Certificates and Class M Certificates, the sum of the
Realized Losses with respect to the Mortgage Loans which have been applied in
reduction of the Certificate Principal Balance of that Class of Certificates
pursuant to Section 5.04A of this Agreement which have not previously been
reimbursed reduced by any Subsequent Recoveries applied to such Applied Realized
Loss Amount.

         APPRAISED VALUE: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the related Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.

         AVOIDED PAYMENT: As defined in the Class II-A Policy.

         BASIS RISK SHORTFALL CARRY FORWARD AMOUNT: With respect to any
Distribution Date and any Class of Class A Certificates and Class M Certificates
and any Distribution Date for which the Pass-Through Rate for such Certificates
is equal to the related Net Rate Cap, an amount equal to the sum of (A) the
excess, if any, of (a) the amount of Current Interest that such Class would have
been entitled to receive on such Distribution Date had the Pass-Though Rate
applicable to such Class been calculated at a per annum rate equal to One-Month
LIBOR plus the related Certificate Margin, over (b) the amount of Current
Interest that such Class received on such Distribution Date at a per annum rate
equal to the related Net Rate Cap and (B) the amount in clause (A) for all
previous Distribution Dates not previously paid, together with interest thereon
at a rate equal to the related Pass-Through Rate for such Distribution Date.

         BANKRUPTCY CODE: Title 11 of the United States Code.

         BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 6.06). As of the Closing
Date, each Class of Regular Certificates (other than the Class M-8, Class CE and
Class P Certificates) constitutes a Class of Book-Entry Certificates.

         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, New York, Chicago,
Illinois, Minneapolis,

                                       -6-

<PAGE>

Minnesota or the city in which the Corporate Trust Office of the Trustee or the
principal office of the Certificate Insurer or the Master Servicer is located
are authorized or obligated by law or executive order to be closed.

         CALENDAR QUARTER: January 1 to March 31, April 1 to June 30, July 1 to
September 30, or October 1 to December 31, as applicable.

         CERTIFICATE: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-5.

         CERTIFICATE INSURER: Assured Guaranty Corp., a Maryland domiciled
insurance company, or any successor thereto.

         CERTIFICATE INSURER CONTACT PERSON: The officer designated by the
Master Servicer to provide information to the Certificate Insurer pursuant to
Section 5.07(i).

         CERTIFICATE INSURER DEFAULT: As defined in Section 5.07(l).

         CERTIFICATE INSURER PREMIUM AMOUNT: With respect to the Class II-A
Policy and each Distribution Date, an amount equal to the product of the
Certificate Insurer Premium Rate and the Certificate Principal Balance of the
Class II-A Certificates immediately prior to such Distribution Date.

         CERTIFICATE INSURER PREMIUM RATE: A percentage equal to one twelfth
(1/12) of the "premium percentage" set forth in the Premium Letter.

         CERTIFICATE MARGIN: With respect to the Class I-A-1 Certificates and,
for purposes of the definition of "One-Month LIBOR Pass-Through Rate", REMIC I
Regular Interest I-A-1, 0.210%.

         With respect to the Class I-A-2 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
I-A-2, 0.520% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 1.040% in the case of each
Distribution Date thereafter.

         With respect to the Class II-A Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
II-A, 0.260% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.520% in the case of each
Distribution Date thereafter.

         With respect to the Class M-1 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-1, 0.650% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 0.975% in the case of each
Distribution Date thereafter.

         With respect to the Class M-2 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-2, 0.680% in the case of each

                                       -7-

<PAGE>

Distribution Date through and including the first possible Optional Termination
Date and 1.020% in the case of each Distribution Date thereafter.

         With respect to the Class M-3 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-3, 1.200% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 1.800% in the case of each
Distribution Date thereafter.

         With respect to the Class M-4 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-4, 1.400% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 2.100% in the case of each
Distribution Date thereafter.

         With respect to the Class M-5 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-5, 1.750% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 2.625% in the case of each
Distribution Date thereafter.

         With respect to the Class M-6 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-6, 1.900% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 2.850% in the case of each
Distribution Date thereafter.

         With respect to the Class M-7 Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-7, 3.650% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 5.475% in the case of each
Distribution Date thereafter.

         With respect to the Class M-8A Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-8A, 4.000% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 6.000% in the case of each
Distribution Date thereafter.

         With respect to the Class M-8B Certificates and, for purposes of the
definition of "One- Month LIBOR Pass-Through Rate", REMIC I Regular Interest
M-8B, 4.000% in the case of each Distribution Date through and including the
first possible Optional Termination Date and 6.000% in the case of each
Distribution Date thereafter.

         CERTIFICATE NOTIONAL BALANCE: With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Principal Balance of the REMIC I
Regular Interests (other than REMIC I Regular Interest P) for such Distribution
Date.

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

                                      -8-

<PAGE>

         CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than any
Class CE Certificate or Class R Certificate) and as of any Distribution Date,
the Initial Certificate Principal Balance of such Certificate plus, in the case
of a Class A Certificate and Class M Certificate, any Subsequent Recoveries
added to the Certificate Principal Balance of such Certificate pursuant to
Section 5.04(b), less the sum of (i) all amounts distributed with respect to
such Certificate in reduction of the Certificate Principal Balance thereof on
previous Distribution Dates pursuant to Section 5.04, and (ii) any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates. Exclusively for the purpose of determining any subrogation rights of the
Certificate Insurer arising under Section 5.07 hereof, the Certificate Principal
Balance of the Class II-A Certificates shall not be reduced by the amount of any
payments made by the Certificate Insurer in respect of principal on such
Certificates under the Class II-A Policy, except to the extent such payment
shall have been reimbursed to the Certificate Insurer pursuant to the provisions
of this Agreement.

         CERTIFICATE REGISTER: The register maintained pursuant to Section 6.02
hereof.

         CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates) and, with respect to
the Class II-A Certificates, the Certificate Insurer to the extent of any
Reimbursement Amount.

         CLASS: All Certificates bearing the same Class designation as set forth
in Section 6.01 hereof.

         CLASS A CERTIFICATES: The Class I-A-1, Class I-A-2 and Class II-A
Certificates.

         CLASS A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the Principal Distribution Amount for such
Distribution Date and (y) the excess, if any, of (i) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date, over (ii) the lesser of (a) the product of (1) 59.00% and (2)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period, and (b) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period minus $2,346,930.

         CLASS I-A CERTIFICATE: Any of the Class I-A-1 Certificates or the Class
I-A-2 Certificates.

         CLASS I-A-1 CERTIFICATE: Any Certificate designated as a "Class I-A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A-1 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS I-A-2 CERTIFICATE: Any Certificate designated as a "Class I-A-2
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class I-A-2 Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

                                      -9-

<PAGE>

         CLASS I-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
with respect to the Class I-A Certificates and any Distribution Date, is the
product of the Class A Principal Distribution Amount and a fraction, the
numerator of which is the Principal Funds for Loan Group I for such Distribution
Date and the denominator of which is the Principal Funds for both Loan Groups
for such Distribution Date.

         CLASS II-A CERTIFICATE: Any Certificate designated as a "Class II-A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class II-A Certificates as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS II-A POLICY: The irrevocable financial guaranty insurance policy,
No. D-2004-99, including any endorsements thereto, issued by the Certificate
Insurer with respect to the Class II- A Certificates, in the form attached
hereto as Exhibit N.

         CLASS II-A POLICY PAYMENTS ACCOUNT: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 5.07(c) in the name of
the Trustee for the benefit of the Class II-A Certificateholders and designated
"LaSalle Bank National Association, in trust for registered holders of Bear
Stearns Asset Backed Securities I Trust 2004-FR2, Asset-Backed Certificates,
Series 2004-FR2, Class II-A." Funds in the Class II-A Policy Payments Account
shall be held in trust for the Class II-A Certificateholders for the uses and
purposes set forth in this Agreement.

         CLASS II-A PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
with respect to the Class II-A Certificates and any Distribution Date, is the
product of the Class A Principal Distribution Amount and a fraction, the
numerator of which is the Principal Funds for Loan Group II for such
Distribution Date and the denominator of which is the Principal Funds for both
Loan Groups for such Distribution Date.

         CLASS CE CERTIFICATE: Any Certificate designated as a "Class CE
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class CE Certificates herein and evidencing a Regular Interest in REMIC III.

         CLASS CE DISTRIBUTION AMOUNT: With respect to any Distribution Date,
the sum of (i) the Current Interest for the Class CE Interest for such
Distribution Date and (ii) any Overcollateralization Release Amount for such
Distribution Date; provided, however that on any Distribution Date after the
Distribution Date on which the Certificate Principal Balances of the Class A
Certificates and Class M Certificates have been reduced to zero, the Class CE
Distribution Amount shall include the Overcollateralization Amount.

         CLASS CE INTEREST: An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class CE Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.

                                      -10-

<PAGE>

         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-8A and Class M-8B Certificates.

         CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-1 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the distribution of the Class A Principal Distribution
Amount on such Distribution Date and (2) the Certificate Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 71.90% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $2,346,930.

         CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-2 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount and the Class M-1 Principal Distribution Amount and (y) the
excess, if any, of (a) the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the distribution
of the Class A Principal Distribution Amount on such Distribution Date), (2) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (3) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date, over (b) the lesser of
(1) the product of (x) 75.40% and (y) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period, and (2) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $2,346,930.

         CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-3 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution

                                      -11-

<PAGE>

Amount and the Class M-2 Principal Distribution Amount and (y) the excess, if
any, of (a) the sum of (1) the aggregate Certificate Principal Balance of the
Class A Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (4) the Certificate Principal
Balance of the Class M-3 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 82.40% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $2,346,930.

         CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-4 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal Distribution Amount
and (y) the excess, if any, of (a) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (2) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date) and (5) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 85.40% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $2,346,930.

         CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-5 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount and
the Class M-4 Principal Distribution Amount and (y) the excess, if any, of (a)
the

                                      -12-

<PAGE>

sum of (1) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (6) the Certificate Principal
Balance of the Class M-5 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 87.90% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $2,346,930.

         CLASS M-6 CERTIFICATE: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class M-6 Certificates as set forth herein and evidencing a Regular Interest
in REMIC II.

         CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount and the Class M-5 Principal Distribution
Amount and (y) the excess, if any, of (a) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (2) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (3) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (4) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (5) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date), (6) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the distribution of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (7) the Certificate Principal
Balance of the Class M-6 Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 90.40% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $2,346,930.

         CLASS M-7 CERTIFICATE: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of

                                      -13-

<PAGE>

distributions provided for the Class M-7 Certificates as set forth herein and
evidencing a Regular Interest in REMIC II.

         CLASS M-7 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount, the Class M-5 Principal Distribution
Amount and the Class M-6 Principal Distribution Amount and (y) the excess, if
any, of (a) the sum of (1) the aggregate Certificate Principal Balance of the
Class A Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (4) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) (7) the Certificate Principal Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date) and (8) the Certificate Principal Balance of
the Class M-7 Certificates immediately prior to such Distribution Date, over (b)
the lesser of (1) the product of (x) 92.40% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus $2,346,930.

         CLASS M-8 CERTIFICATE: Any Certificate designated as a "Class M-8A
Certificate" or "Class M-8B Certificate" on the face thereof, in the form of
Exhibit A-2 hereto, representing the right to its Percentage Interest of
distributions provided for the Class M-8A Certificates or Class M-8B
Certificates, as applicable, as set forth herein and evidencing a Regular
Interest in REMIC II.

         CLASS M-8 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an
amount equal to the lesser of (x) the remaining Principal Distribution Amount
for such Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount, the Class M-5 Principal Distribution
Amount, the Class M-6 Principal Distribution Amount and the Class M-7 Principal
Distribution Amount and (y) the excess, if any, of (a) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the distribution of the Class
M-1 Principal Distribution Amount on such Distribution Date), (3) the
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the distribution of the Class M-2 Principal

                                      -14-

<PAGE>

Distribution Amount on such Distribution Date), (4) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (7) the Certificate Principal Balance of the Class M-6 Certificates
(after taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (8) the Certificate Principal
Balance of the Class M-7 Certificates (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such Distribution
Date) and (9) the aggregate Certificate Principal Balance of the Class M-8A
Certificates and Class M-8B Certificates immediately prior to such Distribution
Date, over (b) the lesser of (1) the product of (x) 96.40% and (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period, and (2) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $2,346,930.

         CLASS P CERTIFICATE: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class P Certificates as set forth herein and evidencing a Regular Interest
in REMIC IV.

         CLASS P INTEREST: An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class P Certificates, evidencing a
Regular Interest in REMIC II for purposes of the REMIC Provisions.

         CLASS P CERTIFICATE ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.05 in the name of the Trustee
for the benefit of the Class P Certificateholders.

         CLASS R-1 CERTIFICATE: Any Certificate designated a "Class R-1
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-5 hereto, evidencing the Residual Interest in REMIC I and representing the
right to the Percentage Interest of distributions provided for the Class R-1
Certificates as set forth herein.

         CLASS R-2 CERTIFICATE: Any Certificate designated a "Class R-2
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-5 hereto, evidencing the Residual Interest in REMIC II and representing the
right to the Percentage Interest of distributions provided for the Class R-2
Certificates as set forth herein.

         CLASS RX CERTIFICATE: Any Certificate designated a "Class RX
Certificate" on the face thereof, in substantially the form set forth in Exhibit
A-5 hereto, evidencing the ownership of the Class R-3 Interest and the Class R-4
Interest and representing the right to the Percentage Interest of distributions
provided for the Class RX Certificates as set forth herein.

         CLASS R-3 INTEREST: The uncertificated Residual Interest in REMIC III.

                                      -15-

<PAGE>

         CLASS R-4 INTEREST: The uncertificated Residual Interest in REMIC IV.

         CLOSING DATE: August 31, 2004.

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

         COMPENSATING INTEREST: An amount, not to exceed the Servicing Fee, to
be deposited in the Protected Account by the Master Servicer to the payment of a
Prepayment Interest Shortfall on a Mortgage Loan subject to this Agreement.

         CORPORATE TRUST OFFICE: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at 135 South LaSalle Street, Suite 1625, Chicago, Illinois,
Attention: Global Securitization Trust Services Group - Bear Stearns Asset
Backed Securities I LLC, Series 2004-FR2, or at such other address as the
Trustee may designate from time to time.

         CORRESPONDING CERTIFICATE: With respect to each Uncertificated REMIC I
Regular Interest, the Certificate with the corresponding designation.

         CURRENT INTEREST: As of any Distribution Date, with respect to the
Certificates of each Class (other than the Class P Certificates and the Residual
Certificates), (i) the interest accrued on the Certificate Principal Balance or
Certificate Notional Balance or Uncertificated Notional Balance, as applicable,
during the related Accrual Period at the applicable Pass-Through Rate plus any
amount previously distributed with respect to interest for such Certificate that
has been recovered as a voidable preference by a trustee in bankruptcy minus
(ii) the sum of (a) any Prepayment Interest Shortfall for such Distribution
Date, to the extent not covered by Compensating Interest and (b) any Relief Act
Interest Shortfalls during the related Due Period, provided, however, that for
purposes of calculating Current Interest for any such Class, amounts specified
in clause (ii) hereof for any such Distribution Date shall be allocated first to
the Class CE Certificates and Residual Certificates in reduction of amounts
otherwise distributable to such Certificates on such Distribution Date and then
any excess shall be allocated to each Class of Class A Certificates and Class M
Certificates pro rata based on the respective amounts of interest accrued
pursuant to clause (i) hereof for each such Class on such Distribution Date.

         CURRENT SPECIFIED ENHANCEMENT PERCENTAGE: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class M Certificates and (ii) the
Overcollateralization Amount, in each case prior to the distribution of the
Principal Distribution Amount on such Distribution Date, by (y) the aggregate
Stated Principal Balance of the Mortgage Loans as of the end of the related Due
Period.

         CUSTODIAL AGREEMENT: An agreement, dated as of August 31, 2004, among
the Depositor, the Seller, the Master Servicer, the Trustee and the Custodian in
substantially the form of Exhibit K hereto.

                                      -16-

<PAGE>

         CUSTODIAN: Wells Fargo Bank, National Association, or any successor
custodian appointed pursuant to the provisions hereof and the Custodial
Agreement.

         CUT-OFF DATE: The close of business on August 1, 2004.

         CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.

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

         DEFICIENCY AMOUNT: As of any Distribution Date, the sum of (i) any
shortfall in the Interest Funds to pay the Current Interest due on the Class
II-A Certificates, except for any portion thereof payable under the Class II-A
Policy as an Avoided Payment and (ii) the amount of any Applied Realized Loss
Amount allocated to the Class II-A Certificates on such Distribution Date and
(iii) for the Last Scheduled Distribution Date, the Certificate Principal
Balance of the Class II-A Certificates to the extent unpaid on such Distribution
Date (after taking into account all distributions to be made on such
Distribution Date).

         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 such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.

         DEFINITIVE CERTIFICATES: As defined in Section 6.06.

         DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.

         DELINQUENCY EVENT: A Delinquency Event shall have occurred and be
continuing if at any time, (x) the percent equivalent of a fraction, the
numerator of which is the aggregate Stated Principal Balance of the Mortgage
Loans that are 60 days or more Delinquent (including for this purpose any such
Mortgage Loans in bankruptcy or foreclosure and Mortgage Loans with respect to
which the related Mortgaged Property is REO Property), and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans as
of the last day of the related Due Period exceeds (y) 33% of the Current
Specified Enhancement Percentage.

                                      -17-

<PAGE>

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

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

         DEPOSITOR: Bear Stearns Asset Backed Securities I LLC, a Delaware
limited liability company, or its successor in interest.

         DEPOSITORY: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.

         DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.

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

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

         DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.04 in the name of the Trustee
for the benefit of the Certificateholders and the Certificate Insurer designated
"LaSalle Bank National Association, in trust for registered holders of Bear
Stearns Asset Backed Securities I LLC, Asset-Backed Certificates, Series
2004-FR2". Funds in the Distribution Account shall be held in trust for the
Certificateholders and the Certificate Insurer for the uses and purposes set
forth in this Agreement.

         DISTRIBUTION ACCOUNT DEPOSIT DATE: The Business Day prior to each
Distribution Date.

                                      -18-

<PAGE>

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

         DUE DATE: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.

         DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.

         ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, so long as Moody's is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories, respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee, the Certificate Insurer and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company having capital and surplus of
not less than $50,000,000, acting in its fiduciary capacity or (iv) any other
account acceptable to the Rating Agencies, as evidenced in writing. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.

         EMC: EMC Mortgage Corporation, a Delaware corporation, and its
successors and assigns.

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

         ERISA RESTRICTED CERTIFICATE: Each of the Class CE, Class P and the
Residual Certificates.

         EVENT OF DEFAULT: As defined in Section 8.01 hereof.

         EXCESS CASHFLOW: With respect to any Distribution Date, an amount, if
any, equal to the sum of (a) the Remaining Excess Spread for such Distribution
Date and (b) the Overcollateralization Release Amount for such Distribution
Date.

                                      -19-

<PAGE>

         EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.

         EXCESS SPREAD: With respect to any Distribution Date, the excess, if
any, of (i) the Interest Funds for such Distribution Date over (ii) the sum of
the Certificate Insurer Premium Amount, Current Interest on the Class A
Certificates and Class M Certificates and Interest Carry Forward Amounts on the
Class A Certificates (other than Interest Carry Forward Amounts paid pursuant to
Section 5.04(a)(4)(A)), in each case for such Distribution Date.

         EXEMPTION: Prohibited Transaction Exemption 90-30, as amended from time
to time.

         EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the lesser of (i) the excess, if any, of the Overcollateralization Target
Amount for such Distribution Date over the Overcollateralization Amount for such
Distribution Date (after giving effect to distributions of principal on the
Certificates other than any Extra Principal Distribution Amount) and (ii) the
Excess Spread for such Distribution Date.

         FANNIE MAE: Fannie Mae (formerly, Federal National Mortgage
Association), or any successor thereto.

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

         FINAL CERTIFICATION: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.

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

         FINAL RECOVERY DETERMINATION: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller pursuant to or as contemplated by Section 2.03(c) or Section
10.01), a determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Trustee shall maintain records,
based solely on information provided by the Master Servicer, of each Final
Recovery Determination made thereby.

         FISCAL AGENT: As defined in the Class II-A Policy.

         FREDDIE MAC: Federal Home Loan Mortgage Corporation, or any successor
thereto.

         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

                                      -20-

<PAGE>

Date in accordance with the terms of the related Mortgage Note used to determine
the Mortgage Rate for such Mortgage Loan.

         GROUP I LOANS: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.

         GROUP I PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the product of the Principal Distribution Amount for such Distribution
Date and a fraction, the numerator of which is the Principal Funds for the Loan
Group I for such Distribution Date and the denominator of which is the Principal
Funds for both Loan Groups for such Distribution Date.

         GROUP II LOANS: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.

         GROUP II PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the product of the Principal Distribution Amount for such
Distribution Date and a fraction, the numerator of which is the Principal Funds
for the Loan Group II for such Distribution Date and the denominator of which is
the Principal Funds for both Loan Groups for such Distribution Date.

         INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Certificate
Insurer, the Trust Fund and their officers, directors, agents and employees and,
with respect to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.

         INDEX: With respect to each Adjustable Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.

         INITIAL CERTIFICATION: The certification substantially in the form of
Exhibit One to the Custodial Agreement.

         INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.

         INSURANCE AGREEMENT: The Insurance and Indemnity Agreement, dated
August 31, 2004, among the Certificate Insurer, the Seller, the Master Servicer,
the Depositor and the Trustee, as the same may be amended from time to time in
accordance with the terms thereof.

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

         INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.

                                      -21-

<PAGE>

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

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

         INSURED PAYMENT: With respect to any Distribution Date, (i) any
Deficiency Amount and (ii) any Avoided Payment.

         INTEREST CARRY FORWARD AMOUNT: As of any Distribution Date and with
respect to each Class of Certificates (other than the Class CE, Class P and the
Residual Certificates), the sum of (i) the excess of (a) the Current Interest
for such Class with respect to such Distribution Date and any prior Distribution
Dates over (b) the amount actually distributed to such Class of Certificates
with respect to interest on such Distribution Dates and (ii) interest thereon
(to the extent permitted by applicable law) at the applicable Pass-Through Rate
for such Class for the related Accrual Period including the Accrual Period
relating to such Distribution Date.

         INTEREST DETERMINATION DATE: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.

         INTEREST FUNDS: With respect to each Loan Group and any Distribution
Date (i) the sum, without duplication, of (a) all scheduled interest during the
related Due Period with respect to the related Mortgage Loans less the Servicing
Fee, the Trustee Fee and the LPMI Fee, if any, (b) all Advances relating to
interest with respect to the related Mortgage Loans made on or prior to the
related Distribution Account Deposit Date, (c) all Compensating Interest with
respect to the related Mortgage Loans and required to be remitted by the Master
Servicer pursuant to this Agreement with respect to such Distribution Date, (d)
Liquidation Proceeds and Subsequent Recoveries with respect to the related
Mortgage Loans collected during the related Prepayment Period (to the extent
such Liquidation Proceeds and Subsequent Recoveries relate to interest), and (e)
all amounts relating to interest with respect to each Mortgage Loan in such Loan
Group repurchased by the Seller pursuant to Sections 2.02 and 2.03 and by EMC
pursuant to Section 3.18, in each case to the extent remitted by the Master
Servicer to the Distribution Account pursuant to this Agreement minus (ii) all
amounts relating to interest required to be reimbursed pursuant to Sections 4.02
and 4.05 or as otherwise set forth in this Agreement.

         INTERIM CERTIFICATION: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.

         LAST SCHEDULED DISTRIBUTION DATE: Solely for the purposes of the face
of the Certificates as follows: with respect to (i) the Certificates, other than
the Class I-A-1 Certificates and Class M- 8A Certficates, the Distribution Date
in June 2034; with respect to the Class I-A-1 Certificates,

                                      -22-

<PAGE>

the Distribution Date in January 2029; with respect to the Class M-8A
Certificates, the Distribution Date in December 2030.

         LATEST POSSIBLE MATURITY DATE: The Distribution Date in the month
following the final scheduled maturity date of the Mortgage Loan in the Trust
Fund having the latest scheduled maturity date as of the Cut-off Date. For
purposes of the Treasury Regulations under Code section 860A through 860G, the
latest possible maturity date of each regular interest issued by REMIC I, REMIC
II, REMIC III and REMIC IV shall be the Latest Possible Maturity Date.

         LIBOR BUSINESS DAY: Shall mean a day on which banks are open for
dealing in foreign currency and exchange in London and New York City.

         LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Master Servicer has made a Final Recovery
Determination with respect thereto.

         LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds, received
in connection with the partial or complete liquidation of a Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise, or in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received with respect to an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees and Servicing Advances and all expenses of
liquidation, including property protection expenses and foreclosure and sale
costs, including court and reasonable attorneys fees.

         LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.

         LOAN GROUP: Any of Loan Group I or Loan Group II.

         LOAN GROUP I: The Mortgage Loans included as such on the Mortgage Loan
Schedule.

         LOAN GROUP II: The Mortgage Loans included as such on the Mortgage Loan
Schedule.

         LPMI FEE: The fee payable to the insurer for each Mortgage Loan subject
to an LPMI Policy as set forth in such LPMI Policy.

         LPMI POLICY: A policy of mortgage guaranty insurance issued by an
insurer meeting the requirements of Fannie Mae and Freddie Mac in which the
Master Servicer or the related subservicer of the related Mortgage Loan is
responsible for the payment of the LPMI Fee thereunder from collections on the
related Mortgage Loan.

         MARKER RATE: With respect to the Class CE Interest and any Distribution
Date, a per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC I Pass-

                                      -23-
<PAGE>

Through Rate for each of REMIC I Regular Interest I-A-1, REMIC I Regular
Interest I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest M-1,
REMIC I Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC
I Regular Interest M-7, REMIC I Regular Interest M-8A, REMIC I Regular Interest
M-8B and REMIC I Regular Interest ZZ, with the rate on each such REMIC I Regular
Interest (other than REMIC I Regular Interest ZZ) subject to a cap equal to the
lesser of (i) the related One-Month LIBOR Pass-Through Rate for the
Corresponding Certificate plus, in the case of REMIC I Regular Interest II-A,
the Certificate Insurer Premium Rate and (ii) the Net Rate Cap for the
Corresponding Certificate for the purpose of this calculation for such
Distribution Date and with the rate on REMIC I Regular Interest ZZ subject to a
cap of zero for the purpose of this calculation.

         MASTER SERVICER: EMC Mortgage Corporation, in its capacity as master
servicer, and its successors and assigns.

         MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by the Master 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 superceded 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.

         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.

         MAXIMUM UNCERTIFICATED ACCRUED INTEREST DEFERRAL AMOUNT: With respect
to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest
ZZ for such Distribution Date on a balance equal to the Uncertificated Principal
Balance of REMIC I Regular Interest ZZ minus the REMIC I Overcollateralized
Amount, in each case for such Distribution Date, over (ii) Uncertificated
Accrued Interest on REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest M-1, REMIC I
Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest
M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
Interest M-7, REMIC I Regular Interest M-8A and REMIC I Regular Interest M-8B
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 One-Month LIBOR Pass-Through

                                      -24-
<PAGE>

Rate for the Corresponding Certificate plus, in the case of REMIC I Regular
Interest II-A, the Certificate Insurer Premium Rate and (ii) the Net Rate Cap
for the Corresponding Certificate for the purpose of this calculation for such
Distribution Date.

         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 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 STATEMENT: The statement delivered to the Certificateholders
and the Certificate Insurer pursuant to Section 5.05.

         MOODY'S: Moody's Investors Service, Inc., and any successor thereto.

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

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

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

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement,
dated as of August 31, 2004, between the Seller, as seller and the Depositor, as
purchaser.

         MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.

         MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Seller or the Master Servicer to reflect the deletion of
Deleted Mortgage Loans and the

                                      -25-
<PAGE>

addition of Replacement Mortgage Loans pursuant to the provisions of this
Agreement) transferred to the Trustee as part of the Trust Fund and from time to
time subject to this Agreement, the initial Mortgage Loan Schedule being
attached hereto as Exhibit B, setting forth the following information with
respect to each Mortgage Loan:

                  (i) the loan number;

                  (ii) the Mortgage Rate in effect as of the Cut-off Date;

                  (iii) the Servicing Fee Rate;

                  (iv) the Trustee Fee Rate;

                  (v) the LPMI Fee, if applicable;

                  (vi) the Net Mortgage Rate in effect as of the Cut-off Date;

                  (vii) the maturity date;

                  (viii) the original principal balance;

                  (ix) the Cut-off Date Principal Balance;

                  (x) the original term;

                  (xi) the remaining term;

                  (xii) the property type;

                  (xiii) the MIN with respect to each MOM Loan;

                  (xiv) with respect to each Adjustable Rate Mortgage Loan, the
         Minimum Mortgage Rate;

                  (xv) with respect to each Adjustable Rate Mortgage Loan, the
         Maximum Mortgage Rate;

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

                  (xvii) with respect to each Adjustable Rate Mortgage Loan, the
         next Adjustment Date;

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

                  (xix) the Loan Group; and

                                      -26-
<PAGE>

                  (xx) a code indicating whether such Mortgage Loan is a first
         lien Mortgage Loan or a second lien Mortgage Loan.

Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans.

         MORTGAGE NOTE: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.

         MORTGAGE RATE: With respect to each fixed rate Mortgage Loan, the rate
set forth in the related Mortgage Note. With respect to each Adjustable Rate
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 (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, to equal the sum, rounded to the next
highest or nearest 0.125% (as provided in the Mortgage Note), of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. 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.

         MORTGAGOR: The obligors on a Mortgage Note.

         NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the sum of (i) the Servicing Fee
Rate, (ii) the Trustee Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.

         NET RATE CAP: With respect to the Class I-A-1 Certificates and Class
I-A-2 Certificates and any Distribution Date, a rate per annum equal to the
product of (x) the weighted average of the Net Mortgage Rates on the then
outstanding Mortgage Loans in Loan Group I, weighted based on their Stated
Principal Balances as of the first day of the calendar month preceding the month
in which the Distribution Date occurs and (y) a fraction, the numerator of which
is 30 and the denominator of which is the actual number of days elapsed in the
related Accrual Period. For federal income tax purposes, however, such rate
shall be the economic equivalent of the foregoing, expressed as the weighted
average of (adjusted for the actual number of days elapsed in the related
Accrual Period) the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest 1B, weighted on the basis of the Uncertificated Principal Balance of
such REMIC I Regular Interest.

         With respect to the Class II-A Certificates and any Distribution Date,
a rate per annum equal to the product of (x) the weighted average of the Net
Mortgage Rates on the then

                                      -27-
<PAGE>

outstanding Mortgage Loans in Loan Group II, 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 Certificate Insurer Premium
Rate 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 Accrual Period. For
federal income tax purposes, however, such rate shall be the economic equivalent
of the foregoing, expressed as the weighted average of (adjusted for the actual
number of days elapsed in the related Accrual Period) the Uncertificated REMIC I
Pass-Through Rate on REMIC I Regular Interest 3B, weighted on the basis of the
Uncertificated Principal Balance of such REMIC I Regular Interest, minus the
Certificate Insurer Premium Rate. For purposes of the definitions of the Marker
Rate and Maximum Uncertificated Accrued Interest Deferral Amount, the foregoing
definitions in this paragraph shall not be reduced by the Certificate Insurer
Premium Rate.

         With respect to the Class M Certificates and any Distribution Date, a
rate per annum equal to the product of (x) the weighted average of the weighted
average of the Net Mortgage Rates on the then outstanding Mortgage Loans in each
Loan Group, weighted in proportion to the results of subtracting from the
aggregate Stated Principal Balance of each such Loan Group as of the first day
of the calendar month preceding the month in which the Distribution Date, the
Current Principal Amount of the related Class or Classes of Senior 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 Accrual Period. For federal
income tax purposes, however, such rate shall be the economic equivalent of the
foregoing, expressed as the weighted average of (adjusted for the actual number
of days elapsed in the related Accrual Period) the Uncertificated REMIC I Pass-
Through Rates on (a) REMIC I Regular Interest 1A, subject to a cap and a floor
equal to the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest 1B, and (b) REMIC I Regular Interest 2A, subject to a cap and a floor
equal to the Uncertificated REMIC I Pass- Through Rate on REMIC I Regular
Interest 2B, weighted on the basis of the Uncertificated Balance of each such
REMIC I Regular Interest.

         NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.

         NONRECOVERABLE ADVANCE: Any portion of an Advance previously made or
proposed to be made by the Master Servicer pursuant to this Agreement, that, 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 it from the related
Mortgagor, related Liquidation Proceeds, Insurance Proceeds or otherwise.

         OFFERED CERTIFICATES: The Class I-A-1, Class I-A-2, Class II-A, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates.

         OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Master Servicer (or any other officer customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of

                                      -28-
<PAGE>

and familiarity with a particular subject) or (ii), if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor, the Seller, the Certificate Insurer and/or the Trustee, as the
case may be, as required by this Agreement.

         ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR for the first Accrual Period shall equal 1.63% per annum. If such rate
does not appear on such page (or such other page as may replace that page on
that service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by
the Trustee), One-Month LIBOR for the applicable Accrual Period will be the
Reference Bank Rate. If no such quotations can be obtained by the Trustee and no
Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period. The establishment of One-Month LIBOR
on each Interest Determination Date by the Trustee and the Trustee's calculation
of the rate of interest applicable to the Class A Certificates and Class M
Certificates for the related Accrual Period shall, in the absence of manifest
error, be final and binding.

         ONE-MONTH LIBOR PASS-THROUGH RATE: With respect to the Class I-A-1
Certificates and, for purposes of the definition of "Marker Rate" and "Maximum
Uncertificated Accrued Interest Deferral Amount", REMIC I Regular Interest
I-A-1, a per annum rate equal to One-Month LIBOR plus the related Certificate
Margin.

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

         With respect to the Class II-A Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest II-A, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-1, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-2, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-3, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.

                                      -29-
<PAGE>

         With respect to the Class M-4 Certificates and, for purposes of the
definition of "Marker Rate" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-4, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-5, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-6, 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" and "Maximum Uncertificated Accrued Interest
Deferral Amount", REMIC I Regular Interest M-7, a per annum rate equal to
One-Month LIBOR plus the related Certificate Margin.

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

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

         OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Seller, the Depositor or the Master Servicer, reasonably acceptable to
each addressee of such opinion; provided that with respect to Section 2.05,
7.05, 7.07 or 11.01, or the interpretation or application of the REMIC
Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor and the Master Servicer, (ii) not have any direct financial interest
in the Seller, the Depositor or the Master Servicer or in any affiliate of
either, and (iii) not be connected with the Seller, the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.

         OPTIONAL TERMINATION: The termination of the Trust Fund created
hereunder as a result of the purchase of all of the Mortgage Loans and any REO
Property pursuant to the last sentence of Section 10.01 hereof.

         OPTIONAL TERMINATION DATE: The Distribution Date on which the Stated
Principal Balance of all of the Mortgage Loans is equal to or less than 10% of
the Stated Principal Balance of all of the Mortgage Loans as of the Cut-off
Date.

         ORIGINAL VALUE: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal or the sales price of such property or, in the case of a
refinancing, on an appraisal.

                                      -30-
<PAGE>

         OTS: The Office of Thrift Supervision.

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

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

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

         OUTSTANDING MORTGAGE LOAN: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.

         OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date,
the excess, if any, of the aggregate Stated Principal Balances of the Mortgage
Loans as of the last day of the related Due Period (including any reduction due
to Realized Losses) over the Certificate Principal Balances of the Certificates
on such Distribution Date (after taking into account the payment of principal
other than any Extra Principal Distribution Amount on such Certificates).

         OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date (with the amount
pursuant to clause (y) deemed to be $0 if the Overcollateralization Amount is
less than or equal to the Overcollateralization Target Amount on that
Distribution Date).

         OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any Distribution
Date, (a) prior to the Stepdown Date, 1.80% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, (b) on or after the
Stepdown Date and if a Trigger Event is not in effect, the greater of (i) 3.60%
of the then current aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (ii) $2,346,930 or (c) on or after
the Stepdown Date and if a Trigger Event is in effect, the Overcollateralization
Target Amount for the immediately preceding Distribution Date.

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

         PASS-THROUGH RATE: With respect to the Class A Certificates and Class M
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 Rate Cap for such Distribution Date. The initial
Pass-Through Rates for the Class I-A-1, Class I-A-2, Class II-A,

                                      -31-
<PAGE>

Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8A and Class M-8B Certificates will be 1.84%, 2.15%, 1.89%, 2.28%,
2.31%, 2.83%, 3.03%, 3.38%, 3.53%, 5.28%, 5.63% and 5.63%, respectively.

         With respect to the Class CE Interest and any Distribution Date, a rate
per annum equal to the percentage equivalent of a fraction, the numerator of
which is the sum of the amounts calculated pursuant to clauses (a) through (n)
below, and the denominator of which is the aggregate Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I
Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest
M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC
I Regular Interest M-7, REMIC I Regular Interest M-8A, REMIC I Regular Interest
M-8B and REMIC I Regular Interest ZZ. For purposes of calculating the
Pass-Through Rate for the Class CE Interest, the numerator is equal to the sum
of the following components:

         (a)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest AA minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest AA;

         (b)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest I-A- 1 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest I-A-1;

         (c)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest I-A- 2 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest I-A-2;

         (d)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest II-A minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest II-A;

         (e)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-1 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-1;

         (f)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-2 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-2;

         (g)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-3 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-3;

         (h)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-4 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-4;

                                      -32-
<PAGE>

         (i)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-5 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-5;

         (j)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-6 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-6;

         (k)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M-7 minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-7;

         (l)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M- 8A minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-8A;

         (m)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest M- 8B minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest M-8B; and

         (n)      the Uncertificated REMIC I Pass-Through Rate for REMIC I
                  Regular Interest ZZ minus the Marker Rate, applied to an
                  amount equal to the Uncertificated Principal Balance of REMIC
                  I Regular Interest ZZ.

         With respect to the Class CE Certificates, 100% of the amounts
distributable to the Class CE Interest.

         With respect to the Class P Certificates, 0.00% per annum.

         PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of the such Class.

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

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

                                      -33-
<PAGE>

                  (ii) general obligations of or obligations guaranteed by any
         state of the United States or the District of Columbia receiving the
         highest long-term debt rating of each Rating Agency, or such lower
         rating as will not result in the downgrading or withdrawal of the
         ratings then assigned to the Certificates by each Rating Agency
         (determined without regard to the Class II-A Policy), as evidenced in
         writing;

                  (iii) [Reserved];

                  (iv) commercial or finance company paper which is then
         receiving the highest commercial or finance company paper rating of
         each Rating Agency, or such lower rating as will not result in the
         downgrading or withdrawal of the ratings then assigned to the
         Certificates by each Rating Agency (determined without regard to the
         Class II-A Policy), as evidenced in writing;

                  (v) certificates of deposit, demand or time deposits, or
         bankers' acceptances issued by any depository institution or trust
         company incorporated under the laws of the United States or of any
         state thereof and subject to supervision and examination by federal
         and/or state banking authorities (including the Trustee in its
         commercial banking capacity), provided that the commercial paper and/or
         long term unsecured debt obligations of such depository institution or
         trust company are then rated one of the two highest long-term and the
         highest short-term ratings of each such Rating Agency for such
         securities, or such lower ratings as will not result in the downgrading
         or withdrawal of the rating then assigned to the Certificates by any
         Rating Agency (determined without regard to the Class II-A Policy), as
         evidenced in writing;

                  (vi) guaranteed reinvestment agreements issued by any bank,
         insurance company or other corporation containing, at the time of the
         issuance of such agreements, such terms and conditions as will not
         result in the downgrading or withdrawal of the rating then assigned to
         the Certificates by any such Rating Agency (determined without regard
         to the Class II-A Policy), as evidenced in writing;

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

                  (viii) securities (other than stripped bonds, stripped coupons
         or instruments sold at a purchase price in excess of 115% of the face
         amount thereof) bearing interest or sold at a discount issued by any
         corporation incorporated under the laws of the United States or any
         state thereof which, at the time of such investment, have one of the
         two highest short term ratings of each Rating Agency (except if the
         Rating Agency is Moody's, such rating shall be the highest commercial
         paper rating of Moody's for any such securities), or such lower rating
         as will not result in the downgrading or withdrawal of the rating then
         assigned to the Certificates by any Rating Agency (determined without
         regard to the Class II-A Policy), as evidenced by a signed writing
         delivered by each Rating Agency;

                                      -34-
<PAGE>

                  (ix) interests in any money market fund (including any such
         fund managed or advised by the Trustee or any affiliate thereof) which
         at the date of acquisition of the interests in such fund and throughout
         the time such interests are held in such fund has the highest
         applicable short term rating by each Rating Agency or such lower rating
         as will not result in the downgrading or withdrawal of the ratings then
         assigned to the Certificates by each Rating Agency (determined without
         regard to the Class II-A Policy), as evidenced in writing;

                  (x) short term investment funds sponsored by any trust company
         or banking association incorporated under the laws of the United States
         or any state thereof (including any such fund managed or advised by the
         Trustee or the Master Servicer or any affiliate thereof) which on the
         date of acquisition has been rated by each Rating Agency in their
         respective highest applicable rating category or such lower rating as
         will not result in the downgrading or withdrawal of the ratings then
         assigned to the Certificates by each Rating Agency (determined without
         regard to the Class II-A Policy), as evidenced in writing; and

                  (xi) such other investments having a specified stated maturity
         and bearing interest or sold at a discount acceptable to each Rating
         Agency and as will not result in the downgrading or withdrawal of the
         rating then assigned to the Certificates by any Rating Agency
         (determined without regard to the Class II-A Policy), as evidenced by a
         signed writing delivered by each Rating Agency;

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC may be invested in investments (other
than money market funds) treated as equity interests for federal income tax
purposes, unless the Master Servicer shall receive an Opinion of Counsel, at the
expense of the Master Servicer, to the effect that such investment will not
adversely affect the status of any such REMIC as a REMIC under the Code or
result in imposition of a tax on any such REMIC. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.

         PERMITTED TRANSFEREE: Any person other than (i) the United States, any
State or political subdivision thereof, any possession of the United States or
any agency or instrumentality of any of the foregoing, (ii) a foreign
government, International Organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in section 521 of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by section 511 of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(1) of the Code) with respect to

                                      -35-
<PAGE>

any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
citizen or resident of the United States, a corporation, partnership (other than
a partnership that has any direct or indirect foreign partners) or other entity
(treated as a corporation or a partnership for federal income tax purposes),
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an estate whose income from sources without
the United States is includible in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trustor and (vi) any other Person so designated by
the Trustee based upon an Opinion of Counsel addressed to the Trustee (which
shall not be an expense of the Trustee) that states that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause REMIC I,
REMIC II, REMIC III or REMIC IV to fail to qualify as a REMIC at any time that
any Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of Freddie Mac, a majority of its board of directors is not
selected by such government unit.

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

         PREMIUM LETTER: The letter agreement dated August 31, 2004, among the
Seller, the Depositor, the Certificate Insurer and the Trustee.

         PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to each Class of Offered Certificates.

         PREPAYMENT CHARGE: 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 INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.18 or
10.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such Principal Prepayment or such liquidation proceeds less the sum of (a)
the Trustee Fee, (b) the Servicing Fee and (c) the LPMI Fee, if any.

                                      -36-
<PAGE>

         PREPAYMENT PERIOD: As to any Distribution Date, the period commencing
on the 16th day of the month prior to the month in which the related
Distribution Date occurs and ending on the 15th day of the month in which such
Distribution Date occurs.

         PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related security instrument, if any or any
replacement policy therefor through the related Accrual Period for such Class
relating to a Distribution Date.

         PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Distribution Date,
an amount equal to (x) the Principal Funds for such Distribution Date plus (y)
any Extra Principal Distribution Amount for such Distribution Date, less (z) any
Overcollateralization Release Amount.

         PRINCIPAL FUNDS: With respect to each Loan Group and any Distribution
Date, (i) the sum, without duplication, of (a) all scheduled principal collected
during the related Due Period, (b) all Advances relating to principal made on or
before the Distribution Account Deposit Date, (c) Principal Prepayments
exclusive of prepayment charges or penalties collected during the related
Prepayment Period, (d) the Stated Principal Balance of each Mortgage Loan in the
related Loan Group that was repurchased by the Seller pursuant to Sections 2.02
and 2.03 or by EMC pursuant to Section 3.18, (e) the aggregate of all
Substitution Adjustment Amounts for the related Determination Date in connection
with the substitution of Mortgage Loans pursuant to Section 2.03(c), (f) all
Liquidation Proceeds and Subsequent Recoveries collected during the related
Prepayment Period (to the extent such Liquidation Proceeds and Subsequent
Recoveries relate to principal), in each case to the extent remitted by the
Master Servicer to the Distribution Account pursuant to this Agreement and (g)
amounts in respect of principal paid by EMC pursuant to Section 10.01, minus
(ii) all amounts required to be reimbursed pursuant to Sections 4.02 and 4.05 or
as otherwise set forth in this Agreement.

         PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 3.18 and 10.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Master Servicer, as appropriate, in
accordance with the terms of the related Mortgage Note.

         PRINCIPAL REMITTANCE AMOUNT: With respect to each Distribution Date,
the sum of the amounts listed in clauses (a) through (f) of the definition of
Principal Funds.

         PRIVATE CERTIFICATE: Each of the Class M-8A, Class M-8B, Class P, Class
CE and Residual Certificates.

         PRIVATELY OFFERED CERTIFICATES: The Class M-8A Certificates and Class
M-8B Certificates, offered pursuant to the Private Placement Memorandum, dated
August 31, 2004.

                                      -37-
<PAGE>

         PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated August 25, 2004
relating to the public offering of the Class I-A-1, Class I-A-2, Class II-A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates.

         PROTECTED ACCOUNT: The separate Eligible Account established and
maintained by the Master Servicer with respect to the Mortgage Loans and REO
Property in accordance with Section 4.01 hereof.

         PUD: A Planned Unit Development.

         PURCHASE PRICE: With respect to any Mortgage Loan (x) required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof or (y) that
EMC has a right to purchase pursuant to Section 3.18 hereof, an amount equal to
the sum of (i) 100% of the outstanding principal balance of the Mortgage Loan as
of the date of such purchase (or if the related Mortgaged Property was acquired
with respect thereto, 100% of the Outstanding Principal Balance at the date of
the acquisition), plus (ii) accrued interest thereon at the applicable Mortgage
Rate through the first day of the month in which the Purchase Price is to be
distributed to Certificateholders, reduced by any portion of the Servicing Fee,
Servicing Advances and Advances payable to the purchaser of the Mortgage Loan
plus (iii) any costs and damages (if any) incurred by the Trust in connection
with any violation of such Mortgage Loan of any anti-predatory lending laws.

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

         RATING EVENT: Any time any of the Class A Certificates is put on a
"watch list" by Moody's or S&P or downgraded below "Aaa" by Moody's or "AAA" by
S&P (and with respect to the Class II-A Certificates, without regard to the
Class II-A Policy).

         REALIZED LOSS: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (v) the proceeds, if
any, received in respect of such Mortgage Loan during the calendar month in
which such Final Recovery Determination was made, net of amounts that are
payable therefrom to the Master Servicer pursuant to this Agreement. In
addition, to the extent the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the Realized Loss with respect to
that Mortgage Loan will be reduced to the extent such

                                      -38-
<PAGE>

recoveries are applied to reduce the Certificate Principal Balance of any Class
of Certificates on any Distribution Date.

         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, minus (iv)
the aggregate of all unreimbursed Advances and Servicing Advances.

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

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

         RECORD DATE: With respect to any Distribution Date and the Class A,
Class M-1, Class M- 2, Class M-3, Class M-4, Class M-5, Class M-6 and M-7
Certificates, so long as the Class A Certificates and Class M Certificates are
Book-Entry Certificates, the Business Day preceding such Distribution Date, and
otherwise, the close of business on the last Business Day of the month preceding
the month in which such Distribution Date occurs. With respect to the Class M-8,
Class CE, Class P and Residual Certificates and (a) the first Distribution Date,
the Closing Date and (b) with respect to any other Distribution Date, the close
of business on the last Business Day of the month preceding the month in which
such Distribution Date occurs.

         REFERENCE BANKS: Shall mean leading banks selected by the Trustee and
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, (ii) which have been
designated as such by the Trustee and (iii) which are not controlling,
controlled by, or under common control with, the Depositor, the Seller or the
Master Servicer.

         REFERENCE BANK RATE: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates

                                      -39-
<PAGE>

for United States dollar deposits for one month that are quoted by the Reference
Banks as of 11:00 a.m., New York City time, on the related Interest
Determination Date to prime banks in the London interbank market for a period of
one month in an amount approximately equal to the aggregate Certificate
Principal Balance of the Class A Certificates and Class M Certificates for such
Accrual Period, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean, rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%, of the rates quoted by one or more major banks in New York
City, selected by the Trustee, as of 11:00 a.m., New York City time, on such
date for loans in United States dollars to leading European banks for a period
of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A Certificates and Class M Certificates for such
Accrual Period.

         REGULAR CERTIFICATE: Any Certificate other than a Residual Certificate.

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

         REIMBURSEMENT AMOUNT: Shall mean the sum of (a) the aggregate
unreimbursed amount of any payments made by the Certificate Insurer under the
Class II-A Policy, together with interest on such amount from the date of
payment by the Certificate Insurer until paid in full at a rate of interest
equal to the Accrual Rate and (b) any other amounts owed to the Certificate
Insurer under this Agreement or the Insurance Agreement.

         RELIEF ACT: The Servicemembers Civil Relief Act, as amended, or similar
state law.

         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.

         REMAINING EXCESS SPREAD: With respect to any Distribution Date, the
Excess Spread less (i) any Extra Principal Distribution Amount, in each case for
such Distribution Date and (ii) any unpaid Reimbursement Amounts related to
interest or principal draws not previously paid to the Certificate Insurer
pursuant to Sections 5.04(a)(1), (2) and (3).

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

         REMIC I: The segregated pool of assets described in Section 5.06(a).

         REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Accrual Period) equal to (a) the product of
(i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then outstanding and (ii) the Uncertificated REMIC I Pass-Through
Rate for REMIC I Regular Interest AA minus the Marker Rate, divided by (b) 12.

                                      -40-
<PAGE>

         REMIC I MARKER ALLOCATION PERCENTAGE: 50% of any amount payable or loss
attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest M-1, REMIC I
Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest
M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
Interest M-7, REMIC I Regular Interest M-8A, REMIC I Regular Interest M-8B and
REMIC I Regular Interest ZZ.

         REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC I Regular Interests (other than REMIC I Regular Interest P) minus (ii)
the aggregate of the Uncertificated Principal Balances of REMIC I Regular
Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest II-A,
REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5 and
REMIC I Regular Interest M-6, REMIC I Regular Interest M-7, REMIC I Regular
Interest M-8A and REMIC I Regular Interest M-8B 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) 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 Principal Balances of REMIC I Regular Interest
I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest
M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular
Interest M-6, REMIC I Regular Interest M-7, REMIC I Regular Interest M-8A and
REMIC I Regular Interest M-8B and the denominator of which is the aggregate of
the Uncertificated Principal Balances of REMIC I Regular Interest I-A-1, REMIC I
Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest
M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular
Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC
I Regular Interest M-7, REMIC I Regular Interest M-8A, REMIC I Regular Interest
M-8B and REMIC I Regular Interest ZZ.

         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 Uncertificated REMIC I Pass- Through 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 Principal 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 AA: 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 AA shall accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the

                                      -41-
<PAGE>

terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST I-A-1: 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-A-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST I-A-2: 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-A-2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST II-A: 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 II-A shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-1: 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 M-1 shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-2: 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 M-2 shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-3: 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 M-3 shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

                                      -42-
<PAGE>

         REMIC I REGULAR INTEREST M-4: 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 M-4 shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-5: 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 M-5 shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-6: 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 M-6 shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-7: 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 M-7 shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-8A: 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 M-8A shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST M-8B: 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 M-8B shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST P: 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 P shall accrue interest at
the related Uncertificated REMIC I Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the

                                      -43-
<PAGE>

terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST XX: 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 XX shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST ZZ: 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 ZZ shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST 1A: 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 1A shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST 1B: 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 1B shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST 2A: 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 2A shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST 2B: 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 2B shall accrue interest
at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

                                      -44-
<PAGE>

         REMIC I SUB WAC ALLOCATION PERCENTAGE: 50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC I
Regular Interest 1A, REMIC I Regular Interest 1B, REMIC I Regular Interest 2A,
REMIC I Regular Interest 2B and REMIC I Regular Interest XX.

         REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the designation
"A" (other than REMIC I Regular Interest II-A), equal to the ratio among, with
respect to each such REMIC I Regular Interest, the excess of (x) the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group I or the Mortgage
Loans in Loan Group II, as applicable over (y) the current Certificate Principal
Balance of related Class A Certificates.

         REMIC I REQUIRED OVERCOLLATERALIZATION AMOUNT: 0.50% of the
Overcollateralization Target Amount.

         REMIC II:  The segregated pool of assets described in Section 5.06(a).

         REMIC II CERTIFICATE: Any Regular Certificate (other than the Class CE
Certificate and Class P Certificate) or Class R-2 Certificate.

         REMIC II CERTIFICATEHOLDER: The Holder of any REMIC II Certificate.

         REMIC II REGULAR INTEREST: Any Class A Certificate, Class M
Certificate, the Class CE Interest or Class P Interest.

         REMIC III: The segregated pool of assets consisting of the Class CE
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Class CE Certificates and the Class RX Certificate (in respect of the Class R-3
Interest), with respect to which a separate REMIC election is to be made.

         REMIC III CERTIFICATE: Any Class CE Certificate or Class RX Certificate
(in respect of the Class R-3 Interest).

         REMIC IV: The segregated pool of assets consisting of the Class P
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Class P Certificates and the Class RX Certificate (in respect of the Class R-4
Interest), with respect to which a separate REMIC election is to be made.

         REMIC IV CERTIFICATE: Any Class P Certificate or Class RX Certificate
(in respect of the Class R-4 Interest).

         REMIC OPINION: Shall mean an Opinion of Counsel to the effect that the
proposed action will not cause any of REMIC I, REMIC II, REMIC III or REMIC IV
to fail to fail to qualify as a REMIC at any time that any Certificates are
outstanding.

                                      -45-
<PAGE>

         REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.

         REMITTANCE DATE: Shall mean the Business Day immediately preceding the
Distribution Account Deposit Date.

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

         REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) if the Replacement Mortgage Loan is a fixed rate Mortgage Loan, have a
fixed Mortgage Rate not less than or more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to maturity no greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (vi) not permit conversion of the
Mortgage Rate from a fixed rate to a variable rate; (vii) have the same lien
priority as the Deleted Mortgage Loan; (viii) constitute the same occupancy type
as the Deleted Mortgage Loan or be owner occupied; (ix) if the Replacement
Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Maximum Mortgage Rate
not less than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (x) if the
Replacement 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, (xi) if the Replacement Mortgage Loan is an Adjustable Rate Mortgage Loan,
have a Gross Margin equal to or greater than the Gross Margin of the Deleted
Mortgage Loan, (xii) if the Replacement 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, (xiii) comply with each
representation and warranty set forth in Section 7 of the Mortgage Loan Purchase
Agreement and (xiv) the Custodian has delivered a Final Certification noting no
defects or exceptions.

         REQUEST FOR RELEASE: The Request for Release to be submitted by the
Seller or the Master Servicer to the Custodian substantially in the form of
Exhibit H. Each Request for Release furnished to the Custodian by the Seller or
the Master Servicer shall be in duplicate and shall be

                                      -46-
<PAGE>

executed by an officer of such Person or a Servicing Officer (or, if furnished
electronically to the Custodian, shall be deemed to have been sent and executed
by an officer of such Person or a Servicing Officer) of the Master Servicer.

         REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.

         RESERVE FUND: Shall mean the separate trust account created and
maintained by the Trustee pursuant to Section 3.20 hereof.

         RESIDUAL CERTIFICATES: The Class R-1, Class R-2 and Class RX
Certificates (representing ownership of the Class R-3 Interest and Class R-4
Interest) each evidencing the sole class of "residual interests" (within the
meaning of Section 860G(a)(2) of the Code) in the related REMIC.

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

         RESPONSIBLE OFFICER: With respect to the Trustee, any Vice President,
any Assistant Vice President, the Secretary, any Assistant Secretary, or any
Trust Officer with specific responsibility for the transactions contemplated
hereby, any other officer customarily performing functions similar to those
performed by any of the above designated officers or other officers of the
Trustee specified by the Trustee, as to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

         S&P: Standard & Poor's, a division of The McGraw-Hill Companies, Inc.,
and any successor thereto.

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

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

         SELLER: EMC Mortgage Corporation, a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.

         SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2 and Class II-A
Certificates.

         SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Master Servicer of its servicing obligations hereunder,
including, but not limited to, the cost of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, and including any expenses incurred in
relation to any such proceedings that result from the Mortgage Loan being
registered in the MERS(R) System, (iii) the management and liquidation of any
REO Property (including, without limitation, realtor's commissions) and

                                      -47-
<PAGE>

(iv) compliance with any obligations under Section 3.07 hereof to cause
insurance to be maintained.

         SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period or, in the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the period covered by such
payment of interest.

         SERVICING FEE RATE: 0.500% per annum.

         SERVICING MODIFICATION: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Master Servicer, as to which
default is reasonably foreseeable, any modification which is effected by the
Master Servicer in accordance with the terms of this Agreement which results in
any change in the outstanding Stated Principal Balance, any change in the
Mortgage Rate or any extension of the term of such Mortgage Loan.

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

         STARTUP DAY: The Startup Day for each REMIC formed hereunder shall be
the Closing Date.

         STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Cut-off Date Principal Balance
thereof minus the sum of (i) the principal portion of the Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Master Servicer as recoveries of principal in accordance
with Section 3.09 with respect to such Mortgage Loan, that were received by the
Master Servicer as of the close of business on the last day of the Prepayment
Period related to such Distribution Date and (iii) any Realized Losses on such
Mortgage Loan incurred during the related Prepayment Period. The Stated
Principal Balance of a Liquidated Loan equals zero.

         STEPDOWN DATE: The later to occur of (a) the Distribution Date in
September 2007 and (b) the first Distribution Date on which the Current
Specified Enhancement Percentage (calculated for this purpose only, prior to
distributions on the Certificates but following distributions on the Mortgage
Loans for the related Due Period) is greater than or equal to 41.00%.

         SUBORDINATED CERTIFICATES: The Class M Certificates, Class CE
Certificates and Residual Certificates.

                                      -48-
<PAGE>

         SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer (net of any related expenses permitted to be reimbursed
pursuant to Section 4.02) or surplus amounts held by the Master Servicer to
cover estimated expenses (including, but not limited to, recoveries in respect
of the representations and warranties made by the Seller pursuant to the
Mortgage Loan Purchase Agreement) specifically related to a Mortgage Loan that
was the subject of a liquidation or final disposition of any REO Property prior
to the related Prepayment Period that resulted in a Realized Loss.

         SUBSERVICING AGREEMENT: Any agreement entered into between the Master
Servicer and a subservicer with respect to the subservicing of any Mortgage Loan
hereunder by such subservicer.

         SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(c).

         SUCCESSOR MASTER SERVICER: The meaning ascribed to such term pursuant
to Section 8.01.

         TAX MATTERS PERSON: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax Matters Person for
the related REMIC. The Trustee, or any successor thereto or assignee thereof
shall serve as tax administrator hereunder and as agent for the related Tax
Matters Person.

         TRANSACTION DOCUMENTS: This Agreement, the Mortgage Loan Purchase
Agreement, the Custodial Agreement, the Insurance Agreement, the Indemnification
Agreement (as defined in the Insurance Agreement), the Underwriting Agreement
and the Premium Letter.

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

         TRANSFER AFFIDAVIT: As defined in Section 6.02(c).

         TRIGGER EVENT: With respect to any Distribution Date after the Stepdown
Date, a Trigger Event exists if (i) a Delinquency Event shall have occurred and
be continuing or (ii) the aggregate amount of Realized Losses on the Mortgage
Loans since the Cut-off Date as a percentage of the initial aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut- off Date exceeds the
applicable percentages set forth below with respect to such Distribution Date:

         DISTRIBUTION DATE                                    PERCENTAGE
         September 2007 to August 2008                        2.75%
         September 2008 to August 2009                        4.50%
         September 2009 to August 2010                        5.75%
         September 2010 and thereafter                        6.50%

                                      -49-
<PAGE>

         TRUST FUND: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest accruing and principal due with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Distribution Account, the Class
II-A Policy Payments Account, the Class P Certificate Account, the Reserve Fund
and the Protected Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (iv) the mortgagee's rights under the Insurance Policies with respect
to the Mortgage Loans; (v) for the benefit of the Class II-A Certificates only,
the Class II-A Policy; (vi) the rights under the Yield Maintenance Agreements;
(vii) the rights under the Mortgage Loan Purchase Agreement; and (viii) all
proceeds of the foregoing, including proceeds of conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.

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

         TRUSTEE FEE: As to each Mortgage Loan and any Distribution Date, a fee
per annum equal to 0.0039% multiplied by the Stated Principal Balance of such
Mortgage Loan as of the last day of the related Due Period.

         UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC I Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the Uncertificated REMIC I Pass- Through Rate on the Uncertificated Principal
Balance of such REMIC I Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls (allocated to such REMIC I Regular Interests as set forth in
Section 5.06).

         UNCERTIFICATED NOTIONAL BALANCE: With respect to the Class CE Interest
and any Distribution Date, the Uncertificated Principal Balance of the REMIC I
Regular Interests (other than REMIC I Regular Interest P) for such Distribution
Date.

UNCERTIFICATED PRINCIPAL BALANCE: The amount of the REMIC I Regular Interests
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
uncertificated principal balance. On each Distribution Date, the Uncertificated
Principal 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 5.06 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 5.04A and the Uncertificated Principal Balance of
REMIC I Regular Interest ZZ shall be increased by interest deferrals as provided
in Section 5.06(b)(1)(i). The Uncertificated Principal Balance of each REMIC I
Regular Interest shall never be less than zero. With respect to the Class CE
Interest as

                                      -50-
<PAGE>

of any date of determination, an amount equal to the excess, if any, of (A) the
then aggregate Uncertificated Principal Balances of the REMIC I Regular
Interests over (B) the then aggregate Certificate Principal Balances of the
Class A Certificates, the Class M Certificates and the Class P Interest then
outstanding.

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interest AA, REMIC I Regular Interest I-A-1, REMIC I Regular Interest
I-A-2, REMIC I Regular Interest II-A, REMIC I Regular Interest M-1, REMIC I
Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest
M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
Interest M-7, REMIC I Regular Interest M-8A, REMIC I Regular Interest M-8B,
REMIC I Regular Interest ZZ, REMIC I Regular Interest 1A, REMIC I Regular
Interest 2A and REMIC I Regular Interest XX, the weighted average of the Net
Mortgage Rates of the Mortgage Loans. With respect to REMIC I Regular Interest
1B, the weighted average of the Net Mortgage Rates of the Mortgage Loans in Loan
Group I. With respect to REMIC I Regular Interest 2B, the weighted average of
the Net Mortgage Rates of the Mortgage Loans in Loan Group II. With respect to
REMIC I Regular Interest P, 0.00%.

         UNDERWRITING AGREEMENT: The Underwriting Agreement, dated as of April
26, 2004, between the Depositor and Bear, Stearns & Co. Inc. ("Bear Stearns")
together with the related Terms Agreement, dated as of August 25, 2004 between
the Depositor and Bear Stearns.

         UNPAID REALIZED LOSS AMOUNT: With respect to any Class A Certificates
and as to any Distribution Date, is the excess of Applied Realized Loss Amounts
with respect to such Class over the sum of all distributions in reduction of the
Applied Realized Loss Amounts on all previous Distribution Dates. Any amounts
distributed to the Class A Certificates in respect of any Unpaid Realized Loss
Amount shall not be applied to reduce the Certificate Principal Balance of such
Class.

         VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 93% to the Class A Certificates
and Class M Certificates, (ii) 3% to the Class CE Certificates until paid in
full, and (iii) 1% to each Class of Residual Certificates and Class P
Certificates, with the allocation among the Certificates (other than the Class
CE, Class P and the Residual Certificates) to be in proportion to the
Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes. Voting Rights will be allocated
among the Certificates of each such Class in accordance with their respective
Percentage Interests. With respect to Voting Rights, the Class II-A
Certificateholders are subject to Section 5.07(l) of this Agreement.

         YIELD MAINTENANCE AGREEMENTS: The three Yield Maintenance Agreements,
each dated August 31, 2004 between the Trust (on behalf of the Class I-A, Class
II-A and Class M Certificateholders) and Bear Stearns Financial Products Inc.

                                      -51-
<PAGE>

         Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

         For purposes of calculating the amount of Current Interest for the
Class A Certificates, the Class M Certificates and the Class CE Certificates for
any Distribution Date, the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 5.02) 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 based on, and to the extent of, one month's
interest at the then applicable respective Pass-Through Rate on the Certificate
Notional Amount thereof and, thereafter, among the Offered Certificates, in each
case 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 of each such Certificate.

         For purposes of calculating the amount of Uncertificated Accrued
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 the
Master Servicer pursuant to Section 5.02) 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-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular Interest
II-A, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I
Regular Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest
M-5, REMIC I Regular Interest M-6, REMIC I Regular Interest M-7, REMIC I Regular
Interest M-8A, REMIC I Regular Interest M-8B and REMIC I Regular Interest ZZ,
PRO RATA, based on, and to the extent of, one month's interest at the then
applicable respective Uncertificated REMIC I Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC I Regular Interest;

         (b) The REMIC I Sub WAC Allocation Percentage of the aggregate amount
of any Prepayment Interest Shortfalls (to the extent not covered by payments by
the Master Servicer pursuant to Section 5.02) 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 to Uncertificated
Accrued Interest payable to REMIC I Regular Interest 1A, REMIC I Regular
Interest 1B, REMIC I Regular Interest 2A, REMIC I Regular Interest 2B and REMIC
I Regular Interest XX, PRO RATA, based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC I Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC I
Regular Interest; and

         (c) The aggregate amount of any Prepayment Interest Shortfalls (to the
extent not covered by payments by the Master Servicer pursuant to Section 5.02)
and any Relief Act Interest Shortfalls allocated to the Class CE Certificates
shall be deemed allocated to the Class CE Interest.

                                      -52-
<PAGE>

                                   ARTICLE II

                            CONVEYANCE OF TRUST FUND
                         REPRESENTATIONS AND WARRANTIES

         Section 2.01 CONVEYANCE OF TRUST FUND.

         Pursuant to the Mortgage Loan Purchase Agreement, the Seller sold,
transferred, assigned, set over and otherwise conveyed to the Depositor, without
recourse, all the right, title and interest of the Seller in and to the assets
in the Trust Fund.

         The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor pursuant to the Mortgage Loan
Purchase Agreement and has agreed to take the actions specified herein.

         The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders and the Certificate Insurer,
without recourse, all the right, title and interest of the Depositor in and to
the Trust Fund. In addition, on or prior to the Closing Date, the Depositor
shall cause the Certificate Insurer to deliver the Class II-A Policy to the
Trustee.

         In connection with such sale, the Depositor has delivered to, and
deposited with, the Trustee or the Custodian, as its agent, the following
documents or instruments with respect to each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed without recourse
to the order of "LaSalle Bank National Association, as Trustee for
certificateholders of Bear Stearns Asset Backed Securities I LLC Asset Backed
Certificates, Series 2004-FR2," and showing an unbroken chain of endorsements
from the original payee thereof to the Person endorsing it to the Trustee, (ii)
the original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting
the presence of the MIN and language indicating that such Mortgage Loan is a MOM
Loan, which shall have been recorded (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or if clause (x) in
the proviso below applies, shall be in recordable form), (iii) unless the
Mortgage Loan is a MOM Loan, the assignment (either an original or a copy, which
may be in the form of a blanket assignment if permitted in the jurisdiction in
which the Mortgaged Property is located) to the Trustee of the Mortgage with
respect to each Mortgage Loan in the name of "LaSalle Bank National Association,
as Trustee for certificateholders of Bear Stearns Asset Backed Securities I LLC
Asset Backed Certificates, Series 2004-FR2," which shall have been recorded (or
if clause (x) in the proviso below applies, shall be in recordable form) (iv) an
original or a copy of all intervening assignments of the Mortgage, if any, with
evidence of recording thereon, (v) the original policy of title insurance or
mortgagee's certificate of title insurance or commitment or binder for title
insurance, if available, or a copy thereof, or, in the event that such original
title insurance policy is unavailable, a photocopy thereof, or in lieu thereof,
a current lien search on the related Mortgaged Property and (vi) originals or
copies of all available assumption, modification or substitution agreements, if
any; provided, however, that in lieu of the foregoing, the Seller may deliver
the following documents, under the circumstances set forth below: (x) if any
Mortgage, assignment thereof to the Trustee or intervening assignments thereof
have been delivered or are being delivered to recording offices for recording
and have not been returned in time to permit their

                                      -53-
<PAGE>

delivery as specified above, the Depositor may deliver a true copy thereof with
a certification by the Seller or the title company issuing the commitment for
title insurance, on the face of such copy, substantially as follows: "Certified
to be a true and correct copy of the original, which has been transmitted for
recording"; and (y) in lieu of the Mortgage Notes relating to the Mortgage Loans
identified in the list set forth in Exhibit J, the Depositor may deliver a lost
note affidavit and indemnity and a copy of the original note, if available; and
provided, further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-Off Date and prior to the Closing Date, the
Depositor, in lieu of delivering the above documents, may deliver to the Trustee
and its Custodian a certification of a Servicing Officer to such effect and in
such case shall deposit all amounts paid in respect of such Mortgage Loans, in
the Protected Account or in the Distribution Account on the Closing Date. In the
case of the documents referred to in clause (x) above, the Depositor shall
deliver such documents to the Trustee or its Custodian promptly after they are
received. The Seller shall cause, at its expense, the Mortgage and intervening
assignments, if any, and to the extent required in accordance with the
foregoing, the assignment of the Mortgage to the Trustee to be submitted for
recording promptly after the Closing Date; provided that the Seller need not
cause to be recorded (a) any assignment in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel addressed to the Trustee delivered
by the Seller to the Trustee, the Certificate Insurer and the Rating Agencies,
the recordation of such assignment is not necessary to protect the Trustee's
interest in the related Mortgage Loan or (b) if MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee
of record solely as nominee for Seller and its successors and assigns. In the
event that the Seller, the Depositor or the Master Servicer gives written notice
to the Trustee that a court has recharacterized the sale of the Mortgage Loans
as a financing, the Seller shall submit or cause to be submitted for recording
as specified above each such previously unrecorded assignment to be submitted
for recording as specified above at the expense of the Trust. In the event a
Mortgage File is released to the Master Servicer as a result of such Person
having completed a Request for Release, the Custodian shall, if not so
completed, complete the assignment of the related Mortgage in the manner
specified in clause (iii) above.

         In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller further agrees that it will cause, at the
Seller's own expense, within 30 days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Seller to the
Depositor and by the Depositor to the Trustee in accordance with this Agreement
for the benefit of the Certificateholders and the Certificate Insurer by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code in the field
which identifies the specific Trustee and (b) the code in the field "Pool Field"
which identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Seller further agrees that it will not, and will not permit
the Master Servicer to, and the Master Servicer agrees that it will not, alter
the codes referenced in this paragraph with respect to any Mortgage Loan during
the term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement or the Mortgage Loan Purchase
Agreement.

                                      -54-
<PAGE>

         Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.

         (a) Based on the Initial Certification received by it from the
Custodian, the Trustee acknowledges receipt of, subject to the further review
and exceptions reported by the Custodian pursuant to the procedures described
below, the documents (or certified copies thereof) delivered to the Trustee or
the Custodian on its behalf pursuant to Section 2.01 and declares that it holds
and will continue to hold directly or through a custodian those documents and
any amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it in trust for the use and benefit of all present and
future Holders of the Certificates and the Certificate Insurer. On the Closing
Date, the Trustee or the Custodian on its behalf will deliver an Initial
Certification in the form of Exhibit One to the Custodial Agreement confirming
whether or not it has received the Mortgage File for each Mortgage Loan, but
without review of such Mortgage File, except to the extent necessary to confirm
whether such Mortgage File contains the original Mortgage Note or a lost note
affidavit and indemnity in lieu thereof. No later than 90 days after the Closing
Date, the Trustee or the Custodian on its behalf shall, for the benefit of the
Certificateholders and the Certificate Insurer, review each Mortgage File
delivered to it and execute and deliver to the Seller, the Master Servicer and
the Certificate Insurer and, if reviewed by the Custodian, the Trustee, an
Interim Certification substantially in the form of Exhibit Two to the Custodial
Agreement. In conducting such review, the Trustee or the Custodian on its behalf
will ascertain whether all required documents 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
identified in Exhibit B to this Agreement, as supplemented (provided, however,
that with respect to those documents described in subclauses (iv) and (vi) of
Section 2.01, such obligations shall extend only to documents actually delivered
pursuant to such subclauses). In performing any such review, the Trustee and the
Custodian 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 Trustee or the Custodian on its behalf 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 or to appear to be
defective on its face, the Trustee or the Custodian on its behalf shall include
such information in the exception report attached to the Interim Certification.
The Seller shall correct or cure any such defect or, if prior to the end of the
second anniversary of the Closing Date, the Seller may substitute for the
related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee and the Certificate Insurer an Opinion of
Counsel addressed to the Trustee to the effect that such defect does not
materially or adversely affect the interests of the Certificateholders in such
Mortgage Loan (such determination to be made without regard to the Class II-A
Policy) within 60 days from the date of notice from the Trustee of the defect
and if the Seller fails to correct or cure the defect or deliver such opinion
within such period, the Seller will, subject to Section 2.03, within 90 days
from the notification of the Trustee purchase such Mortgage Loan at the Purchase
Price; provided, however, that if such defect relates solely to the inability of
the Seller to deliver the Mortgage, assignment thereof to the Trustee, or
intervening assignments thereof with evidence of recording thereon because such
documents have been submitted for recording and have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if the Seller delivers such documents promptly upon receipt, but
in no event later than 360 days after the Closing Date.

                                      -55-
<PAGE>

         (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian on its behalf will review, for the benefit of the Certificateholders
and the Certificate Insurer, the Mortgage Files and will execute and deliver or
cause to be executed and delivered to the Seller, the Master Servicer and the
Certificate Insurer and, if reviewed by the Custodian, the Trustee, a Final
Certification substantially in the form of Exhibit Three to the Custodial
Agreement. In conducting such review, the Trustee or the Custodian on its behalf
will ascertain whether each document required to be recorded has been returned
from the recording office with evidence of recording thereon and the Trustee or
the Custodian on its behalf has received either an original or a copy thereof,
as required in Section 2.01 (provided, however, that with respect to those
documents described in subclauses (iv) and (vi) of Section 2.01, such
obligations shall extend only to documents actually delivered pursuant to such
subclauses). If the Trustee or the Custodian on its behalf finds any document
with respect to a Mortgage Loan 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 or to appear
defective on its face, the Trustee or the Custodian on its behalf shall note
such defect in the exception report attached to the Final Certification and
shall promptly notify the Seller and the Certificate Insurer. The Seller shall
correct or cure any such defect or, if prior to the end of the second
anniversary of the Closing Date, the Seller may substitute for the related
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee and the Certificate Insurer an Opinion of
Counsel addressed to the Trustee to the effect that such defect does not
materially or adversely affect the interests of Certificateholders in such
Mortgage Loan (such determination to be made without regard to the Class II-A
Policy) within 60 days from the date of notice from the Trustee of the defect
and if the Seller is unable within such period to correct or cure such defect,
or to substitute the related Mortgage Loan with a Replacement Mortgage Loan or
to deliver such opinion, the Seller shall, subject to Section 2.03, within 90
days from the notification of the Trustee, purchase such Mortgage Loan at the
Purchase Price; provided, however, that if such defect relates solely to the
inability of the Seller to deliver the Mortgage, assignment thereof to the
Trustee or intervening assignments thereof with evidence of recording thereon,
because such documents have not been returned by the applicable jurisdiction,
the Seller shall not be required to purchase such Mortgage Loan, if the Seller
delivers such documents promptly upon receipt, but in no event later than 360
days after the Closing Date. Notwithstanding anything to the contrary, the
Trustee shall have no responsibility with respect to the custody or review of
Mortgage Files held by the Custodian pursuant to the Custodial Agreement. The
Trustee shall have no liability for the failure of the Custodian to perform its
obligations under the Custodial Agreement.

         (c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller
shall remit the applicable Purchase Price to the Master Servicer for deposit in
the Protected Account and shall provide written notice to the Trustee and the
Certificate Insurer detailing the components of the Purchase Price, signed by a
Servicing Officer. Upon deposit of the Purchase Price in the Protected Account
and upon receipt of a Request for Release with respect to such Mortgage Loan,
the Trustee or the Custodian will release to the Seller the related Mortgage
File and the Trustee shall execute and deliver all instruments of transfer or
assignment, without recourse, representation or warranty furnished to it by the
Seller, as are necessary to vest in the Seller title to and rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the deposit into the Protected Account was made. The Trustee shall
promptly notify the Rating Agencies and the Certificate Insurer of such
repurchase.

                                      -56-
<PAGE>

The obligation of the Seller to cure, repurchase or substitute for any Mortgage
Loan as to which a defect in a constituent document exists shall be the sole
remedies respecting such defect available to the Certificateholders and the
Certificate Insurer or to the Trustee on their behalf.

         (d) The Seller shall deliver to the Trustee or the Custodian on its
behalf, and Trustee agrees to accept the Mortgage Note and other documents
constituting the Mortgage File with respect to any Replacement Mortgage Loan,
which the Trustee or the Custodian will review as provided in subsections
2.02(a) and 2.02(b), provided, that the Closing Date referred to therein shall
instead be the date of delivery of the Mortgage File with respect to each
Replacement Mortgage Loan.

         Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER AND THE SELLER.

         (a) The Master Servicer hereby represents and warrants to the
Depositor, the Trustee and the Certificate Insurer as follows, as of the Closing
Date:

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

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

                  (iii) The execution and delivery of this Agreement and any
         other Transaction Documents to which it is a party by it, the servicing
         of the Mortgage Loans by it under this Agreement, the consummation of
         any other of the transactions contemplated by this Agreement and any
         other Transaction Documents to which it is a party , and the
         fulfillment of or compliance with the terms hereof and thereof are in
         its ordinary course of business and will not (A) result in a breach of
         any term or provision of its charter or by-laws or (B)

                                      -57-
<PAGE>

         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 it is a party or by which it may be bound, or (C)
         constitute a violation of any statute, order or regulation applicable
         to it of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over it; and it is not in breach
         or violation of any material indenture or other material agreement or
         instrument, or in violation of any statute, order or regulation of any
         court, regulatory body, administrative agency or governmental body
         having jurisdiction over it which breach or violation may materially
         impair its ability to perform or meet any of its obligations under this
         Agreement and any other Transaction Documents to which it is a party.

                  (iv) It is an approved servicer of conventional mortgage loans
         for Fannie Mae or Freddie Mac and is a mortgagee approved by the
         Secretary of Housing and Urban Development pursuant to sections 203 and
         211 of the National Housing Act.

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

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for its execution, delivery
         and performance of, or compliance with, this Agreement and any other
         Transaction Documents to which it is a party or the consummation of the
         transactions contemplated hereby or thereby, or if any such consent,
         approval, authorization or order is required, it has obtained the same.

                  (vii) The Master Servicer will transmit full-file credit
         reporting data for each Group II Loan pursuant to the Fannie Mae
         Selling Guide and that for each Mortgage Loan, the Master Servicer
         agrees it shall report one of the following statuses each month as
         follows: new origination, current, delinquent (30-, 60-, 90-days, etc.)
         or foreclosed.

         (b) The Seller hereby represents and warrants to the Depositor, the
Trustee and the Certificate Insurer as follows, as of the Closing Date:

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

                                      -58-
<PAGE>

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

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

                  (iv) The Seller is an approved seller of conventional mortgage
         loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the
         Secretary of Housing and Urban Development pursuant to sections 203 and
         211 of the National Housing Act.

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

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Seller of, or

                                      -59-
<PAGE>

         compliance by the Seller with, this Agreement and any other Transaction
         Documents to which it is a party or the consummation of the
         transactions contemplated hereby or thereby, or if any such consent,
         approval, authorization or order is required, the Seller has obtained
         the same.

                  (vii) With respect to each Mortgage Loan as of the Closing
         Date (or such other date as may be specified in Section 7 of the
         Mortgage Loan Purchase Agreement), the Seller hereby remakes and
         restates each of the representations and warranties set forth in
         Section 7 of the Mortgage Loan Purchase Agreement to the Depositor, the
         Certificate Insurer and the Trustee to the same extent as if fully set
         forth herein.

         (c) Upon discovery by any of the parties hereto or the Certificate
Insurer of a breach of a representation or warranty set forth in the Mortgage
Loan Purchase Agreement with respect to the Mortgage Loans that materially and
adversely affects the interests of the Certificateholders or the Certificate
Insurer in any Mortgage Loan (such determination to be made without regard to
the Class II-A Policy), the party discovering such breach shall give prompt
written notice thereof to the other parties and the Certificate Insurer. The
Seller hereby covenants with respect to the representations and warranties set
forth in the Mortgage Loan Purchase Agreement with respect to the Mortgage
Loans, that within 90 days of the discovery of a breach of any representation or
warranty set forth therein that materially and adversely affects the interests
of the Certificateholders (such determination to be made without regard to the
Class II-A Policy) or the Certificate Insurer in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
(i) if such 90 day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Replacement Mortgage Loan, in the manner and
subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided that any such substitution pursuant to
(i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee and the Certificate Insurer of an Opinion of Counsel
if required by Section 2.05 hereof and any such substitution pursuant to (i)
above shall not be effected prior to the additional delivery to the Trustee of a
Request for Release. The Trustee shall give prompt written notice to the parties
hereto and the Certificate Insurer of the Seller's failure to cure such breach
as set forth in the preceding sentence. The Seller shall promptly reimburse the
Master Servicer and the Trustee for any expenses reasonably incurred by the
Master Servicer or the Trustee in respect of enforcing the remedies for such
breach. To enable the Master Servicer to amend the Mortgage Loan Schedule, the
Seller shall, unless it cures such breach in a timely fashion pursuant to this
Section 2.03, promptly notify the Master Servicer whether it intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties with respect to the Mortgage
Loans that are made to the best of the Seller's knowledge, if it is discovered
by any of the Depositor, the Master Servicer, the Seller, the Trustee, the
Custodian or the Certificate Insurer that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan, notwithstanding the Seller's lack of
knowledge with respect to the substance of such representation or warranty, the
Seller shall nevertheless be required to cure, substitute for or repurchase the
affected Mortgage Loan in accordance with the foregoing.

                                      -60-
<PAGE>

         With respect to any Replacement Mortgage Loan or Loans, the Seller
shall deliver to the Trustee or the Custodian on its behalf for the benefit of
the Certificateholders and the Certificate Insurer such documents and agreements
as are required by Section 2.01. No substitution will be made in any calendar
month after the Determination Date for such month. Scheduled Payments due with
respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller. For the month of
substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for the related Due Period and
thereafter the Seller shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan. The Master Servicer shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders and the
Certificate Insurer to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Replacement Mortgage Loan or Loans and the Master Servicer
shall deliver the amended Mortgage Loan Schedule to the Trustee, the Custodian
and the Certificate Insurer. Upon such substitution, the Replacement Mortgage
Loan or Loans shall be subject to the terms of this Agreement in all respects,
and the Seller shall be deemed to have made with respect to such Replacement
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties set forth in Section 7 of the Mortgage Loan Purchase Agreement with
respect to such Mortgage Loan. Upon any such substitution and the deposit into
the Protected Account of the amount required to be deposited therein in
connection with such substitution as described in the following paragraph and
receipt by the Trustee of a Request for Release for such Mortgage Loan, the
Trustee or the Custodian shall release to the Seller the Mortgage File relating
to such Deleted Mortgage Loan and held for the benefit of the Certificateholders
and the Certificate Insurer and the Trustee shall execute and deliver at the
Seller's direction such instruments of transfer or assignment as have been
prepared by the Seller, in each case without recourse, representation or
warranty as shall be necessary to vest in the Seller, or its respective
designee, title to the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.

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

         In the event that the Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited into the Protected Account, on
the Determination Date for the Distribution Date in the month following the
month during which the Seller became obligated to repurchase or replace such
Mortgage Loan and upon such deposit of the Purchase Price, the delivery of an
Opinion of Counsel if required by Section 2.05 and the receipt of a Request for
Release, the Trustee or the Custodian shall release the related Mortgage File
held for the benefit of the Certificateholders to the Seller, and the Trustee
shall execute and deliver at such Person's direction the related instruments of
transfer or assignment prepared by the Seller, in each case without

                                      -61-
<PAGE>

recourse, as shall be necessary to transfer title from the Trustee for the
benefit of the Certificateholders and transfer the Trustee's interest to the
Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Seller to
cure, repurchase or replace any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedies against the Seller
respecting such breach available to the Certificateholders, the Depositor or the
Trustee.

         (d) The representations and warranties set forth in this Section 2.03
hereof shall survive delivery of the respective Mortgage Loans and Mortgage
Files to the Trustee or the Custodian for the benefit of the Certificateholders
and the Certificate Insurer.

         Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

         The Depositor hereby represents and warrants to the Master Servicer,
the Trustee and the Certificate Insurer as follows, as of the date hereof and as
of the Closing Date:

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

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

                  (iii) The execution and delivery of this Agreement and any
         other Transaction Document to which it is a party by the Depositor, the
         consummation of the transactions contemplated by this Agreement and any
         other Transaction Document to which it is a party, and the fulfillment
         of or compliance with the terms hereof and thereof are in the ordinary
         course of business of the Depositor and will not (A) result in a
         material breach of any term or provision of the certificate of
         formation or limited liability company agreement of the Depositor 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 Depositor is a party or by which it may be
         bound or (C) constitute a violation of any statute, order or regulation
         applicable to the Depositor of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over the
         Depositor; and the Depositor is

                                      -62-
<PAGE>

         not in breach or violation of any material indenture or other material
         agreement or instrument, or in violation of any statute, order or
         regulation of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over it which breach or violation
         may materially impair the Depositor's ability to perform or meet any of
         its obligations under this Agreement and any other Transaction Document
         to which it is a party.

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

                  (v) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Depositor of, or compliance by the Depositor
         with, this Agreement and any other Transaction Document to which it is
         a party or the consummation of the transactions contemplated hereby or
         thereby, or if any such consent, approval, authorization or order is
         required, the Depositor has obtained the same.

         The Depositor hereby represents and warrants to the Trustee and the
Certificate Insurer as of the Closing Date, following the transfer of the
Mortgage Loans to it by the Seller, the Depositor had good title to the Mortgage
Loans and the related Mortgage Notes were subject to no offsets, claims,
defenses or counterclaims.

         It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee or the Custodian for the benefit of the Certificateholders and the
Certificate Insurer. Upon discovery by the Depositor, the Trustee or the
Certificate Insurer of a breach of such representations and warranties, the
party discovering such breach shall give prompt written notice to the others, to
each Rating Agency and to the Certificate Insurer.

         Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTIONS AND REPURCHASES.

         (a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Seller delivers to the Trustee and the Certificate
Insurer an Opinion of Counsel, addressed to the Trustee and the Certificate
Insurer, to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of REMIC I, REMIC II,
REMIC III or REMIC IV or contributions after the Closing Date, as defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any of
REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default

                                      -63-
<PAGE>

or imminent default with respect to such Mortgage Loan and (b) receipt by the
Trustee and the Certificate Insurer of an Opinion of Counsel addressed to the
Trustee to the effect that such repurchase or substitution, as applicable, will
not result in the events described in clause (i) or clause (ii) of the preceding
sentence.

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

         Section 2.06 COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.

         (a) The Trustee acknowledges the sale, transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, countersigned and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and the Certificate Insurer and to perform the duties set forth
in this Agreement in accordance with its terms.

         (b) The Depositor concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests, and the other assets of REMIC II for the
benefit of the holders of the REMIC II Regular Interests and the Class R-2
Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interests
(which are uncertificated) and the other assets of REMIC II and declares that it
holds and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC II Regular Interests and the Class R-2 Certificates.

         (c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class CE Interest for the benefit of the holders of the REMIC III
Certificates. The Trustee acknowledges receipt of the Class CE Interest (which
are uncertificated) and declares that it holds and will hold the same in trust
for the exclusive use and benefit of the holders of the REMIC III Certificates.

         (d) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class P Interest for the benefit of the holders of the

                                      -64-
<PAGE>

REMIC IV Certificates. The Trustee acknowledges receipt of the Class P Interest
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC IV
Certificates.

                                      -65-
<PAGE>

                                   ARTICLE III

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

         Section 3.01 THE MASTER SERVICER TO ACT AS MASTER SERVICER.

                  The Master Servicer shall service and administer the Mortgage
Loans in accordance with customary and usual standards of practice of prudent
mortgage loan servicers in the respective states in which the related Mortgaged
Properties are located. In connection with such servicing and administration,
the Master Servicer shall have full power and authority, acting alone and/or
through subservicers as provided in Section 3.03, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders, the Trustee and the Certificate Insurer, customary
consents or waivers and other instruments and documents, (ii) to consent to
transfers of any related Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages (but only in the manner provided herein), (iii) to
collect any Insurance Proceeds and other Liquidation Proceeds or Subsequent
Recoveries, and (iv) subject to Section 3.09, to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage
Loan; provided that the Master Servicer shall take no action that is
inconsistent with or prejudices the interests of the Trust Fund, the Certificate
Insurer or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor, the Trustee or the Certificate Insurer under this
Agreement and any other Transaction Document to which it is a party.

         Without limiting the generality of the foregoing, the Master Servicer,
in its own name or in the name of the Trust, the Depositor or the Trustee, is
hereby authorized and empowered by the Trust, the Depositor and the Trustee,
when the Master Servicer believes it appropriate in its reasonable judgment, to
execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans, and with respect to
the Mortgaged Properties held for the benefit of the Certificateholders and the
Certificate Insurer. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer.

         In accordance with the standards of the first paragraph of this Section
3.01, the Master Servicer shall advance or cause to be advanced funds as
necessary for the purpose of effecting the payment of taxes and assessments on
the Mortgaged Properties, which advances shall be reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section 5.03,
and further as provided in Section 5.02. All costs incurred by the Master
Servicer, if any, in effecting the timely payments of taxes and assessments on
the Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be added
to the Stated Principal Balance under the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit.

                                      -66-
<PAGE>

         Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.

         (a) Except as otherwise provided in this Section 3.02, when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.02(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.02(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be in
default under this Section 3.02(a) by reason of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from preventing.

         (b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.02(a), in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the related Mortgage Loan, the Master Servicer shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its servicing standards as then in effect. The Master Servicer shall notify the
Trustee that any such substitution or assumption agreement has been completed by
forwarding to the Trustee the original of such substitution or assumption
agreement, which in the case of the

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original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.

         Section 3.03 SUBSERVICERS.

         The Master Servicer shall perform all of its servicing responsibilities
hereunder or may cause a subservicer to perform any such servicing
responsibilities on its behalf, but the use by the Master Servicer of a
subservicer shall not release the Master Servicer from any of its obligations
hereunder and the Master Servicer shall remain responsible hereunder for all
acts and omissions of each subservicer as fully as if such acts and omissions
were those of the Master Servicer. The Master Servicer shall pay all fees of
each subservicer from its own funds, and a subservicer's fee shall not exceed
the Servicing Fee payable to the Master Servicer hereunder.

         At the cost and expense of the Master Servicer, without any right of
reimbursement from its Protected Account, the Master Servicer shall be entitled
to terminate the rights and responsibilities of a subservicer and arrange for
any servicing responsibilities to be performed by a successor subservicer;
provided, however, that nothing contained herein shall be deemed to prevent or
prohibit the Master Servicer, at the Master Servicer's option, from electing to
service the related Mortgage Loans itself. In the event that the Master
Servicer's responsibilities and duties under this Agreement are terminated
pursuant to Section 8.03, the Master Servicer shall at its own cost and expense
terminate the rights and responsibilities of each subservicer effective as of
the date of termination of the Master Servicer. The Master Servicer shall pay
all fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Master Servicer's own funds
without reimbursement from the Trust Fund.

         Notwithstanding the foregoing, the Master Servicer shall not be
relieved of its obligations hereunder and shall be obligated to the same extent
and under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to enter
into an agreement with a subservicer for indemnification of the Master Servicer
by the subservicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification.

         Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Master Servicer alone, and the Trustee shall
not have any obligations, duties or liabilities with respect to such subservicer
including any obligation, duty or liability of the Trustee to pay such
subservicer's fees and expenses. Each subservicing agreement shall provide that
such agreement may be assumed or terminated without cause or penalty by the
Trustee or other Successor Master Servicer in the event the Master Servicer is
terminated in accordance with this Agreement. For purposes of remittances to the
Trustee pursuant to this Agreement, the Master Servicer shall be deemed to have
received a payment on a Mortgage Loan when a subservicer has received such
payment.

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<PAGE>

         Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE MASTER
SERVICER TO BE HELD FOR TRUSTEE.

         Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee or the Custodian on behalf of the Trustee
as required by this Agreement all documents and instruments in respect of a
Mortgage Loan coming into the possession of the Master Servicer from time to
time and shall account fully to the Trustee for any funds received by the Master
Servicer or that otherwise are collected by the Master Servicer as Liquidation
Proceeds, Insurance Proceeds or Subsequent Recoveries in respect of any such
Mortgage Loan. 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 Subsequent Recoveries, including but not limited to, any funds on deposit in
the Protected Account, shall be held by the Master Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Protected Account or in any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders and the Certificate Insurer,
to any claim, lien, security interest, judgment, levy, writ of attachment or
other encumbrance, or assert by legal action or otherwise any claim or right of
set off against any Mortgage File or any funds collected on, or in connection
with, a Mortgage Loan, except, however, that the Master Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Master Servicer under this Agreement.

         Section 3.05 MAINTENANCE OF HAZARD INSURANCE.

         The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance on buildings upon, or comprising part of, the Mortgaged
Property against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the related Mortgaged Property is
located with an insurer which is licensed to do business in the state where the
related Mortgaged Property is located. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 4.01, any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures) shall be deposited in the Protected Account. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section
4.02. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally

                                      -69-
<PAGE>

designated special flood hazard area and such area is participating in the
national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the least of (i) the Stated Principal
Balance of the related Mortgage Loan, (ii) minimum amount required to compensate
for damage or loss on a replacement cost basis or (iii) the maximum amount of
such insurance available for the related Mortgaged Property under the Flood
Disaster Protection Act of 1973, as amended.

         In the event that the Master Servicer shall obtain and maintain a
blanket policy insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section 3.05, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Master Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section 3.05, and there shall
have been a loss that would have been covered by such policy, deposit in the
Protected Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Such deposit shall be from the Master
Servicer's own funds without reimbursement therefor. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to present, on behalf of itself, the Depositor and the Trustee
for the benefit of the Certificateholders and the Certificate Insurer claims
under any such blanket policy.

         Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.

         The Master Servicer shall prepare and present on behalf of the Trustee
and the Certificateholders and the Certificate Insurer all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such Insurance Policies. Any proceeds disbursed to the
Master Servicer in respect of such Insurance Policies shall be promptly
deposited in the Protected 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 deposited (or remitted).

         Section 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

         (a) The Master Servicer 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 the Master Servicer would have been covered
thereunder. The Master Servicer shall use its best efforts 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.
The Master Servicer 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 Mortgage Note and is required to be kept in force hereunder.

         (b) The Master Servicer agrees to present on behalf of the Trustee, the
Certificateholders and the Certificate Insurer, claims to the insurer under any
Primary Mortgage Insurance Policies and,

                                      -70-
<PAGE>

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. Pursuant to Section 4.01, any amounts collected by the Master
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Protected Account, subject to withdrawal pursuant to Section 4.02 hereof.

         Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.

         The Master Servicer shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad coverage
with responsible companies on all officers, employees or other persons acting in
any capacity with regard to the Mortgage Loans and who handle funds, money,
documents and papers relating to the Mortgage Loans. The fidelity bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Master Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such fidelity bond shall also protect and insure
the Master Servicer against losses in connection with the failure to maintain
any insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan which is not in accordance with Accepted
Servicing Practices. No provision of this Section 3.08 requiring the fidelity
bond and errors and omissions insurance shall diminish or relieve the Master
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by Accepted Servicing Practices. The
Master Servicer shall deliver to the Trustee a certificate from the surety and
the insurer as to the existence of the fidelity bond and errors and omissions
insurance policy and shall obtain a statement from the surety and the insurer
that such fidelity bond or insurance policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Trustee. The
Master Servicer shall notify the Trustee within five business days of receipt of
notice that such fidelity bond or insurance policy will be, or has been,
materially modified or terminated. The Trustee for the benefit of the
Certificateholders and the Certificate Insurer must be named as loss payees on
the fidelity bond and as additional insured on the errors and omissions policy.

         Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION
OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES; REPURCHASES OF CERTAIN
MORTGAGE LOANS.

         (a) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Insurance Proceeds, Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Protected Account pursuant to
Section 4.02). If the Master Servicer reasonably believes that Liquidation
Proceeds with respect to

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<PAGE>

any such Mortgage Loan would not be increased as a result of such foreclosure or
other action, such Mortgage Loan will be charged-off and will become a
Liquidated Loan. The Master Servicer will give notice of any such charge-off to
the Trustee and the Certificate Insurer. The Master Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided that such costs and expenses shall be Servicing Advances
and that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 4.02.
If the Master Servicer has knowledge that a Mortgaged Property that the Master
Servicer is contemplating acquiring in foreclosure or by deed- in-lieu of
foreclosure is located within a one-mile radius of any site with environmental
or hazardous waste risks known to the Master Servicer, the Master Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with its established environmental review procedures.

         With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
and the Certificate Insurer (or the Trustee's nominee on behalf of the
Certificateholders and the Certificate Insurer). The Trustee's name shall be
placed on the title to such REO Property solely as the Trustee hereunder and not
in its individual capacity. The Master Servicer shall ensure that the title to
such REO Property references this Agreement and the Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall either itself or through an agent selected by the Master Servicer
protect and conserve such REO Property in the same manner and to such extent as
is customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the
Certificateholders and the Certificate Insurer, rent the same, or any part
thereof, as the Master Servicer deems to be in the best interest of the Master
Servicer and the Certificateholders and the Certificate Insurer for the period
prior to the sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement with respect to each REO Property that
has been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Protected Account no later than
the close of business on each Determination Date. The Master Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.

         In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property
prior to three years after its acquisition by the Trust Fund or, at the expense
of the Trust Fund, request more than 60 days prior to the day on which such
three-year period would otherwise expire, an extension of the three-year grace
period unless the Trustee and the Certificate Insurer shall have been supplied
with an Opinion of Counsel addressed to the Trustee and the Certificate Insurer
(such opinion not to be an expense of the Trustee or the Certificate Insurer) to
the effect that the holding by the Trust Fund of such Mortgaged Property
subsequent to such three-year period will not result in the imposition of taxes
on "prohibited transactions" of REMIC I, REMIC II, REMIC III or REMIC IV as
defined in section 860F of the Code or cause any of REMIC I, REMIC II, REMIC III
or REMIC IV 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

                                      -72-
<PAGE>

Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust Fund
in such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or (ii) subject any of REMIC I, REMIC II, REMIC
III or REMIC IV to the imposition of any federal, state or local income taxes on
the income earned from such Mortgaged Property under section 860G(c) of the Code
or otherwise, unless the Master Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.

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

         The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Master Servicer as provided above, shall be deposited in
the Protected Account on the next succeeding Determination Date following
receipt thereof for distribution on the related Distribution Date, except that
any Excess Liquidation Proceeds shall be retained by the Master Servicer as
additional servicing compensation.

         The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 4.02 or this Section 3.09; second, to
reimburse the Master Servicer for any unreimbursed Advances, pursuant to Section
4.02 or this Section 3.09; third, to accrued and unpaid interest (to the extent
no Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan.

         (b) On each Determination Date, the Master Servicer shall determine the
respective aggregate amounts of Excess Liquidation Proceeds and Realized Losses,
if any, for the related Prepayment Period.

                                      -73-
<PAGE>

         (c) The Master Servicer has no intent to foreclose on any Mortgage Loan
based on the delinquency characteristics as of the Closing Date; provided, that
the foregoing does not prevent the Master Servicer from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such
Mortgage Loans including delinquency characteristics in the Master Servicer's
discretion so warrant such action.

         Section 3.10 SERVICING COMPENSATION.

         As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Protected Account out of each payment
of interest on a Mortgage Loan included in the Trust Fund an amount equal to the
Servicing Fee.

         Additional servicing compensation in the form of any Excess Liquidation
Proceeds, assumption fees, late payment charges, all income and gain net of any
losses realized from Permitted Investments with respect to funds in or credited
to the Protected Account shall be retained by the Master Servicer to the extent
not required to be deposited in the Protected Account pursuant to Section 4.02.
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including payment of any
premiums for hazard insurance, as required by Section 3.05 and maintenance of
the other forms of insurance coverage required by Section 3.07) and shall not be
entitled to reimbursement therefor except as specifically provided in Section
4.02.

         Section 3.11 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 and the Certificate Insurer. The Master Servicer shall sell
any REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement. Pursuant to its efforts to sell such REO Property,
the Master Servicer shall protect and conserve such REO Property in the manner
and to the extent required herein, in accordance with the REMIC Provisions.

         (b) The Master Servicer shall deposit all funds collected and received
in connection with the operation of any REO Property into the Protected Account.

         (c) The Master Servicer, upon the final disposition of any REO
Property, shall be entitled to reimbursement for any related unreimbursed
Advances, unreimbursed Servicing Advances or Servicing Fees from Liquidation
Proceeds received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Advances or Servicing Fees as well as any
unpaid Servicing Fees may be reimbursed or paid, as the case may be, prior to
final disposition, out of any net rental income or other net amounts derived
from such REO Property.

                                      -74-
<PAGE>

         Section 3.12 LIQUIDATION REPORTS.

         Upon the foreclosure of any Mortgaged Property or the acquisition
thereof by the Trust Fund pursuant to a deed-in-lieu of foreclosure, the Master
Servicer shall submit a liquidation report to the Trustee and Certificate
Insurer containing such information as shall be mutually acceptable to the
Master Servicer and the Trustee with respect to such Mortgaged Property.

         Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.

         (a) The Master Servicer will deliver to the Trustee, the Rating
Agencies and the Certificate Insurer not later than March 1, 2005 and not later
than March 1 of each year thereafter, a certificate of a Servicing Officer
stating, as to each signatory thereof, that (i) a review of the activities of
the Master Servicer during the preceding calendar year or portion thereof and of
its performance under this Agreement has been made under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all of its obligations under this
Agreement in all material respects throughout such year or portion thereof, 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 except for such defaults as such officer in its good faith judgment
believe to be immaterial.

         (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 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' SERVICING
REPORT.

         Not later than March 1, 2005 and not later than March 1 of each year
thereafter, the Master Servicer at its expense shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee, the Rating Agencies
and the Certificate Insurer to the effect that, with respect to the preceding
calendar year, such firm has examined certain documents and records relating to
the Master Servicer's servicing of mortgage loans of the same type as the
Mortgage Loans pursuant to servicing agreements substantially similar to this
Agreement, which agreements may include this Agreement, and that, on the basis
of such an examination, conducted substantially in compliance with the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of the opinion
that the Master Servicer's servicing has been conducted in compliance with the
agreements examined pursuant to this Section 3.14, except for (i) such
exceptions as such firm shall believe to be immaterial,(ii) such other
exceptions as shall be set forth in such statement and (iii) such exceptions
that the Uniform Single Attestation Program for Mortgage Bankers 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 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).

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<PAGE>

         Section 3.15 BOOKS AND RECORDS.

         The Master Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the Mortgage Loans which shall
be appropriately identified in the Master Servicer's computer system to clearly
reflect the ownership of the Mortgage Loans by the Trust. In particular, the
Master Servicer shall maintain in its possession, available for inspection by
the Trustee and the Certificate Insurer and shall deliver to the Trustee and the
Certificate Insurer upon demand, evidence of compliance with all federal, state
and local laws, rules and regulations. To the extent that original documents are
not required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Master Servicer may be in the form of
microfilm or microfiche or such other reliable means of recreating original
documents, including, but not limited to, optical imagery techniques so long as
the Master Servicer complies with the requirements of Accepted Servicing
Practices.

         The Master Servicer shall maintain with respect to each Mortgage Loan
and shall make available for inspection by the Trustee and the Certificate
Insurer the related servicing file during the time such Mortgage Loan is subject
to this Agreement and thereafter in accordance with applicable law.

         Section 3.16 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.

         (a) 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
Trustee shall, in accordance with industry standards, file with the Commission
via the Electronic Data Gathering and Retrieval System ("EDGAR"), a Form 8-K
with a copy of the monthly statement to be furnished by the Trustee to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30 in each year commencing in 2005, the Trustee shall, in accordance
with industry standards, file a Form 15 Suspension Notice with respect to the
Trust Fund, if applicable. Prior to (i) March 15, 2005 and (ii) unless and until
a Form 15 Suspension Notice shall have been filed, prior to March 15 of each
year thereafter, the Master Servicer shall provide the Trustee with a Master
Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance to be delivered
by the Master Servicer pursuant to Sections 3.13 and 3.14. 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 Trustee shall, subject to
subsection (d) below, file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. Such Form 10-K shall include the
Master Servicer Certification and other documentation provided by the Master
Servicer pursuant to the second preceding sentence and the Form 10-K
certification signed by the Depositor. The Depositor hereby grants to the
Trustee 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 Trustee from the Depositor of written termination
of such power of attorney and (ii) the termination of the Trust Fund. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Trustee reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Trustee shall have no responsibility to file any items other than those
specified in this Section 3.16; provided, however, the Trustee will cooperate
with the Depositor in connection with any additional filings with respect

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to the Trust Fund as the Depositor deems necessary under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Copies of all reports filed by the
Trustee under the Exchange Act shall be sent to: the Depositor c/o Bear, Stearns
& Co. Inc., Attn: Managing Director-Analysis and Control, One Metrotech Center
North, Brooklyn, New York 11202-3859. Fees and expenses incurred by the Trustee
in connection with this Section 3.16 shall not be reimbursable from the Trust
Fund.

         (b) In connection with the filing of any 10-K hereunder, the Trustee
shall sign a certification (in the form attached hereto as Exhibit L) for the
Depositor regarding certain aspects of the Form 10-K certification signed by the
Depositor, provided, however, that the Trustee shall not be required to
undertake an analysis of any accountant's report attached as an exhibit to the
Form 10-K.

         (c) (i) The Trustee shall indemnify and hold harmless the Depositor and
its officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 3.16 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith.
                  (ii) The Depositor shall indemnify and hold harmless the
Trustee and its officers, directors and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the obligations of the Depositor under this Section 3.16 or the
Depositor's negligence, bad faith or willful misconduct in connection therewith.

                  (iii) The Master Servicer shall indemnify and hold harmless
         the Trustee and the Depositor and their respective officers, directors
         and affiliates from and against any losses, damages, penalties, fines,
         forfeitures, reasonable and necessary legal fees and related costs,
         judgments and other costs and expenses arising out of or based upon a
         breach of the obligations of the Master Servicer under this Section
         3.16 or the Master Servicer's negligence, bad faith or willful
         misconduct in connection therewith.

                  (iv) If the indemnification provided for herein is unavailable
         or insufficient to hold harmless the Depositor or the Trustee, as
         applicable, then the defaulting party, in connection with a breach of
         its respective obligations under this Section 3.16 or its respective
         negligence, bad faith or willful misconduct in connection therewith,
         agrees that it shall contribute to the amount paid or payable by the
         other parties as a result of the losses, claims, damages or liabilities
         of the other party in such proportion as is appropriate to reflect the
         relative fault and the relative benefit of the Depositor on the one
         hand and the Trustee on the other.

         (d) Nothing shall be construed from the foregoing subsections (a), (b)
and (c) to require the Trustee or any officer, director or Affiliate thereof to
sign any Form 10-K or any certification contained therein. Furthermore, the
inability of the Trustee to file a Form 10-K as a result of the lack of required
information as set forth in Section 3.16(a) or required signatures on such Form
10-K or

                                      -77-
<PAGE>

any certification contained therein shall not be regarded as a breach by the
Trustee of any obligation under this Agreement.

         (e) Notwithstanding the provisions of Section 11.01, this Section 3.16
may be amended without the consent of the Certificateholders or the Certificate
Insurer.

         Section 3.17 UCC. The Trustee agrees to file continuation statements
for any Uniform Commercial Code financing statements which the Seller has
informed the Trustee were filed on the Closing Date in connection with the
Trust. The Seller shall file any financing statements or amendments thereto
required by any change in the Uniform Commercial Code.

         Section 3.18 OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS.

         With respect to any Mortgage Loans which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase any Mortgage Loan from the Trust
which becomes 90 days or more delinquent or becomes an REO Property at a price
equal to the Purchase Price; provided however (i) that such Mortgage Loan is
still 90 days or more delinquent or is an REO Property as of the date of such
purchase and (ii) this purchase option, if not theretofore exercised, shall
terminate on the date prior to the last day of the related Calendar Quarter.
This purchase option, if not exercised, shall not be thereafter reinstated
unless the delinquency is cured and the Mortgage Loan thereafter again becomes
90 days or more delinquent or becomes an REO Property, in which case the option
shall again become exercisable as of the first day of the related Calendar
Quarter.

         In addition, EMC shall, at its option, purchase any Mortgage Loan from
the Trust if the first Due Date for such Mortgage Loan is subsequent to the
Cut-off Date and the initial Scheduled Payment is not made within thirty (30)
days of such Due Date. Such purchase shall be made at a price equal to the
Purchase Price.

         If at any time EMC remits to the Master Servicer a payment for deposit
in the Protected Account covering the amount of the Purchase Price for such a
Mortgage Loan, and EMC provides to the Trustee a certification signed by a
Servicing Officer stating that the amount of such payment has been deposited in
the Protected Account, then the Trustee shall execute the assignment of such
Mortgage Loan prepared and delivered to the Trustee, at the request of EMC,
without recourse, representation or warranty, to EMC which shall succeed to all
the Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. EMC will thereupon own such Mortgage, and all
such security and documents, free of any further obligation to the Trustee or
the Certificateholders with respect thereto.

         Section 3.19 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE
RATES AND SCHEDULED PAYMENTS.

         In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Scheduled Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms

                                      -78-
<PAGE>

of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the
Trustee, the Depositor and any successor Master Servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement. Notwithstanding the foregoing, this Section 3.19 shall not limit the
ability of the Master Servicer to seek recovery of any such amounts from the
related Mortgagor under the terms of the related Mortgage Note and Mortgage, to
the extent permitted by applicable law.

         Section 3.20 RESERVE FUND.

         (a) On or before the Closing Date, the Trustee shall establish a
Reserve Fund on behalf of the Holders of the Certificates. The Reserve Fund must
be an Eligible Account. The Reserve Fund shall be entitled "Reserve Fund,
LaSalle Bank National Association as Trustee for the benefit of holders of Bear
Stearns Asset Backed Securities I LLC, Asset-Backed Certificates, Series 2004-
FR2". The Trustee shall demand payment of all money payable by Bear Stearns
Financial Products Inc. (the "Counterparty") under the Yield Maintenance
Agreements. The Trustee shall deposit in the Reserve Fund all payments received
from the Counterparty pursuant to the Yield Maintenance Agreements. On each
Distribution Date the Trustee shall remit amounts received from the Counterparty
to the Holders of the Class A Certificates, Class M Certificates and Class CE
Certificates in the manner provided in clause (b) below. In addition, on each
Distribution Date as to which there is a Basis Risk Shortfall Carry Forward
Amount payable to any Class A and/or Class M Certificates, the Trustee shall
deposit the amounts distributable pursuant to clauses (C) and (E) of Section
5.04(a)(4) into the Reserve Fund and the Trustee has been directed by the Class
CE Certificateholder to distribute such amounts to the Holders of the Class A
and/or Class M Certificates in the amounts and priorities set forth in clauses
(C) and (E) of Section 5.04(a)(4). Any amount paid to the Holders of Class A
and/or Class M Certificates pursuant to the preceding sentence in respect of
Basis Risk Shortfall Carry Forward Amount shall be treated as distributed to the
Class CE Certificateholder in respect of the Class CE Certificates and paid by
the Class CE Certificateholder to the Holders of the Class A and/or Class M
Certificates. Any payments to the Holders of the Class A and/or Class M
Certificates in respect of Basis Risk Shortfall Carry Forward Amount, whether
pursuant to the second preceding sentence or pursuant to subsection (b) below,
shall not be payments with respect to a "regular interest" in a REMIC within the
meaning of Code Section 860(G)(a)(1).

         (b) Amounts received from the Counterparty under the Yield Maintenance
Agreement shall be distributed in the following manner and order of priority:

                  (i) FIRST, (A) from amounts received under the Yield
                  Maintenance Agreement related to the Class I-A Certificates,
                  to the Class I-A Certificates, pro rata based on the amount of
                  Basis Risk Shortfall Carry Forward Amount for such Classes of
                  Certificates for the related Distribution Date, (B) from
                  amounts received under the Yield Maintenance Agreement related
                  to the Class II-A Certificates, to the Class II-A
                  Certificates, the amount of Basis Risk Shortfall Carry Forward
                  Amount for such Class of Certificates for the related
                  Distribution Date and (C) from amounts received under the
                  Yield Maintenance Agreement related to the Class M
                  Certificates,

                                      -79-
<PAGE>

                  sequentially to the Class M-1, Class M-2, Class M-3, Class
                  M-4, Class M-5, Class M-6, Class M-7, Class M-8A and Class
                  M-8B Certificates, in that order, the amount of any Basis Risk
                  Shortfall Carry Forward Amount for such Classes of
                  Certificates for the related Distribution Date;

                  (ii) SECOND, from any remaining amounts received under the
                  non-related Yield Maintenance Agreements, to the Class A
                  Certificates and Class M Certificates, as applicable, pro
                  rata, based on the aggregate amount of Basis Risk Shortfall
                  Carry Forward Amounts for the Class A Certificates and Class M
                  Certificates, as applicable, for such Distribution Date to the
                  extent not covered in clause (i) above, which amounts shall be
                  paid in the case of the Class I-A, Class II-A and Class M
                  Certificates in the order of priority in clause (i) first (A),
                  (B) and (C) above; and

                  (iii) THIRD, any remaining amounts received under the Yield
                  Maintenance Agreements, to the Class CE Certificates.

         (c) The Reserve Fund is an "outside reserve fund" within the meaning of
Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust Fund but
not an asset of any REMIC. The Trustee on behalf of the Trust shall be the
nominal owner of the Reserve Fund. The Class CE Certificateholder shall be the
beneficial owner of the Reserve Fund, subject to the power of the Trustee to
transfer amounts under Section 5.04. Amounts in the Reserve Fund shall, at the
direction of the Class CE Certificateholder, be invested in Permitted
Investments that mature no later than the Business Day prior to the next
succeeding Distribution Date. All net income and gain from such investments
shall be distributed to the Class CE Certificateholder, not as a distribution in
respect of any interest in any REMIC, on such Distribution Date. All amounts
earned on amounts on deposit in the Reserve Fund shall be taxable to the Class
CE Certificateholder. Any losses on such investments shall be deposited in the
Reserve Fund by the Class CE Certificateholder out of its own funds immediately
as realized.

         Section 3.21 ADVANCING FACILITY.

         (a) The Master Servicer and/or the Trustee on behalf of the Trust Fund,
in either case, with the consent of the Master Servicer in the case of the
Trustee and, in each case, with the consent of the Certificate Insurer (which
consent shall not be unreasonably withheld) and notice to the Rating Agencies,
is hereby authorized to enter into a facility (the "Advancing Facility") with
any Person which provides that such Person (an "Advancing Person") may fund
Advances and/or Servicing Advances to the Trust Fund under this Agreement,
although no such facility shall reduce or otherwise affect the Master Servicer's
obligation to fund such Advances and/or Servicing Advances. If the Master
Servicer enters into such an Advancing Facility pursuant to this Section 3.21,
upon reasonable request of the Advancing Person, the Trustee shall execute a
letter of acknowledgment, confirming its receipt of notice of the existence of
such Advancing Facility. To the extent that an Advancing Person funds any
Advance or any Servicing Advance and provides the Trustee with notice
acknowledged by the Servicer that such Advancing Person is entitled to
reimbursement, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Agreement for such amount to the extent provided in Section
3.21(b). Such notice from the Advancing Person must

                                      -80-
<PAGE>

specify the amount of the reimbursement, the Section of this Agreement that
permits the applicable Advance or Servicing Advance to be reimbursed and the
section(s) of the Advancing Facility that entitle the Advancing Person to
request reimbursement from the Trustee, rather than the Master Servicer, and
include the Master Servicer's acknowledgment thereto or proof of an Event of
Default under the Advancing Facility. The Trustee shall have no duty or
liability with respect to any calculation of any reimbursement to be paid to an
Advancing Person and shall be entitled to rely without independent investigation
on the Advancing Person's notice provided pursuant to this Section 3.21. An
Advancing Person whose obligations hereunder are limited to the funding of
Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a subservicer pursuant to Section 8.02
hereof and will not be deemed to be a subservicer under this Agreement.

         (b) If an Advancing Facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself therefor under Section 4.02(a)(ii),
Section 4.02(a)(iii) and Section 4.02(a)(v) prior to the remittance to the Trust
Fund, but instead the Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 4.02. The Trustee
is hereby authorized to pay to the Advancing Person, reimbursements for Advances
and Servicing Advances from the Distribution Account to the same extent the
Master Servicer would have been permitted to reimburse itself for such Advances
and/or Servicing Advances in accordance with Section 4.02(a)(ii), Section
4.02(a)(iii) or Section 4.02(a)(v), as the case may be, had the Master Servicer
itself funded such Advance or Servicing Advance. The Trustee is hereby
authorized to pay directly to the Advancing Person such portion of the Servicing
Fee as the parties to any advancing facility agree.

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

         (d) Any amendment to this Section 3.21 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advancing Facility as described generally in this Section 3.21, including
amendments to add provisions relating to a successor master servicer, may be
entered into by the Trustee and the Master Servicer without the consent of any
Certificateholder but with the consent of the Certificate Insurer,
notwithstanding anything to the contrary in this Agreement.

                                      -81-
<PAGE>

                                   ARTICLE IV

                                    ACCOUNTS

         Section 4.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED ACCOUNT.

         (a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage Loans to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge and (ii) extend the due dates for payments due on a Mortgage Note for a
period not greater than 125 days. In the event of any such arrangement, the
Master Servicer shall make Advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements, and shall be
entitled to reimbursement therefor in accordance with Section 5.01. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law. In addition, if (x) a Mortgage Loan is in
default or default is imminent or (y) the Master Servicer delivers to the
Trustee and the Certificate Insurer a certification addressed to the Trustee and
the Certificate Insurer, based on the advice of counsel or certified public
accountants, in either case, that have a national reputation with respect to
taxation of REMICs, that a modification of such Mortgage Loan will not result in
the imposition of taxes on or disqualify any of REMIC I, REMIC II, REMIC III or
REMIC IV, the Master Servicer may, (A) amend the related Mortgage Note to reduce
the Mortgage Rate applicable thereto, provided that such reduced Mortgage Rate
shall in no event be lower than 5.00% with respect to any Mortgage Loan and (B)
amend any Mortgage Note to extend to the maturity thereof.

         The Master Servicer shall not waive (or permit a sub-servicer to waive)
any Prepayment Charge unless: (i) the enforceability thereof shall have been
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally, (ii) the enforcement thereof is
illegal, or any local, state or federal agency has threatened legal action if
the prepayment penalty is enforced, (iii) the collectability thereof shall have
been limited due to acceleration in connection with a foreclosure or other
involuntary payment or (iv) such waiver is standard and customary in servicing
similar Mortgage Loans and relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Master Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan. In no event will the Master Servicer waive
a Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default. If a Prepayment
Charge is waived, but does not meet the standards described above, then the
Master Servicer is required to pay the amount of such waived Prepayment Charge,
for the benefit of the Class P Certificates, by remitting such amount to the
Trustee by the Distribution Account Deposit Date.

                                      -82-
<PAGE>

         (b) The Master Servicer shall establish and maintain a Protected
Account (which shall at all times be an Eligible Account) with a depository
institution in the name of the Master Servicer for the benefit of the Trustee on
behalf of the Certificateholders and the Certificate Insurer and designated "EMC
Mortgage Corporation, as Master Servicer, for the benefit of LaSalle Bank
National Association, in trust for registered holders of Bear Stearns Asset
Backed Securities I LLC, Asset-Backed Certificates Series 2004-FR2". The Master
Servicer shall deposit or cause to be deposited into the Protected Account on a
daily basis within one Business Day of receipt, except as otherwise specifically
provided herein, the following payments and collections remitted by subservicers
or received by it in respect of the Mortgage Loans subsequent to the Cut-off
Date (other than in respect of principal and interest due on the Mortgage Loans
on or before the Cut-off Date) and the following amounts required to be
deposited hereunder:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         net of the Servicing Fee permitted under Section 3.10 and LPMI Fees, if
         any;

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

                  (iv) any amount required to be deposited by the Master
         Servicer pursuant to Section 4.01(c) in connection with any losses on
         Permitted Investments;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.05;

                  (vi) any Prepayment Charges collected on the Mortgage Loans;
         and

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

         The foregoing requirements for remittance by the Master Servicer into
the Protected 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 or assumption fees, if collected, need not be remitted by the
Master Servicer. In the event that the Master Servicer shall remit any amount
not required to be remitted and not otherwise subject to withdrawal pursuant to
Section 4.02, it may at any time withdraw or direct the institution maintaining
the Protected Account, to withdraw such amount from the Protected Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the institution
maintaining the Protected Account, that describes the amounts deposited in error
in the Protected Account. The Master Servicer shall maintain adequate records
with respect to all withdrawals made pursuant to this Section. All funds
deposited in the Protected Account shall be held in trust for the
Certificateholders and the Certificate Insurer until withdrawn in accordance
with Section 4.02.

                                      -83-
<PAGE>

         (c) The institution that maintains the Protected Account shall invest
the funds in the Protected Account, in the manner directed by the Master
Servicer, in Permitted Investments which shall mature not later than the
Remittance Date and shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders and the Certificate Insurer. All income and
gain net of any losses realized from any such investment shall be for the
benefit of the Master Servicer as servicing compensation and shall be remitted
to it monthly as provided herein. The amount of any losses incurred in the
Protected Account in respect of any such investments shall be deposited by the
Master Servicer into the Protected Account, out of the Master Servicer's own
funds.

         (d) The Master Servicer shall give at least 30 days advance notice to
the Trustee, the Seller, each Rating Agency, the Certificate Insurer and the
Depositor of any proposed change of location of the Protected Account prior to
any change thereof.

         Section 4.02 PERMITTED WITHDRAWALS FROM THE PROTECTED ACCOUNT.

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

                  (i) to pay itself (to the extent not previously paid to or
         withheld by the Master Servicer), as servicing compensation in
         accordance with Section 3.10, that portion of any payment of interest
         that equals the Servicing Fee for the period with respect to which such
         interest payment was made, and, as additional servicing compensation,
         those other amounts set forth in Section 3.10;

                  (ii) to reimburse the Master Servicer for Advances made by it
         with respect to the Mortgage Loans, provided, however, that the Master
         Servicer's right of reimbursement pursuant to this subclause (ii) shall
         be limited to amounts received on particular Mortgage Loan(s)
         (including, for this purpose, Liquidation Proceeds, Insurance Proceeds
         and Subsequent Recoveries) that represent late recoveries of payments
         of principal and/or interest on such particular Mortgage Loan(s) in
         respect of which any such Advance was made;

                  (iii) to reimburse the Master Servicer for any previously made
         portion of a Servicing Advance or an Advance made by the Master
         Servicer that, in the good faith judgment of the Master Servicer, will
         not be ultimately recoverable by it from the related Mortgagor, any
         related Liquidation Proceeds, Insurance Proceeds or otherwise (a
         "Nonrecoverable Advance"), to the extent not reimbursed pursuant to
         clause (ii) or clause (v);

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

                  (v) to pay the Master Servicer any unpaid Servicing Fees and
         to reimburse it for any unreimbursed Servicing Advances, provided,
         however, that the Master Servicer's right to reimbursement for
         Servicing Advances pursuant to this subclause (v) with respect to any
         Mortgage Loan shall be limited to amounts received on particular
         Mortgage Loan(s)

                                      -84-
<PAGE>

         (including, for this purpose, Liquidation Proceeds, Insurance Proceeds,
         Subsequent Recoveries and purchase and repurchase proceeds) that
         represent late recoveries of the payments for which such Servicing
         Advances were made;

                  (vi) to pay to the Seller, the Depositor or itself, as
         applicable, with respect to each Mortgage Loan or property acquired in
         respect thereof that has been purchased pursuant to Section 2.02, 2.03
         or 3.18 of this Agreement, all amounts received thereon and not taken
         into account in determining the related Stated Principal Balance of
         such repurchased Mortgage Loan;

                  (vii) to pay any expenses recoverable by the Master Servicer
         pursuant to Section 7.04 of this Agreement;

                  (viii) to withdraw pursuant to Section 4.01 any amount
         deposited in the Protected Account and not required to be deposited
         therein; and

                  (ix) to clear and terminate the Protected Account upon
         termination of this Agreement pursuant to Section 10.01 hereof.

         In addition, no later than 1:00 p.m. Eastern time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Protected
Account and remit to the Trustee the amount of Interest Funds for each Loan
Group (without taking into account any reduction in the amount of Interest Funds
attributable to the application of clause (c) of the definition thereof
contained in Article I of this Agreement) and Principal Funds for each Loan
Group collected, to the extent on deposit, and the Trustee shall deposit such
amount in the Distribution Account. In addition, on or before the Distribution
Account Deposit Date, the Master Servicer shall remit to the Trustee for deposit
in the Distribution Account any Advances or any payments of Compensating
Interest required to be made by the Master Servicer with respect to the Mortgage
Loans. Furthermore, on each Distribution Account Deposit Date, the Master
Servicer shall remit to the Trustee all Prepayment Charges collected by the
Master Servicer with respect to the Mortgage Loans during the related Prepayment
Period.

         The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Protected Account pursuant to subclauses (i), (ii), (iv),
(v), (vi) and (vii) above. Prior to making any withdrawal from the Protected
Account pursuant to subclause (iii), the Master Servicer shall deliver to the
Trustee an Officer's Certificate of a Servicing Officer indicating the amount of
any previous Advance or Servicing Advance determined by the Master Servicer to
be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.

                                      -85-
<PAGE>

         Section 4.03 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
ACCOUNTS.

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

         Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made with
respect to each Mortgage Loan pursuant to Section 3.01 (with respect to taxes
and assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors for any Mortgage Loans any sums as may
be determined to be overages, to pay interest, if required by law or the terms
of the related Mortgage or Mortgage Note, to such Mortgagors on balances in the
Escrow Account or to clear and terminate the Escrow Account at the termination
of this Agreement in accordance with Section 10.01 thereof. The Escrow Account
shall not be a part of the Trust Fund.

         Section 4.04 DISTRIBUTION ACCOUNT.

         (a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders and the Certificate Insurer,
the Distribution Account as a segregated trust account or accounts.

         (b) All amounts deposited to the Distribution Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders and the Certificate Insurer in accordance with the terms and
provisions of this Agreement.

         (c) The Distribution Account shall constitute an Eligible Account of
the Trust Fund segregated on the books of the Trustee and held by the Trustee
and the Distribution Account and the funds deposited therein shall not be
subject to, and shall be protected from, all claims, liens, and encumbrances of
any creditors or depositors of the Trustee (whether made directly, or indirectly
through a liquidator or receiver of the Trustee). The amount at any time
credited to the Distribution Account may be invested in the name of the Trustee,
in such Permitted Investments, or deposited in demand deposits with such
depository institutions, as determined by the Trustee. All Permitted Investments
shall mature or be subject to redemption or withdrawal on or before, and shall
be held until, the next succeeding Distribution Date if the obligor for such
Permitted Investment is the Trustee or, if such obligor is any other Person, the
Business Day preceding such Distribution Date. All investment earnings on
amounts on deposit in the Distribution Account or benefit from funds uninvested
therein from time to time shall be for the account of the Trustee. The Trustee
shall be permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Trustee shall deposit
the amount of the loss in the Distribution Account not later than the applicable
Distribution Date on which the moneys so invested are required to be distributed

                                      -86-
<PAGE>

to the Certificateholders. With respect to the Distribution Account and the
funds deposited therein, the Trustee shall take such action as may be necessary
to ensure that the Certificateholders and the Certificate Insurer shall be
entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e),
and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.

         Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.

         (a) The Trustee will make or cause to be made such withdrawals or
transfers from the Distribution Account for the following purposes:

                  (i) to pay to itself the Trustee Fee;

                  (ii) to reimburse the Trustee for expenses, costs and
         liabilities incurred by or reimbursable to it pursuant to this
         Agreement;

                  (iii) to pay investment income to the Trustee;

                  (iv) to remove amounts deposited in error; and

                  (v) to clear and terminate the Distribution Account pursuant
         to Section 10.01.

         (b) On each Distribution Date, the Trustee shall distribute Interest
Funds and Principal Funds in the Distribution Account for each Loan Group to the
holders of the Certificates and the Certificate Insurer in accordance with
Section 5.04.

         Section 4.06 CLASS P CERTIFICATE ACCOUNT.

         (a) The Trustee shall establish and maintain in the name of the
Trustee, for the benefit of the Class P Certificateholders, the Class P
Certificate Account as a segregated trust account or accounts.

         (b) On the Closing Date, the Depositor will deposit, or cause to be
deposited in the Class P Certificate Account, an amount equal to $100. All
amounts deposited to the Class P Certificate Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the Class P
Certificateholders in accordance with the terms and provisions of this
Agreement. The amount on deposit in the Class P Certificate Account shall be
held uninvested.

                                      -87-
<PAGE>

                                    ARTICLE V

                           DISTRIBUTIONS AND ADVANCES

         Section 5.01 ADVANCES.

         The Master Servicer shall, or shall cause the related subservicer
pursuant to the Subservicing Agreement to, make an Advance and deposit such
Advance in the Protected Account. Each such Advance shall be remitted to the
Distribution Account no later than 1:00 p.m. Eastern time on the Distribution
Account Deposit Date in immediately available funds. The Master Servicer shall
be obligated to make any such Advance only to the extent that such advance would
not be a Nonrecoverable Advance. If the Master Servicer shall have determined
that it has made a Nonrecoverable Advance or that a proposed Advance or a lesser
portion of such Advance would constitute a Nonrecoverable Advance, the Master
Servicer shall deliver (i) to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer funds constituting the remaining
portion of such Advance, if applicable, and (ii) to the Depositor, each Rating
Agency, the Certificate Insurer and the Trustee an Officer's Certificate setting
forth the basis for such determination. Subject to the Master Servicer's
recoverability determination, in the event that a subservicer fails to make a
required Advance, the Master Servicer shall be required to remit the amount of
such Advance to the Distribution Account.

         In lieu of making all or a portion of such Advance from its own funds,
the Master Servicer may (i) cause to be made an appropriate entry in its records
relating to the Protected Account that any Amount Held for Future Distributions
has been used by the Master Servicer in discharge of its obligation to make any
such Advance and (ii) transfer such funds from the Protected Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Master Servicer by deposit in the Distribution Account, no later than the
close of business on the Business Day immediately preceding the Distribution
Date on which such funds are required to be distributed pursuant to this
Agreement.

         The Master Servicer shall be entitled to be reimbursed from the
Protected Account for all Advances of its own funds made pursuant to this
Section as provided in Section 4.02. The obligation to make Advances with
respect to any Mortgage Loan shall continue until such Mortgage Loan is paid in
full or the related Mortgaged Property or related REO Property has been
liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 5.01.

         Subject to and in accordance with the provisions of Article VIII
hereof, in the event the Master Servicer fails to make such Advance, then the
Trustee, as Successor Master Servicer, shall be obligated to make such Advance,
subject to the provisions of this Section 5.01.

                                      -88-
<PAGE>

         Section 5.02 COMPENSATING INTEREST PAYMENTS.

         In the event that there is a Prepayment Interest Shortfall arising from
a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any Mortgage Loan, the Master Servicer shall, to the extent of the
Servicing Fee for such Distribution Date, deposit into the Distribution Account,
as a reduction of the Servicing Fee for such Distribution Date, no later than
the close of business on the Business Day immediately preceding such
Distribution Date, an amount equal to the Prepayment Interest Shortfall; and in
case of such deposit, the Master Servicer shall not be entitled to any recovery
or reimbursement from the Depositor, the Trustee, the Seller, the Trust Fund or
the Certificateholders.

         Section 5.03 REMIC DISTRIBUTIONS.

         On each Distribution Date the Trustee shall be deemed to have allocated
distributions to the REMIC I Regular Interests in accordance with Section 5.06
hereof.

         Section 5.04 DISTRIBUTIONS.

         (a) On each Distribution Date, an amount equal to the Interest Funds
and Principal Funds for each Loan Group for such Distribution Date shall be
withdrawn by the Trustee from the Distribution Account and distributed in the
following order of priority:

         (1) Interest Funds shall be distributed in the following manner and
order of priority:

                  (A) From Interest Funds in respect of:

                  (i) Loan Group I, to the Class I-A-1 Certificates and Class
         I-A-2 Certificates, the Current Interest and any Interest Carry Forward
         Amount for each such Class, on a pro rata basis based on the
         entitlement of each such Class; and

                  (ii) Loan Group II, first, to the Certificate Insurer, the
         Certificate Insurer Premium Amount, second, to the Class II-A
         Certificates, the Current Interest and any Interest Carry Forward
         Amount for such Class, and third, to the Certificate Insurer, with
         respect to any Reimbursement Amount in connection with any draws
         relating to interest on the Class II-A Policy;

                  (B) From remaining Interest Funds in respect of the
         non-related Loan Group, to the Class I-A Certificates and Class II-A
         Certificates, the remaining Current Interest, if any, and the remaining
         Interest Carry Forward Amount, if any, for such Classes, pro rata based
         on the entitlement of each such Class; provided, however, any such
         remaining Interest Funds that would otherwise be distributed to the
         Class II-A Certificates to pay the remaining Interest Carry Forward
         Amount for any Distribution Date will be used to pay the Certificate
         Insurer the Reimbursement Amount related to interest draws on the Class
         II-A Policy, if any, prior to paying such Interest Carry Forward Amount
         to the Class II-A Certificates and

                                      -89-
<PAGE>

                  (C) From remaining Interest Funds in respect of both Loan
         Groups, sequentially, to the Class M-1, Class M-2, Class M-3, Class
         M-4, Class M-5, Class M-6, Class M-7, Class M-8A and Class M-8B
         Certificates, in that order, the Current Interest for each such Class.

         Any Excess Spread to the extent necessary to meet a level of
overcollateralization equal to the Overcollateralization Target Amount will be
the Extra Principal Distribution Amount and will be included as part of the
Principal Distribution Amount; provided, however, any such Excess Spread that
would otherwise be distributed to the Class II-A Certificates to pay the Extra
Principal Distribution Amount for any Distribution Date will be used to pay the
Certificate Insurer the Reimbursement Amount related to interest or principal
draws on the Class II-A Policy, if any, prior to paying such Extra Principal
Distribution Amount to the Class II-A Certificates. Any Remaining Excess Spread
together with any Overcollateralization Release Amount will be applied as Excess
Cashflow and distributed pursuant to clauses (4)(A) through (H) below.

         On any Distribution Date, any Relief Act Interest Shortfalls and any
Prepayment Interest Shortfalls to the extent not covered by Compensating
Interest will be allocated as set forth in the definition of "Current Interest"
herein.

         (2) Principal Funds, including any Extra Principal Distribution Amount,
shall be distributed in the following manner and order of priority:

                  (A) For each Distribution Date (i) prior to the Stepdown Date
         or (ii) on which a Trigger Event is in effect:

                  (i) To the Class A Certificates, the Principal Distribution
                  Amount for such Distribution Date to be distributed as
                  follows:

                           (1) from the Group I Principal Distribution Amount
                           for such Distribution Date, sequentially, to the
                           Class I-A-1 Certificates and Class I-A-2
                           Certificates, in that order, in each case until the
                           Certificate Principal Balance thereof is reduced to
                           zero; and

                           (2) from the Group II Principal Distribution Amount
                           for such Distribution Date, to the Class II-A
                           Certificates, until the Certificate Principal Balance
                           thereof is reduced to zero;

                  (ii) To the Class M-1 Certificates, from any remaining
                  Principal Funds in respect of both Loan Groups for such
                  Distribution Date, the remaining Principal Distribution
                  Amount, until the Certificate Principal Balance thereof is
                  reduced to zero;

                  (iii) To the Class M-2 Certificates, from any remaining
                  Principal Funds in respect of both Loan Groups for such
                  Distribution Date, the remaining Principal Distribution
                  Amount, until the Certificate Principal Balance thereof is
                  reduced to zero;

                                      -90-
<PAGE>

                  (iv) To the Class M-3 Certificates, from any remaining
                  Principal Funds in respect of both Loan Groups for such
                  Distribution Date, the remaining Principal Distribution
                  Amount, until the Certificate Principal Balance thereof is
                  reduced to zero;

                  (v) To the Class M-4 Certificates, from any remaining
                  Principal Funds in respect of both Loan Groups for such
                  Distribution Date, the remaining Principal Distribution
                  Amount, until the Certificate Principal Balance thereof is
                  reduced to zero;

                  (vi) To the Class M-5 Certificates, from any remaining
                  Principal Funds in respect of both Loan Groups for such
                  Distribution Date, the remaining Principal Distribution
                  Amount, until the Certificate Principal Balance thereof is
                  reduced to zero;

                  (vii) To the Class M-6 Certificates, from any remaining
                  Principal Funds in respect of both Loan Groups for such
                  Distribution Date, the remaining Principal Distribution
                  Amount, until the Certificate Principal Balance thereof is
                  reduced to zero;

                  (viii) To the Class M-7 Certificates, from any remaining
                  Principal Funds in respect of both Loan Groups for such
                  Distribution Date, the remaining Principal Distribution
                  Amount, until the Certificate Principal Balance thereof is
                  reduced to zero; and

                  (ix) Sequentially, to the Class M-8A Certificates and Class
                  M-8B Certificates, in that order, from any remaining Principal
                  Funds in respect of both Loan Groups for such Distribution
                  Date, the remaining Principal Distribution Amount, in each
                  case until the Certificate Principal Balance thereof is
                  reduced to zero.

                  (B) For each Distribution Date on or after the Stepdown Date,
         so long as a Trigger Event is not in effect:

                  (i) To the Class A Certificates, the Principal Distribution
                  Amount for such Distribution Date to be distributed as
                  follows:

                           (1) from the Group I Principal Distribution Amount
                           for such Distribution Date, sequentially, to the
                           Class I-A-1 Certificates and Class I-A-2
                           Certificates, in that order, the Class I-A Principal
                           Distribution Amount for such Distribution Date, in
                           each case until the Certificate Principal Balance
                           thereof is reduced to zero; and

                           (2) from the Group II Principal Distribution Amount
                           for such Distribution Date, to the Class II-A
                           Certificates, the Class II-A Principal Distribution
                           Amount for such Distribution Date, until the
                           Certificate Principal Balance thereof is reduced to
                           zero;

                  (ii) To the Class M-1 Certificates, from any remaining
                  Principal Distribution Amount in respect of both Loan Groups,
                  the Class M-1 Principal Distribution Amount, until the
                  Certificate Principal Balance thereof is reduced to zero;

                                      -91-
<PAGE>

                  (iii) To the Class M-2 Certificates, from any remaining
                  Principal Distribution Amount in respect of both Loan Groups,
                  the Class M-2 Principal Distribution Amount, until the
                  Certificate Principal Balance thereof is reduced to zero;

                  (iv) To the Class M-3 Certificates, from any remaining
                  Principal Distribution Amount in respect of both Loan Groups,
                  the Class M-3 Principal Distribution Amount, until the
                  Certificate Principal Balance thereof is reduced to zero;

                  (v) To the Class M-4 Certificates, from any remaining
                  Principal Distribution Amount in respect of both Loan Groups,
                  the Class M-4 Principal Distribution Amount, until the
                  Certificate Principal Balance thereof is reduced to zero;

                  (vi) To the Class M-5 Certificates, from any remaining
                  Principal Distribution Amount in respect of both Loan Groups,
                  the Class M-5 Principal Distribution Amount, until the
                  Certificate Principal Balance thereof is reduced to zero;

                  (vii) To the Class M-6 Certificates, from any remaining
                  Principal Distribution Amount in respect of both Loan Groups,
                  the Class M-6 Principal Distribution Amount, until the
                  Certificate Principal Balance thereof is reduced to zero;

                  (viii) To the Class M-7 Certificates, from any remaining
                  Principal Distribution Amount in respect of both Loan Groups,
                  the Class M-7 Principal Distribution Amount, until the
                  Certificate Principal Balance thereof is reduced to zero; and

                  (ix) Sequentially, to the Class M-8A Certificates and Class
                  M-8B Certificates, in that order, from any remaining Principal
                  Distribution Amount in respect of both Loan Groups, the Class
                  M-8 Principal Distribution Amount, in each case until the
                  Certificate Principal Balance thereof is reduced to zero.

         (3) Notwithstanding the provisions of clauses (2)(A) and (B) above, if
on any Distribution Date the Class A Certificates related to a Loan Group are no
longer outstanding, the pro rata portion of the Principal Distribution Amount or
the applicable Class A Principal Distribution Amount, as applicable, otherwise
allocable to such Class A Certificates will be allocated among the remaining
group or groups of Class A Certificates pro rata and among the Classes of each
such group in the same manner and order of priority described above; provided,
however, any such amount allocable to the Class II-A Certificates will be used
first to pay the Certificate Insurer any Reimbursement Amounts related to
principal draws on the Class II-A Policy, if any; and

         (4) Any Excess Cashflow shall be distributed in the following manner
and order of priority:

                  (A) from any remaining Excess Cashflow, to the Class A
         Certificates, (a) first, any remaining Interest Carry Forward Amount
         for such Classes, pro rata, in accordance with the Interest Carry
         Forward Amount due with respect to each such Class, to the extent not
         fully paid pursuant to clauses (1) (A) and (B) above; provided,
         however, that any Excess Cashflow allocable to the Class II-A
         Certificates under this clause will be used to pay any unpaid

                                      -92-
<PAGE>

         Reimbursement Amounts relating to interest draws owed to the
         Certificate Insurer prior to paying any such Interest Carry Forward
         Amount to the Class II-A Certificates and (b) second, any Unpaid
         Realized Loss Amount for such Classes for such Distribution Date, pro
         rata, in accordance with the Applied Realized Loss Amount allocated to
         each such Class;

                  (B) from any remaining Excess Cashflow, sequentially, to the
         Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
         M-7, Class M-8A and Class M-8B Certificates, in that order, an amount
         equal to the Interest Carry Forward Amount for each such Class for such
         Distribution Date;

                  (C) from any remaining Excess Cashflow otherwise distributable
         to the Class CE Certificates, to the Reserve Fund to pay to the Class
         I-A Certificates and Class II-A Certificates, any Basis Risk Shortfall
         Carry Forward Amount for each such Class for such Distribution Date, on
         a pro rata basis, based on the amount of the Basis Risk Shortfall Carry
         Forward Amount for each such Class, and to the extent not covered by
         the Yield Maintenance Agreements;

                  (D) from any such remaining Excess Cashflow, to pay the
         Certificate Insurer any Reimbursement Amount to the extent not paid
         above;

                  (E) from any remaining Excess Cashflow otherwise distributable
         to the Class CE Certificates, to the Reserve Fund to pay to the Class
         M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
         Class M-8A and Class M-8B Certificates, sequentially in that order, any
         Basis Risk Shortfall Carry Forward Amount for each such Class for such
         Distribution Date, if any, in each case to the extent not covered by
         the Yield Maintenance Agreements;

                  (F) from any remaining Excess Cashflow, to the Class A
         Certificates, on a pro rata basis, based on the entitlement of each
         such Class, and then sequentially to the Class M-1, Class M-2, Class
         M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8A and Class
         M-8B Certificates, in that order, the amount of Relief Act Shortfalls
         and any Prepayment Interest Shortfalls allocated to such Classes of
         Certificates, to the extent not previously reimbursed;

                  (G) from any remaining Excess Cashflow, to the Class CE
         Certificates, an amount equal to the Class CE Distribution Amount
         reduced by amounts distributed in clauses (C) and (E) above; and

                  (H) any remaining amounts to each of the Class R-1, Class R-2
         and Class RX Certificates, based on the related REMIC in which such
         amounts remain.

         On each Distribution Date, all amounts in respect of Prepayment Charges
shall be distributed to the Holders of the Class P Certificates, provided that
such distributions shall not be in reduction of the principal balance thereof.
On the Distribution Date immediately following the expiration of the latest
Prepayment Charge term as identified on the Mortgage Loan Schedule, any amount
on

                                      -93-
<PAGE>

deposit in the Class P Certificate Account will be distributed to the Holders of
the Class P Certificates in reduction of the Certificate Principal Balance
thereof.

         In addition, notwithstanding the foregoing, on any Distribution Date
after the Distribution Date on which the Certificate Principal Balance of a
Class of Offered Certificates has been reduced to zero, that Class of Offered
Certificates will be retired and will no longer be entitled to distributions,
including distributions in respect of Prepayment Interest Shortfalls or Basis
Risk Shortfall Carry Forward Amounts.

         (b) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the Master Servicer shall deposit such funds into the
Protected Account pursuant to Section 4.01(b)(iii). If, after taking into
account such Subsequent Recoveries, 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 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
Certificates pursuant to Section 5.04A. The amount of any remaining Subsequent
Recoveries will be applied to increase the Certificate Principal Balance of the
Class of Certificates with the next highest payment priority, up to the amount
of such Realized Losses previously allocated to that Class of Certificates
pursuant to Section 5.04A, and so on. 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 Certificate of such Class in accordance
with its respective Percentage Interest.

         (c) Subject to Section 10.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if such Holder has so notified
the Trustee at least 5 Business Days prior to the related Record Date, or, if
not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 10.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.

         (d) On or before 5:00 p.m. Eastern time on the fifth Business Day
immediately preceding each Distribution Date, the Master Servicer shall deliver
a report to the Trustee in electronic form (or by such other means as the Master
Servicer and the Trustee may agree from time to time) containing such data and
information, as agreed to by the Master Servicer and the Trustee such as to
permit the Trustee to prepare the Monthly Statement to Certificateholders and to
make the required distributions for the related Distribution Date.

         Section 5.04A  ALLOCATION OF REALIZED LOSSES.

         (a) All Realized Losses on the Mortgage Loans allocated to any REMIC I
Regular Interest pursuant to Section 5.04A(b) on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows: first, to Excess
Spread; second, to the Class CE Certificates, until

                                      -94-
<PAGE>

the Certificate Principal Balance thereof has been reduced to zero; third, to
the Class M-8A Certificates and Class M-8B Certificates, on a pro rata basis,
until the Certificate Principal Balances thereof have been reduced to zero;
fourth, to the Class M-7 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class M-6 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; sixth, to
the Class M-5 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; seventh, to the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; eighth, to the
Class M-3 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; ninth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; tenth, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; eleventh, to related Class or Classes of Class A Certificates, on a pro
rata basis, until the Certificate Principal Balances thereof have been reduced
to zero; and twelfth, to the unrelated Class or Classes of Class A Certificates,
on a pro rata basis, until the Certificate Principal Balances thereof have been
reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses, in each case to be allocated to such Class of Certificates,
on such Distribution Date.

         (b) Any allocation of Realized Losses to a Class of Certificates 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 clause SEVENTH Section 5.04(a). No allocations of
any Realized Losses shall be made to the Certificate Principal Balance of the
Class P Certificates.

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

         (c) (i) The REMIC I Marker Percentage of all Realized Losses on the
Mortgage Loans (without duplication of losses allocated pursuant to Section
1.02) shall be allocated by the Trustee on each Distribution Date to the
following REMIC I Regular Interests in the specified percentages, as follows:
first, to Uncertificated Accrued Interest payable to the REMIC I Regular
Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to
the REMIC I Interest Loss Allocation Amount, 98.00% and 2.00%, respectively;
second, to the Uncertificated Principal Balances of the REMIC I Regular Interest
AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC
I Principal Loss Allocation Amount, 98.00% and 2.00%, respectively; third, to
the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-8A, REMIC I Regular Interest M-8B and REMIC I Regular
Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-7 has been reduced to zero;
fourth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA,
REMIC I Regular Interest M-7 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and

                                      -95-
<PAGE>

1.00%, respectively, until the Uncertificated Principal Balance of REMIC I
Regular Interest M-7 has been reduced to zero; fifth, to the Uncertificated
Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-6
and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until
the Uncertificated Principal Balance of REMIC I Regular Interest M-6 has been
reduced to zero; sixth to the Uncertificated Principal Balances of REMIC I
Regular Interest AA, REMIC I Regular Interest M-5 and REMIC I Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest M-5 has been reduced to zero; seventh, to
the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-4 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-4 has been reduced to zero; eighth to the Uncertificated Principal
Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-3 and REMIC
I Regular Interest ZZ, 98.00%, 1.00%, and 1.00%, respectively, until the
Uncertificated Principal Balance of REMIC I Regular Interest M-3 has been
reduced to zero; ninth to the Uncertificated Principal Balances of REMIC I
Regular Interest AA, REMIC I Regular Interest M-2 and REMIC I Regular Interest
ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal
Balance of REMIC I Regular Interest M-2 has been reduced to zero; tenth to the
Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I
Regular Interest M-1 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%,
respectively, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-1 has been reduced to zero; and eleventh with respect to any Realized
Losses on the Mortgage Loans, to the Uncertificated Principal Balance of REMIC I
Regular Interest AA, 98.00%, to the Uncertificated Principal Balances of REMIC I
Regular Interests I-A-1, I-A-2 and II-A, 1.00% pro rata, and to the
Uncertificated Principal Balance of REMIC I Regular Interest ZZ, 1.00%, until
the Uncertificated Principal Balances of REMIC I Regular Interests I-A-1, I-A-2
and II-A have 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 Principal
         Balance of each REMIC I Regular Interest ending with the designation
         "B" 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 "A" (other than REMIC I
         Regular Interest II-A) so that the Uncertificated Principal Balance of
         each such REMIC I Regular Interest is equal to 0.01% of the excess of
         (x) the aggregate Stated Principal Balance of the Mortgage Loans in the
         related Loan Group over (y) the current Certificate Principal Balance
         of the Class A Certificates related to such 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 XX.

         Section 5.05 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.

         (a) Not later than each Distribution Date, the Trustee shall prepare
and make available to each Holder of Certificates, the Certificate Insurer, the
Master Servicer and the Depositor a statement setting forth for the
Certificates:

                                      -96-
<PAGE>

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

                  (ii) the amount of such distribution to Holders of each Class
         allocable to interest and the portion thereof, if any, provided by the
         Yield Maintenance Agreements;

                  (iii) the Interest Carry Forward Amount and any Basis Risk
         Shortfall Carry Forward Amount for each Class of Certificates;

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

                  (v) for each Loan Group, the aggregate of the Stated Principal
         Balances of (A) all of the Mortgage Loans in such Loan Group, (B) the
         first lien Mortgage Loans in such Loan Group, (C) the second lien
         Mortgage Loans in such Loan Group, and (D) the Adjustable Rate Mortgage
         Loans in such Loan Group, for the following Distribution Date;

                  (vi) the related amount of the Servicing Fees paid to or
         retained by the Master Servicer for the related Due Period;

                  (vii) the Pass-Through Rate for each Class of Offered
         Certificates with respect to the current Accrual Period, and, if
         applicable, whether such Pass-Through Rate was limited by the
         applicable Net Rate Cap;

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

                  (ix) the cumulative amount of Applied Realized Loss Amounts to
         date;

                  (x) the number and aggregate Stated Principal Balances of
         Mortgage Loans in each Loan Group (A) Delinquent (exclusive of Mortgage
         Loans in foreclosure and bankruptcy) (1) 31 to 60 days, (2) 61 to 90
         days and (3) 91 or more days, (B) in foreclosure and delinquent (1) 31
         to 60 days, (2) 61 to 90 days and (3) 91 or more days and (C) in
         bankruptcy and delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3)
         91 or more days, in each case as of the close of business on the last
         day of the calendar month preceding such Distribution Date and
         separately identifying such information for the (1) first lien Mortgage
         Loans, (2) second lien Mortgage Loans, and (3) Adjustable Rate Mortgage
         Loans, in each such Loan Group;

                  (xi) with respect to any Mortgage Loan that was liquidated
         during the preceding calendar month, the loan number and Stated
         Principal Balance of, and Realized Loss on, such Mortgage Loan as of
         the close of business on the Determination Date preceding such
         Distribution Date;

                                      -97-
<PAGE>

                  (xii) the total number and principal balance of any real
         estate owned or REO Properties as of the close of business on the
         Determination Date preceding such Distribution Date;

                  (xiii) the three month rolling average of the percent
         equivalent of a fraction, the numerator of which is the aggregate
         stated Principal Balance of the Mortgage Loans in each Loan Group that
         are 60 days or more delinquent or are in bankruptcy or foreclosure or
         are REO Properties, and the denominator of which is the aggregate
         Stated Principal Balance of all of the Mortgage Loans in such Loan
         Group as of the last day of such Distribution Date and separately
         identifying such information for the (1) first lien Mortgage Loans, (2)
         second lien Mortgage Loans, and (3) Adjustable Rate Mortgage Loans, in
         each such Loan Group;

                  (xiv) the Realized Losses during the related Prepayment Period
         and the cumulative Realized Losses through the end of the preceding
         month;

                  (xv) whether a Trigger Event exists;

                  (xvi) the amount of the distribution made on such Distribution
         Date to the Holders of the Class P Certificates allocable to Prepayment
         Charges;

                  (xvii) the Certificate Insurer Premium Amount; and

                  (xviii) the Reimbursement Amount, separately indicating the
         amount related to (a) interest draws on the Class II-A Policy, (b)
         principal draws on the Class II-A Policy and (c) all other amounts
         representing such Reimbursement Amount.

         The Trustee may make the foregoing Monthly Statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders and the Certificate Insurer
via the Trustee's internet website. The Trustee's internet website shall
initially be located at "www.etrustee.net". Assistance in using the website can
be obtained by calling the Trustee's customer service desk at (312) 904-0351.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee may change the way Monthly
Statements are distributed in order to make such distributions more convenient
or more accessible to the above parties.

         (b) The Trustee's responsibility for making the above information
available to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer. The Trustee
will make available a copy of each statement provided pursuant to this Section
5.05 to each Rating Agency.

         (c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished upon request to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 5.05 aggregated for such calendar year or applicable portion thereof
during which such

                                      -98-
<PAGE>

Person was a Certificateholder. Such obligation of the Trustee shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code as
from time to time in effect.

         (d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Residual Certificates the applicable Form 1066 and
each applicable Form 1066Q and shall respond promptly to written requests made
not more frequently than quarterly by any Holder of a Residual Certificate with
respect to the following matters:

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

                  (ii) The projected remaining principal and interest cash flows
         as of the end of any calendar quarter with respect to each Class of
         regular and residual interests created hereunder and the Mortgage
         Loans, based on the Prepayment Assumption;

                  (iii) The applicable Prepayment Assumption and any interest
         rate assumptions used in determining the projected principal and
         interest cash flows described above;

                  (iv) The original issue discount (or, in the case of the
         Mortgage Loans, market discount) or premium accrued or amortized
         through the end of such calendar quarter with respect to each Class of
         regular or residual interests created hereunder and to the Mortgage
         Loans, together with each constant yield to maturity used in computing
         the same;

                  (v) The treatment of losses realized with respect to the
         Mortgage Loans or the regular interests created hereunder, including
         the timing and amount of any cancellation of indebtedness income of a
         REMIC with respect to such regular interests or bad debt deductions
         claimed with respect to the Mortgage Loans;

                  (vi) The amount and timing of any non-interest expenses of a
         REMIC; and

                  (vii) Any taxes (including penalties and interest) imposed on
         the REMIC, including, without limitation, taxes on "prohibited
         transactions," "contributions" or "net income from foreclosure
         property" or state or local income or franchise taxes.

         The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 9.12.

         Section 5.06 REMIC DESIGNATIONS AND REMIC DISTRIBUTIONS.

         (a) The Trustee shall elect that each of REMIC I, REMIC II, REMIC III
and REMIC IV shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of such
REMIC elections. The assets of REMIC I shall include the Mortgage Loans and all
interest owing in respect of and principal due thereon, the Distribution
Account, the

                                      -99-
<PAGE>

Protected Account, any REO Property, any proceeds of the foregoing and any other
assets subject to this Agreement (other than the Reserve Fund). The REMIC I
Regular Interests shall constitute the assets of REMIC II. The Class CE Interest
shall constitute the assets of REMIC III and the Class P Interest shall
constitute the assets of REMIC IV.

         (b) (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-1 Certificates, as the
case may be:

                  (i) to Holders of REMIC I Regular Interest AA, REMIC Regular
         Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular
         Interest II-A, REMIC I Regular Interest M-1, REMIC I Regular Interest
         M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC
         I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
         Interest M-7, REMIC I Regular Interest M-8A, REMIC I Regular Interest
         M-8B and REMIC I Regular Interest ZZ, PRO RATA, in an amount equal to
         (A) the Uncertificated Accrued Interest for such Distribution Date,
         plus (B) any amounts in respect thereof remaining unpaid from previous
         Distribution Dates. Amounts payable as Uncertificated Accrued Interest
         in respect of REMIC I Regular Interest ZZ 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 Uncertificated Accrued Interest Deferral
         Amount and such amount will be payable to the Holders of REMIC I
         Regular Interest I-A-1, REMIC I Regular Interest I-A-2, REMIC I Regular
         Interest II-A, REMIC I Regular Interest M-1, REMIC I Regular Interest
         M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-4, REMIC
         I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC I Regular
         Interest M-7, REMIC I Regular Interest M-8A and REMIC I Regular
         Interest M-8B in the same proportion as the Overcollateralization
         Increase Amount is allocated to the Corresponding Certificates and the
         Uncertificated Principal Balance of REMIC I Regular Interest ZZ shall
         be increased by such amount;

                  (ii) to Holders of REMIC I Regular Interest 1A, REMIC I
         Regular Interest 1B, REMIC I Regular Interest 2A, REMIC I Regular
         Interest 2B and REMIC I Regular Interest XX, pro rata, an amount equal
         to (A) the Uncertificated Accrued 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 Interest Funds and Principal Funds for both Loan
         Groups for such Distribution Date after the distributions made pursuant
         to clause (i) above, allocated as follows:

                  (A) 98% of such remainder to the Holders of REMIC I Regular
         Interest AA, until the Uncertificated Principal Balance of such REMIC I
         Regular Interest is reduced to zero;

                  (B) 2% of such remainder, first, to the Holders of REMIC I
         Regular Interest I-A-1,

                                     -100-
<PAGE>

         REMIC I Regular Interest I-A-2, REMIC I Regular Interest II-A, REMIC I
         Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
         Interest M-3, REMIC I Regular Interest M-4, REMIC I Regular Interest
         M-5, REMIC I Regular Interest M-6, REMIC I Regular Interest M-7, REMIC
         I Regular Interest M-8A and REMIC I Regular Interest M-8B, in an
         aggregate amount equal to 1% of and in the same proportion as principal
         payments are allocated to the Corresponding Certificates, until the
         Uncertificated Principal Balances of such REMIC I Regular Interests are
         reduced to zero; and second, to the Holders of REMIC I Regular Interest
         ZZ, until the Uncertificated Principal Balance of such REMIC I Regular
         Interest is reduced to zero; then

                  (C) any remaining amount to the Holders of the Class R-1
         Certificates;

                  (iv) to the Holders of REMIC I Regular Interests, in an amount
         equal to the remainder of the REMIC I Sub WAC Allocation Percentage of
         the Interest Funds and Principal Funds for both Loan Groups for such
         Distribution Date after the distributions made pursuant to clause (ii)
         above, first, so as to keep the Uncertificated Principal Balance of
         each REMIC I Regular Interest ending with the designation "B" 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 "A," so that the Uncertificated Principal
         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 related to such 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 XX.

         (c) On each Distribution Date, all amounts representing Prepayment
Charges deemed distributed in respect of the Class P Interest shall be deemed
distributed in respect of REMIC I Regular Interest P, provided that such amounts
shall not reduce the Uncertificated Principal Balance of REMIC I Regular
Interest P. On the Distribution Date immediately following the expiration of the
latest Prepayment Charge term as identified on the Mortgage Loan Schedule, $100
shall be deemed distributed in respect of REMIC I Regular Interest P in
reduction of the Uncertificated Principal Balance thereof.

         (d) On each Distribution Date, an amount equal to the amounts
distributed pursuant to Sections 5.04(a)(4)(C), (E) and (G) on such date shall
be deemed distributed from REMIC II to REMIC III in respect of the Class CE
Distribution Amount distributable to the Class CE Interest.

         (e) On each Distribution Date, 100% of the amounts deemed distributed
on REMIC I Regular Interest P shall be deemed distributed by REMIC II to REMIC
IV in respect of the Class P Interest.

                                     -101-
<PAGE>

         Section 5.07 POLICY MATTERS.

         (a) If, on the third Business Day before any Distribution Date, the
Trustee determines that a Deficiency Amount exists on such Distribution Date,
the Trustee shall give notice to the Certificate Insurer and the Fiscal Agent
(as defined in the Class II-A Policy), if any, by telephone or telecopy of the
amount of such Deficiency Amount, confirmed in writing by notice substantially
in the form of Exhibit A to the Class II-A Policy by 12:00 noon, New York City
time on such third Business Day. The Trustee's responsibility for delivering the
notice to the Certificate Insurer as provided in the preceding sentence is
contingent upon its receipt of available, timely and accurate information from
the Master Servicer.

         (b) In the event the Trustee receives a certified copy of an order of
the appropriate court regarding any Avoided Payment (as defined in the Class
II-A Policy), the Trustee shall (i) promptly notify the Certificate Insurer and
the Fiscal Agent, if any, and (ii) comply with the provisions of the Class II-A
Policy to obtain payment by the Certificate Insurer of such Avoided Payment. In
addition, the Trustee shall mail notice to all Holders of the Class II-A
Certificates so affected that, in the event that any such Holder's scheduled
payment is an Avoided Payment, such Holder will be entitled to payment pursuant
to the terms of the Class II-A Policy, a copy of which shall be made available
to such Holders by the Trustee. The Trustee shall furnish to the Certificate
Insurer and the Fiscal Agent, if any, its records listing the payments on the
affected Class II-A Certificates, if any, that have been made by the Trustee and
subsequently recovered from the affected Holders, and the dates on which such
payments were made by the Trustee.

         (c) At the time of the execution hereof, and for the purposes hereof,
the Trustee shall establish a separate special purpose trust account in the name
of the Trustee for the benefit of Holders of the Class II-A Certificates (the
"Class II-A Policy Payments Account") over which the Trustee shall have
exclusive control and sole right of withdrawal. The Class II-A Policy Payments
Account shall be an Eligible Account. The Trustee shall deposit any amount paid
under the Class II-A Policy into the Class II-A Policy Payments Account and
distribute such amount only for the purposes of making the payments to Holders
of the Class II-A Certificates in respect of the Insured Payment for which the
related claim was made under the Class II-A Policy. Such amounts shall be
allocated by the Trustee to Holders of Class II-A Certificates affected by such
shortfalls in the same manner as interest and principal payments are to be
allocated with respect to such Certificates pursuant to Section 5.04. 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 make regular payments
hereunder with funds withdrawn from the Distribution Account. However, any
payments made on the Class II-A Certificates from funds in the Class II-A Policy
Payments Account shall be noted as provided in subsection (e) below. Funds held
in the Class II-A Policy Payments Account shall not be invested by the Trustee.

         (d) Any funds received from the Certificate Insurer for deposit into
the Class II-A Policy Payments Account pursuant to the Class II-A Policy in
respect of a Distribution Date or otherwise as a result of any claim under the
Class II-A Policy shall be applied by the Trustee directly to the payment in
full (i) of the Deficiency Amount due on such Distribution Date on the Class
II-A Certificates, or (ii) of other amounts payable under the Class II-A Policy.
Funds received by the Trustee as a result of any claim under the Class II-A
Policy shall be used solely for payment to the

                                     -102-
<PAGE>

Holders of the Class II-A Certificates and may not be applied for any other
purpose, including, without limitation, satisfaction of any costs, expenses or
liabilities of the Trustee, the Depositor, the Seller, any subservicer, the
Master Servicer or the Trust Fund. Any funds remaining in the Class II-A Policy
Payments Account on the first Business Day after each Distribution Date shall be
remitted promptly to the Certificate Insurer pursuant to the written instruction
of the Certificate Insurer.

         (e) The Trustee shall keep complete and accurate records in respect of
(i) all funds remitted to it by the Certificate Insurer and deposited into the
Class II-A Policy Payments Account and (ii) the allocation of such funds to (A)
payments of interest on and principal in respect of any Class II-A Certificates
and (B) the amount of funds available to make distributions on the Class II-A
Certificates pursuant to Section 5.04. The Certificate Insurer shall have the
right to inspect such records at reasonable times during normal business hours
upon three Business Days' prior notice to the Trustee.

         (f) The Trustee acknowledges, and each Holder of a Class II-A
Certificate by its acceptance of the Class II-A Certificate agrees, that,
without the need for any further action on the part of the Certificate Insurer
or the Trustee to the extent the Certificate Insurer makes payments, directly or
indirectly, on account of principal of or interest on any Class II-A
Certificates, the Certificate Insurer will be fully subrogated to the rights of
the Holders of such Class II-A Certificates to receive such principal and
interest from the Trust Fund. The Holders of the Class II-A Certificates, by
acceptance of the Class II-A Certificates, assign their rights as Holders of the
Class II-A Certificates to the extent of the Certificate Insurer's interest with
respect to amounts paid under the Class II-A Policy. Anything herein to the
contrary notwithstanding, solely for purposes of determining the Certificate
Insurer's rights, as applicable, as subrogee for payments distributable pursuant
to Section 5.04, any payment with respect to distributions to the Class II-A
Certificates which is made with funds received pursuant to the terms of the
Class II-A Policy, shall not be considered payment of the Class II-A
Certificates from the Trust Fund and shall not result in the distribution or the
provision for the distribution in reduction of the Certificate Principal Balance
of the Class II-A Certificates as described in this Article V.

         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 or
the Insurance Agreement without limiting the rights or affecting the interests
of the Holders as otherwise set forth herein.

         (g) Upon its becoming aware of the occurrence of an Event of Default,
the Trustee shall promptly notify the Certificate Insurer of such Event of
Default.

         (h) The Trustee shall promptly notify the Certificate Insurer of either
of the following as to which a Responsible Officer has actual knowledge: (A) the
commencement of any proceeding by or against the Depositor commenced under the
United States bankruptcy code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") and (B)
the making of any claim in connection with any proceeding seeking the avoidance
as a preferential transfer (a "Preference Claim") of any distribution made with
respect to the Class II-A Certificates as to which it has actual knowledge. Each
Holder of a Class II-A Certificate, by its purchase of Class II-A Certificates,
and the Trustee hereby agrees that the Certificate Insurer (so long

                                     -103-
<PAGE>

as no Certificate Insurer Default exists) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to any Preference Claim and (ii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Certificate
Insurer shall be subrogated to the rights of the Trustee and each Holder of a
Class II-A Certificate in the conduct of any Preference Claim, including,
without limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such Preference
Claim.

         (i) The Master Servicer shall designate a Certificate Insurer Contact
Person who shall be available to the Certificate Insurer to provide reasonable
access to information regarding the Mortgage Loans. The initial Certificate
Insurer Contact Person is to the attention of EMC Mortgage Corporation, 909
Hidden Ridge Drive, Irving, Texas 75038, Attention: Christa Fellers, telephone:
972-444-3329.

         (j) The Trustee shall promptly surrender the Class II-A Policy to the
Certificate Insurer for cancellation upon the reduction of the Certificate
Principal Balance of the Class II-A Certificates to zero.

         (k) The Trustee shall send to the Certificate Insurer the statements
prepared pursuant to Section 5.05, as well as any other statements or
communications sent to Holders of the Class II-A Certificates, in each case at
the same time such reports, statements and communications are otherwise sent.

         (l) For so long as there is not continuing default by the Certificate
Insurer under its obligations under the Class II-A Policy (a "Certificate
Insurer Default"), each Holder of a Class II-A Certificate agrees that the
Certificate Insurer shall be treated by the Depositor, the Master Servicer and
the Trustee as if the Certificate Insurer were the Holder of all Class II-A
Certificates for the purpose (and solely for the purpose) of the giving of any
consent, the making of any direction or the exercise of any voting or other
control rights otherwise given the Holders of the Class II-A Certificates
hereunder without any further consent of the Holders of the Class II-A
Certificates and such holders shall not exercise such rights without the prior
written consent of the Certificate Insurer.

         With respect to this Section 5.07, (i) the terms "Receipt" and
"Received" shall mean actual delivery to the Certificate Insurer and Certificate
Insurer's Fiscal Agent, if any, received prior to 12:00 noon, New York City
time, on a Business Day; delivery either on a day that is not a Business Day or
after 12:00 noon, New York City time, shall be deemed to be Received on the next
succeeding Business Day. If any notice or certificate given under the Class II-A
Policy by the Trustee is not in proper form or is not properly completed,
executed or delivered, it shall be deemed not to have been Received. The
Certificate Insurer or its Fiscal Agent, if any, shall promptly so advise the
Trustee and the Trustee may submit an amended notice and (ii) "Business Day"
means any day other than (A) a Saturday or Sunday, (B) a day on which the
Certificate Insurer is closed or (C) a day on which banking institutions in the
City of New York, New York, or in which the Corporate Trust Office of the
Trustee is located, are authorized or obligated by law or executive order to be
closed.

                                     -104-
<PAGE>

         (m) Unless otherwise designated in writing by the President or a
Managing Director of the Certificate Insurer to the Trustee, the Certificate
Insurer Premium Amount to be paid pursuant to Section 5.04(a)(1) shall be paid
by the Trustee to the Certificate Insurer in accordance with the terms of the
Premium Letter.

                                     -105-
<PAGE>

                                   ARTICLE VI

                                THE CERTIFICATES

         Section 6.01 THE CERTIFICATES.

         The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-5. The Certificates shall be issuable in registered form,
in the minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate of each Class may be issued in a different amount
which must be in excess of the applicable minimum dollar denomination) and
aggregate dollar denominations as set forth in the following table:

<TABLE>
<CAPTION>

                            Minimum           Integral Multiple in      Original Certificate
        Class             Denomination          Excess of Minimum        Principal Balance
        -----             ------------          -----------------        -----------------
<S>                         <C>                    <C>                  <C>
       I-A-1                $25,000                $   1.00             $    96,889,000.00
       I-A-2                $25,000                $   1.00             $    32,363,000.00
       II-A                 $25,000                $   1.00             $   243,910,000.00
        M-1                 $25,000                $   1.00             $    30,276,000.00
        M-2                 $25,000                $   1.00             $     8,214,000.00
        M-3                 $25,000                $   1.00             $    16,428,000.00
        M-4                 $25,000                $   1.00             $     7,041,000.00
        M-5                 $25,000                $   1.00             $     5,867,000.00
        M-6                 $25,000                $   1.00             $     5,867,000.00
        M-7                 $25,000                $   1.00             $     4,694,000.00
       M-8A                 $25,000                $   1.00             $     4,694,000.00
       M-8A                 $25,000                $   1.00             $     4,694,000.00
        CE                       10%                   1%               $     8,448,026.79
         P                  $   100                N/A                  $           100.00
        R-1                     100%               N/A                  N/A
        R-2                     100%               N/A                  N/A
        RX                      100%               N/A                  N/A
</TABLE>

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate the countersignature
of the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly countersigned and delivered hereunder. All
Certificates shall be dated the date of their countersignature. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.

                                     -106-
<PAGE>

         The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.

         Section 6.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND
EXCHANGE OF CERTIFICATES.

         (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 6.09 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.

         At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.

         No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.

         All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.

         (b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee in writing the facts surrounding the Transfer by (x)(i) the
delivery to the Trustee by the Certificateholder desiring to effect such
transfer of a certificate substantially in the form set forth in Exhibit E (the
"Transferor Certificate") and (ii) the delivery by the Certificateholder's
prospective transferee of (A) a letter in substantially the form of Exhibit F
(the "Investment Letter") if the prospective transferee is an Institutional
Accredited Investor or (B) a letter in substantially the form of Exhibit G (the
"Rule 144A and Related Matters Certificate") if the prospective transferee is a
QIB or (y) there shall be delivered to the Trustee an Opinion of Counsel
addressed to the Trustee that such Transfer may be made pursuant to an exemption
from the Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Seller, the Master Servicer or the Trustee. The Depositor shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related

                                     -107-
<PAGE>

Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee and the Master Servicer shall cooperate with the Depositor in providing
the Rule 144A information referenced in the preceding sentence, including
providing to the Depositor such information regarding the Certificates, the
Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall
reasonably request to meet its obligation under the preceding sentence. Each
Holder of a Private Certificate desiring to effect such Transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Seller and the Master
Servicer against any liability that may result if the Transfer is not so exempt
or is not made in accordance with such federal and state laws.

         No Transfer of an ERISA Restricted Certificate shall be made unless
either (i) the Trustee and the Master Servicer shall have received a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee and the Master Servicer, to the effect
that such transferee is not an employee benefit plan subject to Section 406 of
ERISA and/or a plan subject to Section 4975 of the Code, or a Person acting on
behalf of any such plan or using the assets of any such plan, or (ii) in the
case of any such ERISA Restricted Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or a plan subject to Section
4975 of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or any other person acting on behalf of any such plan,
the Trustee shall have received an Opinion of Counsel for the benefit of the
Trustee and the Master Servicer and on which they may rely, satisfactory to the
Trustee, to the effect that the purchase and holding of such ERISA Restricted
Certificate will not constitute or result in the assets of the Trust being
deemed to be "plan assets" under ERISA or the Code, will not result in any
prohibited transactions under ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Depositor to any obligation in
addition to those expressly undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Trustee, the Master Servicer or the
Depositor. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA Restricted Certificate to or on behalf of an employee
benefit plan subject to Section 406 of ERISA and/or a plan subject to Section
4975 of the Code without the delivery of the Opinion of Counsel as described
above shall be void and of no effect; provided that the restriction set forth in
this sentence shall not be applicable if there has been delivered to the Trustee
an Opinion of Counsel meeting the requirements of clause (ii) of the first
sentence of this paragraph. Neither the Trustee nor the Master Servicer shall be
required to monitor, determine or inquire as to compliance with the transfer
restrictions with respect to any ERISA Restricted Certificate that is a
Book-Entry Certificate, and neither the Trustee nor the Master Servicer shall
have any liability for transfers of any such Book-Entry Certificates made
through the book-entry facilities of any Depository or between or among
participants of the Depository or Certificate Owners made in violation of the
transfer restrictions set forth herein. Neither the Trustee nor the Master
Servicer shall be under any liability to any Person for any registration of
transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 6.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement. The Trustee shall be entitled, but not obligated,
to recover from any Holder of any ERISA Restricted Certificate that was in fact
an employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a Person acting on behalf of any such plan at the
time it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a

                                     -108-
<PAGE>

plan, all payments made on such ERISA Restricted Certificate at and after either
such time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Holder of such Certificate that
is not such a plan or Person acting on behalf of a plan.

         Each beneficial owner of a Class M Certificate or any interest therein
shall be deemed to have represented, by virtue of its acquisition or holding of
that certificate or interest therein, that either (i) it is not a Plan or
investing with "Plan Assets", (ii) in the case of Certificates other than the
Class M-8 Certificates, it has acquired and is holding such certificate in
reliance on the Exemption, and that it understands that there are certain
conditions to the availability of the Exemption, including that the certificate
must be rated, at the time of purchase, not lower than "BBB-" (or its
equivalent) by S&P, Fitch Ratings or Moody's, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire or
hold the certificate or interest therein is an "insurance company general
account," as such term is defined in Prohibited Transaction Class Exemption
("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.

         (c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:

                  (i) Each Person holding or acquiring any Ownership Interest in
         a Residual Certificate shall be a Permitted Transferee and shall
         promptly notify the Trustee of any change or impending change in its
         status as a Permitted Transferee.

                  (ii) No Ownership Interest in a Residual Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Residual Certificate
         unless, in addition to the certificates required to be delivered to the
         Trustee under subparagraph (b) above, the Trustee shall have been
         furnished with an affidavit (a "Transfer Affidavit") of the initial
         owner or the proposed transferee in the form attached hereto as Exhibit
         D.

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Residual Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Residual Certificate, (B) to
         obtain a Transfer Affidavit from any Person for whom such Person is
         acting as nominee, trustee or agent in connection with any Transfer of
         a Residual Certificate and (C) not to Transfer its Ownership Interest
         in a Residual Certificate or to cause the Transfer of an Ownership
         Interest in a Residual Certificate to any other Person if it has actual
         knowledge that such Person is not a Permitted Transferee.

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Residual Certificate in violation of the provisions of
         this Section 6.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Residual Certificate in violation of the
         provisions of this Section 6.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder

                                     -109-
<PAGE>

         thereof retroactive to the date of registration of Transfer of such
         Residual Certificate. The Trustee shall be under no liability to any
         Person for any registration of Transfer of a Residual Certificate that
         is in fact not permitted by Section 6.02(b) and this Section 6.02(c) or
         for making any payments due on such Certificate to the Holder thereof
         or taking any other action with respect to such Holder under the
         provisions of this Agreement so long as the Transfer was registered
         after receipt of the related Transfer Affidavit. The Trustee shall be
         entitled but not obligated to recover from any Holder of a Residual
         Certificate that was in fact not a Permitted Transferee at the time it
         became a Holder or, at such subsequent time as it became other than a
         Permitted Transferee, all payments made on such Residual Certificate at
         and after either such time. Any such payments so recovered by the
         Trustee shall be paid and delivered by the Trustee to the last
         preceding Permitted Transferee of such Certificate.

                  (v) The Master Servicer shall make available within 60 days of
         written request from the Trustee, all information necessary to compute
         any tax imposed under Section 860E(e) of the Code as a result of a
         Transfer of an Ownership Interest in a Residual Certificate to any
         Holder who is not a Permitted Transferee.

The restrictions on Transfers of a Residual Certificate set forth in this
Section 6.02(c) shall cease to apply (and the applicable portions of the legend
on a Residual Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee and the Certificate Insurer of an Opinion of
Counsel addressed to the Trustee and the Certificate Insurer, which Opinion of
Counsel shall not be an expense of the Trustee, the Seller, the Certificate
Insurer or the Master Servicer to the effect that the elimination of such
restrictions will not cause REMIC I, REMIC II, REMIC III or REMIC IV, as
applicable, to fail to qualify as a REMIC at any time that the Certificates are
outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
ownership Interest in a Residual Certificate hereby consents to any amendment of
this Agreement that, based on an Opinion of Counsel addressed to the Trustee and
the Certificate Insurer and furnished to the Trustee and the Certificate
Insurer, is reasonably necessary (a) to ensure that the record ownership of, or
any beneficial interest in, a Residual Certificate is not transferred, directly
or indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.

         (d) The preparation and delivery of all certificates and opinions
referred to above in this Section 6.02 shall not be an expense of the Trust
Fund, the Trustee, the Depositor, the Seller or the Master Servicer.

         Section 6.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee (and with respect to any Class II-A Certificates, to the Certificate
Insurer) such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage

                                     -110-
<PAGE>

Interest. In connection with the issuance of any new Certificate under this
Section 6.03, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 6.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates surrendered to the
Trustee under the terms of this Section 6.03 shall be canceled and destroyed by
the Trustee in accordance with its standard procedures without liability on its
part.

         Section 6.04 PERSONS DEEMED OWNERS.

         The Trustee, the Certificate Insurer and any agent of the Trustee or
the Certificate Insurer may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Trustee, the Certificate Insurer nor any agent of
the Trustee or the Certificate Insurer shall be affected by any notice to the
contrary.

         Section 6.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.

         If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor, the Certificate Insurer or the Master Servicer shall request such
information in writing from the Trustee, then the Trustee shall, within ten
Business Days after the receipt of such request, provide the Depositor, the
Certificate Insurer, the Master Servicer or such Certificateholders at such
recipients' expense the most recent list of the Certificateholders of the Trust
Fund held by the Trustee, if any. The Depositor and every Certificateholder, by
receiving and holding a Certificate, agree that the Trustee shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.

         Section 6.06 BOOK-ENTRY CERTIFICATES.

         The Regular Certificates (other than the Class M-8, Class CE and Class
P Certificates), upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to the Depository by or on behalf of the Depositor. Such Certificates
shall initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of such Certificates will
receive a definitive certificate representing such Certificate Owner's interest
in such Certificates, except as provided in Section 6.08. Unless and until
definitive, fully registered Certificates ("Definitive Certificates") have been
issued to the Certificate Owners of such Certificates pursuant to Section 6.08:

         (a) the provisions of this Section shall be in full force and effect;

                                     -111-
<PAGE>

         (b) the Depositor and the Trustee may deal with the Depository and the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of such
Certificates;

         (c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;

         (d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 6.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;

         (e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;

         (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

         (g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.

         For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.

         Section 6.07 NOTICES TO DEPOSITORY.

         Whenever any notice or other communication is required to be given to
Certificateholders of a Class with respect to which Book-Entry Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Trustee shall give all such notices and
communications to the Depository.

         Section 6.08 DEFINITIVE CERTIFICATES.

         If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Depositor is unable to locate a qualified successor or (b)
the Depositor, at its sole option, advises the Trustee that it elects to
terminate the book-entry system with respect to such Certificates through the
Depository, then the Trustee shall notify all Certificate Owners of such

                                     -112-
<PAGE>

Certificates, through the Depository, of the occurrence of any such event and of
the availability of Definitive Certificates to applicable Certificate Owners
requesting the same. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Trustee of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall countersign and deliver such Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions.

         In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such Certificate Owner's Voting
Rights in the related Class of Certificates. In order to make such request, such
Certificate Owner shall, subject to the rules and procedures of the Depository,
provide the Depository or the related Depository Participant with directions for
the Trustee to exchange or cause the exchange of the Certificate Owner's
interest in such Class of Certificates for an equivalent Voting Right in fully
registered definitive form. Upon receipt by the Trustee of instructions from the
Depository directing the Trustee to effect such exchange (such instructions to
contain information regarding the Class of Certificates and the Current
Principal Amount being exchanged, the Depository Participant account to be
debited with the decrease, the registered holder of and delivery instructions
for the definitive Certificate, and any other information reasonably required by
the Trustee), (i) the Trustee shall instruct the Depository to reduce the
related Depository Participant's account by the aggregate Current Principal
Amount of the definitive Certificate, (ii) the Trustee shall execute,
authenticate and deliver, in accordance with the registration and delivery
instructions provided by the Depository, a definitive Certificate evidencing
such Certificate Owner's Voting Rights in such Class of Certificates and (iii)
the Trustee shall execute and authenticate a new Book-Entry Certificate
reflecting the reduction in the Current Principal Amount of such Class of
Certificates by the amount of the definitive Certificates.

         Section 6.09 MAINTENANCE OF OFFICE OR AGENCY.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies at the Corporate Trust Office where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office, as the office for such
purposes. The Trustee will give prompt written notice to the Certificateholders
and the Certificate Insurer of any change in such location of any such office or
agency.

                                     -113-
<PAGE>

                                   ARTICLE VII

                      THE DEPOSITOR AND THE MASTER SERVICER

         Section 7.01 LIABILITIES OF THE DEPOSITOR AND THE MASTER SERVICER. Each
of the Depositor, and the Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by it herein.

         Section 7.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER
SERVICER.

         (a) Each of the Depositor and the Master Servicer will keep in full
force and effect its existence, rights and franchises as a corporation under the
laws of the state of its incorporation, and 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 and the other Transaction Documents to which it
is a party, the Certificates or any of the Mortgage Loans and to perform its
duties under this Agreement and the other Transaction Documents to which it is a
party.

         (b) Any Person into which the Depositor or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer hereunder,
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.

         Section 7.03 INDEMNIFICATION OF THE TRUSTEE AND THE MASTER SERVICER.

         (a) The Master Servicer agrees to indemnify the Indemnified Persons
for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, including any powers of attorney delivered
pursuant to this Agreement, the Custodial Agreement or the Certificates (i)
related to the Master Servicer's failure to perform its duties in compliance
with this Agreement (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or (ii) incurred by reason of
the Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect to
any such claim or legal action (or pending or threatened claim or legal action),
the Trustee shall have given the Master Servicer and the Seller written notice
thereof promptly after the Trustee shall have with respect to such claim or
legal action knowledge thereof; provided, however that the failure to give such
notice shall not relieve the Master Servicer of its indemnification obligations
hereunder. This indemnity shall survive the resignation or removal of the
Trustee or Master Servicer and the termination of this Agreement.

         (b) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise paid or covered
pursuant to Subsection (a) above.

                                     -114-
<PAGE>

         Section 7.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER AND OTHERS. Subject to the obligation of the Master Servicer to
indemnify the Indemnified Persons pursuant to Section 7.03:

         (a) Neither the Depositor, the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor and the Master
Servicer shall be under any liability to the Indemnified Persons, the Trust Fund
or the Certificateholders for taking any action or for refraining from taking
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Master Servicer or any such Person against any breach of warranties or
representations made herein or any liability which would otherwise be imposed by
reason of such Person's willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder.

         (b) The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor and the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder.

         (c) The Depositor, the Master Servicer, the Trustee, the Custodian and
the Certificate Insurer and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Trustee, the Custodian or the Certificate
Insurer shall be indemnified by the Trust and held harmless thereby against any
loss, liability or expense (including reasonable legal fees and disbursements of
counsel) incurred on their part that may be sustained in connection with,
arising out of, or related to, any claim or legal action (including any pending
or threatened claim or legal action) relating to this Agreement, the Custodial
Agreement, the Insurance Agreement or the Certificates, other than (i) any such
loss, liability or expense related to the Master Servicer's or the Certificate
Insurer's failure to perform its duties in compliance with this Agreement or the
Insurance Agreement, as applicable (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement or the
Insurance Agreement, as applicable), or (ii) any such loss, liability or expense
incurred by reason of the Master Servicer's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or the Certificate
Insurer's breach of a representation, warranty or covenant under the Insurance
Agreement, or by reason of reckless disregard of obligations and duties
hereunder or the Insurance Agreement, as applicable, (iii) in the case of the
Trustee, any such loss, liability or expense incurred by reason of the Trustee's
willful misfeasance, bad faith or negligence in the performance of its duties
hereunder, or by reason of its reckless disregard of obligations and duties
hereunder and (iv) in the case of the Custodian, any such loss, liability or
expense incurred by reason of the Custodian's willful misfeasance, bad faith or
negligence in the performance of its duties under the Custodial Agreement, or by
reason of its reckless disregard of obligations and duties thereunder.

         (d) Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties under this Agreement and that in its opinion may
involve it in any expense or liability; provided, however, the Master Servicer
may in its discretion, with the consent of the Trustee (which consent shall not
be unreasonably withheld), 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

                                     -115-
<PAGE>

hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Protected Account as provided by Section 4.02. Nothing in this
Subsection 7.04(d) shall affect the Master Servicer's obligation to service and
administer the Mortgage Loans pursuant to Article III.

         (e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.

         Section 7.05 MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) with the prior consent of the Trustee and
the Certificate Insurer (which consents shall not be unreasonably withheld) or
(ii) upon a determination that any such duties hereunder are no longer
permissible under applicable law and such impermissibility cannot be cured. Any
such determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel, addressed to and delivered to, the Trustee
and the Certificate Insurer. No such resignation by the Master Servicer shall
become effective until the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee and the Certificate Insurer shall have
assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies and the Certificate Insurer of the resignation of the Master Servicer.

         Section 7.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, the Trustee may make such arrangements for the compensation
of such successor master servicer out of payments on the Mortgage Loans as the
Trustee and such successor master servicer shall agree. If the successor master
servicer does not agree that such market value is a fair price, such successor
master servicer shall obtain two quotations of market value from third parties
actively engaged in the servicing of single-family mortgage loans. In no event
shall the compensation of any successor master servicer exceed that permitted
the Master Servicer hereunder without the consent of the Certificate Insurer and
all of the Certificateholders.

         Section 7.07 SALE AND 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 accepting such assignment and delegation
(a) shall be a Person which shall be qualified to service mortgage loans for
Fannie Mae or Freddie Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee and the
Certificate Insurer (as evidenced in a writing signed by the Trustee and the
Certificate Insurer); and (d) shall execute and deliver to the Trustee and the
Certificate Insurer an agreement, in form and substance reasonably satisfactory
to the Trustee and the Certificate Insurer, 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

                                     -116-
<PAGE>

Rating Agency and the Certificate Insurer 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 (determined without regard to the Class II-A
Policy) 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, the Trustee and the Certificate Insurer; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee and the Certificate Insurer an Officer's Certificate and
an Opinion of Counsel addressed to the Trustee and the Certificate Insurer, 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 prior to the effective date thereof.

                                     -117-
<PAGE>

                                  ARTICLE VIII

                     DEFAULT; TERMINATION OF MASTER SERVICER

         Section 8.01 EVENTS OF DEFAULT.

         "Event of Default," wherever used herein, means any one of the
following events:

                  (i) any failure by the Master Servicer to remit to the Trustee
         any amounts received or collected by the Master Servicer in respect of
         the Mortgage Loans and required to be remitted by it hereunder (other
         than any Advance), which failure shall continue unremedied for one
         Business Day after the date on which written notice of such failure
         shall have been given to the Master Servicer by the Trustee or the
         Depositor, or to the Trustee and the Master Servicer by the Holders of
         Certificates evidencing not less than 25% of the Voting Rights
         evidenced by the Certificates;

                  (ii) any failure by the Master Servicer 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 any breach
         of a representation or warranty by the Master Servicer, which failure
         or breach shall continue unremedied for a period of 60 days after the
         date on which written notice of such failure shall have been given to
         Master Servicer by the Trustee or the Depositor, or to the Trustee and
         the Master Servicer by the Holders of Certificates evidencing not less
         than 25% of the Voting Rights evidenced by the Certificates;

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises for the appointment of a
         receiver or liquidator in any insolvency, readjustment of debt,
         marshalling of assets and liabilities or similar proceedings, or for
         the winding-up or liquidation of its affairs, shall have been entered
         against the Master Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 60
         consecutive days;

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

                  (v) the Master Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of, or commence a voluntary case under, any applicable
         insolvency or reorganization statute, make an assignment for the
         benefit of its creditors, or voluntarily suspend payment of its
         obligations;

                  (vi) the Master Servicer assigns or delegates its duties or
         rights under this Agreement in contravention of the provisions
         permitting such assignment or delegation under Sections 7.05 or 7.07;
         or

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                  (vii) The Master Servicer fails to deposit, or cause to be
         deposited, in the Distribution Account any Advance (other than a
         Nonrecoverable Advance) by 5:00 p.m. New York City time on the
         Distribution Account Deposit Date; or

                  (viii) any draw on the Class II-A Policy, unless a Certificate
         Insurer Default has occurred and is continuing; provided that if the
         Master Servicer is EMC Mortgage Corporation, the Master Servicer shall
         not be in default pursuant to this clause if the direct or indirect
         parent of EMC Mortgage Corporation is rated at least "BBB" by Standard
         & Poor's or "Baa2" by Moody's.

         If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, and at the direction of the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates, the Trustee shall
in the case of any Event of Default described in clauses (i) through (vii) above
or upon receipt of written instructions from the Certificate Insurer in the case
of an Event of Default described in clause (viii) above, by notice in writing to
the Master Servicer (with a copy to each Rating Agency and the Certificate
Insurer), terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. On or after the receipt
by the Master Servicer of such written notice, all authority and power of the
Master Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee, or any successor
appointed pursuant to Section 8.02 (a "Successor Master Servicer"); provided, to
the extent the Certificate Insurer directs the Trustee to terminate the Master
Servicer due to an Event of Default described in clause (viii) above, the
Certificate Insurer will be required to appoint a Successor Master Servicer
which is reasonably acceptable to the Trustee and the Rating Agencies; and
provided further no such termination of the Master Servicer due to an Event of
Default as described under clause (viii) shall occur until and unless a
Successor Master Servicer has been appointed. Such Successor Master Servicer
shall thereupon if such Successor Master Servicer is a successor to the Master
Servicer, make any Advance required by Article V, subject, in the case of the
Trustee, to Section 8.02. The Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the terminated Master Servicer, as attorney-
in-fact or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of any Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Master Servicer to pay amounts owed pursuant
to Article VII or Article IX. The Master Servicer agrees to cooperate with the
Trustee in effecting the termination of the Master Servicer's responsibilities
and rights hereunder, including, without limitation, the transfer to the
applicable Successor Master Servicer of all cash amounts which shall at the time
be credited to the Protected Account maintained pursuant to Section 4.02, or
thereafter be received with respect to the applicable Mortgage Loans. The
Trustee shall promptly notify the Rating Agencies and the Certificate Insurer of
the occurrence of an Event of Default known to the Trustee.

         Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a Scheduled Payment on a Mortgage Loan that was due prior to
the notice terminating the Master Servicer's rights and

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obligations as Master Servicer hereunder and received after such notice, that
portion thereof to which the Master Servicer would have been entitled pursuant
to Sections 4.02 and to receive any other amounts payable to the Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.

         Notwithstanding the foregoing, if an Event of Default described in
clause (vii) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, with a copy to the Certificate Insurer, which
may be delivered by telecopy, immediately terminate all of the rights and
obligations of the Master Servicer thereafter arising under this Agreement, but
without prejudice to any rights it may have as a Certificateholder or to
reimbursement of Advances and other advances of its own funds, and the Trustee
shall act as provided in Section 8.02 to carry out the duties of the Master
Servicer, including the obligation to make any Advance the nonpayment of which
was an Event of Default described in clause (vii) of this Section 8.01. Any such
action taken by the Trustee must be prior to the distribution on the relevant
Distribution Date.

         Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         Except with respect to an Event of Default described in Section
8.01(viii) above for which the Certificate Insurer is required to appoint a
Successor Master Servicer, on and after the time the Master Servicer receives a
notice of termination pursuant to Section 8.01 hereof the Trustee shall
automatically become the successor to the Master Servicer with respect to the
transactions set forth or provided for herein and after a transition period (not
to exceed 90 days), shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof; provided, however that, pursuant to Article V hereof, the
Trustee in its capacity as successor Master Servicer shall be responsible for
making any Advances required to be made by the Master Servicer immediately upon
the termination of the Master Servicer and any such Advance shall be made on the
Distribution Date on which such Advance was required to be made by the
predecessor Master Servicer. Effective on the date of such notice of
termination, as compensation therefor, the Trustee shall be entitled to all
compensation, reimbursement of expenses and indemnification that the Master
Servicer would have been entitled to if it had continued to act hereunder,
provided, however, that the Trustee shall not be (i) liable for any acts or
omissions of the Master Servicer, (ii) obligated to make Advances if it is
prohibited from doing so under applicable law, (iii) responsible for expenses of
the Master Servicer pursuant to Section 2.03 or (iv) obligated to deposit losses
on any Permitted Investment directed by the Master Servicer. Notwithstanding the
foregoing, the Trustee may, if it shall be unwilling to so act, or shall, if it
is prohibited by applicable law from making Advances pursuant to Article V or if
it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency (determined without regard to the Class II-A
Policy) as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Any Successor Master Servicer shall (i) be an institution
that is a Fannie Mae and Freddie Mac approved seller/servicer in good standing,
that has a net worth of at least $15,000,000, (ii) be acceptable to the Trustee
and the Certificate Insurer (which consent shall not be unreasonably withheld)
and (iii) be willing to act as successor servicer of any Mortgage Loans under
this Agreement, and shall have executed and delivered to the Depositor, the
Trustee and the Certificate Insurer an agreement accepting such delegation and

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assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than any liabilities of the Master Servicer hereof incurred prior to
termination of the Master Servicer under Section 8.01 or as otherwise set forth
herein), with like effect as if originally named as a party to this Agreement,
provided that each Rating Agency shall have acknowledged in writing that its
rating of the Certificates in effect immediately prior to such assignment and
delegation (determined without regard to the Class II-A Policy) will not be
qualified or reduced as a result of such assignment and delegation. If the
Trustee assumes the duties and responsibilities of the Master Servicer in
accordance with this Section 8.02, the Trustee shall not resign as Master
Servicer until a Successor Master Servicer has been appointed and has accepted
such appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise as
it and such successor shall agree; provided that no such compensation unless
agreed to by the Certificateholders shall be in excess of that permitted the
Master Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other Successor Master Servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Master Servicer to
deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.

         The costs and expenses of the Trustee in connection with the
termination of the Master Servicer, appointment of a Successor Master Servicer
and, if applicable, any transfer of servicing, including, without limitation,
all costs and expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or the Successor Master
Servicer to service the related Mortgage Loans properly and effectively, to the
extent not paid by the terminated Master Servicer, shall be payable to the
Trustee pursuant to Section 9.05. Any successor to the Master Servicer as
successor servicer under any Subservicing Agreement shall give notice to the
applicable Mortgagors of such change of servicer and shall, during the term of
its service as successor servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 3.08.

         Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS.

         (a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Certificate Insurer and to each Rating Agency.

         (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and the Certificate
Insurer notice of each such Event of Default hereunder actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured or waived.

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         Section 8.04 WAIVER OF DEFAULTS.

         The Trustee shall transmit by mail to all Certificateholders and the
Certificate Insurer, within 60 days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Trustee, unless such Event of
Default shall have been cured, notice of each such Event of Default hereunder
known to the Trustee. The Certificate Insurer or the Holders of Certificates
evidencing not less than 51% of the Voting Rights (with the consent of the
Certificate Insurer, which consent shall not be unreasonably withheld) may, on
behalf of all Certificateholders, waive any default by the Master Servicer in
the performance of its obligations hereunder and the consequences thereof,
except a default in the making of or the causing to be made of any required
distribution on the Certificates. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies and the
Certificate Insurer.

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                                   ARTICLE IX

                             CONCERNING THE TRUSTEE

         Section 9.01 DUTIES OF TRUSTEE.

         (a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and the same degree of
care and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of such Person's own affairs.

         (b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee pursuant to any provision of this
Agreement, the Trustee shall examine them to determine whether they are in the
form required by this Agreement; provided, however, that the Trustee shall not
be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Master Servicer; provided, further, that the Trustee shall not be responsible
for the accuracy or verification of any calculation provided to it pursuant to
this Agreement.

         (c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 5.04 and 10.01 herein.

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

                  (i) Prior to the occurrence of an Event of Default, and after
         the curing or waiver of all such Events of Default which may have
         occurred, the duties and obligations of the Trustee shall be determined
         solely by the express provisions of this Agreement, the Trustee shall
         not be liable except for the performance of their respective duties and
         obligations as are specifically set forth in this Agreement, no implied
         covenants or obligations shall be read into this Agreement against the
         Trustee and, in the absence of bad faith on the part of the Trustee,
         the Trustee may conclusively rely, as to the truth of the statements
         and the correctness of the opinions expressed therein, upon any
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Agreement;

                  (ii) The Trustee shall not be liable in its individual
         capacity for an error of judgment made in good faith by a Responsible
         Officer or Responsible Officers of the Trustee unless it shall be
         proved that the Trustee was negligent in ascertaining the pertinent
         facts;

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                  (iii) The Trustee shall not be liable with respect to any
         action taken, suffered or omitted to be taken by it in good faith in
         accordance with the directions of the Holders of Certificates
         evidencing not less than 25% of the aggregate Voting Rights of the
         Certificates (or such other percentage as specifically set forth
         herein), if such action or non-action relates to the time, method and
         place of conducting any proceeding for any remedy available to the
         Trustee or exercising any trust or other power conferred upon the
         Trustee under this Agreement;

                  (iv) The Trustee shall not be required to take notice or be
         deemed to have notice or knowledge of any default or Event of Default
         unless a Responsible Officer of the Trustee shall have actual knowledge
         thereof. In the absence of such knowledge, the Trustee may conclusively
         assume there is no such default or Event of Default;

                  (v) The Trustee shall not in any way be liable by reason of
         any insufficiency in any Account held by or in the name of Trustee
         unless it is determined by a court of competent jurisdiction in a
         non-appealable judgment that the Trustee's negligence or willful
         misconduct was the primary cause of such insufficiency (except to the
         extent that the Trustee is obligor and has defaulted thereon);

                  (vi) Anything in this Agreement to the contrary
         notwithstanding, in no event shall the Trustee be liable for special,
         indirect or consequential loss or damage of any kind whatsoever
         (including but not limited to lost profits), even if the Trustee has
         been advised of the likelihood of such loss or damage and regardless of
         the form of action; and

                  (vii) None of the Master Servicer, the Seller, the Depositor
         or the Trustee shall be responsible for the acts or omissions of the
         other, it being understood that this Agreement shall not be construed
         to render them partners, joint venturers or agents of one another.

The Trustee shall not be required to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer.

         (e) All funds received by the Trustee and required to be deposited in
the Distribution Account pursuant to this Agreement will be promptly so
deposited by the Trustee.

         Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.

         (a) Except as otherwise provided in Section 10.01:

                  (i) The Trustee may rely and shall be protected in acting or
         refraining from acting in reliance on any resolution or certificate of
         the Seller or the Master Servicer, any certificates of auditors or any
         other certificate, statement, instrument, opinion, report, notice,

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         request, consent, order, appraisal, bond or other paper or document
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties;

                  (ii) The Trustee may consult with counsel and any advice of
         such counsel or any Opinion of Counsel shall be full and complete
         authorization and protection with respect to any action taken or
         suffered or omitted by it hereunder in good faith and in accordance
         with such advice or Opinion of Counsel;

                  (iii) The Trustee shall not be under any obligation to
         exercise any of the trusts or powers vested in it by this Agreement,
         other than its obligation to give notices pursuant to this Agreement,
         or to institute, conduct or defend any litigation hereunder or in
         relation hereto at the request, order or direction of any of the
         Certificateholders pursuant to the provisions of this Agreement, unless
         such Certificateholders shall have offered to the Trustee reasonable
         security or indemnity 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
         an Event of Default of which a Responsible Officer of the Trustee has
         actual knowledge (which has not been cured or waived), to exercise such
         of the rights and powers vested in it by this Agreement, and to use the
         same degree of care and skill in their exercise, as a prudent person
         would exercise under the circumstances in the conduct of his own
         affairs;

                  (iv) The Trustee shall not be liable in its individual
         capacity 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) The Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, approval, bond or other paper or document, unless requested in
         writing to do so by Holders of Certificates evidencing not less than
         25% of the aggregate Voting Rights of the Certificates and provided
         that the payment within a reasonable time to the Trustee of the costs,
         expenses or liabilities likely to be incurred by it in the making of
         such investigation is, in the opinion of the Trustee reasonably assured
         to the Trustee by the security afforded to it by the terms of this
         Agreement. The Trustee may require reasonable indemnity against such
         expense or liability as a condition to taking any such action. The
         reasonable expense of every such examination shall be paid by the
         Certificateholders requesting the investigation;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or through
         Affiliates, agents or attorneys; provided, however, that the Trustee
         may not appoint any paying agent to perform any paying agent functions
         under this Agreement without the express written consent of the Master
         Servicer and the Certificate Insurer, which consents will not be
         unreasonably withheld. The Trustee shall not be liable or responsible
         for the misconduct or negligence of any of the Trustee's agents or
         attorneys or paying agent appointed hereunder by the Trustee with due
         care and, when required, with the consent of the Master Servicer;

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                  (vii) Should the Trustee deem the nature of any action
         required on its part to be unclear, the Trustee may require prior to
         such action that it be provided by the Depositor with reasonable
         further instructions; the right of the Trustee to perform any
         discretionary act enumerated in this Agreement shall not be construed
         as a duty, and the Trustee shall not be accountable for other than its
         negligence or willful misconduct in the performance of any such act;

                  (viii) The Trustee shall not be required to give any bond or
         surety with respect to the execution of the trust created hereby or the
         powers granted hereunder, except as provided in Subsection 9.07; and

                  (ix) The Trustee shall not have any duty to conduct any
         affirmative investigation as to the occurrence of any condition
         requiring the repurchase of any Mortgage Loan by any Person pursuant to
         this Agreement, or the eligibility of any Mortgage Loan for purposes of
         this Agreement.

         (b) The Trustee is hereby directed by the Depositor to execute and
deliver the Insurance Agreement and the Yield Maintenance Agreements. Amounts
payable by the Trust on the Closing Date pursuant to the Yield Maintenance
Agreement shall be paid by the Depositor or its designee. The Trustee in its
individual capacity shall have no responsibility for any of the undertakings,
agreements or representations with respect to the Yield Maintenance Agreement,
including, without limitation, for making any payments thereunder.

         Section 9.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.

         The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Depositor, and the Trustee shall not have any
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) or of any Mortgage Loan
except as expressly provided in Sections 2.02 and 2.06 hereof; provided,
however, that the foregoing shall not relieve the Trustee, or the Custodian on
its behalf, of the obligation to review the Mortgage Files pursuant to Section
2.02 of this Agreement. The Trustee's signature and countersignature (or
countersignature of its agent) on the Certificates shall be solely in its
capacity as Trustee and shall not constitute the Certificates an obligation of
the Trustee in any other capacity. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor with respect to the Mortgage Loans. Subject to Section 2.06,
the Trustee shall not be responsible for the legality or validity of this
Agreement or any document or instrument relating to this Agreement, the validity
of the execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. The Trustee shall not at any time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust Fund or its ability to generate the
payments to be distributed to Certificateholders, under this Agreement. The
Trustee

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shall not be responsible for filing any financing or continuation statement in
any public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to record this
Agreement.

         Section 9.04 TRUSTEE MAY OWN CERTIFICATES.

         The Trustee in its individual capacity or in any capacity other than as
Trustee hereunder may become the owner or pledgee of any Certificates with the
same rights it would have if it were not the Trustee and may otherwise deal with
the parties hereto.

         Section 9.05 TRUSTEE'S FEES AND EXPENSES.

         The Trustee will be entitled to recover from the Distribution Account
pursuant to Section 4.05, the Trustee Fee, all reasonable out-of-pocket
expenses, disbursements and advances and the expenses of the Trustee in
connection with any Event of Default (or anything related thereto, including any
determination that an Event of Default does or does not exist), any breach of
this Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee in the administration of
the trusts hereunder (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its negligence or intentional misconduct or which is the
responsibility of the Certificateholders hereunder. If funds in the Distribution
Account are insufficient therefor, the Trustee shall recover such expenses,
disbursements or advances from the Depositor and the Depositor hereby agrees to
pay such expenses, disbursements or advances. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

         Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

         The Trustee and any successor Trustee shall during the entire duration
of this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$50,000,000, subject to supervision or examination by federal or state authority
and rated "BBB" or higher by Fitch with respect to their long-term rating and
rated "BBB" or higher by Standard & Poor's and "Baa2" or higher by Moody's with
respect to any outstanding long-term unsecured unsubordinated debt, and, in the
case of a successor Trustee other than pursuant to Section 9.10, rated in one of
the two highest long-term debt categories of, or otherwise acceptable to, each
of the Rating Agencies and the Certificate Insurer (which consent shall not be
unreasonably withheld). The Trustee shall not be an Affiliate of the Master
Servicer. If the Trustee publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 9.06 the combined capital and
surplus of such corporation shall be deemed to be its total equity capital
(combined capital and surplus) as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.08.

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         Section 9.07 INSURANCE.

         The Trustee, at its own expense, shall at all times maintain and keep
in full force and effect: (i) fidelity insurance, (ii) theft of documents
insurance and (iii) forgery insurance (which may be collectively satisfied by a
"Financial Institution Bond" and/or a "Bankers' Blanket Bond"); provided, that
such insurance may be provided through self-insurance so long as the Trustee is
rated "A" or better by S&P and "A1" or better by Moody's. All such insurance
shall be in amounts, with standard coverage and subject to deductibles, as are
customary for insurance typically maintained by banks or their affiliates which
act as custodians for investor-owned mortgage pools. A certificate of an officer
of the Trustee as to the Trustee's compliance with this Section 9.07 shall be
furnished to any Certificateholder and the Certificate Insurer upon reasonable
written request.

         Section 9.08 RESIGNATION AND REMOVAL OF TRUSTEE.

         The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Depositor, the Seller and
the Master Servicer, with a copy to the Rating Agencies and the Certificate
Insurer. Upon receiving such notice of resignation, the Depositor shall promptly
appoint a successor trustee by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning Trustee and the
successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.

         If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii)(A) a tax is imposed with respect to the Trust Fund by any state in which
the Trustee or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in multiple copies, a copy of which instrument shall be delivered to
the Trustee, the Master Servicer and the successor trustee.

         The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates (with the prior written consent of the Certificate Insurer,
which consent shall not be unreasonably withheld) may at any time remove the
Trustee and appoint a successor trustee by written instrument or instruments, in
multiple copies, signed by such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be delivered by the
successor trustee to the Master Servicer, the Trustee so removed and the
successor trustee so appointed. Notice of any removal of the Trustee shall be
given to each Rating Agency and the Certificate Insurer by the Trustee or
successor trustee.

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         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.09 hereof.

         Section 9.09 SUCCESSOR TRUSTEE.

         Any successor trustee appointed as provided in Section 9.08 hereof
shall execute, acknowledge and deliver to the Depositor, to its predecessor
trustee, the Master Servicer and the Certificate Insurer an instrument accepting
such appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein.

         No successor trustee shall accept appointment as provided in this
Section 9.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 9.07 hereof and its appointment
shall not adversely affect the then current rating of the Certificates
(determined without regard to the Class II-A Policy).

         Upon acceptance of appointment by a successor trustee as provided in
this Section 9.09, the successor trustee shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates and the Certificate
Insurer. If the successor trustee fails to mail such notice within ten days
after acceptance of appointment, the Depositor shall cause such notice to be
mailed at the expense of the Trust Fund.

         Section 9.10 MERGER OR CONSOLIDATION OF TRUSTEE.

         Any corporation, state bank or national banking association into which
the Trustee may be merged or converted or with which it may be consolidated or
any corporation, state bank or national banking association resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation, state bank or national banking association succeeding to
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 9.06 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

         Section 9.11 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Certificate Insurer, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other

                                     -129-
<PAGE>

provisions of this Section 9.11, such powers, duties, obligations, rights and
trusts as the Master Servicer and the Trustee may consider necessary or
desirable. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request to do so, or in the case an
Event of Default shall have occurred and be continuing, the Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 9.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 9.09.

         Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

                  (i) All rights, powers, duties and obligations conferred or
         imposed upon the Trustee, except for the obligation of the Trustee
         under this Agreement to advance funds on behalf of the Master Servicer,
         shall be conferred or imposed upon and exercised or performed by the
         Trustee and such separate trustee or co-trustee jointly (it being
         understood that such separate trustee or co-trustee is not authorized
         to act separately without the Trustee joining in such act), except to
         the extent that under any law of any jurisdiction in which any
         particular act or acts are to be performed (whether a Trustee hereunder
         or as a Successor Master Servicer hereunder), the Trustee shall be
         incompetent or unqualified to perform such act or acts, in which event
         such rights, powers, duties and obligations (including the holding of
         title to the Trust Fund or any portion thereof in any such
         jurisdiction) shall be exercised and performed singly by such separate
         trustee or co-trustee, but solely at the direction of the Trustee;

                  (ii) No trustee hereunder shall be held personally liable by
         reason of any act or omission of any other trustee hereunder; and

                  (iii) The Trustee may at any time accept the resignation of or
         remove any separate trustee or co-trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co- trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

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<PAGE>

         Section 9.12 TAX MATTERS.

         It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of the Trust Fund. The Trustee, as
agent on behalf of the Trust Fund, shall do or refrain from doing, as
applicable, the following: (a) the Trustee shall prepare and file, or cause to
be prepared and filed, in a timely manner, U.S. Real Estate Mortgage Investment
Conduit Income Tax Returns (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and filed
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
such REMIC containing such information and at the times and in the manner as may
be required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
the Trustee shall apply for an employer identification number with the Internal
Revenue Service via a Form SS-4 or other comparable method for each REMIC that
is or becomes a taxable entity, and within thirty days of the Closing Date,
furnish or cause to be furnished to the Internal Revenue Service, on Forms 8811
or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) the Trustee
shall make or cause to be made elections, on behalf of each REMIC formed
hereunder to be treated as a REMIC on the federal tax return of such REMIC for
its first taxable year (and, if necessary, under applicable state law); (d) the
Trustee shall prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) the Trustee shall provide information necessary for the
computation of tax imposed on the transfer of a Residual Certificate to a Person
that is not a Permitted Transferee, or an agent (including a broker, nominee or
other middleman) of a Person that is not a Permitted Transferee, or a
pass-through entity in which a Person that is not a Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) the
Trustee shall, to the extent under its control, conduct the affairs of the Trust
Fund at all times that any Certificates are outstanding so as to maintain the
status of each REMIC formed hereunder as a REMIC under the REMIC Provisions; (g)
the Trustee shall not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any REMIC
formed hereunder; (h) the Trustee shall pay, from the sources specified in the
penultimate paragraph of this Section 9.12, the amount of any federal, state and
local taxes, including prohibited transaction taxes as described below, imposed
on any REMIC formed hereunder prior to the termination of the Trust Fund when
and as the same shall be due and payable (but such obligation shall not prevent
the Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) the Trustee shall maintain records relating to each REMIC
formed hereunder including but not limited to the income, expenses, assets

                                     -131-
<PAGE>

and liabilities of each such REMIC and adjusted basis of the Trust Fund property
determined at such intervals as may be required by the Code, as may be necessary
to prepare the foregoing returns, schedules, statements or information; (j) the
Trustee shall, for federal income tax purposes, maintain books and records with
respect to the REMICs on a calendar year and on an accrual basis; (k) the
Trustee shall not enter into any arrangement not otherwise provided for in this
Agreement by which the REMICs will receive a fee or other compensation for
services nor permit the REMICs 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; and (l) as and when
necessary and appropriate, the Trustee, at the expense of the Trust Fund, shall
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC formed hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of each REMIC formed hereunder in relation to any tax matter
involving any such REMIC.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.

         In the event that any tax is imposed on "prohibited transactions" of
any of REMIC I, REMIC II, REMIC III or REMIC IV as defined in Section 860F(a)(2)
of the Code, on the "net income from foreclosure property" of the Trust Fund as
defined in Section 860G(c) of the Code, on any contribution to any of REMIC I,
REMIC II, REMIC III or REMIC IV after the startup day pursuant to Section
860G(d) of the Code, or any other tax is imposed, including, without limitation,
any federal, state or local tax or minimum tax imposed upon any of REMIC I,
REMIC II, REMIC III or REMIC IV, and is not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) any party hereto (other than the Trustee) to the extent any
such other tax arises out of or results from a breach by such other party of any
of its obligations under this Agreement or (iii) in all other cases, or in the
event that any liable party hereto fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class R Certificateholders, and second with
amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: first, to the Class M- 8A Certificates and Class
M-8B Certificates (pro rata based on their then outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution Date), second, to the Class M-7 Certificates, third, to the Class
M-6 Certificates, fourth, to the Class M-5 Certificates, fifth, to the Class M-4
Certificates, sixth, to the Class M-3 Certificates, seventh, to the Class M-2
Certificates, eighth to the Class M-1 Certificates, and ninth to the Class A
Certificates

                                     -132-
<PAGE>

(pro rata based on the amounts to be distributed). Notwithstanding anything to
the contrary contained herein, to the extent that such tax is payable by the
Holder of any Certificates, the Trustee is hereby authorized to retain on any
Distribution Date, from the Holders of the Class R Certificates (and, if
necessary, second, from the Holders of the other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Trustee shall promptly
notify in writing the party liable for any such tax of the amount thereof and
the due date for the payment thereof.

         The Trustee agrees that, in the event it should obtain any information
necessary for the other party to perform its obligations pursuant to this
Section 9.12, it will promptly notify and provide such information to such other
party.

                                     -133-
<PAGE>

                                    ARTICLE X

                                   TERMINATION

         Section 10.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL
MORTGAGE LOANS.

         Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Seller and the Trustee created hereby with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by the Master Servicer of all of the Mortgage Loans (and REO Properties)
remaining in the Trust Fund at a price (the "Mortgage Loan Purchase Price")
equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage
Loan (other than in respect of REO Property), (ii) accrued interest thereon at
the applicable Mortgage Rate to, but not including, the first day of the month
of such purchase, (iii) the appraised value of any REO Property in the Trust
Fund (up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Master
Servicer and the Trustee, (iv) unreimbursed out-of pocket costs of the Master
Servicer, including unreimbursed servicing advances and the principal portion of
any unreimbursed Advances, made on the Mortgage Loans prior to the exercise of
such repurchase right, (v) any unreimbursed costs and expenses of the Trustee
payable pursuant to Section 9.05 and (vi) the amount of any Reimbursement Amount
due to the Certificate Insurer and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property and (ii) the
distribution to Certificateholders and to the Certificate Insurer of all amounts
required to be distributed to them pursuant to this Agreement, as applicable. In
no event shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late Ambassador of the United States to the Court of St.
James, living on the date hereof and (ii) the Latest Possible Maturity Date.

         The right to repurchase all Mortgage Loans and REO Properties pursuant
to clause in the preceding paragraph shall be conditioned upon the Stated
Principal Balance of all of the Mortgage Loans in the Trust Fund, at the time of
any such repurchase, aggregating 10% or less of the aggregate Cut- off Date
Principal Balance of all of the Mortgage Loans.

         Section 10.02 FINAL DISTRIBUTION ON THE CERTIFICATES.

         If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Protected Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to the
Certificate Insurer and each Certificateholder or (ii) the Trustee determines
that a Class of Certificates shall be retired after a final distribution on such
Class, the Trustee shall notify the Certificateholders (and the Certificate
Insurer with respect to the Class II-A Certificates) within five (5) Business
Days after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately following
Distribution Date. Any final distribution made pursuant to the immediately
preceding sentence will be made only upon presentation and surrender of the
related Certificates at the Corporate Trust Office of the Trustee. If the Master
Servicer elects to terminate the Trust Fund pursuant to Section 10.01, at least
20 days prior to the date notice is to be mailed to the Certificateholders, the
Master Servicer shall notify the

                                     -134-
<PAGE>

Depositor, the Certificate Insurer and the Trustee of the date the Master
Servicer intends to terminate the Trust Fund. The Master Servicer shall remit
the Mortgage Loan Purchase Price to the Trustee on the Business Day prior to the
Distribution Date for such Optional Termination by the Master Servicer.

         Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders and the Certificate Insurer
mailed not later than two Business Days after the Determination Date in the
month of such final distribution. Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such notice
to each Rating Agency at the time such notice is given to Certificateholders.

         In the event such notice is given, the Master Servicer shall cause all
funds in the Protected Account to be remitted to the Trustee for deposit in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of the Certificates
and any Reimbursement Amounts due to the Certificate Insurer. Upon such final
deposit with respect to the Trust Fund and the receipt by the Trustee of a
Request for Release therefor, the Trustee or the Custodian shall promptly
release to EMC as applicable the Mortgage Files for the Mortgage Loans and the
Trustee shall execute and deliver any documents prepared and delivered to it
which are necessary to transfer any REO Property.

         Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class and to the
Certificate Insurer the amounts allocable to such Certificates and to the
Certificate Insurer held in the Distribution Account in the order and priority
set forth in Section 5.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

         In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto.

                                     -135-
<PAGE>

         Section 10.03 ADDITIONAL TERMINATION REQUIREMENTS.

         (a) Upon exercise by the Master Servicer of its purchase option as
provided in Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee and the Certificate
Insurer have been supplied with an Opinion of Counsel addressed to the Trustee
and the Certificate Insurer, at the expense of the Master Servicer, to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 10.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause a REMIC to fail to qualify as a REMIC at
any time that any Certificates are outstanding:

         (1) The Master Servicer shall establish a 90-day liquidation period and
notify the Trustee thereof, and the Trustee shall in turn specify the first day
of such period in a statement attached to the tax return for each of REMIC I,
REMIC II, REMIC III and REMIC IV pursuant to Treasury Regulation Section
1.860F-1. The Master Servicer shall satisfy all the requirements of a qualified
liquidation under Section 860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel obtained at the expense of the Master
Servicer;

         (2) During such 90-day liquidation period, and at or prior to the time
of making the final payment on the Certificates, the Trustee shall sell all of
the assets of REMIC I, REMIC II, REMIC III and REMIC IV for cash; and

         (3) At the time of the making of the final payment on the Certificates,
the Trustee shall distribute or credit, or cause to be distributed or credited,
to the Holders of the Residual Certificates all cash on hand (other than cash
retained to meet claims), and REMIC I shall terminate at that time.

         (b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the adoption of a 90-day liquidation period for REMIC I, REMIC II,
REMIC III and REMIC IV, which authorization shall be binding upon all successor
Certificateholders.

         (c) The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Master
Servicer, and the receipt of the Opinion of Counsel referred to in Section
10.03(a)(1) and to take such other action in connection therewith as may be
reasonably requested by the Master Servicer.

                                     -136-
<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         Section 11.01 AMENDMENT.

         This Agreement may be amended from time to time by parties hereto, with
the consent of the Certificate Insurer but without the consent of any of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein (including to give effect to the expectations of investors),
to change the manner in which the Protected Account is maintained or to make
such other provisions with respect to matters or questions arising under this
Agreement as shall not be inconsistent with any other provisions herein if such
action shall not, as evidenced by an Opinion of Counsel addressed to the
Trustee, adversely affect in any material respect the interests of any
Certificateholder; 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 (determined without regard to the Class II-A
Policy).

         Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I, REMIC II, REMIC III and REMIC IV as a REMIC under the Code
or to avoid or minimize the risk of the imposition of any tax on any of REMIC I,
REMIC II, REMIC III or REMIC IV pursuant to the Code that would be a claim
against any of REMIC I, REMIC II, REMIC III or REMIC IV at any time prior to the
final redemption of the Certificates, provided that the Trustee and the
Certificate Insurer has been provided an Opinion of Counsel addressed to the
Trustee and the Certificate Insurer, which opinion shall be an expense of the
party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
appropriate to maintain such qualification or to avoid or minimize the risk of
the imposition of such a tax.

         This Agreement may also be amended from time to time by the parties
hereto with the consent of the Certificate Insurer and the Holders of each Class
of Certificates affected thereby evidencing over 50% of the Voting Rights of
such Class or Classes 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 that
no such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) cause any of REMIC I, REMIC II,
REMIC III or REMIC IV to cease to qualify as a REMIC or (iii) reduce the
aforesaid percentages of Certificates of each Class the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all Certificates of such Class then outstanding.

                                     -137-
<PAGE>

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it and the
Certificate Insurer shall have first received an Opinion of Counsel addressed to
the Trustee and the Certificate Insurer, which opinion shall be an expense of
the party requesting such amendment but in any case shall not be an expense of
the Trustee, to the effect that such amendment will not (other than an amendment
pursuant to clause (ii) of, and in accordance with, the preceding paragraph)
cause the imposition of any tax on any of REMIC I, REMIC II, REMIC III or REMIC
IV or the Certificateholders or cause any of REMIC I, REMIC II, REMIC III or
REMIC IV to cease to qualify as a REMIC at any time that any Certificates are
outstanding. Further, nothing in this Agreement shall require the Trustee to
enter into an amendment without receiving an Opinion of Counsel (a copy of which
shall be addressed to and delivered to the Certificate Insurer), satisfactory to
the Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement (including any
consent of the applicable Certificateholders) have been complied with.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder, the
Certificate Insurer and each Rating Agency.

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

         Section 11.02 RECORDATION OF AGREEMENT; COUNTERPARTS.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Master Servicer shall effect such recordation at the
Trust's expense upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.

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

         Section 11.03 GOVERNING LAW.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES

                                     -138-
<PAGE>

HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS).

         Section 11.04 INTENTION OF PARTIES.

         It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the Seller
to the Depositor, and by the Depositor to the Trustee be, and be construed as,
an absolute sale thereof to the Depositor or the Trustee, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason the Mortgage Loan Purchase Agreement or
this Agreement is held or deemed to create a security interest in such assets,
then (i) the Mortgage Loan Purchase Agreement and this Agreement shall each be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) the conveyance provided for in the
Mortgage Loan Purchase Agreement from the Seller to the Depositor, and the
conveyance provided for in this Agreement from the Depositor to the Trustee,
shall be deemed to be an assignment and a grant by the Seller or the Depositor,
as applicable, for the benefit of the Certificateholders and the Certificate
Insurer, of a security interest in all of the assets that constitute the Trust
Fund, whether now owned or hereafter acquired.

         The Depositor for the benefit of the Certificateholders and the
Certificate Insurer shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the assets of the Trust Fund, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement.

         Section 11.05 NOTICES.

         (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency and the Certificate Insurer with respect to each of the
following of which a Responsible Officer of the Trustee has actual knowledge:

                  (i) Any material change or amendment to this Agreement;

                  (ii) The occurrence of any Event of Default that has not been
         cured;

                  (iii) The resignation or termination of the Master Servicer or
         the Trustee and the appointment of any successor;

                  (iv) The repurchase or substitution of Mortgage Loans pursuant
         to Sections 2.02, 2.03, 3.18 and 10.01; and

                                     -139-
<PAGE>

                  (v) The final payment to Certificateholders.

         (b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered at or mailed by
registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Bear Stearns Asset Backed Securities I LLC, 383 Madison
Avenue, New York, New York 10179, Attention: Chief Counsel; (ii) in the case of
the Seller or the Master Servicer, EMC Mortgage Corporation, 909 Hidden Ridge
Drive, Irving, Texas 75038, Attention: Ralene Ruyle or such other address as may
be hereafter furnished to the other parties hereto by the Master Servicer in
writing; (iii) in the case of the Trustee, at each Corporate Trust Office or
such other address as the Trustee may hereafter furnish to the other parties
hereto; (iv) in the case of the Certificate Insurer, Assured Guaranty Corp.,
1325 Avenue of the Americas, New York, New York 10019, Attention: General
Counsel, with a copy to Risk Management at the same address, or such other
address as may be hereafter furnished to the Trustee by the Certificate Insurer
in writing; and (v) in the case of the Rating Agencies, (x) Moody's Investors
Service, Inc., 99 Church Street, New York, New York 10007, Attention: Home
Equity Monitoring and (y) Standard & Poor's, 55 Water Street, 41st Floor, New
York, New York 10041, Attention: Mortgage Surveillance Group. Any notice
delivered to the Seller, the Master Servicer, the Trustee or the Certificate
Insurer under this Agreement shall be effective only upon receipt. Any notice
required or permitted to be mailed to a Certificateholder, unless otherwise
provided herein, shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register; any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.

         Section 11.06 SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 11.07 ASSIGNMENT.

         Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Master Servicer, the Seller or the Depositor.

         Section 11.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding

                                     -140-
<PAGE>

up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.08, each and every Certificateholder or the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

         Section 11.09 INSPECTION AND AUDIT RIGHTS. The Master Servicer agrees
that, on reasonable prior notice, it will permit any representative of the
Depositor, the Trustee or the Certificate Insurer during the Master Servicer's
normal business hours, to examine all the books of account, records, reports and
other papers of the Master Servicer relating to the Mortgage Loans, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the Depositor, the Trustee or the
Certificate Insurer and to discuss its affairs, finances and accounts relating
to such Mortgage Loans with its officers, employees and independent public
accountants (and by this provision the Master Servicer hereby authorizes such
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Depositor,
the Trustee or the Certificate Insurer of any right under this Section 11.09
shall be borne by the party requesting such inspection, subject to such party's
right to reimbursement hereunder (in the case of the Trustee, pursuant to
Section 9.05 hereof or in the case of the Certificate Insurer, solely if a
Rating Event exists or at any time the Certificate Insurer has not be fully
reimbursed for amounts paid pursuant to the Class II-A Policy, as provided in
the Insurance Agreement).

                                     -141-
<PAGE>

         Section 11.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

         Section 11.11 CERTIFICATE INSURER RIGHTS.

         (a) All notices, statements, reports, certificates, lists or opinions
required by this Agreement to be sent to the parties hereto, the Rating Agencies
or the Class II-A Certificateholders shall also be sent at such time to the
Certificate Insurer at the notice address set forth in Section 11.05.

         (b) The Certificate Insurer shall be an express third party beneficiary
of this Agreement for the purpose of enforcing the provisions hereof to the
extent of the Certificate Insurer's or any Class II-A Certificateholder's rights
explicitly specified herein as if a party hereto.

         (c) All references herein to the ratings assigned to the Certificates
and to the interests of any Certificateholders shall be without regard to the
Class II-A Policy.

         (d) The Trustee, the Depositor 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
hereunder without limiting the rights or affecting the interests of the
Certificateholders as otherwise set forth herein.

         (e) The Certificate Insurer will have the right to exercise all rights,
including voting rights, which the Holders of the Class II-A Certificates are
entitled to exercise under this Agreement, under the Mortgage Loan Purchase
Agreement or any other instrument, document or agreement relating to the
foregoing. In addition, the Certificate Insurer shall have the right to
participate in, to direct the enforcement or defense of, and, at the Certificate
Insurer's sole option, to institute or assume the defense of, any action,
proceeding or investigation for any remedy available to the Trustee with respect
to any matter that could adversely affect the Trust, the Trust Fund or the
rights or obligations of the Certificate Insurer hereunder, under the Mortgage
Loan Purchase Agreement, under the Insurance Agreement or under the Class II-A
Policy or any other instrument, document or agreement relating to the foregoing
or under the other Transaction Documents, including (without limitation) any
insolvency or bankruptcy proceeding in respect of the Seller, the Master
Servicer, the Depositor or any Affiliate thereof provided, that such
participation or direction shall not be in conflict with any rule of law or with
the terms of this Agreement. Following written notice to the Trustee, the
Certificate Insurer shall have the exclusive right to determine, in its sole
discretion, the actions necessary to preserve and protect the Trust and the
Trust Fund.

         (f) The Trustee hereby agrees to provide to the Certificate Insurer
prompt written notice of any action, proceeding or investigation of which it has
actual knowledge that names the Trust or the Trustee as a party or that could
adversely affect the Trust or the Trust Fund.

                                     -142-
<PAGE>

         (g) Notwithstanding anything contained herein or in any of the other
Transaction Documents to the contrary, the Trustee shall not, without the
Certificate Insurer's prior written consent or unless directed in writing by the
Certificate Insurer, undertake or join any litigation or agree to any settlement
of any action, proceeding or investigation affecting the Trust or the Trust Fund
to the extent any such settlement, action, proceeding or investigation could
reasonably be expected to have a material adverse affect on the rights or
obligations of the Certificate Insurer hereunder or under the Class II-A Policy
or the Transaction Documents.

         (h) Each Holder of a Certificate, by acceptance of its Certificate, and
the Trustee agree that Certificate Insurer shall have such rights as set forth
in this Section, which are in addition to any rights of the Certificate Insurer
pursuant to the other provisions of the Transaction Documents, that the rights
set forth in this Section may be exercised by the Certificate Insurer, in its
sole discretion, without the need for the consent or approval of any
Certificateholder or the Trustee, notwithstanding any other provision contained
herein or in any of the other Transaction Documents, and that nothing contained
in this Section shall be deemed to be an obligation of the Certificate Insurer
to exercise any of the rights provided for herein.

                                      * * *

                                     -143-
<PAGE>

         IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller and
the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.

                                      BEAR STEARNS ASSET BACKED SECURITIES
                                      I LLC,
                                               as Depositor

                                      By:______________________________________
                                      Name:    Baron Silverstein
                                      Title:   Vice President

                                      EMC MORTGAGE CORPORATION,
                                               as Seller and Master Servicer

                                      By:______________________________________
                                      Name:    Sue Stepanek
                                      Title:   Executive Vice President

                                      LASALLE BANK NATIONAL ASSOCIATION
                                               as Trustee

                                      By:______________________________________
                                      Name:
                                      Title:

                                     -144-
<PAGE>

STATE OF NEW YORK           )
                            ) ss.:
COUNTY OF NEW YORK          )

         On this 31st day of August, 2004, before me, a notary public in and for
said State, appeared Baron Silverstein, personally known to me on the basis of
satisfactory evidence to be an authorized representative of Bear Stearns Asset
Backed Securities I LLC, one of the companies that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such limited liability company and acknowledged to me that such limited
liability company 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]

                                     -145-
<PAGE>

STATE OF TEXAS              )
                            ) ss.:
COUNTY OF DALLAS            )

         On this 31st day of August, 2004, before me, a notary public in and for
said State, appeared Sue Stepanek, personally known to me on the basis of
satisfactory evidence to be an authorized representative of EMC Mortgage
Corporation, one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such 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]

                                     -146-
<PAGE>

STATE OF ILLINOIS         )
                          ) ss.:
COUNTY OF COOK            )

         On this 31st day of August, 2004, before me, a notary public in and for
  said State, appeared , personally known to me on the basis of satisfactory
  evidence to be an
authorized representative of LaSalle Bank National Association that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such 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]

                                     -147-
<PAGE>

                                   EXHIBIT A-1

                          Form of Class A 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").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
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 TRUSTEE NAMED HEREIN.

                  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>
<CAPTION>
<S>                                                        <C>
Certificate No. 1                                          Variable Pass-Through Rate

Class [I-A-1][I-A-2][II-A] Senior

Date of Pooling and Servicing Agreement                    Aggregate Initial Certificate  Principal Balance of this
and Cut-off Date:                                          Certificate as of the Cut-off Date:
August 1, 2004                                             $[__________]

First Distribution Date:                                   Initial   Certificate    Principal   Balance   of   this
September 27, 2004                                         Certificate as of the Cut-off Date:
                                                           $[----------]

Master Servicer:                                           CUSIP: [___________]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
[----------,----]
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-FR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [I-A-1][I-A-2][II-A] Certificates with respect
         to a Trust Fund consisting primarily of a pool of conventional,
         closed-end one- to four-family first and second lien, fixed and
         adjustable interest rate mortgage loans sold by BEAR STEARNS ASSET
         BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional, closed-end first and second lien, fixed
and adjustable rate mortgage loans secured by one- to four- family residences
(collectively, the "Mortgage Loans") sold by Bear Stearns Asset Backed
Securities I LLC ("BSABS I"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to BSABS I. EMC will act as master servicer of the Mortgage
Loans (the "Master Servicer," which

                                     A-1-2
<PAGE>

term includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement, dated as
of the Cut-off Date specified above (the "Agreement"), among BSABS I, as
depositor (the "Depositor"), EMC Mortgage Corporation as seller and Master
Servicer and LaSalle Bank 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, capitalized terms used herein shall have the
meaning ascribed to them 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 its acceptance hereof
assents and by which such Holder is bound.

                  Interest on this Certificate will accrue from and including
the immediately preceding Distribution Date (or with respect to the First
Distribution Date, the Closing Date) to and including the day prior to the
current Distribution Date on the Certificate Principal Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, 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 so long as such
Certificate remains in book-entry form (and otherwise, the close of business on
the last Business Day of the month immediately preceding the month of such
Distribution Date), an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice. The
initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any realized losses applicable
hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  [This Certificate is entitled to the benefits of an
irrevocable and unconditional financial guaranty insurance policy issued by
Assured Guaranty Corp. (the "Policy").]

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund [and the Policy] for payment
hereunder and that the Trustee is not liable to the Certificateholders for any
amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

                                     A-1-3
<PAGE>

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of each Class of Certificates affected thereby evidencing over 50% of
the Voting Rights of such Class or Classes. 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created

                                     A-1-4
<PAGE>

by the Agreement continue beyond the expiration of 21 years after the death of
certain persons identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-1-5
<PAGE>

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

Dated: _____________, ____                  LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

                  This is one of the Class [I-A-1][I-A-2][II-A] Certificates
referred to in the within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION

                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed 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 Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                           -----------------------------------------------------
                                    Signature by or on behalf of assignor

                                      ------------------------------------------
                                                 Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-2

           Form of Class M-[1][2][3][4][5][6][7][8A][8B] Certificates

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR 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] [,] [CLASS M-7 CERTIFICATES] [AND] [CLASS M-8A CERTIFICATES] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

                  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").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES APPLICABLE
THERETO. 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 TRUSTEE NAMED HEREIN.

                  [FOR CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND
CLASS M-6, AND CLASS M-7] EACH BENEFICIAL OWNER OF A CERTIFICATE OR ANY INTEREST
THEREIN SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR
HOLDING OF THAT CERTIFICATE OR INTEREST THEREIN, THAT EITHER (I) IT IS NOT A
PLAN OR INVESTING WITH "PLAN ASSETS", (II) IT HAS ACQUIRED AND IS HOLDING SUCH
CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 2002-41 AS AMENDED
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY S&P, FITCH
RATINGS OR MOODY'S, AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST THEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT," AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.

                  [FOR CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND
CLASS M-6, AND CLASS M-7] [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE

                                     A-2-1
<PAGE>

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.]

         [FOR CLASS M-8A AND CLASS M-8B] [THIS CERTIFICATE HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
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 ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO
(A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN
THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY
OTHER APPLICABLE JURISDICTION.]

                   [FOR CLASS M-8A AND CLASS M-8B] [THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (A) WILL NOT
RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR
CLASS PROHIBITED TRANSACTION

                                     A-2-2
<PAGE>

EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION
("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23 AND (B) WILL NOT GIVE
RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR
UNLESS THE OPINION SPECIFIED IN SECTION 6.02 OF THE AGREEMENT IS PROVIDED.]

                                     A-2-3
<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No.1                                           Variable Pass-Through Rate

Class:M-[1][2][3][4][5][6][7][8A][8B]
Subordinate

Date of Pooling and Servicing Agreement and                Aggregate Initial Certificate  Principal Balance
Cut-off Date:                                              of this Certificate as of the Cut-off Date:
August 1, 2004                                             $[----------]

First Distribution Date:                                   Initial Certificate Principal Balance of this
September 27, 2004                                         Certificate as of the Cut-off Date:
                                                           $[----------]

Master Servicer:                                           CUSIP:  [_________]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
June 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-FR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class M-[1][2][3][4][5][6][7][8A][8B] Certificates
         with respect to a Trust Fund consisting primarily of a pool of
         conventional, closed-end one- to four-family first and second lien,
         fixed and adjustable interest rate mortgage loans sold by BEAR STEARNS
         ASSET BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that _________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in a trust (the "Trust
Fund") generally consisting of conventional, closed-end first and second lien,
fixed and adjustable rate mortgage loans secured by one- to four- family
residences (collectively, the "Mortgage Loans") sold by Bear Stearns Asset
Backed Securities I

                                     A-2-4
<PAGE>

LLC ("BSABS I"). The Mortgage Loans were sold by EMC Mortgage Corporation
("EMC") to BSABS I. EMC will act as master servicer of the Mortgage Loans (in
that capacity, the "Master Servicer," which term includes any successors thereto
under the Agreement referred to below). The Trust Fund was created pursuant to
the Pooling and Servicing Agreement, dated as of the Cut-off Date specified
above (the "Agreement"), among BSABS I, as depositor (the "Depositor"), EMC
Mortgage Corporation as seller and Master Servicer and LaSalle Bank 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,
capitalized terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such
Holder is bound.

                  [For Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6 and Class M-7] [Interest on this Certificate will accrue from and
including the immediately preceding Distribution Date (or with respect to the
First Distribution Date, the Closing Date) to and including the day prior to the
current Distribution Date on the Certificate Principal Balance hereof at a per
annum rate equal to the Pass-Through Rate set forth above. The Trustee will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, 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 so long as such
Certificate remains in book-entry form (and otherwise, the close of business on
the last Business Day of the month immediately preceding the month of such
Distribution Date), an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate.]

                  [For Class M-8A and Class M-8B] [Interest on this Certificate
will accrue from and including the immediately preceding Distribution Date (or
with respect to the First Distribution Date, the Closing Date) to and including
the day prior to the current Distribution Date on the Certificate Principal
Balance hereof at a per annum rate equal to the Pass-Through Rate set forth
above. The Trustee will distribute on the 25th day of each month, or, if such
25th day is not a Business Day, the immediately following Business Day (each, 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 last Business Day of the month immediately preceding the month
of such Distribution date so long as this Certificate remains in non-book entry
form (and otherwise, the close of business on the Business Day immediately
preceding such Distribution Date) an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to the Holders of Certificates
of the same Class as this Certificate.]

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon

                                     A-2-5
<PAGE>

presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose and designated in such notice. The initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal hereon and any Realized Losses allocable
hereto and any realized losses applicable hereto.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  [For Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6 and Class M-7][Each beneficial owner of a Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of that certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets," (ii) it has acquired and is holding such
certificate in reliance on the Exemption, and that it understands that there are
certain conditions to the availability of the Exemption, including that the
certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by S&P, Fitch Ratings or Moody's, and the certificate is so
rated or (iii) (1) it is an insurance company, (2) the source of funds used to
acquire or hold the certificate or interest therein is an "insurance company
general account," as

                                     A-2-6
<PAGE>

such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.]

                  [For Class M-8A and Class M-8B][ No transfer of this Class
M-8A Certificate and Class M-8B Certificate will be made unless such transfer is
(i) exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws and (ii) made in accordance with Section 6.02 of the
Agreement. In the event that such transfer is to be made the Trustee shall
register such transfer if, (i) made to a transferee who has provided the Trustee
with evidence as to its QIB status; or (ii) (A) the transferor has advised the
Trustee in writing that the Certificate is being transferred to an Institutional
Accredited Investor and (B) prior to such transfer the transferee furnishes to
the Trustee an Investment Letter; provided that if based upon an Opinion of
Counsel to the effect that (A) and (B) above are not sufficient to confirm that
such transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and other
applicable laws, the Trustee shall as a condition of the registration of any
such transfer require the transferor to furnish such other certifications, legal
opinions or other information prior to registering the transfer of this
Certificate as shall be set forth in such Opinion of Counsel. ]

                  [For Class M-8A and Class M-8B] [This Certificate may not be
acquired directly or indirectly by, or on behalf of, an employee benefit plan or
other retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended, unless the transferee certifies or
represents that the proposed transfer and holding of a Certificate and the
servicing, management and operation of the trust and its assets: (i) will not
result in any prohibited transaction which is not covered under an individual or
class prohibited transaction exemption, including, but not limited to,
Prohibited Transaction Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60
or PTE 96-23 and (ii) will not give rise to any additional obligations on the
part of the Depositor, the Securities Administrator, the Master Servicer or the
Trustee, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate or unless the opinion specified in section
6.02 of the Agreement is provided. This Certificate is one of a duly authorized
issue of Certificates designated as set forth on the face hereof (the
"Certificates"). The Certificates, in the aggregate, evidence the entire
beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.]

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is

                                     A-2-7
<PAGE>

registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee or any such agent shall be affected by notice to
the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.
The exercise of such right will effect the early retirement of the Certificates.
In no event, however, will the Trust Fund created by the Agreement continue
beyond the expiration of 21 years after the death of certain persons identified
in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-2-8
<PAGE>

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

Dated: _____________, ____                  LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class M-[1][2][3][4][5][6][7][8A][8B] Certificates
referred to in the within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION

                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed 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 Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                           -----------------------------------------------------
                                    Signature by or on behalf of assignor

                                      ------------------------------------------
                                                 Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3

                           Form of Class P Certificate

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON. 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 TRUSTEE NAMED HEREIN.

                  THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES 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 ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                                     A-3-1
<PAGE>

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 6.02
OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, MASTER
SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.

                                     A-3-2
<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No.1                                           Percentage Interest: 100%

Class P

Date of Pooling and Servicing Agreement and Cut-off Date:  Aggregate Initial Certificate  Principal Balance of this
August 1, 2004                                             Certificate as of the Cut-off Date:
                                                           $100.00

First Distribution Date:                                   Initial   Certificate    Principal   Balance   of   this
September 27, 2004                                         Certificate as of the Cut-off Date:
                                                           $100.00

Master Servicer:                                           CUSIP:  [__________]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
June 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-FR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class P Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional, closed-end one- to
         four-family first and second lien, fixed and adjustable interest rate
         mortgage loans sold by BEAR STEARNS ASSET BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer, the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that ___________________ is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional, closed-end first and second
lien, fixed and adjustable rate mortgage loans secured by one- to four- family
residences (collectively, the "Mortgage Loans") sold by Bear Stearns Asset
Backed Securities I LLC ("BSABS I"). The Mortgage Loans were sold by EMC
Mortgage Corporation

                                     A-3-3
<PAGE>

("EMC") to BSABS I. EMC will act as master servicer of the Mortgage Loans (in
that capacity, the "Master Servicer," which term includes any successors thereto
under the Agreement referred to below). The Trust Fund was created pursuant to
the Pooling and Servicing Agreement, dated as of the Cut-off Date specified
above (the "Agreement"), among BSABS I, as depositor (the "Depositor"), EMC
Mortgage Corporation as seller and Master Servicer and LaSalle Bank 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,
capitalized terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such
Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, 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 last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  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

                                     A-3-4
<PAGE>

such a transfer of this Certificate is to be made without registration or
qualification, the Trustee shall require receipt of (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Holder of the Certificate desiring to effect the
transfer, and from such Holder's prospective transferee, substantially in the
forms attached to the Agreement as Exhibit E and either Exhibit F or G, as
applicable, and (ii) in all other cases, an Opinion of Counsel satisfactory to
it that such transfer may be made without such registration or qualification
(which Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Trustee or the Master Servicer in their respective capacities as
such), together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. Neither the Depositor
nor the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any Holder
desiring to effect a transfer of this Certificate shall be required to indemnify
the Trustee, the Depositor, the Seller and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

                  No transfer of this Class P Certificate will be made unless
the transferee provides either a certification pursuant to section 6.02(b) of
the Agreement or an Opinion of Counsel under Section 6.02(b) of the Agreement
satisfactory to the Trustee that the purchase of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Depositor to any obligation or
liability in addition to those undertaken in the agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. 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 lieu hereof whether or not notation of such

                                     A-3-5
<PAGE>

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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-3-6
<PAGE>

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

Dated: _____________, ____                  LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class P Certificates referred to in the
within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION

                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed 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 Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                           -----------------------------------------------------
                                    Signature by or on behalf of assignor

                                      ------------------------------------------
                                                 Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-4

                          Form of Class CE Certificates

                  THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
SENIOR CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT
(AS DEFINED BELOW).

                  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 "SECURITIES 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 ONLY
(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 6.02
OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,

                                     A-4-1
<PAGE>

WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, MASTER
SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.

                                     A-4-2
<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No.1                                           Percentage Interest: 100%

Class CE                                                   Variable Pass-Through Rate

Date of Pooling and Servicing Agreement and Cut-off Date:  Initial    Certificate    Notional   Balance   of   this
August 1, 2004                                             Certificate as of the Cut-off Date:
                                                           $[----------]

First Distribution Date:                                   Aggregate   Certificate   Notional   Balance   of   this
September 27, 2004                                         Certificate as of the Cut-off Date:
                                                           $[----------]

Master Servicer:                                           CUSIP:  [_________]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
June 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-FR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class CE Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional, closed-end one- to
         four-family first and second lien, fixed and adjustable interest rate
         mortgage loans sold by BEAR STEARNS ASSET BACKED SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer or the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that __________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership interest
of Certificates of the same Class as this Certificate in a trust (the "Trust
Fund") generally consisting of conventional, closed-end first and second lien,
fixed and adjustable rate mortgage loans secured by one- to four- family
residences (collectively, the "Mortgage Loans") sold by Bear Stearns Asset
Backed Securities I LLC ("BSABS"). The Mortgage Loans were sold by EMC Mortgage
Corporation ("EMC") to

                                     A-4-3
<PAGE>

BSABS I. EMC will act as master servicer of the Mortgage Loans (in that
capacity, the "Master Servicer," which term includes any successors thereto
under the Agreement referred to below). The Trust Fund was created pursuant to
the Pooling and Servicing Agreement, dated as of the Cut-off Date specified
above (the "Agreement"), among BSABS I, as depositor (the "Depositor"), EMC
Mortgage Corporation as seller and Master Servicer and LaSalle Bank 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,
capitalized terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such
Holder is bound.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, 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 last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit D and either
Exhibit E or F, as applicable, and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration or qualification (which Opinion of Counsel shall not be an expense
of the Trust Fund or of the Depositor, the Trustee or the Master Servicer in
their respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. Neither the Depositor nor the Trustee is obligated to register
or qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be

                                     A-4-4
<PAGE>

required to indemnify the Trustee, the Depositor, the Seller and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  No transfer of this Class CE Certificate will be made unless
the transferee provides either a certification pursuant to section 6.02 of the
Agreement or an Opinion of Counsel under Section 6.02 of the Agreement
satisfactory to the Trustee that the purchase of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer or the Depositor to any obligation or
liability in addition to those undertaken in the agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more

                                     A-4-5
<PAGE>

new Certificates evidencing the same Class and in the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Master Servicer,
the Trustee or any such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-4-6
<PAGE>

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

Dated: _____________, ____                  LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION

                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed 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 Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                           -----------------------------------------------------
                                    Signature by or on behalf of assignor

                                      ------------------------------------------
                                                 Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-5

                          Form of Class R Certificates

                  THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

                  SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

                  NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 6.02
OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, MASTER
SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) 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), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
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
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE

                                     A-5-1
<PAGE>

FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR 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
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.

                                     A-5-2
<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No.1

Class R[-1][-2][RX]                                        Percentage Interest: 100%

Date of Pooling and Servicing Agreement and
Cut-off Date:
August 1, 2004

First Distribution Date:
September 27, 2004

Master Servicer:                                           CUSIP:  [_________]
EMC Mortgage Corporation

Last Scheduled Distribution Date:
June 25, 2034
</TABLE>

                            ASSET-BACKED CERTIFICATE
                                 SERIES 2004-FR2

         evidencing a fractional undivided interest in the distributions
         allocable to the Class R[-1][-2][RX] Certificates with respect to a
         Trust Fund consisting primarily of a pool of conventional, closed-end
         one- to four-family first and second lien, fixed and adjustable
         interest rate mortgage loans sold by BEAR STEARNS ASSET BACKED
         SECURITIES I LLC.

                  This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or the Trustee or any of
their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental entity
or by Bear Stearns Asset Backed Securities I LLC, the Master Servicer, the
Trustee or any of their affiliates or any other person. None of Bear Stearns
Asset Backed Securities I LLC, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

                  This certifies that Bear, Stearns Securities Corp. is the
registered owner of the Percentage Interest evidenced hereby in the beneficial
ownership interest of Certificates of the same Class as this Certificate in a
trust (the "Trust Fund") generally consisting of conventional, closed-end first
and second lien, fixed and adjustable rate mortgage loans secured by one- to
four- family residences (collectively, the "Mortgage Loans") sold by Bear
Stearns Asset Backed Securities I LLC ("BSABS I"). The Mortgage Loans were sold
by EMC Mortgage Corporation ("EMC") to BSABS I. EMC will act as master servicer
of the Mortgage Loans (in that capacity,

                                     A-5-3
<PAGE>

the "Master Servicer," which term includes any successors thereto under the
Agreement referred to below). The Trust Fund was created pursuant to the Pooling
and Servicing Agreement, dated as of the Cut-off Date specified above (the
"Agreement"), among BSABS I, as depositor (the "Depositor"), EMC Mortgage
Corporation as seller and Master Servicer and LaSalle Bank 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, capitalized
terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such Holder is bound.

                  Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the delivery
to the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Depositor will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Depositor, which purchaser
may be the Depositor, or any affiliate of the Depositor, on such terms and
conditions as the Depositor may choose.

                  The Trustee will distribute on the 25th day of each month, or,
if such 25th day is not a Business Day, the immediately following Business Day
(each, 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 last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the calendar month
immediately preceding the month in which the Distribution Date occurs, an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amounts required to be distributed to the Holders of Certificates of the
same Class as this Certificate.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and designated in such notice.

                  No transfer of this Class R Certificate will be made unless
the transferee provides either a certification pursuant to section 6.02 of the
Agreement or an Opinion of Counsel satisfactory to the Trustee that the purchase
of this Certificate will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and

                                     A-5-4
<PAGE>

will not subject the Trustee, the Master Servicer or the Depositor to any
obligation or liability in addition to those undertaken in the agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates").
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and that
the Trustee is not liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the parties thereto with the consent of the
Holders of the Class or Classes of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes. 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 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
with the Trustee upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Trustee for such purposes, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate Percentage Interest
will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

                  No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Master Servicer, the
Trustee or 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 (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of (A) the maturity or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (B) the
remittance of all funds due under the Agreement, or (ii) the optional repurchase
by the party named in the Agreement of all the Mortgage Loans and other assets
of the Trust Fund in accordance with the terms of the Agreement. Such optional
repurchase may be made only on or after the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

                  Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any purpose.

                                     A-5-6
<PAGE>

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

Dated: _____________, ____                  LASALLE BANK NATIONAL ASSOCIATION
                                            not in its individual capacity but
                                            solely as Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class R[-1][-2][RX] Certificates referred to in the
within-mentioned Agreement.

                                            LASALLE BANK NATIONAL ASSOCIATION

                                            Authorized signatory of LaSalle Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

                                            By:
                                               ---------------------------------
                                                    Authorized Signatory

<PAGE>

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Asset-Backed 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 Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Dated:
                           -----------------------------------------------------
                                    Signature by or on behalf of assignor

                                      ------------------------------------------
                                                 Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

                  This information is provided by __________________, the
assignee named above, or ________________________, as its agent.

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                             [provided upon request]

                                      B-1

<PAGE>

                                    EXHIBIT C

                                   [RESERVED]

                                      C-1

<PAGE>

                                    EXHIBIT D

                           FORM OF TRANSFER AFFIDAVIT

                                                   Affidavit pursuant to Section
                                                   860E(e)(4) of the Internal
                                                   Revenue Code of 1986, as
                                                   amended, and for other
                                                   purposes

STATE OF                   )
                           )ss:
COUNTY OF                  )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Bear Stearns Asset-Backed
Securities I LLC Asset-Backed Certificates, Series 2004-FR2, Class R-__
Certificates (the "Residual Certificates") for the account of a disqualified
organization; (iii) it consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by Bear Stearns Asset Backed Securities
I LLC (upon advice of counsel) to constitute a reasonable arrangement to ensure
that the Residual Certificates will not be owned directly or indirectly by a
disqualified organization; and (iv) it will not transfer such Residual
Certificates unless (a) it has received from the transferee an affidavit in
substantially the same form as this affidavit containing these same four
representations and (b) as of the time of the transfer, it does not have actual
knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that 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 United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

                                      D-1
<PAGE>

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.

                                    [NAME OF INVESTOR]

                                    By:
                                         ---------------------------------------
                                         [Name of Officer]
                                         [Title of Officer]
                                         [Address of Investor for receipt of
                                         distributions]

                                         Address of Investor for receipt of tax
                                         information:

                                      D-2
<PAGE>

                  Personally appeared before me the above-named [Name of
Officer], known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Investor, 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 Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

                                      D-3
<PAGE>

                                    EXHIBIT E

                         FORM OF TRANSFEROR CERTIFICATE

                              ______________,200___

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

LaSalle Bank National Association
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603

Attention: Bear Stearns Asset Backed Securities I Trust 2004-FR2

         Re:      Bear Stearns Asset Backed Securities I LLC
                  Asset-Backed Certificates, Series 2004-FR2, Class[   ]_
                  -------------------------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Asset-Backed Certificates, Series 2004-FR2, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of August 1, 2004, among Bear Stearns Asset
Backed Securities I LLC, as depositor (the "Depositor"), EMC Mortgage
Corporation, as seller and master servicer and LaSalle Bank National
Association, as trustee (the "Trustee"). The Seller hereby certifies, represents
and warrants to, a covenants with, the Depositor and the Trustee that:

         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.

                                      E-1
<PAGE>

                                            Very truly yours,

                                            (Seller)

                                            By:_____________________

                                            Name:___________________

                                            Title:__________________

<PAGE>

                                    EXHIBIT F

                     FORM OF INVESTMENT LETTER-NON RULE 144A

                                                                          [Date]
[SELLER]

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

LaSalle Bank National Association
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603

         Re:      Bear Stearns Asset-Backed Securities I Trust 2004-FR2,
                  Asset-Backed Certificates, Series 2004-FR2 (the
                  "Certificates"), including the Class __ Certificates (the
                  "Privately Offered Certificates")
                  ---------------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

                  (i)      we understand that the Privately Offered Certificates
                           are not being registered under the Securities Act of
                           1933, as amended (the "Act") or any applicable state
                           securities or "Blue Sky" laws, and are being sold to
                           us in a transaction that is exempt from the
                           registration requirements of such laws;

                  (ii)     any information we desired concerning the
                           Certificates, including the Privately Offered
                           Certificates, the trust in which the Certificates
                           represent the entire beneficial ownership interest
                           (the "Trust") or any other matter we deemed relevant
                           to our decision to purchase Privately Offered
                           Certificates has been made available to us;

                  (iii)    we are able to bear the economic risk of investment
                           in Privately Offered Certificates; we are an
                           institutional "accredited investor" as defined in
                           Section 501(a) of Regulation D promulgated under the
                           Act and a sophisticated institutional investor;

                  (iv)     we are acquiring Privately Offered Certificates for
                           our own account, not as nominee for any other person,
                           and not with a present view to any distribution or
                           other disposition of the Privately Offered
                           Certificates;

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)
                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration

                                      F-1
<PAGE>

                           requirements of the Act and any applicable state
                           securities or "Blue Sky" laws is available;

                  (vi)     we agree that in the event that at some future time
                           we wish to dispose of or exchange any of the
                           Privately Offered Certificates (such disposition or
                           exchange not being currently foreseen or
                           contemplated), we will not transfer or exchange any
                           of the Privately Offered Certificates unless:

                                    (A) (1) the sale is to an Eligible Purchaser
                           (as defined below), (2) if required by the Pooling
                           and Servicing Agreement (as defined below) a letter
                           to substantially the same effect as either this
                           letter or, if the Eligible Purchaser is a Qualified
                           Institutional Buyer as defined under Rule 144A of the
                           Act, the Rule 144A and Related Matters Certificate in
                           the form attached to the Pooling and Servicing
                           Agreement (as defined below) (or such other
                           documentation as may be acceptable to the Trustee) is
                           executed promptly by the purchaser and delivered to
                           the addressees hereof and (3) all offers or
                           solicitations in connection with the sale, whether
                           directly or through any agent acting on our behalf,
                           are limited only to Eligible Purchasers and are not
                           made by means of any form of general solicitation or
                           general advertising whatsoever; and

                                    (B) if the Privately Offered Certificate is
                           not registered under the Act (as to which we
                           acknowledge you have no obligation), the Privately
                           Offered Certificate is sold in a transaction that
                           does not require registration under the Act and any
                           applicable state securities or "blue sky" laws and,
                           if LaSalle Bank National Association (the "Trustee")
                           so requests, a satisfactory Opinion of Counsel is
                           furnished to such effect, which Opinion of Counsel
                           shall be an expense of the transferor or the
                           transferee;

                  (vii)    we agree to be bound by all of the terms (including
                           those relating to restrictions on transfer) of the
                           Pooling and Servicing, pursuant to which the Trust
                           was formed; we have reviewed carefully and understand
                           the terms of the Pooling and Servicing Agreement;

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate directly or indirectly by, or on
                           behalf of, an employee benefit plan or other
                           retirement arrangement which is subject to Title I of
                           the Employee Retirement Income Security Act of 1974,
                           as amended, and/or section 4975 of the Internal
                           Revenue Code of 1986, as amended, or (ii) in the case
                           of the Class M-8A Certificates and Class M-8B
                           Certificates, have provided the Opinion of Counsel
                           required by the Agreement, or, in the case of the
                           Class M-8A Certificates and Class M-8B Certificates,
                           the proposed transfer and holding of a Certificate
                           and the servicing, management and operation of the
                           trust and its assets: (i) will not result in any
                           prohibited transaction which is not covered under an
                           individual or class prohibited transaction

                                      F-2
<PAGE>

                           exemption, including, but not limited to, Prohibited
                           Transaction Exemption ("PTE") 84-14, PTE 91-38, PTE
                           90-1, PTE 95-60 or PTE 96-23 and (ii) will not give
                           rise to any additional obligations on the part of the
                           Depositor, the Securities Administrator, the Master
                           Servicer or the Trustee.

                  (ix)     We understand that each of the Privately Offered
                           Certificates bears, and will continue to bear, a
                           legend to substantiate the following effect: "THIS
                           CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
                           UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                           "SECURITIES 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 ONLY (1) PURSUANT TO RULE 144A
                           UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
                           THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
                           INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
                           (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
                           PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
                           HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
                           PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
                           RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
                           REGISTRATION PROVIDED BY RULE 144 UNDER THE
                           SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
                           FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
                           THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
                           (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
                           WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
                           PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
                           VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
                           RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
                           THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
                           RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
                           ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
                           PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
                           SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
                           CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
                           LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
                           JURISDICTION. [In the case of the Class M-8A
                           Certificates and Class M-8B Certificates]: THIS
                           CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR
                           INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT
                           PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT
                           TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
                           ACT OF 1974,

                                      F-3
<PAGE>

                           AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
                           CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE
                           CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER
                           AND HOLDING OF A CERTIFICATE AND THE SERVICING,
                           MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS:
                           (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION
                           WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS
                           PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
                           LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE")
                           84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23
                           AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
                           OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE
                           SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE
                           TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
                           OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE
                           OR UNLESS THE OPINION SPECIFIED IN SECTION 6.02 OF
                           THE AGREEMENT IS PROVIDED. [In the case of the Class
                           P and Class CE Certificates]: NO TRANSFER OF THIS
                           CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
                           TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT
                           TO SECTION 6.02 OF THE AGREEMENT OR AN OPINION OF
                           COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
                           AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER
                           APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A
                           NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406
                           OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
                           1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE
                           CODE AND WILL NOT SUBJECT THE TRUSTEE, MASTER
                           SERVICER OR THE DEPOSITOR TO ANY OBLIGATION OR
                           LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
                           AGREEMENT.

         "Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of August 1, 2004, among
Bear Stearns Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation, as seller and master and LaSalle Bank National Association, as
Trustee (the "Pooling and Servicing Agreement').

                                      F-4
<PAGE>

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):
                          ---------------------------

                                      F-5
<PAGE>

         IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.

                                            Very truly yours,

                                            [PURCHASER]

                                            By:
                                                 -------------------------------
                                                     (Authorized Officer)

                                            By:
                                               ---------------------------------
                                                     (Attorney-in-fact)

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                               [NAME OF NOMINEE]

                                               By:
                                                  --------------------------
                                                     (Authorized Officer)

                                               By:
                                                  --------------------------
                                                     (Attorney-in-fact)

<PAGE>

                                    EXHIBIT G

                FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

[SELLER]

Bear Stearns Asset Backed Securities I LLC
383 Madison Avenue
New York, New York 10179

LaSalle Bank National Association
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60603

         Re:      Bear Stearns Asset Backed Securities I Trust 2004-FR2,
                  Asset-Backed Certificates, Series 2004-FR2 (the
                  "Certificates"), including the Class __ Certificates (the
                  "Privately Offered Certificates")
                  ---------------------------------------------------------

Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:

1.       It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to a
repurchase agreement and swaps), as described below:

         Date: ______________, 20__ (must be on or after the close of its most
         recent fiscal year)

         Amount: $ _____________________; and

2.    The dollar amount set forth above is:

         a.       greater than $100 million and the undersigned is one of the
                  following entities:

                  (x)      |_|      an insurance company as defined in Section
                                    2(13) of the Act1; or

                  (y)      |_|      an investment company registered under the
                                    Investment Company Act or any business
                                    development company as defined in Section
                                    2(a)(48) of the Investment Company Act of
                                    1940; or
----------

1        A purchase by an insurance company for one or more of its separate
accounts, as defined by Section 2(a)(37) of the Investment Company Act of 1940,
which are neither registered nor required to be registered thereunder, shall be
deemed to be a purchase for the account of such insurance company.

                                      G-1
<PAGE>

                  (z)      |_|      a Small Business Investment Company
                                    licensed by the U.S. Small Business
                                    Administration under Section 301(c) or (d)
                                    of the Small Business Investment Act of
                                    1958; or

                  (aa)     |_|      a plan (i) established and maintained by a
                                    state, its political subdivisions, or any
                                    agency or instrumentality of a state or its
                                    political subdivisions, the laws of which
                                    permit the purchase of securities of this
                                    type, for the benefit of its employees and
                                    (ii) the governing investment guidelines of
                                    which permit the purchase of securities of
                                    this type; or

                  (bb)     |_|      a business development company as defined in
                                    Section 202(a)(22) of the Investment
                                    Advisers Act of 1940; or

                  (cc)     |_|      a corporation (other than a U.S. bank,
                                    savings and loan association or equivalent
                                    foreign institution), partnership,
                                    Massachusetts or similar business trust, or
                                    an organization described in Section
                                    501(c)(3) of the Internal Revenue Code; or

                  (dd)     |_|      a U.S. bank, savings and loan association
                                    or equivalent foreign institution, which has
                                    an audited net worth of at least $25 million
                                    as demonstrated in its latest annual
                                    financial statements; or

                  (ee)     |_|      an investment adviser registered under the
                                    Investment Advisers Act; or

         b.       |_|      greater than $10 million, and the undersigned is a
                           broker-dealer registered with the SEC; or

         c.       |_|      less than $ 10 million, and the undersigned is a
                           broker-dealer registered with the SEC and will only
                           purchase Rule 144A securities in transactions in
                           which it acts as a riskless principal (as defined in
                           Rule 144A); or

         d.       |_|      less than $100 million, and the undersigned is an
                           investment company registered under the Investment
                           Company Act of 1940, which, together with one or more
                           registered investment companies having the same or an
                           affiliated investment adviser, owns at least $100
                           million of eligible securities; or

         e.       |_|      less than $100 million, and the undersigned is an
                           entity, all the equity owners of which are qualified
                           institutional buyers.

         The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by

                                      G-2
<PAGE>

Rule 144A. The undersigned understands that the Privately Offered Certificates
may be resold, pledged or transferred only to (i) 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 in Rule 144A, or (ii) an
institutional "accredited investor," as such term is defined under Rule 501 of
the Act in a transaction that otherwise does not constitute a public offering.

         The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of August 1, 2004, among Bear Stearns Asset Backed
Securities I LLC, EMC Mortgage Corporation and LaSalle Bank National
Association, as Trustee, pursuant to which the Certificates were issued.

          The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, or section
4975 of the Internal Revenue Code of 1986, as amended, or (ii) has provided the
Opinion of Counsel required by the Agreement, or (iii) in the case of the Class
M-8A Certificates and Class M-8B Certificates, the proposed transfer and holding
of a Certificate and the servicing, management and operation of the trust and
its assets: (A) will not result in any prohibited transaction which is not
covered under an individual or class prohibited transaction exemption,
including, but not limited to, Prohibited Transaction Exemption ("PTE") 84-14,
PTE 91-38, PTE 90-1, PTE 95-60 or PTE 96-23 and (B) will not give rise to any
additional obligations on the part of the Depositor, the Securities
Administrator, the Master Servicer or the Trustee.

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):
                          ---------------------------

                                      G-3
<PAGE>

IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
____ day of ___________, 20___.

                                          Very truly yours,

                                          [PURCHASER]

                                          By:
                                              ---------------------------------
                                                   (Authorized Officer)

                                          By:
                                              ---------------------------------
                                                    (Attorney-in-fact)

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                          [NAME OF NOMINEE]

                                          By:
                                              ---------------------------------
                                                   (Authorized Officer)

                                          By:
                                              ---------------------------------
                                                    (Attorney-in-fact)

<PAGE>

                                    EXHIBIT H

                           FORM OF REQUEST FOR RELEASE

To:      LaSalle Bank National Association
         135 South LaSalle Street, Suite 1625
         Chicago, Illinois 60603

RE:      Pooling and Servicing Agreement, dated as of August 1, 2004, among Bear
         Stearns Asset Backed Securities I LLC, as Depositor, EMC Mortgage
         Corporation, as seller and master servicer and LaSalle Bank National
         Association, as Trustee
         -----------------------------------------------------------------------

         In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.

Mortgage Loan Number:
--------------------

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_____             1.       Mortgage Paid in Full and proceeds have been
                           deposited into the Custodial Account

_____             2.       Foreclosure

_____             3.       Substitution

_____             4.       Other Liquidation

_____             5.       Nonliquidation           Reason:
                                                           ---------------------

_____             6.       California Mortgage Loan paid in full

                                          By:
                                             -----------------------------------
                                                   (authorized signer)

                                          Issuer:
                                                 -------------------------------
                                          Address:
                                                  ------------------------------

                                          Date:
                                               ---------------------------------

                                      H-1

<PAGE>

                                    EXHIBIT I

                          DTC Letter of Representations
                             [provided upon request]

                                      I-1

<PAGE>

                                    EXHIBIT J

                   Schedule of Mortgage Loans with Lost Notes
                             [provided upon request]

                                      J-1

<PAGE>

                                    EXHIBIT K

                           FORM OF CUSTODIAL AGREEMENT
                           ---------------------------

                  THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of August 31, 2004, by and among
LASALLE BANK NATIONAL ASSOCIATION, not individually but solely as trustee under
the Pooling and Servicing Agreement defined below (including its successors
under the Pooling and Servicing Agreement defined below, the "Trustee"), BEAR
STEARNS ASSET BACKED SECURITIES I LLC, as depositor (together with any successor
in interest, the "Depositor"), EMC MORTGAGE CORPORATION, as seller (in that
capacity, the "Seller") and master servicer (together with any successor in
interest or successor under the Pooling and Servicing Agreement referred to
below, the "Master Servicer") and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").

                                WITNESSETH THAT:
                                ---------------

                  WHEREAS, the Depositor, the Seller, the Master Servicer and
the Trustee have entered into a Pooling and Servicing Agreement, dated as of
August 1, 2004, relating to the issuance of Bear Stearns Asset Backed Securities
I Trust 2004-FR2, Asset-Backed Certificates, Series 2004-FR2 (as in effect on
the date of this Agreement, the "Original Pooling and Servicing Agreement," and
as amended and supplemented from time to time, the "Pooling and Servicing
Agreement'); and

                  WHEREAS, the Custodian has agreed to act as agent for the
Trustee on behalf of the Certificateholders and the Certificate Insurer for the
purposes of receiving and holding certain documents and other instruments
delivered by the Depositor, the Seller or the Master Servicer under the Pooling
and Servicing Agreement and the Servicers under their respective Servicing
Agreements, all upon the terms and conditions and subject to the limitations
hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the
Depositor, the Seller, the Master Servicer and the Custodian hereby agree as
follows:

                                   ARTICLE I.

                                   DEFINITIONS

                  Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.

                                      K-1
<PAGE>

                                  ARTICLE II.

                          CUSTODY OF MORTGAGE DOCUMENTS

                  Section 2.1. Custodian to Act as Agent: Acceptance of Mortgage
Files. The custodian, as the duly appointed custodial agent of the Trustee for
these purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders and the Certificate Insurer.

                  Section 2.2. Recordation of Assignments. If any Mortgage File
includes one or more assignments of Mortgage that have not been recorded
pursuant to the provisions of Section 2.01 of the Pooling and Servicing
Agreement and the related Mortgage Loan is not a MOM Loan or the related
Mortgaged Properties are located in jurisdictions specifically excluded by the
Opinion of Counsel delivered to the Trustee pursuant to Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Seller for the purpose of recording it in the appropriate
public office for real property records, and the Seller, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.

                  Section 2.3. Review of Mortgage Files.

                  (a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Seller, the Trustee and the Certificate Insurer an Initial Certification
in the form annexed hereto as Exhibit One evidencing receipt (subject to any
exceptions noted therein) of a Mortgage File for each of the Mortgage Loans
listed on the Schedule attached hereto (the "Mortgage Loan Schedule").

                  (b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of the Certificateholders and the Certificate Insurer, to
review, in accordance with the provisions of Section 2.02 of the Pooling and
Servicing Agreement, each such document, and shall deliver to the Seller, the
Master Servicer, the Certificate Insurer and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.

                  (c) Not later than 180 days after the Closing Date, the
Custodian shall review, for the benefit of Certificateholders and the
Certificate Insurer, the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Seller, the Master

                                      K-2
<PAGE>

Servicer, the Certificate Insurer and the Trustee a Final Certification in the
form annexed hereto as Exhibit Three evidencing the completeness of the Mortgage
Files.

                  (d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.

         Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.

                  Section 2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor as set forth in the Pooling and Servicing
Agreement with respect to a Mortgage Loan relating to a Mortgage File, the
Custodian shall give prompt written notice to the Depositor, the Master
Servicer, the Certificate Insurer and the Trustee.

                  Section 2.5. Custodian to Cooperate: Release of Mortgage
Files. Upon receipt of written notice from the Trustee that the Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and a request for release (a "Request for Release") confirming that
the purchase price therefore has been deposited in the Protected Account or the
Distribution Account, then the Custodian agrees to promptly release to the
Seller the related Mortgage File.

                  Upon the Custodian's receipt of a Request for Release
substantially in the form of Exhibit H to the Pooling and Servicing Agreement
signed by a Servicing Officer of the Master Servicer, stating that it has
received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees promptly
to release to the Master Servicer, the related Mortgage File. The Depositor
shall deliver to the Custodian and the Custodian agrees to review in accordance
with the provisions of the Custodial Agreement the Mortgage Note and other
documents constituting the Mortgage File with respect to any Replacement
Mortgage Loan.

                  From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Mortgage Insurance Policy or LPMI Policy, the Master Servicer shall
deliver to the Custodian a Request for Release signed by a Servicing Officer
requesting that possession of all of the Mortgage File be released to the Master
Servicer and certifying as to the reason for such release and that such release
will not invalidate any insurance coverage provided in respect of the Mortgage
Loan under any of the Insurance Policies. Upon receipt of the foregoing, the
Custodian shall deliver the Mortgage File to the Master Servicer. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Custodian when the need therefore by the Master Servicer no
longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Protected Account or the

                                      K-3
<PAGE>

Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.

                  At any time that the Master Servicer is required to deliver to
the Custodian a Request for Release, the Master Servicer shall deliver two
copies of the Request for Release if delivered in hard copy or the Master
Servicer may furnish such Request for Release electronically to the Custodian,
in which event the Servicing Officer transmitting the same shall be deemed to
have signed the Request for Release. In connection with any Request for Release
of a Mortgage File because of a repurchase of a Mortgage Loan, such Request for
Release shall be accompanied by an assignment of mortgage, without recourse,
representation or warranty from the Trustee to the Seller (unless such Mortgage
Loan is a MOM Loan) and the related Mortgage Note shall be endorsed without
recourse, representation or warranty by the Trustee and be returned to the
Seller. In connection with any Request for Release of a Mortgage File because of
the payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the Master Servicer.

                  Section 2.6. Assumption Agreements. In the event that any
assumption agreement, substitution of liability agreement or sale of servicing
agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the Pooling
and Servicing Agreement, shall notify the Custodian that such assumption or
substitution agreement has been completed by forwarding to the Custodian the
original of such assumption or substitution agreement, which shall be added to
the related Mortgage File and, for all purposes, shall be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting parts thereof.

                                  ARTICLE III.

                            CONCERNING THE CUSTODIAN

                  Section 3.1. Custodian a Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and custodial agent of the Trustee and has no instructions to hold
any Mortgage Note or Mortgage for the benefit of any person other than the
Trustee, the Certificateholders and the Certificate Insurer undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement and in the Pooling and Servicing Agreement. Except upon compliance
with the provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage
or Mortgage File shall be delivered by the Custodian to the Seller, the
Depositor or the Master Servicer or otherwise released from the possession of
the Custodian.

                                      K-4
<PAGE>

                  Section 3.2. Reserved.

                  Section 3.3. Custodian May Own Certificates. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.

                  Section 3.4. Master Servicer to Pay Custodian's Fees and
Expenses. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith or to the extent that such cost or
expense is indemnified by the Depositor pursuant to the Pooling and Servicing
Agreement.

                  Section 3.5. Custodian May Resign; Trustee May Remove
Custodian. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such written notice of resignation, the
Trustee shall either take custody of the Mortgage Files itself and give prompt
written notice thereof to the Depositor, the Master Servicer, the Certificate
Insurer and the Custodian, or promptly appoint a successor Custodian by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Custodian and one copy to the successor Custodian. If the Trustee
shall not have taken custody of the Mortgage Files and no successor Custodian
shall have been so appointed and have accepted appointment within 30 days after
the giving of such written notice of resignation, the resigning Custodian may
petition any court of competent jurisdiction for the appointment of a successor
Custodian.

                  The Trustee, at the direction of 25% of the
Certificateholders, shall remove the Custodian at any time upon 60 days prior
written notice to Custodian. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Master Servicer and the Depositor.

                  Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor, the
Certificate Insurer and the Master Servicer of the appointment of any successor
Custodian. Notwithstanding anything to the contrary set forth herein, no
successor Custodian shall be appointed by the Trustee without the prior approval
of the Depositor and the Master Servicer and with the prior written consent of
the Certificate Insurer (which consent shall not be unreasonably withheld).

                                      K-5
<PAGE>

                  Section 3.6. Merger or Consolidation of Custodian. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
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.

                  Section 3.7. Representations of the Custodian. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.

                  Section 3.8. Limitation on Liability. Neither the Custodian
nor any of its directors, officers, agents or employees, shall be liable for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith in good faith and believed (which belief may be based upon the opinion
or advice of counsel selected by it in the exercise of reasonable care) by it or
them to be within the purview of this Agreement, except for its or their own
negligence, lack of good faith or willful misconduct. The Custodian and any
director, officer, employee or agent of the Custodian may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. In no event shall the Custodian
or its directors, officers, agents and employees be held liable for any special,
indirect or consequential damages resulting from any action taken or omitted to
be taken by it or them hereunder or in connection herewith even if advised of
the possibility of such damages.

                  Notwithstanding anything herein to the contrary, the Custodian
agrees to indemnify the Trust Fund, the Trustee and each of their respective
officers, directors and agents for any and all liabilities, obligations, losses,
damages, payments, costs or expenses of any kind whatsoever that may be imposed
on, incurred by or asserted against the Trustee or Trust Fund, due to any act or
omission by the Custodian with respect to the Mortgage Files; provided, however,
that the Custodian shall not be liable to any of the foregoing Persons for any
amount and any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of such Person. The provisions of this
Section 3.8 shall survive the termination of this Custodial Agreement.

                  The Custodian and its directors, officers, employees and
agents shall be entitled to indemnification and defense from the Trust Fund for
any loss, liability or expense incurred without negligence, willful misconduct,
bad faith on their part, arising out of, or in connection with, the acceptance
or administration of the custodial arrangement created hereunder, including the
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder.

                                      K-6
<PAGE>

                                  ARTICLE IV.

                            MISCELLANEOUS PROVISIONS

                  Section 4.1. Notices. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.

                  Section 4.2. Certificate Insurer Rights. The Certificate
Insurer shall be an express third party beneficiary of this Custodial Agreement
for the purpose of enforcing the provisions hereof to the extent of the
Certificate Insurer's or any Class II-A Certificateholder's rights explicitly
specified herein as if a party hereto.

                  Section 4.3. Amendments. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, with the prior written consent of the
Certificate Insurer (which consent shall not be unreasonably withheld). The
Trustee shall give prompt notice to the Custodian of any amendment or supplement
to the Pooling and Servicing Agreement and furnish the Custodian with written
copies thereof.

                  Section 4.4. GOVERNING LAW. THIS AGREEMENT shall be governed
by, and construed in accordance with, the laws of the State of New York, without
regard to conflict of laws principles thereof other than Section 5-1401 of the
New York General Obligations Law.

                  Section 4.5. Recordation of Agreement. 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 and at the Trust's expense, but
only upon direction accompanied by an Opinion of Counsel reasonably satisfactory
to the Depositor to the effect that the failure to effect such recordation is
likely to materially and adversely affect 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 4.6. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the

                                      K-7
<PAGE>

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.

                                      K-8
<PAGE>

                  IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.

<TABLE>
<CAPTION>
<S>                                                         <C>
Address:                                                    LASALLE BANK NATIONAL ASSOCIATION, not individually
                                                            but solely as Trustee
135 South LaSalle Street
Chicago, IL 60603
                                                            By:________________________________________________
Attention:                                                  Name:
                  BSABS I 2004-FR2                          Title:
Telecopy:
Confirmation:
Address:                                                    BEAR STEARNS ASSET BACKED SECURITIES I LLC

383 Madison Avenue
New York, New York 10179                                    By:_______________________________________________
                                                            Name:
                                                            Title:

Address:                                                    EMC MORTGAGE CORPORATION

909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038                                         By:_______________________________________________
                                                            Name:
                                                            Title:

Address:                                                    WELLS FARGO BANK,
                                                            NATIONAL ASSOCIATION, as Custodian
1015 Tenth Avenue Southeast
Minneapolis, Minnesota 55414                                By:_______________________________________________
                                                            Name:    Leigh Taylor
                                                            Title:   Assistant Vice President
</TABLE>

<PAGE>

STATE OF ILLINOIS                    )
                                     ) ss:
COUNTY OF COOK                       )

                  On the 31st day of August 2004 before me, a notary public in
and for said State, personally appeared _______________, known to me to be a(n)
___________________ of LaSalle Bank National Association, one of the parties
that executed the within agreement, and also known to me to be the person who
executed the within agreement on behalf of said party and acknowledged to me
that such party 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

[SEAL]

<PAGE>

STATE OF NEW YORK                    )
                                     ) ss:
COUNTY OF NEW YORK                   )

                  On the 31st day of August 2004 before me, a notary public in
and for said State, personally appeared_____________________, known to me to be
a(n)________________of Bear Stearns Asset Backed Securities I LLC, and also
known to me to be the person who executed the within instrument on behalf of
said party, and acknowledged to me that such party 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
[SEAL]

<PAGE>

STATE OF TEXAS                       )
                                     ) ss:
COUNTY OF DALLAS                     )

                  On the 31st day of August 2004 before me, a notary public in
and for said State, personally appeared _____________________, known to me to be
a(n) __________________of EMC Mortgage Corporation, one of the parties that
executed the within instrument, and also known to me to be the person who
executed the within instrument on behalf of said party, and acknowledged to me
that such party executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                Notary Public
[Notarial Seal]

<PAGE>

STATE OF MINNESOTA                   )
                                     ) ss:
COUNTY OF HENNEPIN                   )

                  On the 31st day of August 2004 before me, a notary public in
and for said State, personally appeared Leigh Taylor, known to me to be a
Assistant Vice President of Wells Fargo Bank, National Association, one of the
national parties that executed the within instrument, and also known to me to be
the person who executed it on behalf of said party, and acknowledged to me that
such party executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION

                                                   August 31, 2004

LaSalle Bank National Association      Assured Guaranty Corp.
135 South LaSalle Street               1325 Avenue of the Americas, 18th Floor
Chicago, IL 60603                      New York, NY 10019

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-FR2

                  Re:      Custodial Agreement, dated as of August 31, 2004, by
                           and among LaSalle Bank National Association, Wells
                           Fargo Bank, National Association, Bear Stearns Asset
                           Backed Securities I LLC and EMC Mortgage Corporation
                           relating to Bear Stearns Asset Backed Securities I
                           Trust 2004-FR2, Asset-Backed Certificates, Series
                           2004-FR2
                           -----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3(a) of the above-captioned
Custodial Agreement, and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File (which contains an original Mortgage Note or lost note
affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                                      WELLS FARGO BANK, NATIONAL ASSOCIATION

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

                                     K-1-1
<PAGE>

                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                    [DATE]

LaSalle Bank National Association       Assured Guaranty Corp.
135 South LaSalle Street                1325 Avenue of the Americas, 18th Floor
Chicago, IL 60603                       New York, NY 10019

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-FR2

                  Re:      Custodial Agreement, dated as of August 31, 2004, by
                           and among LaSalle Bank National Association, Wells
                           Fargo Bank, National Association, Bear Stearns Asset
                           Backed Securities I LLC and EMC Mortgage Corporation
                           relating to Bear Stearns Asset Backed Securities I
                           Trust 2004-FR2, Asset-Backed Certificates, Series
                           2004-FR2
                           -----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3(b) of the above-captioned
Custodial Agreement and subject to Section 2.02(a) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.

                                         WELLS FARGO BANK, NATIONAL ASSOCIATION

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

                                     K-2-1
<PAGE>

                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                                [DATE]

LaSalle Bank National Association       Assured Guaranty Corp.
135 South LaSalle Street                1325 Avenue of the Americas, 18th Floor
Chicago, IL 60603                       New York, NY 10019

EMC Mortgage Corporation
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038

Attention: Bear Stearns Asset Backed Securities I LLC, Series 2004-FR2

                  Re:      Custodial Agreement, dated as of August 31, 2004, by
                           and among LaSalle Bank National Association, Wells
                           Fargo Bank, National Association, Bear Stearns Asset
                           Backed Securities I LLC and EMC Mortgage Corporation
                           relating to Bear Stearns Asset Backed Securities I
                           Trust 2004-FR2, Asset-Backed Certificates, Series
                           2004-FR2
                           -----------------------------------------------------

                  In accordance with Section 2.3(c) of the above-captioned
Custodial Agreement and, subject to Section 2.02(b) of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement
or in the Pooling and Servicing Agreement, as applicable.

                                   WELLS FARGO BANK, NATIONAL ASSOCIATION

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

                                     K-3-1
<PAGE>

                                   Schedule A

                             (provided upon request)

                                     K-3-2
<PAGE>

                                    EXHIBIT L

             FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE

         This certificate is being delivered pursuant to Section 3.13 of the
Pooling and Servicing Agreement, dated as of August 1, 2004 (the "Agreement"),
among Bear Stearns Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation (the "Company"), as seller and servicer, Wells Fargo Bank, National
Association, as master servicer and securities administrator, and U.S. Bank
National Association, as trustee. Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Agreement.

         I, [identify the certifying individual], on behalf of LaSalle Bank
National Association, as trustee (the "Trustee") certify that:

         1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution or servicing reports
filed in respect of periods included in the year covered by that annual report,
of the trust (the "Trust") created pursuant to the Pooling and Servicing
Agreement, dated August 1, 2004 (the "Pooling and Servicing Agreement"), among
Bear Stearns Asset Backed Securities I LLC, as depositor (the "Depositor"), EMC
Mortgage Corporation as seller (in that capacity, the "Seller") and master
servicer (in that capacity, the "Master Servicer") and LaSalle Bank National
Association as trustee (the "Trustee"); and

         2. Based on my knowledge, the distribution information in these reports
and any other information provided by the Trustee for inclusion in these
reports, taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which the statements were made, not misleading
as of the last day of the period covered by that annual report.

                                            Date:_______________________________

                                            [Signature]
                                            Name:
                                            Title:

                                      L-1

<PAGE>

                                    EXHIBIT M

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENt

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of August 31, 2004,
as amended and supplemented by any and all amendments hereto (collectively,
"this Agreement"), by and between EMC MORTGAGE CORPORATION, a Delaware
corporation (the "Mortgage Loan Seller") and BEAR STEARNS ASSET BACKED
SECURITIES I LLC, a Delaware limited liability company (the "Purchaser").

                  Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, closed-end, fixed rate and adjustable rate,
first and second lien mortgage loans secured by one- to four-family residences
(collectively, the "Mortgage Loans") as described herein. The Purchaser intends
to deposit the Mortgage Loans into a trust fund (the "Trust Fund") and create
Bear Stearns Asset-Backed Securities I Trust 2004-FR2, Asset-Backed
Certificates, Series 2004-FR2 (the "Certificates"), under a pooling and
servicing agreement, to be dated as of August 1, 2004 (the "Pooling and
Servicing Agreement"), among the Purchaser, as depositor, the Mortgage Loan
Seller, as seller and master servicer (in that capacity, the "Master Servicer")
and LaSalle Bank National Association, as trustee (the "Trustee").

                  The Purchaser has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Number
333-113636) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "Securities Act"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "Public Offering"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus," respectively. The "Prospectus Supplement" shall mean that
supplement, dated August 25, 2004, to the Prospectus, dated April 26, 2004,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, Bear, Stearns & Co. Inc. ("Bear
Stearns") and the Purchaser have entered into a terms agreement, dated as of
August 25, 2004, to an underwriting agreement dated April 28, 2004
(collectively, the "Underwriting Agreement") between Bear Stearns and the
Purchaser.

                  Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:

                  SECTION 1. Definitions. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:

                                      M-1
<PAGE>

                  Acquisition Price: Cash in an amount equal to $______________*
$________________* in accrued interest).

                  Bear Stearns: Bear, Stearns & Co. Inc.

                  Closing Date: August 31, 2004.

                  Custodial Agreement: An agreement, dated as of August 31,
2004, among the Depositor, the Seller, the Master Servicer, the Trustee and the
Custodian.

                  Cut-off Date: August 1, 2004.

                  Cut-off Date Balance: Shall mean $469,386,027.

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

                  Due Date: As to any Mortgage Loan, the date in each month on
which the related Scheduled Payment is due, as set forth in the related Mortgage
Note.

                  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.

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

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

                  Mortgage File: The items referred to in Exhibit 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.

                  Mortgage Rate: The annual rate of interest borne by a Mortgage
Note as stated herein.

                  Mortgagor: The obligor(s) on a Mortgage Note.

                  Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the sum of (i) the Servicing
Fee Rate, (ii) the Trustee Fee Rate and (iii) the rate at which the LPMI Fee is
calculated, if any.

----------
* Please contact Bear Stearns for pricing information.

                                      M-2
<PAGE>

                  Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.

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

                  Purchase Price: With respect to any Mortgage Loan required to
be purchased by the Mortgage Loan Seller pursuant to the applicable provisions
of this Agreement, an amount equal to the sum of (i) 100% of the principal
remaining unpaid on such Mortgage Loan as of the date of purchase (including if
a foreclosure has already occurred, the principal balance of the related
Mortgage Loan at the time the Mortgaged Property was acquired), (ii) accrued and
unpaid interest thereon at the Mortgage Interest Rate through and including the
last day of the month of purchase and (iii) any costs and damages (if any)
incurred by the Trust in connection with any violation of such Mortgage Loan of
any anti-predatory lending laws.

                  Rating Agencies: Standard & Poor's and Moody's, each a "Rating
Agency."

                  Replacement Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.

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

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

                  Value: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.

                  SECTION 2. Purchase and Sale of the Mortgage Loans and Related
                             Rights.

                  (a) Upon satisfaction of the conditions set forth in Section
10 hereof, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase Mortgage Loans having an aggregate outstanding principal balance as of
the Cut-off Date equal to the Cut-off Date Balance.

                  (b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.

                  (c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for

                                      M-3
<PAGE>

the Mortgage Loans in immediately available funds by wire transfer to such
account or accounts as shall be designated by the Mortgage Loan Seller.

                  SECTION 3. Mortgage Loan Schedules. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "Preliminary Mortgage Loan Schedule") setting forth
the information listed on Exhibit 3 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "Final
Mortgage Loan Schedule") setting forth the information listed on Exhibit 3 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "Amendment"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.

                  SECTION 4. Mortgage Loan Transfer.

                  (a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereof. The Mortgage
Loan Seller will be entitled to all scheduled payments of principal and interest
on the Mortgage Loans due on or before the Cut-off Date (including payments
collected after the Cut-off Date) and all payments thereof. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.

                  (b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer. In connection with the transfer
and assignment of the Mortgage Loans, the Mortgage Loan Seller has delivered or
will deliver or cause to be delivered to the Trustee, or the Custodian on behalf
of the Trustee, by the Closing Date or such later date as is agreed to by the
Purchaser and the Mortgage Loan Seller (each of the Closing Date and such later
date is referred to as a "Mortgage File Delivery Date"), the items of each
Mortgage File, provided, however, that in lieu of the foregoing, the Mortgage
Loan Seller may deliver the following documents, under the circumstances set
forth below: (x) in lieu of the original Mortgage, assignments to the Trustee or
intervening assignments thereof which have been delivered, are being delivered
or will upon receipt of recording information relating to the Mortgage required
to be included thereon, be delivered to recording offices for recording and have
not been returned in time to permit their delivery as specified above, the
Mortgage Loan Seller may deliver a true copy thereof with a certification by the
Mortgage Loan Seller or the Master Servicer, on the face of such copy,
substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording;" (y) in lieu of the

                                      M-4
<PAGE>

Mortgage, assignments to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents or if the
originals are lost (in each case, as evidenced by a certification from the
Mortgage Loan Seller or the Master Servicer to such effect), the Mortgage Loan
Seller may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
6 the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; and provided further, however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Mortgage Loan Seller, in lieu of delivering the above
documents, may deliver to the Trustee a certification by the Mortgage Loan
Seller or the Master Servicer to such effect. The Mortgage Loan Seller shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) or such certified copies to the
Trustee, or the Custodian on behalf of the Trustee, promptly after they are
received. The Mortgage Loan Seller shall cause the Mortgage and intervening
assignments, if any, and the assignment of the Mortgage to be recorded not later
than 180 days after the Closing Date unless such assignment is not required to
be recorded under the terms set forth in Section 6(a) hereof.

                  (c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the Purchaser
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders and the Certificate Insurer by including (or deleting, in the
case of Mortgage Loans which are repurchased in accordance with this Agreement)
in such computer files (a) the code in the field which identifies the specific
Trustee and (b) the code in the field "Pool Field" which identifies the series
of the Certificates issued in connection with such Mortgage Loans. The Mortgage
Loan Seller further agrees that it will not, and will not permit the Master
Servicer to, and the Master Servicer agrees that it will not, alter the codes
referenced in this paragraph with respect to any Mortgage Loan during the term
of the Pooling and Servicing Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of the Pooling and Servicing Agreement.

                  (d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans will ultimately be assigned to LaSalle
Bank National Association, as Trustee for the benefit of the Certificateholders
and the Certificate Insurer, on the date hereof.

                  SECTION 5. Examination of Mortgage Files.

                  (a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In

                                      M-5
<PAGE>

furtherance of the foregoing, the Mortgage Loan Seller shall make the Mortgage
Files available to the Purchaser or its agent from time to time so as to permit
the Purchaser to confirm the Mortgage Loan Seller's compliance with the delivery
and recordation requirements of this Agreement and the Pooling and Servicing
Agreement. In addition, upon request of the Purchaser, the Mortgage Loan Seller
agrees to provide to the Purchaser, Bear Stearns and to any investors or
prospective investors in the Certificates information regarding the Mortgage
Loans and their servicing, to make the Mortgage Files available to the
Purchaser, Bear Stearns, the Certificate Insurer and to such investors or
prospective investors (which may be at the offices of the Mortgage Loan Seller
and/or the Mortgage Loan Seller's custodian) and to make available personnel
knowledgeable about the Mortgage Loans for discussions with the Purchaser, Bear
Stearns, the Certificate Insurer and such investors or prospective investors,
upon reasonable request during regular business hours, sufficient to permit the
Purchaser, Bear Stearns, the Certificate Insurer and such investors or potential
investors to conduct such due diligence as any such party reasonably believes is
appropriate.

                  (b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Trustee (or the Custodian as obligated under the Custodial
Agreement) for the benefit of the Certificateholders and the Certificate Insurer
will review items of the Mortgage Files as set forth on Exhibit 1 and will
deliver to the Mortgage Loan Seller an initial certification in the form
attached as Exhibit One to the Custodial Agreement.

                  (c) Within 90 days of the Closing Date, the Trustee or the
Custodian on its behalf shall, in accordance with the provisions of Section 2.02
of the Pooling and Servicing Agreement, deliver to the Mortgage Loan Seller and
the Trustee an Interim Certification in the form attached as Exhibit Two to the
Custodial Agreement to the effect that all such documents have been executed and
received and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached
to such Interim Certification. The Custodian shall be under no duty or
obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.

                  (d) The Trustee or the Custodian on its behalf will review the
Mortgage Files within 180 days of the Closing Date and will deliver to the
Mortgage Loan Seller, the Certificate Insurer and the Master Servicer, and if
reviewed by the Custodian, the Trustee, a final certification substantially in
the form of Exhibit Three to the Custodial Agreement. If the Trustee or the
Custodian on its behalf is unable to deliver a final certification with respect
to the items listed in Exhibit 1 due to any document that is missing, has not
been executed, is unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
the Final Mortgage Loan Schedule (a "Material Defect"), the Trustee or the
Custodian on its behalf shall notify the Mortgage Loan Seller of such Material
Defect. The Mortgage Loan Seller shall correct or cure any such Material Defect
within 90 days from the date of notice from the Trustee, the Depositor, the
Master Servicer or the Certificate Insurer of the Material Defect and if the
Mortgage Loan Seller does not correct or cure such Material Defect within such
period and such defect materially and adversely affects the interests of the
Certificateholders or the Certificate Insurer in the related Mortgage Loan, the
Mortgage

                                      M-6
<PAGE>

Loan Seller will, in accordance with the terms of the Pooling and Servicing
Agreement, within 90 days of the date of notice, provide the Trustee with a
Replacement Mortgage Loan (if within two years of the Closing Date) or purchase
the related Mortgage Loan at the applicable Purchase Price; provided, however,
that if such defect relates solely to the inability of the Mortgage Loan Seller
to deliver the original security instrument or intervening assignments thereof,
or a certified copy because the originals of such documents, or a certified
copy, have not been returned by the applicable jurisdiction, the Mortgage Loan
Seller shall not be required to purchase such Mortgage Loan if the Mortgage Loan
Seller delivers such original documents or certified copy promptly upon receipt,
but in no event later than 360 days after the Closing Date. The foregoing
repurchase obligation shall not apply in the event that the Mortgage Loan Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage Loan
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate of Mortgage Loan Seller or a
Servicing Officer confirming that such documents have been accepted for
recording, and delivery to the Trustee shall be effected by the Mortgage Loan
Seller within thirty days of its receipt of the original recorded document.

                  (e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Replacement Mortgage Loan, the
related Mortgage File and any other documents and payments required to be
delivered in connection with a substitution pursuant to the Pooling and
Servicing Agreement. At the time of any purchase or substitution, the Trustee
shall (i) assign the selected Mortgage Loan to the Mortgage Loan Seller and
shall release or cause the Custodian to release the documents (including, but
not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage
File) in the possession of the Trustee or the Custodian, as applicable relating
to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Mortgage Loan Seller title to such Deleted Mortgage Loan.

                  SECTION 6. Recordation of Assignments of Mortgage.

                  (a) The Mortgage Loan Seller will, promptly after the Closing
Date, cause each Mortgage and each assignment of Mortgage from the Mortgage Loan
Seller to the Trustee, and all unrecorded intervening assignments, if any,
delivered on or prior to the Closing Date, to be recorded in all recording
offices in the jurisdictions where the related Mortgaged Properties are located;
provided, however, the Mortgage Loan Seller need not cause to be recorded any
assignment which relates to a Mortgage Loan that is a MOM Loan or for which the
related Mortgaged Property is located in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel delivered by the Mortgage Loan
Seller to the Trustee, the Certificate Insurer and the Rating Agencies, the
recordation of such assignment is not necessary to protect the Trustee's
interest in the related Mortgage Loan; provided, however, notwithstanding the
delivery of any Opinion of Counsel, each assignment of Mortgage shall be
submitted for recording by the Mortgage Loan Seller in the manner described
above, at no expense to the Trust Fund or Trustee, upon the earliest to occur of
(i) reasonable direction by the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of the Trust, (ii) the occurrence of an
Event of Default, (iii) the occurrence of a bankruptcy, insolvency or
foreclosure relating to the

                                      M-7
<PAGE>

Mortgage Loan Seller under the Pooling and Servicing Agreement, (iv) the
occurrence of a servicing transfer or an assignment of the servicing as
described in Section 7.07 of the Pooling and Servicing Agreement or (iv) with
respect to any one assignment of Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

                  While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee or the Custodian on its behalf a certified copy of such Mortgage or
assignment. In the event that, within 180 days of the Closing Date, the Trustee
has not been provided with an Opinion of Counsel as described above or received
evidence of recording with respect to each Mortgage Loan delivered to the
Purchaser pursuant to the terms hereof or as set forth above and the related
Mortgage Loan is not a MOM Loan, the failure to provide evidence of recording or
such Opinion of Counsel shall be considered a Material Defect, and the
provisions of Section 5(d) and (e) shall apply. All customary recording fees and
reasonable expenses relating to the recordation of the assignments of mortgage
to the Trustee or the Opinion of Counsel, as the case may be, shall be borne by
the Mortgage Loan Seller.

                  (b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court to continue to be property of the Mortgage Loan Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Mortgage Loan Seller to the Purchaser of a security interest in all of the
Mortgage Loan Seller's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, to the
extent the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Pooling and Servicing Agreement, whether in the form of cash,
instruments, securities or other property; (c) the possession by the Purchaser
or the Trustee (or the Custodian on its behalf) of Mortgage Notes and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 (or
comparable provision) of the applicable Uniform Commercial Code; and (d)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to any provision hereof or
pursuant to the Pooling and Servicing Agreement shall also be deemed to be an
assignment of any security interest created hereby. The Mortgage Loan Seller and
the Purchaser shall, to the extent consistent with this Agreement, take such
actions as

                                      M-8
<PAGE>

may be reasonably necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Pooling and
Servicing Agreement.

                  SECTION 7. Representations and Warranties of Mortgage Loan
Seller Concerning the Mortgage Loans. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser and the Certificate Insurer as of the Closing Date
or such other date as may be specified below with respect to each Mortgage Loan
being sold by it:

                  (a) The information set forth in the Mortgage Loan Schedule on
the Closing Date is complete, true and correct.

                  (b) All payments required to be made prior to the Cut-off Date
with respect to each Mortgage Loan have been made and no Mortgage Loan is
delinquent thirty one or more days; and the Mortgage Loan Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required under
any Mortgage Loan.

                  (c) Except with respect to taxes, insurance and other amounts
previously advanced by a prior servicer with respect to any Mortgage Loan, there
are no delinquent taxes, water charges, sewer rents, assessments, insurance
premiums, leasehold payments, including assessments payable in future
installments, or other outstanding charges affecting the related Mortgaged
Property.

                  (d) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which in the case of the Mortgage Loans are in the Mortgage File and
have been or will be recorded, if necessary to protect the interests of the
Trustee, and which have been or will be delivered to the Trustee, all in
accordance with this Agreement. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the related policy. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement in the case of the
Mortgage Loans is part of the Mortgage File.

                  (e) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.

                  (f) All buildings upon, or comprising part of, the Mortgaged
Property are insured by an insurer acceptable to Fannie Mae and Freddie Mac
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, and such insurer
is licensed to do business in the state where the Mortgaged

                                      M-9
<PAGE>

Property is located. All such insurance policies contain a standard mortgagee
clause naming the originator, its successors and assigns as mortgagee and
Mortgage Loan Seller has received no notice that all premiums thereon have not
been paid. If upon origination of the Mortgage Loan, the Mortgaged Property was,
or was subsequently deemed to be, in an area identified in the Federal Register
by the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available), which require under applicable
law that a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration (or any successor thereto) be
obtained, such flood insurance policy is in effect which policy is with a
generally acceptable carrier in an amount representing coverage not less than
the least of (A) the Stated Principal Balance of the related Mortgage Loan, (B)
the minimum amount required to compensate for damage or loss on a replacement
cost basis, or (C) the maximum amount of insurance that is available under the
Flood Disaster Protection Act of 1973. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at Mortgagor's cost and expense and,
on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
maintain such insurance at Mortgagor's cost and expense and to obtain
reimbursement therefor from the Mortgagor.

                  (g) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real estate
settlement procedures including, the Real Estate Settlement Procedures Act of
1974, as amended, consumer credit protection, equal credit opportunity,
disclosure and reporting laws and all anti-predatory lending laws applicable to
the Mortgage Loan have been complied with in all material respects.

                  (h) The Mortgage has not been satisfied, canceled,
subordinated, or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such release, cancellation,
subordination or rescission.

                  (i) The Mortgage is a valid, existing and enforceable first or
second lien on the Mortgaged Property, including all improvements on the
Mortgaged Property, if any, subject only to (1) the lien of current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and which do
not adversely affect the Appraised Value of the Mortgaged Property and (3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage. The Mortgage Loan Seller has full right to sell and assign the
Mortgage to the Purchaser.

                  (j) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or reorganization or general principles
of equity.

                  (k) All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan transaction and to execute and
deliver the Mortgage Note and

                                      M-10
<PAGE>

the Mortgage, and the Mortgage Note and the Mortgage have been duly and properly
executed by such parties.

                  (l) The proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvement and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage.

                  (m) Immediately prior to the conveyance of the Mortgage Loans
by the Mortgage Loan Seller to the Purchaser hereunder, the Mortgage Loan Seller
was the sole owner and holder of the Mortgage Loan; the related Originator or
the Mortgage Loan Seller was the custodian of the related escrow account, if
applicable; the Mortgage Loan had neither been assigned nor pledged, and the
Mortgage Loan Seller had good and marketable title thereto, and had full right
to transfer and sell the Mortgage Loan and the related servicing rights to the
Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest subject to the applicable servicing agreement and had full
right and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign the Mortgage Loan and the related
servicing rights, subject to the applicable servicing agreement, to the
Purchaser pursuant to the terms of this Agreement.

                  (n) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (2) organized under the laws of such
state, qualified to do business in such state, a federal savings and loan
association or national bank having principal offices in such state or not
deemed to be doing business in such state under applicable law.

                  (o) The Mortgage Loan is covered by an ALTA lender's title
insurance policy or equivalent form acceptable to the Department of Housing and
Urban Development, or any successor thereto, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in clause (i) above) the Mortgage Loan Seller (as
assignee), its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress,
and against encroachments by or upon the Mortgaged Property or any interest
therein. With respect to each Mortgage Loan, the Mortgage Loan Seller (as
assignee) is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Mortgage Loan Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy.

                  (p) Except as provided in clause (b), immediately prior to the
Cut-off Date, there was no default, breach, violation or event of acceleration
existing under the Mortgage or

                                      M-11
<PAGE>

the Mortgage Note and there was no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Mortgage Loan
Seller has not waived any default, breach, violation or event of acceleration.

                  (q) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
which are or may be liens prior to or equal with, the lien of the related
Mortgage.

                  (r) At the time of origination, each Mortgaged Property was
the subject of a full appraisal which conformed to the underwriting requirements
of the originator of the Mortgage Loan. All improvements which were considered
in any appraisal which was used in determining the Appraised Value of the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.

                  (s) The origination, servicing and collection practices with
respect to each Mortgage Note and Mortgage including, the establishment,
maintenance and servicing of the escrow accounts and escrow payments, if any,
since origination, have been conducted in all respects in accordance with the
terms of Mortgage Note and in compliance with all applicable laws and
regulations and, unless otherwise required by law or Fannie Mae/Freddie Mac
standards, in accordance with the proper, prudent and customary practices in the
mortgage origination and servicing business. With respect to the escrow accounts
and escrow payments, if any, and a Mortgage Loan all such payments are in the
possession or under the control of the Mortgage Loan Seller (including pursuant
to a Subservicing Agreement) and there exists no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. Any interest required to be paid pursuant to state and local law has been
properly paid and credited.

                  (t) The Mortgaged Property is free of material damage and
waste and there is no proceeding pending for the total or partial condemnation
thereof.

                  (u) The Mortgage contains customary and enforceable provisions
to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Mortgage
Loan Seller and the Mortgage Loan Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act.

                  (v) The Mortgage Note is not and has not been secured by any
collateral except the lien of the applicable Mortgage.

                  (w) [Reserved]

                                      M-12
<PAGE>

                  (x) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Certificateholders to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor.

                  (y) No Mortgage Loan contains a permanent or temporary
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan.

                  (z) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of the Mortgage Loan.

                  (aa) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property.

                  (bb) To the best of Mortgage Loan Seller's knowledge, the
Mortgaged Property is lawfully occupied under applicable law and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities.

                  (cc) The assignment of Mortgage with respect to a Mortgage
Loan is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.

                  (dd) The Mortgaged Property consists of a single parcel of
real property with or without a detached single family residence erected
thereon, or an individual condominium unit, or a 2-4 family dwelling, or an
individual unit in a planned unit development as defined by Fannie Mae or a
townhouse, each structure of which is permanently affixed to the Mortgaged
Property, and is legally classified as real estate.

                  (ee) Each Mortgage Loan at the time of origination was
underwritten in general in accordance with guidelines not inconsistent with the
guidelines set forth in the Prospectus Supplement and generally accepted credit
underwriting guidelines.

                  (ff) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Mortgage Loan Seller or the related Originator.

                  (gg) None of the Mortgage Loans are (a) loans subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the
regulation implementing TILA, which implements the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") or (b) classified and/or defined as a "high
cost home loan" under any federal, state, or local law, including, but not
limited to, the States of Georgia or North Carolina.

                  (hh) None of the Mortgage Loans originated on or after October
1, 2002 and before March 7, 2003 was secured by property located in the State of
Georgia.

                                      M-13
<PAGE>

                  (ii) None of the Mortgage Loans contains provisions pursuant
to which monthly payments are (a) paid or partially paid with funds deposited in
any separate account established by the Mortgage Loan Seller, the mortgagor, or
anyone on behalf of the mortgagor, (b) paid by any source other than the
mortgagor or (c) contains any other similar provisions which may constitute a
"buydown" provision. None of the Mortgage Loans is a graduated payment mortgage
loan and no Mortgage Loan has a shared appreciation or other contingent interest
feature;

                  (jj) Each Mortgage Loan that contains a provision for the
assumption substitution of liability, pursuant to which the original mortgagor
is released from liability and another person is substituted as the mortgagor
and becomes liable under the Mortgage Note, shall be effective only if such
person satisfies the then current underwriting practices and procedures of
prudent mortgage lenders in a state in which the mortgaged property is located.

                  (kk) The Mortgaged Property and all improvements thereon
comply with all requirements of any applicable zoning and subdivision laws and
ordinances.

                  (ll) None of Mortgage Loans are secured by a leasehold
interest.

                  (mm) Appraisal Form 1004 or Form 2055 with an interior
inspection for first lien Mortgage Loans has been obtained. Form 704, 2065 or
2055 with an exterior only inspection for junior lien Mortgage Loans has been
obtained.

                  (nn) All points and fees related to each Group II Loan were
disclosed in writing to the mortgagor in accordance with applicable state and
federal law and regulation. Except in the case of a Group II Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no mortgagor was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such loan
and such 5% limitation is calculated in accordance with Fannie Mae's
anti-predatory lending requirements as set forth in the Fannie Mae Selling
Guide.

                  (oo) No Group II Loan is a "High-Risk Home Loan" as defined in
the Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp.
Stat. 137/1 et seq.).

                  (pp) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Group II Loan has been disclosed in
writing to the borrower in accordance with applicable state and federal law and
regulation.

                  (qq) No Group II Loan is a subsection 10 mortgage under the
Oklahoma Home Ownership and Equity Protection Act.

                  (rr) Each Prepayment Charge is enforceable and was originated
in compliance with all applicable federal, state and local laws.

                                      M-14
<PAGE>

                  (ss) With respect to any Mortgage Loan that contains a
provision permitting imposition of a premium upon a prepayment prior to
maturity, the prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law; and

                  (tt) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Appendix E of the Standard & Poor's
Glossary For File Format For LEVELS(R) Version 5.6 Revised attached hereto as
Exhibit 7).

                  (uu) No proceeds from any Loan were used to finance
single-premium credit insurance policies.

                  It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, and the Certificate Insurer,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
assignment of Mortgage or the examination of any Mortgage File. Upon any
substitution for a Mortgage Loan, the representations and warranties set forth
above shall be deemed to be made by the Mortgage Loan Seller as to any
Replacement Mortgage Loan as of the date of substitution.

                  Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser, the Certificate Insurer or the Trustee of a breach of any
representation or warranty of the Mortgage Loan Seller set forth in this Section
7 which materially and adversely affects the value of the interests of the
Purchaser, the Certificateholders, the Certificate Insurer or the Trustee in any
of the Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the
party discovering or receiving notice of such breach shall give prompt written
notice to the others. In the case of any such breach of a representation or
warranty set forth in this Section 7, within 90 days from the date of discovery
by the Mortgage Loan Seller, or the date the Mortgage Loan Seller is notified by
the party discovering or receiving notice of such breach (whichever occurs
earlier), the Mortgage Loan Seller will (i) cure such breach in all material
respects, (ii) purchase the affected Mortgage Loan at the applicable Purchase
Price or (iii) if within two years of the Closing Date, substitute a qualifying
Replacement Mortgage Loan in exchange for such Mortgage Loan; provided that, (A)
in the case of a breach of the representation and warranty concerning the
Mortgage Loan Schedule contained in clause (a) of this Section 7, if such breach
is material and relates to any field on the Mortgage Loan Schedule which
identifies any Prepayment Charge or (B) in the case of a breach of the
representation contained in clause (rr) of this Section 7, then, in each case,
in lieu of purchasing such Mortgage Loan from the Trust Fund at the Purchase
Price, the Mortgage Loan Seller shall pay the amount of the Prepayment Charge
(net of any amount previously collected by or paid to the Trust Fund in respect
of such Prepayment Charge) from its own funds and without reimbursement
therefor, and the Mortgage Loan Seller shall have no obligation to repurchase or
substitute for such Mortgage Loan. The obligations of the Mortgage Loan Seller
to cure, purchase or substitute a qualifying Replacement Mortgage Loan shall
constitute the Purchaser's, the Trustee's and the Certificateholder's sole and
exclusive remedy under this Agreement or otherwise respecting a breach of
representations or warranties hereunder with respect to the Mortgage Loans,
except for the obligation of the Mortgage Loan Seller to indemnify the Purchaser
for such breach as set forth in and limited by Section 13 hereof.

                                      M-15
<PAGE>

                  Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Replacement Mortgage Loan pursuant to the terms hereof.

                  SECTION 8. Representations and Warranties Concerning the
Mortgage Loan Seller. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser and the
Certificate Insurer as to itself in the capacity indicated as follows:

                  (a) the Mortgage Loan Seller (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) is qualified and in good standing to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Mortgage Loan Seller's business as presently conducted or on the Mortgage
Loan Seller's ability to enter into this Agreement or any other Transaction
Document to which it is a party and to consummate the transactions contemplated
hereby or thereby;

                  (b) the Mortgage Loan Seller has full power to own its
property, to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement or any other Transaction Document
to which it is a party;

                  (c) the execution and delivery by the Mortgage Loan Seller of
this Agreement and any other Transaction Document to which it is a party have
been duly authorized by all necessary action on the part of the Mortgage Loan
Seller; and neither the execution and delivery of this Agreement or any other
Transaction Document to which it is a party, nor the consummation of the
transactions herein or therein contemplated, nor compliance with the provisions
hereof or thereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Mortgage Loan Seller or its properties
or the charter or by-laws of the Mortgage Loan Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Mortgage Loan Seller's ability to enter into this
Agreement or any other Transaction Document to which it is a party and to
consummate the transactions contemplated hereby or thereby;

                  (d) the execution, delivery and performance by the Mortgage
Loan Seller of this Agreement or any other Transaction Document to which it is a
party and the consummation of the transactions contemplated hereby or thereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;

                                      M-16
<PAGE>

                  (e) each of this Agreement and the other Transaction Documents
to which it is a party has been duly executed and delivered by the Mortgage Loan
Seller and, assuming due authorization, execution and delivery by the Purchaser
or the parties thereto, constitutes a valid and binding obligation of the
Mortgage Loan Seller enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally);

                  (f) there are no actions, suits or proceedings pending or, to
the knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
Seller, before or by any court, administrative agency, arbitrator or
governmental body (i) with respect to any of the transactions contemplated by
this Agreement and the other Transaction Documents to which it is a party or
(ii) with respect to any other matter which in the judgment of the Mortgage Loan
Seller could reasonably be expected to be determined adversely to the Mortgage
Loan Seller and if determined adversely to the Mortgage Loan Seller materially
and adversely affect the Mortgage Loan Seller's ability to perform its
obligations under this Agreement and the other Transaction Documents to which it
is a party; and the Mortgage Loan Seller is not in default with respect to any
order of any court, administrative agency, arbitrator or governmental body so as
to materially and adversely affect the transactions contemplated by this
Agreement and the other Transaction Documents to which it is a party; and

                  (g) the Mortgage Loan Seller's Information (as defined in
Section 13(a) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.

                  SECTION 9. Representations and Warranties Concerning the
Purchaser. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller and the Certificate Insurer
as follows:

                  (a) the Purchaser (i) is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) is qualified and in good standing to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Purchaser's business as presently conducted or on the Purchaser's ability to
enter into this Agreement or any other Transaction Document to which it is a
party and to consummate the transactions contemplated hereby or thereby;

                  (b) the Purchaser has full power to own its property, to carry
on its business as presently conducted and to enter into and perform its
obligations under this Agreement or any other Transaction Document to which it
is a party;

                  (c) the execution and delivery by the Purchaser of this
Agreement and any other Transaction Documents to which it is a party have been
duly authorized by all necessary action on the part of the Purchaser; and
neither the execution and delivery of this Agreement or any other Transaction
Document to which it is a party, nor the consummation of the transactions herein
or therein contemplated, nor compliance with the provisions hereof or thereof,
will conflict with or result in a breach of, or constitute a default under, any
of the provisions of any

                                      M-17
<PAGE>

law, governmental rule, regulation, judgment, decree or order binding on the
Purchaser or its properties or the certificate of formation or limited liability
company agreement of the Purchaser, except those conflicts, breaches or defaults
which would not reasonably be expected to have a material adverse effect on the
Purchaser's ability to enter into this Agreement or any other Transaction
Document to which it is a party and to consummate the transactions contemplated
hereby or thereby;

                  (d) the execution, delivery and performance by the Purchaser
of this Agreement and the other Transaction Documents to which it is a party and
the consummation of the transactions contemplated hereby or thereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given or
made;

                  (e) each of this Agreement and the other Transaction Documents
to which it is a party has been duly executed and delivered by the Purchaser
and, assuming due authorization, execution and delivery by the Mortgage Loan
Seller, constitutes a valid and binding obligation of the Purchaser enforceable
against it in accordance with its terms (subject to applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of the rights
of creditors generally);

                  (f) there are no actions, suits or proceedings pending or, to
the knowledge of the Purchaser, threatened against the Purchaser, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement and the other
Transaction Documents to which it is a party or (ii) with respect to any other
matter which in the judgment of the Purchaser could reasonably be expected to be
determined adversely to the Purchaser and if determined adversely to the
Purchaser materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement and the other Transaction Documents to which it
is a party; and the Purchaser is not in default with respect to any order of any
court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this Agreement
and the other Transaction Documents to which it is a party; and

                  (g) the Purchaser's Information (as defined in Section 13(b)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.

                  SECTION 10. Conditions to Closing.

                  (a) The obligations of the Purchaser under this Agreement will
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:

                           (1) Each of the obligations of the Mortgage Loan
Seller required to be performed at or prior to the Closing Date pursuant to the
terms of this Agreement shall have been duly performed and complied with in all
material respects; all of the representations and warranties of the Mortgage
Loan Seller under this Agreement shall be true and correct as of the

                                      M-18
<PAGE>

date or dates specified in all material respects; and no event shall have
occurred which, with notice or the passage of time, would constitute a default
under this Agreement, the Pooling and Servicing Agreement or the Insurance
Agreement and the Purchaser and the Certificate Insurer shall have received
certificates to that effect signed by authorized officers of the Mortgage Loan
Seller.

                           (2) The Purchaser shall have received all of the
following closing documents, in such forms as are agreed upon and reasonably
acceptable to the Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the respective terms thereof:

                                    (i) If required pursuant to Section 3
         hereof, the Amendment dated as of the Closing Date and any documents
         referred to therein;

                                    (ii) If required pursuant to Section 3
         hereof, the Final Mortgage Loan Schedule containing the information set
         forth on Exhibit 3 hereto, one copy to be attached to each counterpart
         of the Amendment;

                                    (iii) The Pooling and Servicing Agreement,
         in form and substance reasonably satisfactory to the Trustee, the
         Certificate Insurer and the Purchaser, and all documents required
         thereby duly executed by all signatories;

                                    (iv) A certificate of an officer of the
         Mortgage Loan Seller dated as of the Closing Date, in a form reasonably
         acceptable to the Purchaser and the Certificate Insurer, and attached
         thereto the resolutions of the Mortgage Loan Seller authorizing the
         transactions contemplated by this Agreement and the other Transaction
         Documents to which it is a party, together with copies of the articles
         of incorporation, by-laws and certificate of good standing of the
         Mortgage Loan Seller;

                                    (v) One or more opinions of counsel from the
         Mortgage Loan Seller's counsel otherwise in form and substance
         reasonably satisfactory to the Purchaser, the Trustee, the Certificate
         Insurer and each Rating Agency;

                                    (vi) A letter from each of the Rating
         Agencies giving each Class of Certificates set forth on Schedule A
         hereto the rating set forth therein; and

                                    (vii) Such other documents, certificates
         (including additional representations and warranties) and opinions as
         may be reasonably necessary to secure the intended ratings from each
         Rating Agency for the Certificates (without taking into account the
         Class II-A Policy).

                           (3) The Certificates to be sold to Bear Stearns
pursuant to the Underwriting Agreement and the Purchase Agreement shall have
been issued and sold to the Bear Stearns.

                           (4) The Mortgage Loan Seller shall have furnished to
the Purchaser and the Certificate Insurer such other certificates of its
officers or others and such other

                                      M-19
<PAGE>

documents and opinions of counsel to evidence fulfillment of the conditions set
forth in this Agreement and the transactions contemplated hereby as the
Purchaser, the Certificate Insurer and their respective counsel may reasonably
request.

                  (b) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:

                           (1) The obligations of the Purchaser required to be
performed by it on or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with in all material
respects, and all of the representations and warranties of the Purchaser under
this Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing Date, and no event shall have occurred which would
constitute a breach by it of the terms of this Agreement, the Pooling and
Servicing Agreement or the Insurance Agreement, and the Mortgage Loan Seller and
the Certificate Insurer shall have received a certificate to that effect signed
by an authorized officer of the Purchaser.

                           (2) The Mortgage Loan Seller shall have received
copies of all of the following closing documents, in such forms as are agreed
upon and reasonably acceptable to the Mortgage Loan Seller, duly executed by all
signatories other than the Mortgage Loan Seller as required pursuant to the
respective terms thereof:

                                    (i) If required pursuant to Section 3
         hereof, the Amendment dated as of the Closing Date and any documents
         referred to therein;

                                    (ii) The Pooling and Servicing Agreement, in
         form and substance reasonably satisfactory to the Mortgage Loan Seller,
         the Trustee and the Certificate Insurer, and all documents required
         thereby duly executed by all signatories;

                                    (iii) A certificate of an officer of the
         Purchaser dated as of the Closing Date, in a form reasonably acceptable
         to the Mortgage Loan Seller and the Certificate Insurer, and attached
         thereto the written consent of the member of the Purchaser authorizing
         the transactions contemplated by this Agreement and the other
         Transaction Documents to which it is a party, together with copies of
         the Purchaser's certificate of formation, limited liability company
         agreement and evidence as to the good standing of the Purchaser dated
         as of a recent date;

                                    (iv) One or more opinions of counsel from
         the Purchaser's counsel in form and substance reasonably satisfactory
         to the Mortgage Loan Seller, the Trustee, the Certificate Insurer and
         the Rating Agencies; and

                                    (v) Such other documents, certificates
         (including additional representations and warranties) and opinions as
         may be reasonably necessary to secure the intended rating from each
         Rating Agency for the Certificates (without taking into account the
         Class II-A Policy).

                  SECTION 11. Fees and Expenses. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser

                                      M-20
<PAGE>

(i) the fees and expenses of the Mortgage Loan Seller's attorneys and the
reasonable fees and expenses of the Purchaser's attorneys, (ii) the fees and
expenses of Deloitte & Touche LLP, (iii) the fee for the use of Purchaser's
Registration Statement based on the aggregate original principal amount of the
Certificates and the filing fee of the Commission as in effect on the date on
which the Registration Statement was declared effective, (iv) the fees and
expenses including counsel's fees and expenses in connection with any "blue sky"
and legal investment matters, (v) the fees and expenses of the Trustee which
shall include without limitation the fees and expenses of the Trustee (and the
fees and disbursements of its counsel) with respect to (A) legal and document
review of this Agreement, the Pooling and Servicing Agreement, the Certificates
and related agreements, (B) attendance at the Closing and (C) review of the
Mortgage Loans to be performed by the Trustee or the Custodian on its behalf,
(vi) the expenses for printing or otherwise reproducing the Certificates, the
Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each
Rating Agency (both initial and ongoing), (viii) the fees and expenses relating
to the preparation and recordation of mortgage assignments (including
intervening assignments, if any and if available, to evidence a complete chain
of title from the originator to the Trustee) from the Mortgage Loan Seller to
the Trustee or the expenses relating to the Opinion of Counsel referred to in
Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence
expenses and other out-of-pocket expenses incurred by the Purchaser in
connection with the purchase of the Mortgage Loans and by Bear Stearns in
connection with the sale of the Certificates. The Mortgage Loan Seller
additionally agrees to pay directly to any third party on a timely basis the
fees provided for above which are charged by such third party and which are
billed periodically.

                  SECTION 12. Accountants' Letters.

                  (a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary--The Mortgage
Loans" and "The Mortgage Pool" and in Schedule A thereto. The Mortgage Loan
Seller will cooperate with the Purchaser in making available all information and
taking all steps reasonably necessary to permit such accountants to complete the
review and to deliver the letters required of them under the Underwriting
Agreement. Deloitte & Touche LLP will also confirm certain calculations as set
forth under the caption "Yield, Prepayment and Maturity Considerations" in the
Prospectus Supplement.

                  (b) To the extent statistical information with respect to the
Mortgage Loan Seller's servicing portfolio is included in the Prospectus
Supplement under the caption "Servicing of the Mortgage Loans--The Master
Servicer--Delinquency and Foreclosure Experience of EMC," a letter from the
certified public accountant for the Mortgage Loan Seller will be delivered to
the Purchaser dated the date of the Prospectus Supplement, in the form
previously agreed to by the Mortgage Loan Seller and the Purchaser, with respect
to such statistical information.

                                      M-21
<PAGE>

                  SECTION 13. Indemnification.

                  (a) The Mortgage Loan Seller shall indemnify and hold harmless
the Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the Mortgage Loan Seller's Information
as identified in Exhibit 4, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by the
Mortgage Loan Seller and in which additional Mortgage Loan Seller's Information
is identified), in reliance upon and in conformity with Mortgage Loan Seller's
Information a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty assigned or made by the
Mortgage Loan Seller in Section 7 or Section 8 hereof being, or alleged to be,
untrue or incorrect, or (iii) any failure by the Mortgage Loan Seller to perform
its obligations under this Agreement; and the Mortgage Loan Seller shall
reimburse the Purchaser and each other indemnified party for any legal and other
expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action.

                  The foregoing indemnity agreement is in addition to any
liability which the Mortgage Loan Seller otherwise may have to the Purchaser or
any other such indemnified party.

                  (b) The Purchaser shall indemnify and hold harmless the
Mortgage Loan Seller and its respective directors, officers and controlling
persons (as defined in Section 15 of the Securities Act) from and against any
loss, claim, damage or liability or action in respect thereof, to which they or
any of them may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement of a material fact contained in the Purchaser's
Information as identified in Exhibit 5, the omission to state in the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Purchaser and in which additional Purchaser's Information is
identified), in reliance upon and in conformity with the Purchaser's
Information, a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty made by the Purchaser in
Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the Purchaser to perform its obligations under this Agreement; and
the Purchaser shall reimburse the Mortgage Loan Seller, and each other
indemnified party for any legal and other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action. The foregoing indemnity agreement is
in addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party.

                  (c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but

                                      M-22
<PAGE>

the failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there is a conflict of interest between itself or themselves and
the indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-extensive
with those of the indemnifying party (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties (provided, however, that the
indemnifying party shall be liable only for the fees and expenses of one counsel
in addition to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement or any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.

                  (d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 13 shall for any reason be unavailable to an indemnified
party in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to in Section 13, then the indemnifying party shall in
lieu of indemnifying the indemnified party contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, in such proportion as shall be
appropriate to reflect the relative benefits received by the Mortgage Loan
Seller on the one hand and the Purchaser on the other from the purchase and sale
of the Mortgage Loans, the offering of the Certificates and the other
transactions contemplated hereunder. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person who is not
also found liable for such fraudulent misrepresentation.

                  (e) The parties hereto agree that reliance by an indemnified
party on any publicly available information or any information or directions
furnished by an indemnifying party shall not constitute negligence, bad faith or
willful misconduct by such indemnified party.

                  SECTION 14. Notices. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, 909 Hidden Ridge Drive, Suite 200 Irving,
Texas 75038, (Telecopy: (972-444-2880)), and

                                      M-23
<PAGE>

notices to the Purchaser shall be directed to Bear Stearns Asset Backed
Securities I LLC, 383 Madison Avenue, New York, New York 10179, (Telecopy:
(212-272-7206)), Attention: Chief Counsel; or to any other address as may
hereafter be furnished by one party to the other party by like notice. Any such
demand, notice or communication hereunder shall be deemed to have been received
on the date received at the premises of the addressee (as evidenced, in the case
of registered or certified mail, by the date noted on the return receipt)
provided that it is received on a business day during normal business hours and,
if received after normal business hours, then it shall be deemed to be received
on the next business day.

                  SECTION 15. Transfer of Mortgage Loans. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; provided, however, the Purchaser shall
remain entitled to the benefits set forth in Sections 11, 13 and 14 hereto and
as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Mortgage Loan Seller shall be the cure,
purchase or substitution obligations of the Mortgage Loan Seller contained in
Sections 5 and 7 hereof.

                  SECTION 16. Termination. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of-pocket expenses incurred by the other in connection with the transactions
contemplated by this Agreement. In the event of a termination pursuant to clause
(a), each party shall be responsible for its own expenses.

                  SECTION 17. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, the Mortgage Loan Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Replacement Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.

                  SECTION 18. Severability. If any provision of this Agreement
shall be prohibited or invalid under applicable law, this Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.

                                      M-24
<PAGE>

                  SECTION 19. Counterparts. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.

                  SECTION 20. Amendment. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.

                  SECTION 21. GOVERNING LAW. THIS AGREEMENT shall be governed
by, and construed in accordance with, the laws of the State of New York, without
regard to conflict of laws principles thereof other than Section 5-1401 of the
New York General Obligations Law.

                  SECTION 22. Further Assurances. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.

                  SECTION 23. Successors and Assigns.

                  (a) This Agreement shall bind and inure to the benefit of and
be enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Stearns, and their directors, officers and controlling persons (within the
meaning of federal securities laws), and the Certificate Insurer, to the extent
of its rights as a third party beneficiary hereunder. The parties hereto hereby
acknowledge that the Certificate Insurer shall be a third party beneficiary of
this Agreement. The Mortgage Loan Seller acknowledges and agrees that the
Purchaser may assign its rights under this Agreement (including, without
limitation, with respect to the Mortgage Loan Seller's representations and
warranties respecting the Mortgage Loans) to the Trustee. Any person into which
the Mortgage Loan Seller may be merged or consolidated (or any person resulting
from any merger or consolidation involving the Mortgage Loan Seller), any person
resulting from a change in form of the Mortgage Loan Seller or any person
succeeding to the business of the Mortgage Loan Seller, shall be considered the
"successor" of the Mortgage Loan Seller hereunder and shall be considered a
party hereto without the execution or filing of any paper or any further act or
consent on the part of any party hereto. Except as provided in the two preceding
sentences, this Agreement cannot be assigned, pledged or hypothecated by either
party hereto without the written consent of the other parties to this Agreement
and any such assignment or purported assignment shall be deemed null and void.

                  SECTION 24. The Mortgage Loan Seller. The Mortgage Loan Seller
will keep in full force and effect its existence, all rights and franchises as a
corporation under the laws of the State of its incorporation and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is necessary to perform its obligations
under this Agreement.

                  SECTION 25. Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes

                                      M-25
<PAGE>

all prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof.

                  SECTION 26. No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      M-26
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective duly authorized officers as of the date
first above written.

                                    EMC MORTGAGE CORPORATION

                                    By:
                                       ----------------------------------------
                                    Name: Sue Stepanek
                                          -------------------------------------
                                    Title: Executive Vice President
                                           ------------------------------------

                                    BEAR STEARNS ASSET BACKED SECURITIES I LLC

                                    By:
                                       ----------------------------------------
                                    Name: Joseph T. Jurkowski, Jr.
                                          -------------------------------------
                                    Title: Vice President
                                           ------------------------------------

<PAGE>

                                    EXHIBIT 1
                                    ---------
                            CONTENTS OF MORTGAGE FILE
                            -------------------------

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of this Agreement.

                           (i) The original Mortgage Note, including any riders
         thereto, endorsed without recourse to the order of "LaSalle Bank
         National Association", as Trustee for certificateholders of Bear
         Stearns Asset Backed Securities I LLC Asset Backed Certificates, Series
         2004-FR2," and showing to the extent available to the Mortgage Loan
         Seller an unbroken chain of endorsements from the original payee
         thereof to the Person endorsing it to the Trustee;

                           (ii) the original Mortgage and, if the related
         Mortgage Loan is a MOM Loan, noting the presence of the MIN and
         language indicating that such Mortgage Loan is a MOM Loan, which shall
         have been recorded (or if the original is not available, a copy), with
         evidence of such recording indicated thereon (or if clause (x) in the
         proviso below applies, shall be in recordable form);

                           (iii) unless the Mortgage Loan is a MOM Loan, the
         assignment (either an original or a copy, which may be in the form of a
         blanket assignment if permitted in the jurisdiction in which the
         Mortgaged Property is located) to the Trustee of the Mortgage with
         respect to each Mortgage Loan in the name of "LaSalle Bank National
         Association", as Trustee for certificateholders of Bear Stearns Asset
         Backed Securities I LLC Asset Backed Certificates, Series 2004-FR2,"
         which shall have been recorded (or if clause (x) in the proviso below
         applies, shall be in recordable form);

                           (iv) an original or a copy of all intervening
         assignments of the Mortgage, if any, to the extent available to the
         Mortgage Loan Seller, with evidence of recording thereon;

                           (v) the original policy of title insurance or
         mortgagee's certificate of title insurance or commitment or binder for
         title insurance, if available, or a copy thereof, or, in the event that
         such original title insurance policy is unavailable, a photocopy
         thereof, or in lieu thereof, a current lien search on the related
         Mortgaged Property and

                           (vi) originals or copies of all available assumption,
         modification or substitution agreements, if any; provided, however,
         that in lieu of the foregoing, the Mortgage Loan Seller may deliver the
         following documents, under the circumstances set forth below: (x) if
         any Mortgage, assignment thereof to the Trustee or intervening
         assignments thereof have been delivered or are being delivered to
         recording offices for recording and have not been returned in time to
         permit their delivery as specified above, the Purchaser may deliver a
         true copy thereof with a certification by the Mortgage Loan Seller or
         the title company issuing the commitment for title insurance, on the
         face of such copy, substantially as follows: "Certified to be a true
         and correct copy of the original,

                                     E-1-1
<PAGE>

         which has been transmitted for recording"; and (y) in lieu of the
         Mortgage Notes relating to the Mortgage Loans identified in the list
         set forth in Exhibit J to the Pooling and Servicing Agreement, the
         Purchaser may deliver a lost note affidavit and indemnity and a copy of
         the original note, if available; and provided, further, however, that
         in the case of Mortgage Loans which have been prepaid in full after the
         Cut-Off Date and prior to the Closing Date, the Purchaser, in lieu of
         delivering the above documents, may deliver to the Trustee and its
         Custodian a certification of a Servicing Officer to such effect and in
         such case shall deposit all amounts paid in respect of such Mortgage
         Loans, in the Protected Account or in the Distribution Account on the
         Closing Date. In the case of the documents referred to in clause (x)
         above, the Purchaser shall deliver such documents to the Trustee or its
         Custodian promptly after they are received. The Mortgage Loan Seller
         shall cause, at its expense, the Mortgage and intervening assignments,
         if any, and to the extent required in accordance with the foregoing,
         the assignment of the Mortgage to the Trustee to be submitted for
         recording promptly after the Closing Date; provided that the Mortgage
         Loan Seller need not cause to be recorded any assignment (a) in any
         jurisdiction under the laws of which, as evidenced by an Opinion of
         Counsel addressed to the Trustee delivered by the Mortgage Loan Seller
         to the Trustee, the Certificate Insurer and the Rating Agencies, the
         recordation of such assignment is not necessary to protect the
         Trustee's interest in the related Mortgage Loan or (b) if MERS is
         identified on the Mortgage or on a properly recorded assignment of the
         Mortgage as mortgagee of record solely as nominee for Mortgage Loan
         Seller and its successors and assigns. In the event that the Mortgage
         Loan Seller, the Purchaser or the Master Servicer gives written notice
         to the Trustee that a court has recharacterized the sale of the
         Mortgage Loans as a financing, the Mortgage Loan Seller shall submit or
         cause to be submitted for recording as specified above or, should the
         Mortgage Loan Seller fail to perform such obligations, the Master
         Servicer shall cause each such previously unrecorded assignment to be
         submitted for recording as specified above at the expense of the Trust.
         In the event a Mortgage File is released to the Mortgage Loan Seller or
         the Master Servicer as a result of such Person having completed a
         Request for Release, the Custodian shall, if not so completed, complete
         the assignment of the related Mortgage in the manner specified in
         clause (iii) above.

         In connection with the assignment of any Mortgage Loan registered on
         the MERS(R) System, the Mortgage Loan Seller further agrees that it
         will cause, at the Mortgage Loan Seller's own expense, within 30 days
         after the Closing Date, the MERS(R) System to indicate that such
         Mortgage Loans have been assigned by the Mortgage Loan Seller to the
         Purchaser and by the Purchaser to the Trustee in accordance with this
         Agreement and the Pooling and Servicing Agreement for the benefit of
         the Certificateholders and the Certificate Insurer by including (or
         deleting, in the case of Mortgage Loans which are repurchased in
         accordance with this Agreement) in such computer files (a) the code in
         the field which identifies the Trustee and (b) the code in the field
         "Pool Field" which identifies the series of the Certificates issued in
         connection with such Mortgage Loans. The Mortgage Loan Seller further
         agrees that it will not, and will not permit the Company, any Servicer
         or the Master Servicer to, and the Master Servicer agrees that it will
         not, alter the codes referenced in this paragraph with respect to any
         Mortgage Loan during the term of this Agreement and the Pooling and
         Servicing Agreement unless and

                                     E-1-2
<PAGE>

         until such Mortgage Loan is repurchased in accordance with the terms of
         this Agreement or the Pooling and Servicing Agreement.

                                     E-1-3
<PAGE>

                                    EXHIBIT 2
                                    ---------
                                   [Reserved]
                                   ----------

                                     E-2-1

<PAGE>

                                    EXHIBIT 3
                                    ---------
                       MORTGAGE LOAN SCHEDULE INFORMATION
                       ----------------------------------

         The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:

                           (i) the loan number;

                           (ii) the Mortgage Rate in effect as of the Cut-off
         Date;

                           (iii) the Servicing Fee Rate;

                           (iv) the Trustee Fee Rate;

                           (v) the LPMI Fee, if applicable;

                           (vi) the Net Mortgage Rate in effect as of the
         Cut-off Date;

                           (vii) the maturity date;

                           (viii) the original principal balance;

                           (ix) the Cut-off Date Principal Balance;

                           (x) the original term;

                           (xi) the remaining term;

                           (xii) the property type;

                           (xiii) the MIN with respect to each MOM Loan;

                           (xiv) with respect to each Adjustable Rate Mortgage
         Loan, the Minimum Mortgage Rate;

                           (xv) with respect to each Adjustable Rate Mortgage
         Loan, the Maximum Mortgage Rate;

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

                           (xvii) with respect to each Adjustable Rate Mortgage
         Loan, the next Adjustment Date;

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

                           (xix) the Loan Group; and

                                     E-3-1
<PAGE>

                           (xx) a code indicating whether such Mortgage Loan is
         a first lien Mortgage Loan or a second lien Mortgage Loan.

                                     E-3-2
<PAGE>

                                    EXHIBIT 4
                                    ---------
                       MORTGAGE LOAN SELLER'S INFORMATION
                       ----------------------------------

         All information in the Prospectus Supplement described under the
following captions: "SUMMARY -- The Mortgage Loans," "THE MORTGAGE POOL" and
"SCHEDULE A -- Mortgage Loan Statistical Data."

                                     E-4-1
<PAGE>

                                    EXHIBIT 5
                                    ---------
                             PURCHASER'S INFORMATION
                             -----------------------

         All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.

                                     E-5-1
<PAGE>

                                    EXHIBIT 6
                                    ---------
                             SCHEDULE OF LOST NOTES
                             ----------------------

                             Available Upon Request

                                     E-6-1
<PAGE>

                                   SCHEDULE A
                                   ----------

                 REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
                 -----------------------------------------------

                               Public Certificates
                               -------------------

    Class                            Moody's                         S&P
    I-A-1                              Aaa                           AAA
    I-A-2                              Aaa                           AAA
    II-A                               Aaa                           AAA
     M-1                               Aa2                           AA+
     M-2                               Aa3                            AA
     M-3                                A2                           AA-
     M-4                                A3                            A+
     M-5                               Baa1                           A
     M-6                               Baa2                          BBB+
     M-7                               Baa3                          BBB

None of the above ratings has been lowered, qualified or withdrawn since the
dates of issuance of such ratings by the Rating Agencies.

                              Private Certificates
                              --------------------

    Class                             Moody's                          S&P
    M-8A                                Ba2                            BB+
    M-8B                                Ba2                            BB+
     CE                              Not Rated                      Not Rated
      P                              Not Rated                      Not Rated
     R-1                             Not Rated                      Not Rated
     R-2                             Not Rated                      Not Rated
     RX                              Not Rated                      Not Rated

                                      A-1

<PAGE>

                                    EXHIBIT 7
                                    ---------

APPENDIX E - STANDARD & POOR'S ANTI-PREDATORY LENDING CATEGORIZATION

Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
Arkansas                           Arkansas  Home Loan  Protection  Act,  Ark. Code      High Cost Home Loan
                                   Ann. ss.ss. 23-53-101 et seq.

                                   Effective July 16, 2003
---------------------------------------------------------------------------------------------------------------------
Cleveland Heights, OH              Ordinance  No.  72-2003  (PSH),   Mun.  Code  ss.ss.  Covered Loan
                                   757.01 et seq.

                                   Effective June 2, 2003
---------------------------------------------------------------------------------------------------------------------
Colorado                           Consumer Equity Protection,  Colo. Stat. Ann. ss.ss.  Covered Loan
                                   5-3.5-101 et seq.

                                   Effective  for covered  loans offered or entered
                                   into  on  or  after   January  1,  2003.   Other
                                   provisions  of the Act  took  effect  on June 7,
                                   2002
---------------------------------------------------------------------------------------------------------------------
Connecticut                        Connecticut  Abusive Home Loan Lending Practices      High Cost Home Loan
                                   Act, Conn. Gen. Stat. ss.ss. 36a-746 et seq.

                                   Effective October 1, 2001
---------------------------------------------------------------------------------------------------------------------
District of Columbia               Home  Loan   Protection   Act,   D.C.   Code  ss.ss.  Covered Loan
                                   26-1151.01 et seq.

                                   Effective  for loans closed on or after  January
                                   28, 2003
---------------------------------------------------------------------------------------------------------------------
Florida                            Fair Lending Act,  Fla.  Stat.  Ann. ss.ss. 494.0078  High Cost Home Loan
                                   et seq.

                                   Effective October 2, 2002
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     E-7-1
<PAGE>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
Georgia  (Oct.  1, 2002 - Mar. 6,  Georgia  Fair  Lending  Act,  Ga.  Code Ann.  ss.ss.  High Cost Home Loan
2003)                              7-6A-1 et seq.

                                   Effective October 1, 2002 - March 6, 2003
---------------------------------------------------------------------------------------------------------------------
Georgia as amended  (Mar. 7, 2003  Georgia  Fair  Lending  Act,  Ga.  Code Ann.  ss.ss.  High Cost Home Loan
- current)                         7-6A-1 et seq.

                                   Effective  for loans closed on or after March 7,
                                   2003
---------------------------------------------------------------------------------------------------------------------
HOEPA Section 32                   Home  Ownership  and  Equity  Protection  Act of      High Cost Loan
                                   1994, 15 U.S.C. ss. 1639, 12 C.F.R.  ss.ss. 226.32
                                   and 226.34

                                   Effective  October 1, 1995,  amendments  October
                                   1, 2002
---------------------------------------------------------------------------------------------------------------------
Illinois                           High Risk Home Loan Act, Ill. Comp.  Stat.  tit.      High Risk Home Loan
                                   815, ss.ss. 137/5 et seq.

                                   Effective January 1, 2004 (prior to this
                                   date, regulations under Residential Mortgage
                                   License Act effective from May 14, 2001)
---------------------------------------------------------------------------------------------------------------------
Kansas                             Consumer   Credit  Code,   Kan.  Stat.  Ann.  ss.ss.  High  Loan  to  Value  Consumer
                                   16a-1-101 et seq.                                     Loan (id. ss. 16a-3-207) and;
                                                                                         ----------------------------
                                   Sections    16a-1-301   and   16a-3-207   became      High APR  Consumer
                                   effective  April 14,  1999;  Section  16a-3-308a      Loan (id. ss. 16a-3-308a)
                                   became effective July 1, 1999
---------------------------------------------------------------------------------------------------------------------
Kentucky                           2003 KY H.B.  287 - High Cost Home Loan Act, Ky.      High Cost Home Loan
                                   Rev. Stat. ss.ss. 360.100 et seq.

                                   Effective June 24, 2003
---------------------------------------------------------------------------------------------------------------------
Maine                              Truth in Lending,  Me. Rev.  Stat.  tit. 9-A, ss.ss.  High Rate High Fee Mortgage
                                   8-101 et seq.

                                   Effective  September  29,  1995  and as  amended
                                   from time to time
---------------------------------------------------------------------------------------------------------------------
Massachusetts                      Part 40 and  Part  32,  209  C.M.R.  ss.ss. 32.00 et  High Cost Home Loan
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     E-7-2
<PAGE>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
                                   seq. and 209 C.M.R. ss.ss. 40.01 et seq.

                                   Effective  March 22, 2001 and amended  from time
                                   to time
---------------------------------------------------------------------------------------------------------------------
Nevada                             Assembly  Bill  No.  284,  Nev.  Rev.  Stat.  ss.ss.  Home Loan
                                   598D.010 et seq.
                                            -- ---

                                   Effective October 1, 2003
---------------------------------------------------------------------------------------------------------------------
New Jersey                         New Jersey Home Ownership  Security Act of 2002,      High Cost Home Loan
                                   N.J. Rev. Stat. ss.ss. 46:10B-22 et seq.

                                   Effective for loans closed on or after  November
                                   27, 2003
---------------------------------------------------------------------------------------------------------------------
New Mexico                         Home Loan  Protection  Act, N.M.  Rev.  Stat. ss.ss.  High Cost Home Loan
                                   58-21A-1 et seq.

                                   Effective  as of January 1, 2004;  Revised as of
                                   February 26, 2004
---------------------------------------------------------------------------------------------------------------------
New York                           N.Y. Banking Law Article 6-l                          High Cost Home Loan

                                   Effective  for  applications  made  on or  after
                                   April 1, 2003
---------------------------------------------------------------------------------------------------------------------
North Carolina                     Restrictions  and  Limitations on High Cost Home      High Cost Home Loan
                                   Loans, N.C. Gen. Stat. ss.ss. 24-1.1E et seq.

                                   Effective July 1, 2000; amended October 1,
                                   2003 (adding open-end lines of credit)
---------------------------------------------------------------------------------------------------------------------
Ohio                               H.B. 386  (codified  in various  sections of the      Covered Loan
                                   Ohio  Code),  Ohio Rev.  Code Ann. ss.ss. 1349.25
                                   et seq.

                                   Effective May 24, 2002
---------------------------------------------------------------------------------------------------------------------
Oklahoma                           Consumer   Credit  Code   (codified  in  various      Subsection 10 Mortgage
                                   sections of Title 14A)

                                   Effective  July  1,  2000;   amended   effective
                                   January 1, 2004
</TABLE>

                                     E-7-3
<PAGE>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
-----------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
South Carolina                     South  Carolina  High  Cost  and  Consumer  Home      High Cost Home Loan
                                   Loans Act, S.C. Code Ann. ss.ss. 37-23-10 et seq.

                                   Effective  for loans  taken on or after  January
                                   1, 2004
---------------------------------------------------------------------------------------------------------------------
West Virginia                      West  Virginia   Residential   Mortgage  Lender,      West Virginia Mortgage Loan
                                   Broker and  Servicer  Act,  W. Va.  Code Ann. ss.ss.  Act Loan
                                   31-17-1 et seq.

                                   Effective June 5, 2002
---------------------------------------------------------------------------------------------------------------------
</TABLE>

STANDARD & POOR'S COVERED LOAN CATEGORIZATION
---------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
Georgia  (Oct.  1, 2002 - Mar. 6,  Georgia  Fair  Lending  Act,  Ga.  Code Ann.  ss.ss.  Covered Loan
2003)                              7-6A-1 et seq.

                                   Effective October 1, 2002 - March 6, 2003
---------------------------------------------------------------------------------------------------------------------
New Jersey                         New Jersey Home Ownership  Security Act of 2002,  Covered Home Loan
                                   N.J. Rev. Stat. ss.ss. 46:10B-22 et seq.

                                   Effective November 27, 2003 - July 5, 2004
---------------------------------------------------------------------------------------------------------------------
</TABLE>

STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
Georgia  (Oct.  1, 2002 - Mar. 6,  Georgia  Fair  Lending  Act,  Ga.  Code Ann.  ss.ss.  Home Loan
2003)                              7-6A-1 et seq.

                                   Effective October 1, 2002 - March 6, 2003
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     E-7-4
<PAGE>

STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
       State/Jurisdiction           Name of Anti-Predatory Lending Law/Effective         Category under Applicable
                                                         Date                            Anti-Predatory Lending Law
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                                   <C>
New Jersey                         New Jersey Home Ownership  Security Act of 2002,      Home Loan
                                   N.J. Rev. Stat. ss.ss. 46:10B-22 et seq.

                                   Effective for loans closed on or after  November
                                   27, 2003
---------------------------------------------------------------------------------------------------------------------
New Mexico                         Home Loan  Protection  Act, N.M.  Rev.  Stat. ss.ss.  Home Loan
                                   58-21A-1 et seq.

                                   Effective  as of January 1, 2004;  Revised as of
                                   February 26, 2004
---------------------------------------------------------------------------------------------------------------------
North Carolina                     Restrictions  and  Limitations on High Cost Home      Consumer Home Loan
                                   Loans, N.C. Gen. Stat. ss.ss. 24-1.1E et seq.

                                   Effective July 1, 2000; amended October 1,
                                   2003 (adding open-end lines of credit)
---------------------------------------------------------------------------------------------------------------------
South Carolina                     South  Carolina  High  Cost  and  Consumer  Home      Consumer Home Loan
                                   Loans Act, S.C. Code Ann. ss.ss. 37-23-10 et seq.

                                   Effective  for loans  taken on or after  January
                                   1, 2004
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                     E-7-5
<PAGE>

                                    EXHIBIT N

                            FORM OF CLASS II-A POLICY

                                                                 August 31, 2004

ASSURED GUARANTY CORP.
1325 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019

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

() FINANCIAL GUARANTY INSURANCE POLICY
--------------------------------------------------------------------------------
OBLIGATIONS INSURED:                            ARTICLE V. FINANCIAL GUARANTY
                                                            INSURANCE

All Insured Payments now owing or which         POLICY NUMBER:  D-2004-99
may in the future be owing by the Trust
and to be paid by the Trust to the              EFFECTIVE DATE: August 31, 2004
Beneficiary under the Obligations, as
further described and defined below.

      For value received and subject to the terms and conditions of this
financial guaranty insurance policy number D-2004-99 (the "Policy"), Assured
Guaranty Corp., a Maryland corporation, as Insurer with respect to the
Obligations (the "Insurer") for the trust created pursuant to the Pooling
Agreement, as defined below (the "Trust"), is held and firmly bound unto the
Beneficiary identified below for, and unconditionally and irrevocably agrees to
pay, each and every Insured Payment which shall become Due for Payment, but
shall be unpaid by reason of Nonpayment by the Trust (as such terms are defined
below). This Policy is non-cancelable for any reason, including, without
limitation, the non-payment of premium.

                                       N-1

<PAGE>

TERMS AND CONDITIONS
--------------------

SECTION 1.  Definitions

      Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Pooling Agreement as of the date of execution of
this Policy, without giving effect to any subsequent amendment to or
modification of the Pooling Agreement unless such amendment or modification has
been approved in writing by the Insurer pursuant to the amendment provisions of
the Pooling Agreement. In addition to the terms defined elsewhere herein, the
following terms shall have the respective meanings set forth below.

      (a) "Avoided Payment" shall mean any amount previously distributed by or
on behalf of the Trust in respect of an Obligation that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to Insolvency Proceeding in accordance with a final nonappealable order
of a court having competent jurisdiction.

      (b) "Beneficiary" means the Trustee, on behalf of, and for the benefit of
the holders of the Obligations.

      (c) "Business Day" means any day other than (i) a Saturday or Sunday or
(ii) any other day on which banking institutions are authorized or required by
law, executive order or governmental decree to be closed in New York City,
Minnesota, Maryland or Illinois or in the city in which the Corporate Trust
Office of the Trustee or the Principal Office of the Master Servicer is located.

      (d) "Defaulted Amount" means the portion of an Insured Payment that is Due
for Payment and unpaid by reason of Nonpayment by the Trust.

      (e) "Due for Payment," means with respect to an Insured Payment and any
Distribution Date: (i) any shortfall in amounts available in the Distribution
Account in respect of the Interest Distribution Amount payable on each
Obligation on such Distribution Date; (ii) any Insured Certificate Loss Amount
with respect to each Obligation on such Distribution Date; and (iii) on the
Final Scheduled Distribution Date (or, with the consent of the Insurer, upon the
earlier termination of the Trust pursuant to the terms of the Pooling Agreement)
the Certificate Principal Balance of each Obligation after giving effect to any
distributions on such Distribution Date (other than distributions of Insured
Payments).

      (f) "Final Scheduled Distribution Date" means the Distribution Date
occurring in June 2034.

      (g) "Fiscal Agent" has the meaning assigned thereto in Section 4.

      (h) "Insolvency Proceeding" means the commencement after the date hereof
of any bankruptcy, insolvency, readjustment of debt, reorganization, marshalling
of assets and liabilities or similar proceedings by or against any Person, or
the commencement after the date hereof of any proceedings by or against any
Person for the winding up or the liquidation of its affairs, or the consent
after the date hereof to the appointment of a trustee, conservator,
administrator,

                                      N-2
<PAGE>

receiver or liquidator in any bankruptcy, insolvency, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar proceedings
relating to any Person.

      (i) "Insured Certificate Loss Amount" means, with respect to any
Distribution Date and the Obligation, the Applied Realized Loss Amount with
respect to the Obligation allocated on such Distribution Date.

      (j) "Insured Payment" means the following amounts now owing or which may
in the future be owing by the Trust to the Holders of any Obligation: (i) the
Current Interest payable on each Obligation on such Distribution Date; (ii) any
Insured Certificate Loss Amount with respect to each Obligation on each
Distribution Date; and (iii) the Certificate Principal Balance of each
Obligation on the Final Scheduled Distribution Date, or, with the consent of the
Insurer, upon the earlier termination of the Trust pursuant to the terms of the
Pooling Agreement, in each case after giving effect to any distributions on such
Distribution Date (other than distributions of Insured Payments); provided,
however, that so long as the Insurer has not failed to pay when due and payable
an amount previously referred to in this definition, "Insured Payment" shall not
include any additional amounts owing by the Trust solely as a result of the
failure by the Trustee to pay such amount when due and payable, including,
without limitation, any such additional amounts as may be attributable to
penalties or default interest rates, amounts in respect of indemnification, or
any other additional amounts payable by the Trustee by reason of such a default.
Notwithstanding the foregoing, "Insured Payment" does not include any Basis Risk
Shortfall, any Prepayment Interest Shortfall, any Relief Act Interest Shortfall
or any shortfall attributable to the liability of the Trust, any REMIC or the
Trustee for taxes or withholding taxes including interest and penalties in
respect of such liability.

      (k) "Nonpayment by the Trust" with respect to an Insured Payment at a time
when such Insured Payment is Due for Payment, means that the funds, if any,
remitted to the Beneficiary pursuant to the Pooling Agreement are insufficient
for payment in full of such Insured Payment. In addition to and without limiting
the foregoing, "Nonpayment by the Trust" includes any portion of any Insured
Payment which has become an Avoided Payment.

      (l) "Notice of Claim" means a notice of claim in the form of Exhibit A
hereto.

      (m) "Obligation" means the Asset-Backed Certificates, Series 2004-FR2,
Class II-A Certificates issued under the Pooling Agreement.

      (n) "Order" means a final, nonappealable order of a court or other body
exercising jurisdiction in an Insolvency Proceeding by or against the Trust, to
the effect that the Beneficiary is required to return or repay all or any
portion of an Avoided Payment.

      (o) "Person" means any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
limited liability company, trust or unincorporated organization or similar
entity.

      (p) "Policy" means this Financial Guaranty Insurance Policy No. D-2004-99.

      (q) "Pooling Agreement" means the Pooling and Servicing Agreement, dated
as of August 1, 2004, among Bear Stearns Asset Backed Securities I LLC, as
Depositor, EMC Mortgage

                                      N-3
<PAGE>

Corporation, as Seller and Master Servicer and the Trustee, without regard to
any amendment or supplement thereto unless such amendment or supplement has been
approved in writing by the Insurer pursuant to the amendment provisions of the
Pooling Agreement.

      (r) "Receipt" and "Received" shall mean actual delivery to the Insurer
prior to 2:00 p.m., New York City time, on a Business Day; provided, however,
that delivery either on a day that is not a Business Day, or after 2:00 p.m.,
New York City time, on a Business Day, shall be deemed to be "Received" on the
next succeeding Business Day. For purposes of this definition, "actual delivery"
to the Insurer shall mean (i) the delivery of the original Notice of Claim,
notice or other applicable documentation to the Insurer at its address set forth
in Section 6, or (ii) facsimile transmission of the original Notice of Claim,
notice or other applicable documentation to the Insurer at its facsimile number
set forth in Section 6. If presentation is made by facsimile transmission, the
Beneficiary (i) promptly shall confirm transmission by telephone to the Insurer
at its telephone number set forth in Section 6, and (ii) as soon as is
reasonably practicable, shall deliver the original Notice of Claim, notice or
other applicable documentation to the Insurer at its address set forth in
Section 6. If any Notice of Claim, notice or other documentation actually
delivered (or attempted to be delivered) under the Policy by the Beneficiary is
not in proper form or is not properly completed, executed or delivered, or
otherwise is insufficient for the purpose of making a claim hereunder, "Receipt"
by the Insurer shall be deemed not to have occurred, and the Insurer promptly
shall so advise the Beneficiary. In such case, the Beneficiary may submit an
amended Notice of Claim, notice or other documentation, as the case may be, to
the Insurer.

      (s) "Term of the Policy" means the period from and including the Effective
Date to and including the date on which all Insured Payments have been paid;
provided, however, that in the event that any amount with respect to any Insured
Payment paid to the Beneficiary pursuant to the Pooling Agreement during the
Term of the Policy becomes an Avoided Payment, the Insurer's obligations with
respect thereto shall remain in effect or shall be reinstated, as applicable,
until payment in full by the Insurer pursuant to the terms hereof.

      (t) "Trustee" means LaSalle Bank National Association, or any successor
thereto under the Pooling Agreement.

SECTION 2.  Claims

      The Beneficiary may make a claim under this Policy for the amount of any
Defaulted Amount by executing and delivering, or causing to be executed and
delivered, to the Insurer a Notice of Claim, with appropriate insertions. Such
Notice of Claim, when so completed and delivered, shall constitute proof of a
claim hereunder when Received by the Insurer.

      In the event that any amount shall be received by the Beneficiary in
respect of a Defaulted Amount forming the basis of a claim specified in a Notice
of Claim submitted hereunder, which amount had not been received when the Notice
of Claim was prepared but which is received by the Beneficiary prior to the
receipt of payment from the Insurer as contemplated by this Policy (any such
amount, a "Recovery"), the Beneficiary immediately shall so notify the Insurer
(which notice shall include the amount of any such Recovery). The fact that a
Recovery has been received by the Beneficiary shall be deemed to be incorporated
in the applicable Notice of Claim as of the date such Notice of Claim originally
was prepared, without necessity of any action on

                                      N-4
<PAGE>

the part of any Person, and the Insurer shall pay the amount of the claim
specified in the Notice of Claim as herein provided, net of the Recovery.

      The Insurer will pay each Defaulted Amount (other than a Defaulted Amount
which consists of an Avoided Payment) to the Beneficiary on the later of (i)
noon, New York City time, on the date such Defaulted Amount becomes Due for
Payment or (ii) noon, New York City time, on the second Business Day following
the day on which the Insurer Receives a Notice of Claim as specified in the
preceding paragraph. The Insurer will pay each Defaulted Amount which consists
of an Avoided Payment as provided in Section 3.

      No claim may be made hereunder except by the Beneficiary.

SECTION 3.  Payments

      Payments due hereunder in respect of Insured Payments shall be disbursed
to the Beneficiary by wire transfer of immediately available funds to an account
of the Beneficiary specified in the applicable Notice of Claim.

      The Insurer's obligations hereunder in respect of Insured Payments shall
be discharged to the extent that funds are transferred to the Beneficiary as
provided in the Notice of Claim, whether or not such funds are properly applied
by the Beneficiary.

      If any amount or property paid, credited, transferred or delivered to the
Beneficiary by the Trust becomes an Avoided Payment, the Insurer will pay the
amount of such Avoided Payment when due to be paid pursuant to an applicable
Order, but in any event no earlier than the fourth Business Day following
Receipt by the Insurer from the Beneficiary of (i) a certified copy of such
Order, (ii) a certificate by or on behalf of the Beneficiary that such Order has
been entered and is not subject to any stay, (iii) an assignment, in form and
substance satisfactory to the Insurer, duly executed and delivered by the
Beneficiary, irrevocably assigning to the Insurer all rights and claims of the
Beneficiary against the estate of the Trust or otherwise, which rights and
claims relate to or arise under or with respect to the subject Avoided Payment,
and (iv) a Notice of Claim appropriately completed and executed by the
Beneficiary. Such payment shall be disbursed to the receiver, conservator,
administrator, debtor-in-possession or trustee in bankruptcy named in the Order,
and not to the Beneficiary directly, unless the Beneficiary has previously paid
the Avoided Payment over to such court or receiver, conservator, administrator,
debtor-in-possession, or trustee in bankruptcy, in which case the Insurer will
pay the Beneficiary subject to the delivery of (a) the items referred to in
clauses (i), (ii), (iii) and (iv) above to the Insurer, and (b) evidence
satisfactory to the Insurer that payment has been made to such court or
receiver, conservator, administrator, debtor-in-possession or trustee in
bankruptcy named in the Order.

      Notwithstanding the foregoing paragraph, in no event shall the Insurer be
obligated to make any payment in respect of an Avoided Payment prior to the date
such Avoided Payment is Due for Payment. In the event that the payment of any
amount in respect of any Insured Payment is accelerated or must otherwise be
paid by the Trust in advance of the scheduled payment date therefore, nothing in
this Policy shall be deemed to require the Insurer to make any payment hereunder
in respect of any such Insured Payment prior to the date such Insured Payment

                                      N-5
<PAGE>

otherwise would have been Due for Payment without giving effect to such
acceleration, unless the Insurer in its sole discretion elects to make any prior
payment, in whole or in part, with respect to any such Insured Payment.

SECTION 4.  Fiscal Agent

      At any time during the Term of the Policy, the Insurer may appoint a
fiscal agent (the "Fiscal Agent") for purposes of this Policy by written notice
to the Beneficiary, specifying the name and notice address of such Fiscal Agent.
From and after the date of receipt of such notice by the Beneficiary, copies of
all notices and documents required to be delivered to the Insurer pursuant to
this Policy shall be simultaneously delivered to the Fiscal Agent and to the
Insurer. All payments required to be made by the Insurer under this Policy may
be made directly by the Insurer or by the Fiscal Agent on behalf of the Insurer.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent shall in
no event be liable to the Beneficiary for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.

SECTION 5.  Assignment

      This Policy may not be assigned by the Beneficiary without the prior
written consent of the Insurer.

SECTION 6.  Notices

      All notices, presentations, transmissions, deliveries and communications
made by the Beneficiary to the Insurer with respect to this Policy shall
specifically refer to the number of this Policy, shall be in writing (except as
otherwise specifically provided herein) and shall be mailed by registered mail
or personally delivered or telecopied to the recipient as follows:

         if to the Insurer:

                  Assured Guaranty Corp.
                  1325 Avenue of the Americas
                  New York, New York   10019
                  Attention:   Risk Management
                  Telephone: (212) 974-0100
                  Telecopier: (212) 581-3268,

()       WITH A COPY TO THE GENERAL COUNSEL AT THE ABOVE ADDRESS AND TELECOPIER
         NUMBER.

         if to the Beneficiary:

                  LaSalle Bank National Association, as Trustee
                  135 South LaSalle Street
                  Suite 1625
                  Chicago, Illinois

                                      N-6
<PAGE>

                  Attention: Global Securitization Trust Services Group - Bear
                  Stearns Asset Backed Securities I LLC, Series 2004-FR2

      The Insurer or the Beneficiary may designate an additional or different
address, or telephone or telecopier number, by prior written notice. Each
notice, presentation, delivery and communication to the Insurer shall be
effective only upon Receipt by the Insurer.

SECTION 7.  Subrogation

      The Insurer shall be subrogated to the rights of the Beneficiary to
receive payments in respect of the Insured Payments to the extent of any payment
by the Insurer hereunder. Any payment made by or on behalf of the Trust to, and
any amounts received under the Pooling Agreement for the benefit of, the
Beneficiary in respect of any Insured Payment forming the basis of a claim
hereunder (which claim shall have been paid by the Insurer) shall be received
and held in trust for the benefit of the Insurer and shall be paid over to the
Insurer in accordance with the Pooling Agreement. The Beneficiary shall
cooperate in all reasonable respects, and at the expense of the Insurer, with
any request by the Insurer for action to preserve or enforce the Insurer's
rights and remedies in respect of the Trust under the Obligation, any related
security arrangements or otherwise, including without limitation any request to
(i) institute or participate in any suit, action or other proceeding, (ii)
enforce any judgment obtained and collect from the Trust or the Beneficiary any
amounts adjudged due or (iii) transfer to the Insurer, via absolute legal
assignment, the Beneficiary's rights in respect of any Insured Payment which may
form the basis of a claim hereunder.

SECTION 8.  Premiums

      The Beneficiary shall pay or cause to be paid to the Insurer in accordance
with the Pooling Agreement the premium payable to the Insurer in respect of this
Policy as set forth in the premium letter, dated August 31, 2004, relating to
this Policy.

SECTION 9.  Termination

      This Policy and the obligations of the Insurer hereunder shall terminate
upon the expiration of the Term of the Policy.

SECTION 10.  Miscellaneous

      (a) No waiver of any rights or powers of the Insurer or the Beneficiary,
or any consent by either of them, shall be valid unless in writing and signed by
an authorized officer or agent of the Insurer or Beneficiary, as applicable. The
waiver of any right by the Insurer or the Beneficiary, or the failure promptly
to exercise any such right, shall not be construed as a waiver of any other
right to exercise the same at any time thereafter.

      (b) This Policy will be governed by, and shall be construed in accordance
with, the laws of the State of New York (other than with respect to its
conflicts of laws principles).

                                      N-7
<PAGE>

      (c) The Insurer hereby irrevocably submits to the jurisdiction of the
United States District Court for the Southern District of New York and any court
in the State of New York located in the City and County of New York, and any
Appellate Court which hears appeals from any such court, in any action, suit or
proceeding brought against it in connection with its obligations under this
Policy, or for recognition or enforcement of any judgment with respect thereto,
and the Insurer hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard or determined in such New
York State court or, to the extent permitted by law, in such United States
federal court. The Insurer agrees that a final judgment in any such action, suit
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment, or in any other manner provided by applicable law. To the
extent permitted by applicable law, the Insurer hereby waives and agrees not to
assert by way of motion, as a defense or otherwise in any such suit, action or
proceeding, any claim (i) that it is not personally subject to the jurisdiction
of such courts, (ii) that the suit, action or proceeding is brought in an
inconvenient forum, (iii) that the venue of the suit, action or proceeding is
improper or (iv) that the subject matter thereof may not be litigated in or by
such courts.

      (d) The Insurer hereby waives and agrees not to assert, in each case for
the benefit of the Beneficiary only, any and all rights and defenses of any kind
which the Insurer might have with respect to the Obligation to pay the amounts
due hereunder in full.

      (e) This policy is not subject to coverage under the New York
Property/Casualty Insurance Security Fund.

                                      N-8
<PAGE>

IN WITNESS WHEREOF, ASSURED GUARANTY CORP. has caused this Policy to be affixed
with its corporate seal and to be signed by its authorized officer, to become
effective and binding upon ASSURED GUARANTY CORP. by virtue of such signature.

                                               ASSURED GUARANTY CORP.

                                               By:_________________________
                                               Name:
                                               Title:

[SEAL]

                   Signature Page to Financial Guaranty Policy

<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                                 NOTICE OF CLAIM
                                 ---------------

Assured Guaranty Corp.
1325 Avenue of the Americas
New York, New York   10019

Attention:   General Counsel

      The undersigned, a duly authorized officer of [Name of Beneficiary] (the
"Beneficiary"), hereby certifies to Assured Guaranty Corp. (the "Insurer") with
reference to Financial Guaranty Insurance Policy No. D-2004-99 (the "Policy"),
that:

      (i) The deficiency with respect to the Insured Payment Due for Payment and
unpaid by reason of Nonpayment by the Trust for [insert applicable payment date]
is $[insert applicable amount] (the "Defaulted Amount").

      (ii) The Beneficiary is making a claim under the Policy for the Defaulted
Amount to be applied to the payment of the above-described Insured Payment.

      (iii) The Beneficiary agrees that, following payment by the Insurer made
with respect to the Defaulted Amount which is the subject of this Notice of
Claim, it (a) will cause such amounts to be applied directly to the payment of
the applicable Insured Payment; (b) will insure that such funds are not applied
for any other purpose; and (c) will cause an accurate record of such payment to
be maintained with respect to the appropriate Insured Payment(s), the
corresponding claim on the Policy, and the proceeds of such claim.

      (iv) Payment should be made by wire transfer to the following account :

           LaSalle Bank National Association
           ABA No.:        [________]
           Account No:     [________]
           Reference:      Trust Administration - [_______]

         Upon payment of the applicable Defaulted Amount(s), the Insurer shall
be subrogated to the rights of the Beneficiary with respect to such payment, to
the extent set forth in Section 7 of the Policy.

<PAGE>

         Capitalized terms used in this Notice of Claim and not otherwise
defined herein shall have the respective meanings ascribed thereto in the
Policy.

         This Notice of Claim may be revoked at any time by written notice of
such revocation by the Beneficiary to the Insurer, if and only to the extent
that moneys are actually received prior to any such revocation from a source
other than the Insurer with respect to the Defaulted Amount set forth herein.

         IN WITNESS WHEREOF, the undersigned has executed and delivered this
Notice of Claim as of the __ day of _________ of 20__.

                                         LASALLE BANK NATIONAL ASSOCIATION,
                                          as Trustee

                                         By:  ______________________________
                                              Name:
                                              Title:DEUTSCHE MORTGAGE SECURITIES, INC.

                                    Depositor

                                       and

                             WELLS FARGO BANK, N.A.

                  Master Servicer and Securities Administrator

                                       and

                       HSBC BANK USA, NATIONAL ASSOCIATION

                                     Trustee

                              _____________________

                         POOLING AND SERVICING AGREEMENT

                           Dated as of August 1, 2004

                              _____________________

                       Mortgage Pass-Through Certificates

                                  Series 2004-5

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                    ARTICLE I
                                   DEFINITIONS

<S>                                                                                                          <C>
      Section 1.1    DEFINITIONS..................................................................................5

      Section 1.2    ALLOCATION OF CERTAIN INTEREST SHORTFALLS...................................................45

                                   ARTICLE II
           CONVEYANCE OF TRUST FUND; ORIGINAL ISSUANCE OF CERTIFICATES

      Section 2.1    CONVEYANCE OF TRUST FUND....................................................................47

      Section 2.2    ACCEPTANCE BY TRUSTEE.......................................................................47

      Section 2.3    REPURCHASE OR SUBSTITUTION OF LOANS.........................................................47

      Section 2.4    AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF CERTIFICATES AS REMIC REGULAR
                     AND RESIDUAL INTERESTS......................................................................50

      Section 2.5    REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER.......................................51

      Section 2.6    ESTABLISHMENT OF THE TRUST..................................................................52

                                   ARTICLE III
               ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS

      Section 3.1    MASTER SERVICER.............................................................................53

      Section 3.2    REMIC-RELATED COVENANTS.....................................................................54

      Section 3.3    MONITORING OF SERVICERS.....................................................................54

      Section 3.4    FIDELITY BOND...............................................................................55

      Section 3.5    POWER TO ACT; PROCEDURES....................................................................55

      Section 3.6    DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS..................................................56

      Section 3.7    RELEASE OF MORTGAGE FILES...................................................................57

      Section 3.8    DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER TO BE HELD FOR TRUSTEE........57

      Section 3.9    STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES......................................58

      Section 3.10   PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS............................................59

      Section 3.11   MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES......................................59

      Section 3.12   TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS....................60

      Section 3.13   REALIZATION UPON DEFAULTED LOANS............................................................60

      Section 3.14   COMPENSATION FOR THE MASTER SERVICER........................................................60

      Section 3.15   REO PROPERTY................................................................................60

      Section 3.16   ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE...............................................61

                                      -1-

<PAGE>

      Section 3.17   ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT............................................62

      Section 3.18   REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.......................................62

      Section 3.19   UCC.........................................................................................63

      Section 3.20   OBLIGATION OF THE MASTER SERVICER IN RESPECT OF COMPENSATING INTEREST.......................63

      Section 3.21   RESERVED....................................................................................64

      Section 3.22   PROTECTED ACCOUNTS..........................................................................64

      Section 3.23   DISTRIBUTION ACCOUNT........................................................................65

      Section 3.24   PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT...........................66

      Section 3.25   RESERVE FUND................................................................................68

      Section 3.26   PREPAYMENT PENALTY VERIFICATION.............................................................69

                                   ARTICLE IV
                         PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES; STATEMENTS AND REPORTS

      Section 4.1    DISTRIBUTIONS TO CERTIFICATEHOLDERS.........................................................71

      Section 4.2    ALLOCATION OF REALIZED LOSSES...............................................................77

      Section 4.3    STATEMENTS TO CERTIFICATEHOLDERS............................................................79

      Section 4.4    ADVANCES....................................................................................82

      Section 4.5    COMPLIANCE WITH WITHHOLDING REQUIREMENTS....................................................83

      Section 4.6    REMIC DISTRIBUTIONS.........................................................................83

                                    ARTICLE V
                                THE CERTIFICATES

      Section 5.1    THE CERTIFICATES............................................................................86

      Section 5.2    CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF PRINCIPAL AND INTEREST; AUTHORIZED
                     DENOMINATIONS...............................................................................86

      Section 5.3    REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.......................................87

      Section 5.4    MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES...........................................92

      Section 5.5    PERSONS DEEMED OWNERS.......................................................................92

                                   ARTICLE VI
                            THE DEPOSITOR, MASTER SERVICER AND THE CREDIT RISK MANAGER

      Section 6.1    LIABILITY OF THE DEPOSITOR AND THE MASTER SERVICER..........................................93

      Section 6.2    MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER SERVICER.............................93

      Section 6.3    LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER SERVICER, THE SERVICERS, THE SECURITIES
                     ADMINISTRATOR AND OTHERS....................................................................93

      Section 6.4    LIMITATION ON RESIGNATION OF THE MASTER SERVICER............................................94

                                      -ii-

<PAGE>

      Section 6.5    ASSIGNMENT OF MASTER SERVICING..............................................................94

      Section 6.6    RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER...................................95

      Section 6.7    DUTIES OF THE CREDIT RISK MANAGER...........................................................96

      Section 6.8    LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER........................................96

      Section 6.9    REMOVAL OF THE CREDIT RISK MANAGER..........................................................96

                                   ARTICLE VII
                                     DEFAULT

      Section 7.1    MASTER SERVICER EVENTS OF DEFAULT...........................................................97

      Section 7.2    TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR....................................................98

      Section 7.3    NOTIFICATION TO CERTIFICATEHOLDERS..........................................................99

      Section 7.4    WAIVER OF MASTER SERVICER EVENTS OF DEFAULT................................................100

                                  ARTICLE VIII
             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

      Section 8.1    DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.............................................101

      Section 8.2    CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES ADMINISTRATOR.............................102

      Section 8.3    TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR CERTIFICATES OR LOANS..................104

      Section 8.4    TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES.................104

      Section 8.5    FEES AND EXPENSES OF TRUSTEE AND SECURITIES ADMINISTRATOR..................................104

      Section 8.6    ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES ADMINISTRATOR..........................105

      Section 8.7    RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES ADMINISTRATOR............................105

      Section 8.8    SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR..............................................106

      Section 8.9    MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES ADMINISTRATOR.............................107

      Section 8.10   APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE..............................................107

      Section 8.11   APPOINTMENT OF OFFICE OR AGENCY............................................................108

      Section 8.12   REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE..............................................108

                                   ARTICLE IX
                                   TERMINATION

      Section 9.1    TERMINATION UPON PURCHASE OR LIQUIDATION OF ALL LOANS......................................110

      Section 9.2    ADDITIONAL TERMINATION REQUIREMENTS........................................................112

                                    ARTICLE X
                                REMIC PROVISIONS

      Section 10.1   REMIC ADMINISTRATION.......................................................................113

                                     -iii-

<PAGE>

      Section 10.2   PROHIBITED TRANSACTIONS AND ACTIVITIES.....................................................115

      Section 10.3   INDEMNIFICATION............................................................................116

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

      Section 11.1   AMENDMENT..................................................................................117

      Section 11.2   RECORDATION OF AGREEMENT; COUNTERPARTS.....................................................118

      Section 11.3   LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.................................................118

      Section 11.4   GOVERNING LAW..............................................................................119

      Section 11.5   NOTICES....................................................................................119

      Section 11.6   SEVERABILITY OF PROVISIONS.................................................................120

      Section 11.7   NOTICE TO RATING AGENCIES..................................................................120

      Section 11.8   ARTICLE AND SECTION REFERENCES.............................................................121

      Section 11.9   GRANT OF SECURITY INTEREST.................................................................121

                                   ARTICLE XII
                CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER

      Section 12.1   EXERCISE OF RIGHTS OF HOLDER OF THE INSURED CERTIFICATES...................................121

      Section 12.2   TRUSTEE AND SECURITIES ADMINISTRATOR TO ACT SOLELY WITH CONSENT OF CERTIFICATE INSURER.....122

      Section 12.3   TRUST FUND AND ACCOUNTS HELD FOR BENEFIT OF CERTIFICATE INSURER............................122

      Section 12.4   CLAIMS UPON THE POLICY; POLICY PAYMENTS ACCOUNT............................................123

      Section 12.5   EFFECT OF PAYMENTS BY CERTIFICATE INSURER; SUBROGATION.....................................124

      Section 12.6   NOTICES TO CERTIFICATE INSURER.............................................................125

      Section 12.7   THIRD PARTY BENEFICIARY....................................................................125

      Section 12.8   TRUSTEE TO HOLD THE POLICY.................................................................125

      Section 12.9   Termination of Certain of Certificate Insurer's Rights.....................................125

</TABLE>

                                      -iv-

<PAGE>

                                    EXHIBITS

Exhibit A-1       -     Forms of Class A-[1][2][3][4A][4B][5A][5B] Certificates
Exhibit A-2       -     Forms of Class A-IO Certificates
Exhibit A-3       -     Forms of Class [M-1][M-2][M-3] Certificates
Exhibit A-4       -     Forms of Class CE Certificates
Exhibit A-5       -     Forms of Class P Certificates
Exhibit A-6       -     Forms of Class R Certificates
Exhibit  B        -     [Reserved]
Exhibit C         -     Form of Transfer Affidavit
Exhibit D         -     Form of Transferor Certificate
Exhibit E         -     Form of Investment Letter (Non-Rule 144A)
Exhibit F         -     Form of Rule 144A Investment Letter
Exhibit G         -     Form of Benefit Plan Affidavit
Schedule One      -     Loan Schedule
Schedule Two      -     Prepayment Charge Schedule

                                      -v-

<PAGE>

         This Pooling and Servicing Agreement, dated and effective as of August
1, 2004 (this "Agreement"), is executed by and among Deutsche Mortgage
Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N. A., as
master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), and HSBC Bank USA, National Association as trustee
(the "Trustee"). Capitalized terms used in this Agreement and not otherwise
defined have the meanings ascribed to such terms in Article I hereof.

                              PRELIMINARY STATEMENT

         The Depositor at the Closing Date is the owner of the Loans and the
other property being conveyed by it to the Trustee for inclusion in the Trust
Fund. On the Closing Date, the Depositor will acquire the Certificates from the
Trust Fund as consideration for its transfer to the Trust Fund of the Loans and
certain other assets and will be the owner of the Certificates. The Depositor
has duly authorized the execution and delivery of this Agreement to provide for
the conveyance to the Trustee of the Loans and the issuance to the Depositor of
the Certificates representing in the aggregate the entire beneficial ownership
of the Trust Fund. All covenants and agreements made by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee herein with
respect to the Loans and the other property constituting the Trust Fund are for
the benefit of the Holders from time to time of the Certificates and for the
benefit of the Certificate Insurer. The Depositor, the Master Servicer, the
Securities Administrator and the Trustee are entering into this Agreement, and
the Trustee is accepting the trust created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.

         The Certificates issued hereunder, other than the Class CE, Class P and
Class R Certificates, have been offered for sale pursuant to a Prospectus, dated
January 28, 2004, and a Prospectus Supplement, dated August 25, 2004 of the
Depositor (together, the "Prospectus"). The Trust Fund created hereunder is
intended to be the "Trust" as described in the Prospectus and the Certificates
are intended to be the "Certificates" described therein.

                                     REMIC I

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the Loans and other related assets (other than the
Reserve Fund) in the Trust Fund subject to this Agreement as multiple REMICs for
federal income tax purposes, and such segregated pool of assets shall be
designated as "REMIC I." Component R-1 of the Class R Certificate shall
represent the sole class of "residual interests" in REMIC I for purposes of the
REMIC Provisions under federal income tax law. The following table irrevocably
sets forth the designation, the Uncertificated REMIC I Pass-Through Rate, the
initial Uncertificated Principal 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 Uncertificated REMIC I Regular Interests. None of the
Uncertificated REMIC I Regular Interests will be certificated.

<PAGE>

<TABLE>
<CAPTION>

                                     Initial
                                  Uncertificated        Uncertified REMIC 1        Assumed Final Maturity
         Designation            Principal Balance        Pass-Through Rate                 Date(1)

<S>                               <C>                    <C>                         <C>
            LTI-1                   $425,154,869.32         Variable(2)                 July 25, 2034
          LTI-IO-1                   $12,202,800.00         Variable(2)                 July 25, 2034
          LTI-IO-2                   $12,202,700.00         Variable(2)                 July 25, 2034
          LTI-IO-3                   $12,202,800.00         Variable(2)                 July 25, 2034
          LTI-IO-4                   $24,405,500.00         Variable(2)                 July 25, 2034
            LTI-P                              $100         Variable(2)                 July 25, 2034
</TABLE>

     _______________

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

     (1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
          regulations, the Distribution Date in the month following the maturity
          date for the Loan with the latest maturity date has been designated as
          the "latest possible maturity date" for each Class of Certificates
          that represents one or more of the "regular interests" in REMIC I.

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

                                    REMIC II

         As provided herein, the Trustee shall 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 shall be
designated as "REMIC II". Component R-2 of the Class R Certificate shall
represent the sole class of "residual interests" in REMIC II for purposes of the
REMIC Provisions under federal income tax law. The following table irrevocably
sets forth the designations, the Uncertificated REMIC II Pass-Through Rate, the
initial Uncertificated Principal 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 Uncertificated REMIC II Regular Interests. None of the
Uncertificated REMIC II Regular Interests will be certificated.

<TABLE>
<CAPTION>
   Uncertificated REMIC II          Uncertificated
      Regular Interest              REMIC II Pass         Initial Uncertificated             Latest
        Designation                 Through Rate           Principal Balance             Possible Maturity(1)

<S>                                    <C>            <C>                               <C>
           LTII-AA                       (2)            $     476,445,295.93               July 25, 2034

           LTII -A1                      (2)            $       2,802,000.00               July 25, 2034

           LTII -A2                      (2)            $         166,000.00               July 25, 2034

           LTII -A3                      (2)            $         765,000.00               July 25, 2034

          LTII -A4A                      (2)            $         100,000.00               July 25, 2034

          LTII -A4B                      (2)            $         238,660.00               July 25, 2034

          LTII -A5A                      (2)            $         392,000.00               July 25, 2034

          LTII -A5B                      (2)            $          94,170.00               July 25, 2034

           LTII -M1                      (2)            $         133,700.00               July 25, 2034

           LTII -M2                      (2)            $          80,220.00               July 25, 2034

           LTII -M3                      (2)            $          60,770.00               July 25, 2034

                                      -2-
<PAGE>

           LTII -ZZ                      (2)            $       4,890,853.39               July 25, 2034

        LTII -IO-A(3)                    (2)                         (4)                   July 25, 2034
        LTII -IO-B(5)                    (2)                         (6)                   July 25, 2034
            LTII-P                       (2)            $             100.00               July 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 Loan with the latest maturity date has been designated as the "latest
     possible maturity date" for each Uncertificated REMIC II Regular Interest.
(2)  Calculated in accordance with the definition of "Uncertificated REMIC II
     Pass-Through Rate" herein.
(3)  REMIC II Regular Interest LTII-IO-A will accrue interest at a rate of (i)
     for the first twelve distribution dates, 1.00% and (ii) thereafter, 0.00%.
(4)  REMIC II Regular Interest LTII-IO-A will not have an Uncertificated
     Principal Balance, but will accrue interest on its Uncertificated Notional
     Amount, as defined herein.
(5)  REMIC II Regular Interest LTII-IO-B will accrue interest at a rate of (i)
     for the first twenty-four distribution dates, 3.50% and (ii) thereafter,
     0.00%.
(6)  REMIC II Regular Interest LTII-IO-B will not have an Uncertificated
     Principal Balance, but will accrue interest on its Uncertificated Notional
     Amount, as defined herein.

                                    REMIC III

         As provided herein, the Trustee shall elect to treat the segregated
pool of assets consisting of the REMIC II Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets shall be
designated as "REMIC III". Component R-3 of the Class R Certificate shall
represent the sole class of "residual interests" in REMIC III for purposes of
the REMIC Provisions under federal income tax law. The following table
irrevocably sets forth the designations, the Remittance Rate and initial
Certificate Principal Balance or Notional Amount for each Class of Certificates
which, together with the Class R-3 Component, constitute the entire beneficial
interests in REMIC III. Determined solely for purposes of satisfying Treasury
regulation section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each Class of Certificates shall be the first Distribution Date that is two
years after the end of the remaining amortization schedule of the Loan in the
Mortgage Pool that has, as of the Closing Date, the longest remaining
amortization schedule, irrespective of its scheduled maturity:

<TABLE>
<CAPTION>

                                     Initial
                                   Certificate                                     Assumed Final Maturity
          Class Designation     Principal Balance        Pass-Through Rate                Date1
<S>                            <C>                      <C>                           <C>
              Class A-1         $280,200,000             One-Month LIBOR +              July 25, 2034
                                                             0.26%  (2)
              Class A-2         $16,600,000                  4.980% (2)                 July 25, 2034
              Class A-3         $76,500,000                  5.590% (2)                 July 25, 2034
              Class A-4A        $10,000,000                  5.625% (2)                 July 25, 2034
              Class A-4B        $23,866,000                  5.625% (2)                 July 25, 2034
              Class A-5A        $39,200,000                  5.030% (2)                 July 25, 2034
              Class A-5B        $9,417,000                   5.440% (2)                 July 25, 2034
              Class A-IO        $60,771,000                  4.500% (2)                 July 25, 2034
</TABLE>
_____________________
1    The Distribution Date in the month after the maturity date for the latest
     maturing Loan.

                                      -3-

<PAGE>
<TABLE>
<CAPTION>
<S>                            <C>                      <C>                           <C>
              Class M-1         $13,370,000                  5.625% (2)                 July 25, 2034
              Class M-2         $8,022,000                   5.625% (2)                 July 25, 2034
              Class M-3         $6,077,000                   5.625% (2)                 July 25, 2034
               Class CE         $2,916,669.32                   (4)                     July 25, 2034
               Class P          $100                           N/A(5)                   July 25, 2034
</TABLE>
___________________

(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date in the month following the maturity date
     for the Loan with the latest maturity date has been designated as the
     "latest possible maturity date" for each Class of Certificates.
(2)  Subject to a rate cap as described herein.

(3)  The Class A-IO Certificates will accrue interest at their Pass-Through Rate
     on the Notional Amount of the Class A-IO Certificates calculated in
     accordance with the definition of "Notional Amount" herein. The Class A-IO
     Certificates will not be entitled to distributions in respect of principal.
     For federal income tax purposes, the Class A-IO Certificates will not have
     a Notional Amount, but will be entitled to 100% of amounts distributed on
     REMIC II Regular Interest LTII-IO-A and REMIC II Regular Interest
     LTII-IO-B.
(4)  The Class CE Certificates will not accrue interest on their Certificate
     Principal Balance, but will accrue interest at their Pass-Through Rate on
     the Notional Amount of the Class CE Certificates outstanding from time to
     time which shall equal the aggregate of the Uncertificated Principal
     Balances of the REMIC II Regular Interests (other than REMIC II Regular
     Interest LTII-P, REMIC II Regular Interest LTII-IO-A and REMIC II Regular
     Interest LTII-IO-B).
(5)  The Class P Certificates are not entitled to distributions in respect of
     interest.

                                      -4-

<PAGE>

                               W I T N E S S E T H

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

                                   ARTICLE I
                                  DEFINITIONS

         Section 1.1 DEFINITIONS.

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

         ACCEPTED MASTER SERVICING PRACTICES: With respect to any Loan, as
applicable, those customary mortgage servicing practices of prudent mortgage
servicing institutions that master service mortgage loans of the same type and
quality as such 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 a Servicer).

         ACCOUNT: The Distribution Account and any Protected Account as the
context may require.

         ADVANCE: Either (i) a Monthly Advance made by a Servicer as such term
is defined in and pursuant to the related Servicing Agreement or (ii) an advance
made by the Master Servicer pursuant to Section 4.4.

         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. The Trustee may obtain
and rely on an Officer's Certificate of the Servicer or the Depositor to
determine whether any Person is an Affiliate of such party.

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

         ANNIVERSARY: Each anniversary of the Cut-Off Date.

         APPRAISED VALUE: The amount set forth in an appraisal made by or for
the mortgage originator in connection with its origination of each Loan.

         ALLOCATED REALIZED LOSS AMOUNT: With respect to any Class of Mezzanine
Certificates and any Distribution Date, an amount equal to the sum of any
Realized Loss allocated to that Class of Mezzanine Certificates on such
Distribution Date and any Allocated Realized Loss Amount for that Class
remaining unpaid from the previous Distribution Date.

                                      -5-

<PAGE>

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

         ASSIGNMENT AGREEMENTS: Shall mean (i) the Assignment, Assumption and
Recognition Agreement, dated as of August 30, 2004, among the Seller, the
Depositor and GMAC, pursuant to which the GMAC Servicing Agreement was assigned
to the Depositor, (ii) the Assignment, Assumption and Recognition Agreement,
dated as of August 30, 2004, among the Seller, the Depositor and GreenPoint
pursuant to which the GreenPoint Servicing Agreement was assigned to the
Depositor, and (iii) the Assignment, Assumption and Recognition Agreement, dated
as of August 30, 2004, among the Seller, the Depositor and M&T, pursuant to
which the M&T Servicing Agreement was assigned to the Depositor.

         AUTHORIZED DENOMINATION: With respect to the Class A Certificates and
the Class M Certificates, minimum initial Certificate Principal Balances of
$25,000 and integral multiples of $1.00 in excess thereof. With respect to the
Class P Certificates, minimum initial Certificate Principal Balances of $20 and
integral multiples thereof. With respect to the Class CE Certificates, minimum
initial Certificate Principal Balances of $10,000 and integral multiples of
$1.00 in excess thereof. With respect to the Class R Certificate, a single
denomination of 100% Percentage Interest in such Certificate.

         AVAILABLE DISTRIBUTION AMOUNT: With respect to a Distribution Date, the
sum of the following amounts:

         (1) the total amount of all cash received by or on behalf of each
Servicer with respect to the Loans by the Determination Date for such
Distribution Date and not previously distributed (including Liquidation
Proceeds, Insurance Proceeds and Subsequent Recoveries), except:

          (a) all Prepaid Monthly Payments;

          (b) all Curtailments received after the applicable Prepayment Period,
     together with all interest paid by the related Mortgagor in connection with
     such Curtailments;

          (c) all Payoffs received after the applicable Prepayment Period,
     together with all interest paid by the related Mortgagor in connection with
     such Payoffs;

          (d) Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries
     on the Loans received after the applicable Prepayment Period;

          (e) all amounts which are due and reimbursable to the related Servicer
     pursuant to the terms of the related Servicing Agreement or to the Master
     Servicer, the Securities Administrator, the Trustee or the Custodian
     pursuant to the terms of this Agreement;

                                      -6-

<PAGE>

          (f) the Servicing Fee, the Master Servicing Fee and the Credit Risk
     Management Fee for each such Loan for such Distribution Date;

          (g) all investment earnings, if any, on amounts on deposit in the
     Distribution Account and each Protected Account;

          (h) any premiums payable in connection with any lender paid primary
     mortgage insurance policies, and

          (i) the amount of any Prepayment Charges collected by the related
     Servicer in connection with the Principal Prepayment of any of the Loans.

         (2) to the extent advanced by the related Servicer and/or the Master
Servicer and not previously distributed, the amount of any Advance made by the
related Servicer and/or the Master Servicer with respect to such Distribution
Date relating to the Loans;

         (3) to the extent advanced by the related Servicer and/or the Master
Servicer and not previously distributed, any amount payable as Compensating
Interest by the related Servicer and/or the Master Servicer on such Distribution
Date relating to the Loans; and

         (4) the total amount, to the extent not previously distributed, of all
cash received by the Distribution Date by the Trustee or the Master Servicer, in
respect of a Purchase Obligation under Section 2.3 or any permitted repurchase
of a Loan.

         BANKRUPTCY LOSS: A loss on a Loan as reported by the related Servicer,
arising out of (i) a reduction in the scheduled Monthly Payment for such Loan by
a court of competent jurisdiction in a case under the United States Bankruptcy
Code, other than any such reduction that arises out of clause (ii) of this
definition of "Bankruptcy Loss," including, without limitation, any such
reduction that results in a permanent forgiveness of principal, or (ii) with
respect to any Loan, a valuation, by a court of competent jurisdiction in a case
under such Bankruptcy Code, of the related Mortgaged Property in an amount less
than the then outstanding Principal Balance of such Loan.

         BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a Depository Participant or an Indirect
Depository Participant or a Person holding a beneficial interest in any
Definitive Certificate.

         BOOK-ENTRY CERTIFICATES: The Class A Certificates and the Class M
Certificates, beneficial ownership and transfers of which shall be made through
book entries as described in Section 5.1 and Section 5.3.

         BUSINESS DAY: Any day other than a Saturday, a Sunday, or a day on
which banking institutions in Maryland, Minnesota or New York are authorized or
obligated by law or executive order to be closed.

                                      -7-

<PAGE>

         CAP CONTRACT: Shall mean the Cap Contract between the Trustee and Swiss
Re Financial Corporation, together with any successor thereto, for the benefit
of the Holders of the Class A-1 Certificates.

         CERTIFICATE: Any one of the Certificates issued pursuant to this
Agreement, executed and authenticated by or on behalf of the Securities
Administrator hereunder in substantially one of the forms set forth in Exhibits
A-1, A-2, A-3, A-4, A-5 and A-6 hereto.

         CERTIFICATE INSURER: Financial Guaranty Insurance Company, a New York
stock insurance corporation, organized and created under the laws of the State
of New York and its successors in interest.

         CERTIFICATE INSURER ACCOUNT: An account of the Certificate Insurer
maintained at JPMorgan Chase Bank (ABA No. 040300272), Account No. 90495181,
Attention: Deutsche Bank Mortgage Securities, Inc., Series 2004-5, or such other
account as may be designated by the Certificate Insurer to the Securities
Administrator in writing not less than five Business Days prior to the related
Distribution Date. Any wire transfers to the Certificate Insurer Account shall
reference the Policy No. of the Policy.

         CERTIFICATE INSURER DEFAULT: The existence and continuance of any of
the following:

          (a) The Certificate Insurer fails to make a payment required under the
     Policy in accordance with its terms; or

          (b)(i) the Certificate Insurer (A) files any petition or commences any
     case or proceeding under any provision or chapter of the Bankruptcy Code or
     any other similar federal or state law relating to insolvency, bankruptcy,
     rehabilitation, liquidation or reorganization, (B) makes a general
     assignment with respect to all or substantially all of its assets for the
     benefit of its creditors, or (C) has an order for relief entered against it
     under the Bankruptcy Code or any other similar federal or state law
     relating to insolvency, bankruptcy, rehabilitation, liquidation or
     reorganization which is final and nonappealable; or (ii) a court of
     competent jurisdiction, the New York Department of Insurance or other
     competent regulatory authority enters a final and nonappealable order,
     judgment or decree (A) appointing a custodian, trustee, agent or receiver
     for the Certificate Insurer or for all or any material portion of its
     property or (B) authorizing the taking of possession by a custodian,
     trustee, agent or receiver of the Certificate Insurer (or the taking of
     possession of all or any material portion of the property of the
     Certificate Insurer).

         CERTIFICATE INSURER PREMIUM: The Policy premium payable pursuant to
Section 4.1(a)(i)(A) hereof for each Distribution Date in an amount equal to the
Certificate Insurer Premium Rate accrued for one month, on the basis of a
360-day year consisting of twelve 30-day months, on the aggregate Certificate
Principal Balance of the Insured Certificates immediately prior to such
Distribution Date.

                                      -8-

<PAGE>

         CERTIFICATE INSURER PREMIUM RATE: The per annum rate at which the
Certificate Insurer Premium for the Policy is calculated, as set forth in the
Premium Letter (as defined in the Insurance Agreement).

         CERTIFICATE PRINCIPAL BALANCE: The Certificate Principal Balance with
respect to a Senior Certificate (other than the Class A-IO Certificates, which
have no Certificate Principal Balance), Class M Certificate or Class P
Certificate outstanding at any time, represents the then maximum amount that the
holder of such certificate is entitled to receive as distributions allocable to
principal from the cash flow on the Loans and the other assets in the Trust
Fund. The Certificate Principal Balance of a Senior Certificate, Class M
Certificate or Class P Certificate as of any date of determination is equal to
the initial Certificate Principal Balance of such Certificate reduced by the
aggregate of (i) all amounts allocable to principal previously distributed with
respect to that Certificate; provided, however, that solely for purposes of
determining the Certificate Insurer's rights as subrogee to the Holders of the
Insured Certificates, the Certificate Principal Balance of any Insured
Certificate shall be deemed not to be reduced by any principal amounts paid to
the Holder thereof from payments made by the Certificate Insurer under the
Policy, unless such amounts have been reimbursed to the Certificate Insurer
pursuant to Section 4.1(a)(i)(C) and 4.1(a)(ii)(B), and (ii) with respect to any
Class M Certificate, any reductions in the Certificate Principal Balance of such
Certificate deemed to have occurred in connection with allocations of Realized
Losses, if any, plus any Subsequent Recoveries added to the Certificate
Principal Balance of such Class M Certificate pursuant to Section 5.4. The
Certificate Principal Balance of the Class CE Certificates as of any date of
determination is equal to the excess, if any, of (i) the then aggregate
Principal Balance of the Loans over (ii) the then aggregate Certificate
Principal Balance of the Senior Certificates, the Class M Certificates and the
Class P Certificates. The initial Certificate Principal Balance of each Class of
Certificates is set forth in the Preliminary Statement hereto. When used in
reference to a Class, the term Certificate Principal Balance means the aggregate
of the Certificate Principal Balances of all Certificates of such Class, and
when used in reference to a group of Classes (such as the Class A Certificates,
Senior Certificates and Mezzanine Certificates) shall mean the aggregate
Certificate Principal Balances of all Classes of Certificates included in such
group.

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.3.

         CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor, the Master Servicer, the Securities Administrator, the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests necessary
to effect any such consent has been obtained. The Trustee or the Securities
Administrator may conclusively rely upon a certificate of the Depositor, the
Seller or the Master Servicer in determining whether a Certificate is held by an
Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee or the
Securities Administrator shall be

                                      -9-

<PAGE>

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 Depository Participant.

         CLASS: All Certificates having the same priority and rights to payments
from the Available Distribution Amount, designated as a separate Class under the
heading "REMIC III" in the preliminary statement, as set forth in the forms of
Certificates attached hereto as Exhibits A-1, A-2, A-3, A-4, A-5 and A-6, as
applicable.

         CLASS A CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class A-4A,
Class A-4B, Class A-5A, Class A-5B and Class A-IO Certificates, collectively,
and designated as such on the face thereof in substantially the forms attached
hereto as Exhibits A-1 or A-2, as applicable.

         CLASS A-4 CERTIFICATES: The Class A-4A Certificates and the Class A-4B
Certificates, collectively.

         CLASS A-5 CERTIFICATES: The Class A-5A Certificates and the Class A-5B
Certificates, collectively.

         CLASS A-5 LOCKOUT DISTRIBUTION AMOUNT: For any Distribution Date shall
be the Class A-5 Lockout Distribution Percentage for that Distribution Date
multiplied by the product of (x) a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-5 Certificates and the denominator
of which is the aggregate Certificate Principal Balance of all of the Senior
Certificates, in each case immediately prior to such Distribution Date and (y)
the Senior Principal Distribution Amount for such Distribution Date.

         CLASS A-5 LOCKOUT DISTRIBUTION PERCENTAGE: For each Distribution Date,
the applicable percentage set forth below:

                                                             CLASS A-5 LOCKOUT
                     DISTRIBUTION DATES                  DISTRIBUTION PERCENTAGE
  September 2004 through and including  August 2007                0%
  September 2007 through and including August 2009                45%
  September 2009 through and including August 2010                80%
  September 2010 through and including August 2011               100%
  September 2011 and thereafter                                  300%

         CLASS M CERTIFICATES: The Class M-1, Class M-2 and Class M-3
Certificates, collectively, and designated as such on the face thereof in
substantially the form attached hereto as EXHIBIT A-3.

         CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that

                                      -10-

<PAGE>

Distribution Date, the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Senior Principal Distribution Amount
or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, the lesser of:

     o    the remaining Principal Distribution Amount for that Distribution Date
          after distribution of the Senior Principal Distribution Amount; and

     o    the excess (if any) of (A) the Certificate Principal Balance of the
          Class M-1 Certificates immediately prior to that Distribution Date
          over (B) the positive difference between (i) the aggregate Principal
          Balance of the Loans as of the last day of the related Due Period
          (after reduction for Realized Losses incurred during the related
          Prepayment Period) and (ii) the sum of (x) the aggregate Certificate
          Principal Balance of the Class A Certificates (after taking into
          account the payment of the Senior Principal Distribution Amount for
          such Distribution Date) and (y) the product of (a) the aggregate
          Principal Balance of the Loans as of the last day of the related Due
          Period (after reduction for Realized Losses incurred during the
          related Prepayment Period) and (b) the sum of 5.80% and the Required
          Overcollateralization Percentage.

         CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Senior Principal Distribution Amount and the Class M-1 Principal
Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:

     o    the remaining Principal Distribution Amount for that Distribution Date
          after distribution of the Senior Principal Distribution Amount and the
          Class M-1 Principal Distribution Amount; and

     o    the excess (if any) of (A) the Certificate Principal Balance of the
          Class M-2 Certificates immediately prior to that Distribution Date
          over (B) the positive difference between (i) the aggregate Principal
          Balance of the Loans as of the last day of the related Due Period
          (after reduction for Realized Losses incurred during the related
          Prepayment Period) and (ii) the sum of (x) the aggregate Certificate
          Principal Balance of the Class A Certificates and the Class M-1
          Certificates (after taking into account the payment of the Senior
          Principal Distribution Amount and the Class M-1 Principal Distribution
          Amount for such Distribution Date) and (y) the product of (a) the
          aggregate Principal Balance of the Loans as of the last day of the
          related Due Period (after reduction for Realized Losses incurred
          during the related Prepayment Period) and (b) the sum of 2.50% and the
          Required Overcollateralization Percentage.

         CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Senior Principal Distribution Amount, the Class M-1 Principal Distribution

                                      -11-

<PAGE>

Amount and the Class M-2 Principal Distribution Amount or (ii) on or after the
Stepdown Date if a Trigger Event is not in effect for that Distribution Date,
the lesser of:

     o    the remaining Principal Distribution Amount for that Distribution Date
          after distribution of the Senior Principal Distribution Amount, the
          Class M-1 Principal Distribution Amount and the Class M-2 Principal
          Distribution Amount; and

     o    the excess (if any) of (A) the Certificate Principal Balance of the
          Class M-3 Certificates immediately prior to that Distribution Date
          over (B) the positive difference between (i) the aggregate Principal
          Balance of the Loans as of the last day of the related Due Period
          (after reduction for Realized Losses incurred during the related
          Prepayment Period) and (ii) the sum of (x) the aggregate Certificate
          Principal Balance of the Class A, Class M-1 and Class M-2 Certificates
          (after taking into account the payment of the Senior Principal
          Distribution Amount, the Class M-1 Principal Distribution Amount and
          the Class M-2 Principal Distribution Amount for such Distribution
          Date) and (y) the product of (a) the aggregate Principal Balance of
          the Loans as of the last day of the related Due Period (after
          reduction for Realized Losses incurred during the related Prepayment
          Period) and (b) the Required Overcollateralization Percentage.

         CLASS R CERTIFICATE: The Certificate designated as "Class R" on the
face thereof in substantially the form attached hereto as EXHIBIT A-6, which has
been designated as the sole class of "residual interests" in REMIC I, REMIC II
and REMIC III, respectively, pursuant to Section 2.4.

         CLASS R CERTIFICATEHOLDER: The registered Holder of the Class R
Certificate.

         CLEARING AGENCY: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
which initially shall be the Depository.

         CLOSING DATE: August 30, 2004.

         CODE: The Internal Revenue Code of 1986, as amended.

         COMPENSATING INTEREST: For any Distribution Date, (i) with respect to
each Servicer, an amount equal to the lesser of (a) the aggregate Prepayment
Interest Shortfalls and Curtailment Shortfalls for the Loans serviced by such
Servicer for such Distribution Date and (b) the Servicing Fee payable to such
Servicer for such Distribution Date and (ii) with respect to the Master
Servicer, the amount described in Section 3.20 for such Distribution Date.

         COMPONENT R-1: The uncertificated residual interest in REMIC I.

         COMPONENT R-2: The uncertificated residual interest in REMIC II.

         COMPONENT R-3: The uncertificated residual interest in REMIC III.

                                      -12-

<PAGE>

         CORPORATE TRUST OFFICE: The principal corporate trust office of the
Trustee or the Securities Administrator, as the case may be, at which at any
particular time its corporate trust business in connection with this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at (i) with respect to the Trustee, HSBC Bank USA,
National Association, 452 Fifth Avenue, New York, New York 10018, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Securities
Administrator, or (ii) with respect to the Securities Administrator, (A) for
Certificate transfer and surrender purposes, Wells Fargo Bank, N.A., Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: DMSI
2004-5 and (B) for all other purposes, Wells Fargo Bank, N.A., 9062 Old
Annapolis Road, Columbia, Maryland 21045, Attention: DMSI 2004-5, or at such
other address as the Securities Administrator may designate from time to time by
notice to the Certificateholders, the Depositor, the Master Servicer and the
Trustee.

         CORRESPONDING CERTIFICATE: With respect to:

         (i) REMIC II Regular Interest LTII-A1, the Class A-1 Certificates,

         (ii) REMIC II Regular Interest LTII-A2, the Class A-2 Certificates,

         (iii) REMIC II Regular Interest LTII-A3, the Class A-3 Certificates,

         (iv) REMIC II Regular Interest LTII-A4A, the Class A-4A Certificates,

         (v) REMIC II Regular Interest LTII-A4B, the Class A-4B Certificates,

         (vi) REMIC II Regular Interest LTII-A5A, the Class A-5A Certificates,

         (vii) REMIC II Regular Interest LTII-A5B, the Class A-5B Certificates,

         (viii) REMIC II Regular Interest LTII-M1, the Class M-1 Certificates,

         (ix) REMIC II Regular Interest LTII-M2, the Class M-2 Certificates,

         (x) REMIC II Regular Interest LTII-M3, the Class M-3 Certificates, and

         (xi) REMIC II Regular Interest LTII-P, the Class P Certificates.

         CREDIT ENHANCEMENT PERCENTAGE: For any Class of Certificates and any
Distribution Date, the percentage by dividing (x) the sum of (i) the aggregate
Certificate Principal Balances of the Class or Classes of Certificates
subordinate to such Certificate and (ii) the Overcollateralization Amount by (y)
the aggregate Principal Balance of the Loans, calculated after taking into
account the principal portion of Monthly Payments on the Loans 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 incurred on the Loans during the related
Prepayment Period, and distribution of the Principal Distribution Amount to the
Certificates then entitled to distributions of principal on such Distribution
Date.

                                      -13-

<PAGE>

         CREDIT RISK MANAGEMENT AGREEMENT OR CREDIT RISK MANAGEMENT AGREEMENTS:
Each agreement between the Credit Risk Manager and a Servicer or the 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 any Credit Risk Management Agreement, which amount
shall equal one twelfth of the product of (i) the Credit Risk Management Fee
Rate multiplied by (ii) the Scheduled Principal Balance of the Loans and any
related REO Properties as of the first day of the related Due Period.

         CREDIT RISK MANAGEMENT FEE RATE: 0.01% per annum.

         CREDIT RISK MANAGER: The Murrayhill Company, a Colorado corporation,
and its successors and assigns.

         CURTAILMENT: Any voluntary payment of principal on a Loan, made by or
on behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid
Monthly Payment or a Payoff, which is applied to reduce the outstanding
Principal Balance of the Loan.

         CURTAILMENT SHORTFALL: With respect to any Distribution Date and any
Curtailment received during the related Prepayment Period, an amount equal to
one month's interest on such Curtailment at the applicable Mortgage Interest
Rate on such Loan, net of the related Servicing Fee Rate.

         CUSTODIAL AGREEMENT: The Custodial Agreement dated as of August 1,
2004, among the Trustee, Wells Fargo as Custodian, GMAC, M&T, and GreenPoint 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 Loan
subject to this Agreement.

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

         CUT-OFF DATE: August 1, 2004; except that with respect to each
Substitute Loan, the Cut-Off Date shall be the date of substitution.

         DEFINITIVE CERTIFICATES: As defined in Section 5.3.

         DELETED LOAN: A Loan replaced or to be replaced by a Substitute 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 Principal
Balance of all 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 Principal Balance of the Loans and REO Properties as
of the last day of the previous calendar month.

                                      -14-
<PAGE>

         DEPOSITOR: Deutsche Mortgage Securities, Inc., a Delaware corporation,
or its successor-in-interest.

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

         DEPOSITORY AGREEMENT: The Letter of Representations, dated August __,
2004 by and among the Depository, the Depositor and the Trustee.

         DEPOSITORY PARTICIPANT: A broker, dealer, bank, other financial
institution or other Person for whom the Depository effects book-entry transfers
and pledges of securities deposited with the Depository.

         DETERMINATION DATE: With respect to each Servicer, the day of the month
set forth as the Determination Date in the related Servicing Agreement.

         DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code, and, for purposes of Article V herein, any
Person which is not a Permitted Transferee; provided, that a Disqualified
Organization does not include any Pass-Through Entity which owns or holds a
Class R Certificate and if which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary. DISTRIBUTION ACCOUNT:
The trust account or accounts created and maintained by the Securities
Administrator pursuant to Section 3.23 for the benefit of the Certificateholders
and the Certificate Insurer and designated "Wells Fargo Bank, N.A., as
Securities Administrator, in trust for registered holders of Deutsche Mortgage
Securities, Inc. Mortgage Loan Trust, Series 2004-5". Funds in the Distribution
Account shall be held in trust for the Certificateholders and the Certificate
Insurer for the uses and purposes set forth in this Agreement. The Distribution
Account must be an Eligible Account.

         DISTRIBUTION ACCOUNT DEPOSIT DATE: With respect to any Distribution
Date, the Business Day prior to such Distribution Date.

         DISTRIBUTION DATE: The 25th day (or, if such 25th day is not a Business
Day, the Business Day immediately succeeding such 25th day) of each month, with
the first such date being September 27, 2004.

         DUE DATE: The first day of each calendar month, which is the day on
which the Monthly Payment for each Loan is due, exclusive of any days of grace.
The "related Due Date" for any Distribution Date is the Due Date immediately
preceding such Distribution Date.

         DUE PERIOD: With respect to any Distribution Date and the Loans, other
than the Loans serviced by M&T, 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

                                      -15-

<PAGE>

month in which such Distribution Date occurs; and with respect to the Loans
serviced by M&T, the calendar month preceding the month in which such
Distribution Date occurs.

         ELIGIBLE ACCOUNT: Any account or accounts held and established by the
Securities Administrator in trust for the Certificateholders at any Eligible
Institution.

         ELIGIBLE INSTITUTION: An institution having (i) the highest short-term
debt rating, and one of the two highest long-term debt ratings of each Rating
Agency, (ii) with respect to the Distribution Account, an unsecured long-term
debt rating of at least one of the two highest unsecured long-term debt ratings
of each Rating Agency, or (iii) the approval of each Rating Agency.

         ELIGIBLE INVESTMENTS: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date (or, with respect to the
Distribution Account maintained with the Securities Administrator, having a
scheduled maturity on or before the following Distribution Date; provided that,
such Eligible Investments shall be managed by, or an obligation of, the
institution that maintains the Distribution Account if such Eligible Investments
mature on the Distribution Date), regardless of whether any such obligation is
issued by the Depositor, the applicable Servicer, the Trustee, the Master
Servicer, the Securities Administrator or any of their respective Affiliates and
having at the time of purchase, or at such other time as may be specified, the
required ratings, if any, provided for in this definition:

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

         (b) direct obligations of, or guaranteed as to timely payment of
principal and interest by, Freddie Mac, Fannie Mae or the Federal Farm Credit
System, provided, that any such obligation, at the time of purchase or
contractual commitment providing for the purchase thereof, is qualified by each
Rating Agency as an investment of funds backing securities rated "AAA" in the
case of S&P and Moody's (the initial rating of the Class A Certificates);

         (c) demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, provided, that the short-term deposit ratings
and/or long-term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institutions in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company) have, in the case of commercial paper, the
highest rating available for such securities by each Rating Agency and, in the
case of long-term unsecured debt obligations, one of the two highest ratings
available for such securities by each Rating Agency, or in each case such lower
rating as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating Agency but in
no event less than the initial rating of the Senior Certificates;

         (d) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving one of the two highest
long-term debt ratings

                                      -16-

<PAGE>

available for such securities by each Rating Agency, or such lower rating as
will not result in the downgrading or withdrawal of the rating or ratings then
assigned to any Class of Certificates by any Rating Agency;

         (e) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) that is rated by each Rating Agency in its highest
short-term unsecured rating category at the time of such investment or
contractual commitment providing for such investment, and is issued by a
corporation the outstanding senior long-term debt obligations of which are then
rated by each Rating Agency in one of its two highest long-term unsecured rating
categories, or such lower rating as will not result in the downgrading or
withdrawal of the rating or ratings then assigned to any Class of Certificates
by any Rating Agency but in no event less than the initial rating of the Senior
Certificates;

         (f) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in one of the two highest rating levels
available to such issuers by each Rating Agency at the time of such investment,
provided, that any such agreement must by its terms provide that it is
terminable by the purchaser without penalty in the event any such rating is at
any time lower than such level;

         (g) repurchase obligations with respect to any security described in
clause (a) or (b) above entered into with a depository institution or trust
company (acting as principal) meeting the rating standards described in (c)
above;

         (h) 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 rated by each Rating Agency in one of its two highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding principal amount
of securities issued by such corporation that are then held as part of the
Distribution Account to exceed 20% of the aggregate principal amount of all
Eligible Investments then held in the Distribution Account;

         (i) units of taxable money market funds (including those for which the
Trustee, the Securities Administrator, the Master Servicer or any affiliate
thereof receives compensation with respect to such investment) which funds have
been rated by each Rating Agency rating such fund in its highest rating category
or which have been designated in writing by each Rating Agency as Eligible
Investments with respect to this definition;

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

                                      -17-

<PAGE>

         (k) such other obligations as are acceptable as Eligible Investments to
each Rating Agency;

provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.

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

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

         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.

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

         GMAC: GMAC Mortgage Corporation, or any successor thereto.

         GMAC SERVICING AGREEMENT: The Servicing Agreement, dated as of April 1,
2004 between the Seller and GMAC, as modified pursuant to the related Assignment
Agreement.

         GREENPOINT: GreenPoint Mortgage Funding, Inc. or any successor thereto.

         GREENPOINT SERVICING AGREEMENT: The Master Mortgage Loan Purchase and
Servicing Agreement, dated as of February 1, 2004, between the Seller and
GreenPoint, as amended by Amendment Number One, dated as of April 1, 2004,
between the Seller and GreenPoint (as modified pursuant to the related
Assignment Agreement).

         GUARANTEED DISTRIBUTION: With respect to any Insured Certificates and
any Distribution Date, as defined in the Policy.

         GUARANTEED DISTRIBUTIONS SHORTFALL: With respect to (i) any
Distribution Date, the amount, if any, by which the Interest Remittance Amount
is less than the Senior Interest Distribution Amount for the Insured
Certificates for such Distribution Date and (ii) on the Final Distribution Date
(as defined in the Policy), the Certificate Principal Balance of the Insured
Certificates to the extent unpaid on such date (after giving effect to all
distributions made on the Insured Certificates on such Final Distribution Date
other than distributions of any amounts paid under the Policy).

                                      -18-
<PAGE>

         INDEPENDENT: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor, each Servicer, the
Master Servicer, the Securities Administrator and the Certificate Insurer, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Depositor, any Servicer, the Master Servicer, the Securities
Administrator or the Certificate Insurer or any Affiliate of any such party and
(iii) is not connected with the Depositor, any Servicer, the Master Servicer,
the Securities Administrator or the Certificate Insurer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.

         INDIRECT DEPOSITORY PARTICIPANTS: Entities such as banks, brokers,
dealers or trust companies that clear through or maintain a custodial
relationship with a Depository Participant, either directly or indirectly.

         INSURANCE AGREEMENT: The Insurance and Indemnity Agreement, dated as of
August 30, 2004, among the Certificate Insurer, the Trustee, the Seller and the
Depositor.

         INSURANCE PROCEEDS: Proceeds of any title policy, hazard policy,
mortgage guaranty policy or other insurance policy covering a Loan, to the
extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
applicable Servicing Agreement.

         INSURED CERTIFICATES: The Class A-4A, Class A-5A, and Class A-5B
Certificates.

         INTEREST ACCRUAL PERIOD: With respect to the Certificates, other than
the Class A-1, Class P and Class R Certificates, and each Distribution Date, the
calendar month preceding the month in which that Distribution Date occurs. The
Interest Accrual Period for the Class A-1 Certificates shall be (a) as to the
Distribution Date in September 2004, the period commencing on the Closing Date
and ending on the day preceding the Distribution Date in September 2004, and (b)
as to any Distribution Date after the Distribution Date in September 2004, the
period commencing on the Distribution Date in the month immediately preceding
the month in which that Distribution Date occurs and ending on the day preceding
that Distribution Date. Interest on the Certificates, other than the Class A-1,
Class P and Class R Certificates, will be calculated based on a 360-day year
consisting of twelve 30-day months. Interest on the Class A-1 Certificates will
be calculated based on a 360-day year and the actual number of days elapsed in
the related Interest Accrual Period.

         INTEREST CARRY FORWARD AMOUNT: With respect to any Distribution Date
and any Class of Class A Certificates or Class M Certificates, the sum of (i)
the amount, if any, by which (a) the Interest Distribution Amount for such Class
of Certificates as of the immediately preceding Distribution Date exceeded (b)
the actual amount distributed on such Class of Certificates in respect of
interest on such immediately preceding Distribution Date and (ii) the amount of
any Interest Carry Forward Amount for such Class of Certificates 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 DISTRIBUTION AMOUNT: On any Distribution Date, for any Class
of Certificates (other than the Class P Certificates and the Class R
Certificates), the amount of interest accrued

                                      -19-

<PAGE>

during the related Interest Accrual Period on the Certificate Principal Balance
or Notional Amount of that Class which shall be an amount, not less than zero,
equal to (a) the product of (1) 1/12th of the Pass-Through Rate for such Class
and (2) the Certificate Principal Balance or Notional Amount, as applicable, for
such Class before giving effect to allocations of Realized Losses in connection
with such Distribution Date or distributions to be made on such Distribution
Date, REDUCED BY (b) Uncompensated Interest Shortfalls allocated to such Class
pursuant to Section 1.2 and with respect to the Class M Certificates and Class
CE Certificates, the interest portion of Realized Losses allocated to such Class
pursuant to Section 1.2.

         INTEREST REMITTANCE AMOUNT: With respect to any Distribution Date is
that portion of the Available Distribution Amount attributable to interest
received or advanced on the Loans.

         INVESTMENT WITHDRAWAL DISTRIBUTION DATE: As defined in Section 3.23(c).

         LATE PAYMENT RATE: As defined in the Insurance Agreement.

         LAST SCHEDULED DISTRIBUTION DATE: The Distribution Date in July 2034.

         LIBOR: For the initial Interest Accrual Period, on the Closing Date,
the Securities Administrator will determine the One-Month LIBOR for such
Interest Accrual Period based on information available on the second business
day preceding the Closing Date with respect to the Class A-1 Certificates, and
for any Interest Accrual Period thereafter, the one month rate which appears on
the Dow Jones Telerate System, page 3750, as of 11:00 a.m., London time on the
LIBOR Determination Date. If such rate is not provided, LIBOR shall mean the
rate determined by the Securities Administrator (or a calculation agent on its
behalf) in accordance with the following procedure:

         (i) The Securities Administrator on the LIBOR Determination Date will
request the principal London offices of each of four major Reference Banks in
the London interbank market, as selected by the Securities Administrator, to
provide the Securities Administrator with its offered quotation for deposits in
United States dollars for the upcoming one-month period, commencing on the
second LIBOR Business Day immediately following such LIBOR Determination Date,
to prime banks in the London interbank market at approximately 11:00 a.m. London
time on such LIBOR Determination Date and in a principal amount that is
representative for a single transaction in United States dollars in such market
at such time. If at least two such quotations are provided, LIBOR determined on
such LIBOR Determination Date will be the arithmetic mean of such quotations.

         (ii) If fewer than two quotations are provided, LIBOR determined on
such LIBOR Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m. in New York City on such LIBOR Determination Date by
three major banks in New York City selected by the Securities Administrator for
one-month United States dollar loans to lending European banks, in a principal
amount that is representative for a single transaction in United States dollars
in such market at such time; provided, however, that if the banks so selected by
the Securities Administrator are not quoting as mentioned in this sentence,
LIBOR determined on such LIBOR Determination Date will continue to be LIBOR as
then currently in effect on such LIBOR Determination Date.

                                      -20-

<PAGE>

         The establishment of LIBOR and each Pass-Through Rate for the Class A-1
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Class A-1
Certificate and the Securities Administrator.

         LIBOR BUSINESS DAY: Any day on which dealings in United States dollars
are transacted in the London interbank market.

         LIBOR DETERMINATION DATE: The second LIBOR Business Day before the
first day of the related Interest Accrual Period.

         LIQUIDATED LOAN: A Loan as to which the related Servicer has determined
in accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust Fund shall
not constitute final liquidation of the related Loan.

         LIQUIDATION PROCEEDS: The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the applicable Servicer pursuant to the related
Servicing Agreement or the Master Servicer in connection with (i) the taking of
all or a part of a Mortgaged Property by exercise of the power of eminent domain
or condemnation, (ii) the liquidation of a defaulted Loan through a trustee's
sale, foreclosure sale or otherwise, or (iii) the repurchase, substitution or
sale of a Loan or an REO Property pursuant to or as contemplated by Section 2.3
or Section 9.1.

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

         LOAN SCHEDULE: The schedule, as amended from time to time, of Loans,
attached hereto as Schedule One, which shall set forth as to each Loan the
following, among other things:

     (i)  the loan number of the Loan and name of the related Mortgagor;

     (ii) the street address of the Mortgaged Property including city, state and
          zip code;

     (iii) the Mortgage Interest Rate as of the Cut-Off Date;

     (iv) the original term and maturity date of the related Mortgage Note;

     (v)  the original Principal Balance;

     (vi) the first payment date;

     (vii) the Monthly Payment in effect as of the Cut-Off Date;

     (viii) the date of the last paid installment of interest;

                                      -21-

<PAGE>

     (ix) the unpaid Principal Balance as of the close of business on the
          Cut-Off Date;

     (x)  the Loan-to-Value ratio at origination;

     (xi) the type of property and the Original Value of the Mortgaged Property;

     (xii) whether a primary mortgage insurance policy is in effect as of the
          Cut-Off Date;

     (xiii) the nature of occupancy at origination; and

     (xiv) a code indicating whether the Loan is subject to Prepayment Charge,
          the term of such Prepayment Charge and the amount of such Prepayment
          Charge.

         LOANS: The Mortgages and the related Mortgage Notes, each transferred
and assigned to the Trustee pursuant to the provisions hereof as from time to
time are held as part of the Trust Fund, as so identified in the Loan Schedule.
Each of the Loans is referred to individually in this Agreement as a "Loan".

         LOAN-TO-VALUE RATIO: The original principal amount of a Loan divided by
the Original Value; however, references to "current Loan-to-Value Ratio" shall
mean the then current Principal Balance of a Loan divided by the Original Value.

         M&T: M&T Mortgage Corporation, a New York banking corporation, or any
successor thereto.

         M&T SERVICING AGREEMENT: The Interim Servicing and Servicing Rights
Purchase Agreement, dated as of March 1, 2004 between the Seller and M&T (as
modified pursuant to the related Assignment Agreement).

         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 Uncertificated REMIC II Pass-Through Rate for each of REMIC II Regular
Interest LTII-A1, REMIC II Regular Interest LTII-A2, REMIC II Regular Interest
LTII-A3, REMIC II Regular Interest LTII-A4A, REMIC II Regular Interest LTII-A4B,
REMIC II Regular Interest LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II
Regular Interest LTII-M1, Regular Interest LTII-M2, Regular Interest LTII-M3 and
Regular Interest LTII-ZZ, with the rate on each such REMIC II Regular Interest
(other than REMIC II Regular Interest LTII-ZZ) subject to a cap equal to
Pass-Through Rate for the Corresponding Certificate, and with the rate on REMIC
II Regular Interest LTII-ZZ subject to a cap of zero for the purpose of this
calculation; provided however, each such cap for REMIC II Regular Interest
LTII-A1 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.

                                      -22-

<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 EVENT OF DEFAULT: One or more of the events described
in Section 7.1 hereof.

         MASTER SERVICING FEE: As to each Loan and any Distribution Date, an
amount equal to one twelfth of the product of the Master Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Loan as of the Due Date in
the month preceding the month of such Distribution Date.

         MASTER SERVICING FEE RATE: 0.005% per annum.

         MEZZANINE CERTIFICATES: The Class M-1, Class M-2 and Class M-3
Certificates.

         MONTHLY PAYMENT: The scheduled payment of principal and interest on a
Loan which is due on any Due Date for such Loan after giving effect to any
reduction in the amount of interest collectible from any Mortgagor pursuant to
the Relief Act.

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

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

         MORTGAGE FILE: The Loan Documents pertaining to a particular Loan.

         MORTGAGE INTEREST RATE: For any Loan, the per annum rate at which
interest accrues on such Loan pursuant to the terms of the related Mortgage Note
without regard to any reduction thereof as a result of the Relief Act.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of August 30, 2004, between the Depositor and the Seller.

         MORTGAGE NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Loan.

         MORTGAGE POOL: All of the Loans.

         MORTGAGED PROPERTY: With respect to any Loan, the real property,
together with improvements thereto, securing the indebtedness of the Mortgagor
under the related Loan.

         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 and (ii) the excess of (x)
the Available Distribution Amount over (y) the sum for such Distribution Date of
(A) the aggregate Senior Interest Distribution Amounts payable to the holders of
the Senior Certificates, (B) the aggregate Interest

                                      -23-

<PAGE>

Distribution Amounts payable to the holders of the Class M Certificates, (C) the
Principal Remittance Amount and (D) the Certificate Insurer Premium.

         NET MORTGAGE RATE: For each Loan and for any date of determination, a
per annum rate equal to the Mortgage Interest Rate for such Loan less the
related Servicing Fee Rate, the Master Servicing Fee Rate, the Credit Risk
Management Fee Rate and the rate at which the premium payable in connection with
any lender paid primary mortgage insurance policy is paid, if applicable.

         NET WAC PASS-THROUGH RATE: With respect to the Offered Certificates
(other than the Class A-IO Certificates), (a) for the September 2004
Distribution Date through the August 2006 Distribution Date, a per annum rate
equal to (1) the weighted average of the Net Mortgage Rates of the Loans as of
the first day of the month preceding the month in which such Distribution Date
occurs minus (2) the Pass-Through Rate for the Class A-IO Certificates for such
Distribution Date multiplied by a fraction, the numerator of which is the
Notional Amount of the Class A-IO Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate Principal
Balance of the Loans before giving effect to distributions on such Distribution
Date, minus (3) with respect to the Class A-4A, Class A-5A and Class A-5B
Certificates, the Certificate Insurer Premium Rate payable to the Certificate
Insurer for providing the Policy, multiplied by a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the Class A-4A, Class
A-5A and Class A-5B Certificates and the denominator of which is the aggregate
Principal Balance of the Loans and (b) for each Distribution Date thereafter,
the weighted average of the Net Mortgage Rates of the Loans as of the first day
of the month preceding the month in which such Distribution Date occurs minus,
with respect to the Class A-4A, Class A-5A and Class A-5 Certificates, the
Certificate Insurer Premium Rate payable to the Certificate Insurer for
providing the Policy, multiplied by a fraction, the numerator of which is the
aggregate Certificate Principal Balance of the Class A-4A, Class A-5A and Class
A-5B Certificates and the denominator of which is the aggregate Principal
Balance of the Loans. The Net WAC Pass-Through Rate with respect to the Class
A-1 Certificates shall be subject to adjustment based on the actual number of
days elapsed in the related Interest Accrual Period. For United States federal
income tax purposes, the Net WAC Pass-Through Rate, with respect to any
Distribution Date, shall be expressed as the weighted average of the
Uncertificated REMIC II Pass-Through Rates on each REMIC II Regular Interest
(other than REMIC II Regular Interest LTII-IO-A and REMIC II Regular Interest
LTII-IO-B) weighted on the basis of the Uncertificated Principal Balance of the
REMIC II Regular Interests. With respect to the Class A-4A, Class A-5A and Class
A-5B Certificates, the Net WAC Rate shall be reduced by the Certificate Insurer
Premium Rate multiplied by a fraction, the numerator of which is the aggregate
Certificate Principal Balance of the Class A-4A, Class A-5A and Class A-5B
Certificates and the denominator of which is the aggregate Principal Balance of
the Loans.

         NET WAC RATE CARRYOVER AMOUNT: With respect to any Class A Certificate
(other than the Class A-IO Certificates) or Class M Certificate and any
Distribution Date on which the pass-through rate is limited to the related Net
WAC Pass-Through Rate, an amount equal to the sum of (i) the excess of (x) the
amount of interest the Class A Certificate or Class M Certificate would have
been entitled to receive on such Distribution Date if the Net WAC Pass-Through
Rate had not been applicable to such Certificates on such Distribution Date over
(y) the amount

                                      -24-

<PAGE>

of interest accrued on such Distribution Date at the related Net WAC
Pass-Through Rate plus (ii) the related Net WAC Rate Carryover Amount for the
previous Distribution Date not previously distributed together with interest
thereon at a rate equal to the related Pass-Through Rate for such Class of
Certificates for the most recently ended Interest Accrual Period determined
without taking into account the related Net WAC Pass-Through Rate.

         NONRECOVERABLE ADVANCE: With respect to any Loan, any Advance or
Servicing Advance which the related Servicer shall have determined to be a
Nonrecoverable Advance as defined in and pursuant to the related Servicing
Agreement, or which the Master Servicer shall have determined to be
nonrecoverable pursuant to Section 4.4, respectively, and which was or is
proposed to be made by such Servicer or the Master Servicer.

         NON-U.S. PERSON: A Person that is not a U.S. Person.

         NOTIONAL AMOUNT: With respect to the Class A-IO Certificates will be as
follows: the lesser of (x) from and including the 1st Distribution Date through
and including the 6th Distribution Date, $60,771,000; from and including the 7th
Distribution Date through and including the 12th Distribution Date, $48,617,000;
from and including the 13th Distribution Date through and including the 18th
Distribution Date, $36,462,000; from and including the 18th Distribution Date
through and including the 24th Distribution Date, $24,309,000; thereafter $0 and
(y) the then aggregate principal balance of the Loans (prior to 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). For United States federal income tax purposes,
the Class A-IO Certificates will not have a Notional Amount, but will be
entitled to 100% of amounts distributed on REMIC II Regular Interest LTII-IO-A
and REMIC II Regular Interest LTII-IO-B. With respect to the Class CE
Certificates, immediately prior to any Distribution Date, the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests (other than
REMIC II Regular Interest LTII-P, REMIC II Regular Interest LTII-IO-A and REMIC
II Regular Interest LTII-IO-B).

         OFFICER'S CERTIFICATE: With respect to any Person, a certificate signed
by the Chairman of the Board, the President or a Vice-President, however
denominated, of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.

         OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, a 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.

         ORIGINAL VALUE: With respect to any Loan other than a Loan originated
for the purpose of refinancing an existing mortgage debt, the lesser of (a) the
Appraised Value (if any) of the Mortgaged Property at the time the Loan was
originated or (b) the purchase price paid for the Mortgaged Property by the
Mortgagor. With respect to a Loan originated for the purpose of refinancing
existing mortgage debt, the Original Value shall be equal to the lesser of (a)
the

                                      -25-

<PAGE>

Appraised Value of the Mortgaged Property at the time the Loan was originated or
(b) the appraised value at the time the refinanced mortgage debt was incurred.

         OTS: The Office of Thrift Supervision, or any successor thereto.

         OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date
following the Closing Date, the excess, if any, of (a) the aggregate Principal
Balances of the Loans and REO Properties immediately following such Distribution
Date over (b) the sum of the aggregate Certificate Principal Balances of the
Senior Certificates, the Class M Certificates and the Class P Certificates as of
such Distribution Date (after taking into account all payments of principal on
such Distribution Date).

         OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution
Date, the amount, if any, by which the Required Overcollateralization Amount
exceeds the Overcollateralization Amount (calculated for this purpose only after
assuming that 100% of the Principal Remittance Amount on such Distribution Date
has been distributed).

         OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any
Distribution Date, the lesser of (i) the Principal Remittance Amount and (ii)
the excess, if any, of (a) the Overcollateralization Amount for such
Distribution Date (calculated for this purpose only after assuming that 100% of
the Principal Remittance Amount on such Distribution Date has been distributed)
over (b) the Required Overcollateralization 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: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including any
interest in a Residual Certificate as the Holder thereof and any other interest
therein whether direct or indirect, legal or beneficial, as owner or as pledge.

         PASS-THROUGH ENTITY: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.

         PASS-THROUGH RATE: With respect to the Class A Certificates (other than
the Class A-IO Certificates) and Class M Certificates and any Distribution Date,
the lesser of (i) the interest rate listed in the Preliminary Statement hereto
and (ii) the Net WAC Pass-Through Rate; provided, that with respect to the Class
A-4, Class A-5 and Class M Certificates, the interest rate listed in the
Preliminary Statement hereto shall be increased by 0.50% per annum on the
Distribution Date following the first possible optional termination date
pursuant to Section 9.1(b). With respect to the Class A-IO Certificates (i) for
the first twelve Distribution Dates, 4.50% per annum, (ii) for the next twelve
Distribution Dates, 3.50% per annum and (iii) for any Distribution Date
thereafter, 0.00%. For United States federal income tax purposes, however, the
Class A-IO Certificates will not have a Class A-IO Pass-Through Rate, and the
Interest Distribution Amount for the Class A-IO Certificates and any
Distribution Date will be deemed to be 100% of the amount distributed on REMIC
II Regular Interest LTII-IO-A and REMIC II Regular Interest LTII-IO-B for such
Distribution Date.

                                      -26-

<PAGE>

         With respect to the Class CE Certificates, on any Distribution Date, a
per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is (x) the sum of the amounts calculated pursuant to clauses (A)
through (M) below, and the denominator of which is (y) the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests (other than
REMIC II Regular Interest LTII-P). For purposes of calculating the Pass-Through
Rate for the Class CE Certificates, the numerator is equal to the sum of the
following components:

         (A) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-AA;

         (B) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-A1;

         (C) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-A2;

         (D) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-A3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-A3;

         (E) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-A4A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-A4A;

         (F) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-A4B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-A4B;

         (G) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-A5A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-A5A;

         (H) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-A5B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-A5B;

         (I) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-M1;

         (J) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-M2;

                                      -27-

<PAGE>

         (K) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-M3;

         (L) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular
Interest LTII-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-ZZ; and

         (M) 100% of the interest distributable on REMIC II Regular Interest
LTII-P.

         PAYOFF: Any voluntary payment of principal on a Loan by a Mortgagor
equal to the entire outstanding Principal Balance of such Loan, if received in
advance of the last scheduled Due Date for such Loan and is not accompanied by
scheduled interest due on any date or dates in any month or months subsequent to
the month of such payment-in-full.

         PERCENTAGE INTEREST: With respect to any Class of Certificates (other
than the Residual Certificates) and any date of determination, 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. Each Certificate is issuable only in minimum
Percentage Interests corresponding to the Authorized Denomination of the related
Class of Certificates; provided, however, that a single Certificate of each such
Class of Certificates may be issued having a Percentage Interest corresponding
to the remainder of the aggregate initial Certificate Principal Balance 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, is as set forth on the
face of such Certificate.

         PERMITTED TRANSFEREE: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing, (ii) a foreign government or International Organization, or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any electing large partnership under Section 775
of the Code, (vi) any Person from whom the Trustee or the Securities
Administrator has not received an affidavit to the effect that it is not a
"disqualified organization" within the meaning of Section 860E(e)(5) of the
Code, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the transfer of an Ownership Interest in a Residual
Certificate to such Person may cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in Code Section 7701 or successor provisions. A corporation
shall not be treated as an instrumentality of the United States or of any State
or political subdivision thereof if all of its activities are subject to tax,
and, with the exception of the Freddie Mac, a majority of its board of directors
is not selected by such governmental unit.

                                      -28-

<PAGE>

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

         PLAN: As defined in Section 5.3.

         POLICY: The Certificate Guaranty Insurance Policy No. 04030027 issued
by the Certificate Insurer in respect of the Insured Certificates, including any
endorsements thereto.

         POLICY PAYMENTS ACCOUNT: The account created and maintained by the
Securities Administrator pursuant to Section 12.4 hereof, which shall be
entitled "Wells Fargo Bank, N.A, as Securities Administrator, in trust for the
registered holders of Deutsche Bank Mortgage Securities, Inc., Mortgage
Pass-Through Certificates, Series 2004-5, Class A-4A, Class A-5A and Class A-5B
Certificates." The Policy Payments Account must be an Eligible Account.

         PREPAID MONTHLY PAYMENT: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Loan on its scheduled
Due Date and held in the related Protected Account until the related Servicer
Remittance Date following its scheduled Due Date.

         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 Loan pursuant to the terms of the related Mortgage
Note.

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

     (i)  the Loan identifying number;

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

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

     (iv) the term of the related Prepayment Charge;

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

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

         PREPAYMENT INTEREST SHORTFALL: For any Distribution Date and any Loan
on which a Payoff was made by a Mortgagor during the related Prepayment Period,
an amount equal to one month's interest at the applicable Net Mortgage Rate on
such Loan less the amount of interest actually paid by the Mortgagor with
respect to such Payoff.

                                      -29-

<PAGE>

         PREPAYMENT PERIOD: For any Distribution Date and the Loans serviced by
M&T, the period beginning on the 16th day of the month preceding the month in
which such Distribution Date occurs and ending on the 15th day of the month in
which such Distribution Date occurs with respect to Payoffs, and the calendar
month immediately preceding the month in which such Distribution Date occurs
with respect to Curtailments. For any Distribution Date and the Loans serviced
by GreenPoint and GMAC, the calendar month immediately preceding the month in
which such Distribution Date occurs.

         PRINCIPAL BALANCE: For any Loan and at the time of any determination,
the principal balance of such Loan remaining to be paid at the close of business
on the Cut-Off Date, after deduction of all principal payments due on or before
the Cut-Off Date whether or not received, reduced by the principal portion of
all amounts received with respect to such Loan after the Cut-Off Date and
distributed or to be distributed to Certificateholders through the Distribution
Date in the month of such determination. In the case of a Substitute Loan,
"Principal Balance" shall mean, at the time of any determination, the principal
balance of such Substitute Loan on the related Cut-Off Date, reduced by the
principal portion of all amounts received with respect to such Loan after the
Cut-Off Date and distributed or to be distributed to Certificateholders through
the Distribution Date in the month of determination. The Principal Balance of a
Liquidated Loan shall be zero.

         PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution Date, the sum of (i)
the principal portion of all scheduled Monthly Payments on the Loans due during
the related Due Period, whether or not received on or prior to the related
Determination Date, (ii) the principal portion of repurchase proceeds received
with respect to any Loan which was repurchased by the Depositor pursuant to a
Purchase Obligation or as permitted by this Agreement (or, in the case of a
substitution, certain amounts representing a principal adjustment) during the
related Prepayment Period and (iii) the principal portion of all other
unscheduled collections which were received with respect to any Loan during the
applicable Prepayment Period, including Liquidation Proceeds, Insurance
Proceeds, Subsequent Recoveries and all Curtailments and Payoffs, to the extent
applied as recoveries of principal on the Loans; minus (iv) the amount of any
Overcollateralization Reduction Amount for such Distribution Date and any
amounts payable or reimbursable therefrom to the Servicers, the Trustee, the
Custodian, the Master Servicer or the Securities Administrator prior to
distributions being made on the Certificates. In no event will the Principal
Distribution Amount with respect to any Distribution Date be (x) less than zero
or (y) greater than the outstanding Certificate Principal Balance of the Class
A, the Class M and the Class P Certificates.

         PRINCIPAL PREPAYMENT: Any payment of principal on a Loan which
constitutes a Payoff or a Curtailment.

         PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution Date, the
sum of the amounts described in clauses (i) through (iii) of the definition of
Principal Distribution Amount net of any amounts payable or reimbursable
therefrom to the Trustee, the Custodian, the Securities Administrator, the
Master Servicer or the Servicers pursuant to this Agreement, the Custodial
Agreement or the applicable Servicing Agreement.

                                      -30-

<PAGE>

         PROTECTED ACCOUNT: An account or accounts established and maintained
for the benefit of the Certificateholders by each Servicer with respect to the
related Loans and with respect to REO Property pursuant to the applicable
Servicing Agreement.

         PURCHASE OBLIGATION: An obligation of the Depositor or the Seller to
repurchase Loans under the circumstances and in the manner provided in Section
2.3.

         PURCHASE PRICE: With respect to any Loan to be purchased pursuant to a
Purchase Obligation, or any Loan to be purchased or repurchased relating to an
REO Property, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee and the Securities Administrator, an amount equal to the
sum of (i) 100% of the Principal Balance thereof as of the date of purchase (or
in the case of an REO Property being purchased as provided in Section 9.1, 100%
of the fair market value of such REO Property, such valuation to be conducted by
an appraiser mutually agreed upon between the Terminator and the Securities
Administrator, in their reasonable discretion), (ii) in the case of (x) a Loan,
accrued interest on such Principal Balance at the applicable Net Mortgage Rate
from the date interest was last paid by the related Mortgagor or the date an
Advance by the applicable Servicer or the Master Servicer, which payment or
Advance had as of the date of purchase been distributed pursuant to Section 4.1,
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 Principal
Balance at the applicable Net Mortgage Rate from the date interest was last paid
by the related Mortgagor or the date an Advance by the applicable Servicer or
the Master Servicer through the end of the calendar month immediately preceding
the calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed as or to cover REO Imputed Interest
in accordance with the applicable Servicing Agreement, (iii) any unreimbursed
Servicing Advances and Advances (including Nonrecoverable Advances) and any
unpaid Servicing Fees or Master Servicing Fees allocable to such Loan or REO
Property and (iv) in the case of a Loan required to be purchased pursuant to
Section 2.3, expenses reasonably incurred or to be incurred by the Master
Servicer, the Servicers, the Trustee or the Securities Administrator in respect
of the breach or defect giving rise to a Purchase Obligation and any costs and
damages incurred by the Trust Fund in connection with any violation by any such
Loan of any predatory or abusive lending law.

         RATING AGENCY: Initially, each of S&P and Moody's; thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Depositor, or their respective successors in
interest.

         RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by each Rating Agency.

         REALIZED LOSS: For any Distribution Date and any Loan which became a
Liquidated Loan during the related Prepayment Period, the sum of (i) the
Principal Balance of such Loan remaining outstanding (after all recoveries of
principal have been applied thereto) and the principal portion of Advances which
have been reimbursed with respect to such Loan, and (ii)

                                      -31-

<PAGE>

the accrued interest on such Loan remaining unpaid and the interest portion of
Advances which have been reimbursed from Liquidation Proceeds with respect to
such Loan. The amounts described in clause (i) shall be the principal portion of
Realized Losses and the amounts described in clause (ii) shall be the interest
portion of Realized Losses. For any Distribution Date and any Loan which is not
a Liquidated Loan, the amount of any Bankruptcy Loss incurred with respect to
such Loan as of the related Due Date shall be treated as a Realized Loss.

         RECORD DATE: With respect to each Distribution Date and the
Certificates, other than Class A-1 Certificates, the last Business Day of the
month immediately preceding the month of the related Distribution Date; with
respect to the Class A-1 Certificates, the Business Day preceding the related
Distribution Date.

         REGULAR INTEREST CERTIFICATES: The Certificates, other than the Class R
Certificate.

         REIMBURSEMENT AMOUNT: As to any Distribution Date, the sum of (x) (i)
all claims paid by the Certificate Insurer under the Policy, for which the
Certificate Insurer has not been reimbursed prior to such Distribution Date
pursuant to Section 4.1, plus (ii) interest accrued on such unreimbursed claims
(not previously repaid), calculated at the Late Payment Rate from the date the
claim was paid by the Certificate Insurer, and (y) without duplication (i) any
amounts then due and owing to the Certificate Insurer under the Insurance
Agreement, as certified to the Trustee and the Securities Administrator by the
Certificate Insurer plus (ii) interest on such amounts at the Late Payment Rate.

         RELIEF ACT: The Servicemembers Civil Relief Act, or similar state laws.

         RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date
and a Loan, the reduction in the amount of interest collectible on such Loan for
the most recently ended calendar month immediately preceding such Distribution
Date as a result of the application of the Relief Act.

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

         REMIC I: The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) the Loans (exclusive of payments of
principal and interest due on or before the Cut-off Date, if any, received by
the Master Servicer which shall not constitute an asset of the Trust Fund) as
from time to time are subject to this Agreement and all payments under and
proceeds of the Loans (exclusive of any Prepayment Charges and late payment fees
received on the Loans), together with all documents included in the related
Mortgage File, subject to Section 2.1; (ii) such funds or assets as from time to
time are deposited in the related Distribution Account in respect of a Loan and
belonging to the Trust Fund; (iii) any REO Property in respect of a Loan; (iv)
the primary hazard insurance policies, if any, the primary insurance policies,
if any, and all other insurance policies with respect to the Loans; and (v) the
Depositor's interest in respect of the representations and warranties made by
the Seller in the Mortgage Loan Purchase Agreement as assigned to the Trustee
pursuant to Section 2.1 hereof. The assets of REMIC I shall specifically exclude
the Cap Contract and the Reserve Fund.

                                      -32-

<PAGE>

         REMIC I REGULAR INTEREST LTI-1: 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 LTI-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-1: 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 LTI-IO-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-2: 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 LTI-IO-2 shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-3: 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 LTI-IO-3 shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-IO-4: 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 LTI-IO-4 shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTEREST LTI-P: 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 LTI-P shall accrue
interest at the related Uncertificated REMIC I Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-1, REMIC I
Regular Interest LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular
Interest LTI-IO-3, REMIC I Regular Interest LTI-IO-4 and REMIC I Regular
Interest LTI-P.

                                      -33-

<PAGE>

         REMIC II: The pool of assets consisting of the REMIC I Regular
Interests and all payments of principal or interest on or with respect to the
REMIC I Regular Interests after the Cut-Off Date.

         REMIC II INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Scheduled Principal Balance of the Loans and REO Properties then outstanding and
(ii) the Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest
II-LTAA minus the Marker Rate, divided by (b) 12.

         REMIC II OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC II Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-A1, REMIC II Regular
Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II Regular Interest
LTII-A4A, REMIC II Regular Interest LTII-A4B, REMIC II Regular Interest
LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II Regular Interest LTII-M1,
REMIC II Regular Interest LTII-M2, REMIC II Regular Interest LTII-M3 and REMIC
Regular Interest LTII-P, in each case as of such date of determination.

         REMIC II OVERCOLLATERALIZATION TARGET AMOUNT: 1% of the Required
Overcollateralization Amount.

         REMIC II PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Scheduled Principal Balance of the Loans and REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Principal Balances of REMIC II Regular Interest LTII-A1,
REMIC II Regular Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II
Regular Interest LTII-A4A, REMIC II Regular Interest LTII-A4B, REMIC II Regular
Interest LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II Regular Interest
LTII-M1, REMIC II Regular Interest LTII-M2, REMIC II Regular Interest LTII-M3
and REMIC II Regular Interest LTII-ZZ.

         REMIC II REGULAR INTERESTS: REMIC II Regular Interest LTII-AA, REMIC II
Regular Interest LTII-A1, REMIC II Regular Interest LTII-A2, REMIC II Regular
Interest LTII-A3, REMIC II Regular Interest LTII-A4A, REMIC II Regular Interest
LTII-A4B, REMIC II Regular Interest LTII-A5A, REMIC II Regular Interest
LTII-A5B, REMIC II Regular Interest LTII-M1, REMIC II Regular Interest LTII-M2,
REMIC II Regular Interest LTII-M3, REMIC II Regular Interest LTII-IO-A, REMIC II
Regular Interest LTII-IO-B, REMIC II Regular Interest LTII-ZZ and REMIC II
Regular Interest LTII-P.

         REMIC II REGULAR INTEREST LTII-AA: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-AA shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-A1: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-A1 shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

                                      -34-

<PAGE>

         REMIC II REGULAR INTEREST LTII-A2: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-A2 shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-A3: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-A3 shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-A4A: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LTII-A4A
shall accrue interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the
Preliminary Statement hereto.

         REMIC II REGULAR INTEREST LTII-A4B: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LTII-A4B
shall accrue interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the
Preliminary Statement hereto.

         REMIC II REGULAR INTEREST LTII-A5A: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LTII-A5A
shall accrue interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the
Preliminary Statement hereto.

         REMIC II REGULAR INTEREST LTII-A5B: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in

                                      -35-

<PAGE>

REMIC II. REMIC II Regular Interest LTII-A5B shall accrue interest at the
related Uncertificated REMIC II Pass-Through 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
Principal Balance as set forth in the Preliminary Statement hereto.

         REMIC II REGULAR INTEREST LTII-IO-A: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-IO-A shall accrue interest as provided herein and shall not be entitled to
distributions of principal.

         REMIC II REGULAR INTEREST LTII-IO-B: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-IO-B shall accrue interest as provided herein and shall not be entitled to
distributions of principal.

         REMIC II REGULAR INTEREST LTII-M1: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-M1 shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-M2: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-M2 shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-M3: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-M3 shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-P: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-P shall accrue
interest at the related Uncertificated REMIC II Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

         REMIC II REGULAR INTEREST LTII-ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-ZZ shall accrue
interest at the related Uncertificated

                                      -36-
<PAGE>

REMIC II Pass-Through 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 Principal Balance as set
forth in the Preliminary Statement hereto.

         REMIC II REGULAR INTEREST LTII-ZZ MAXIMUM INTEREST DEFERRAL AMOUNT:
With respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC II Pass-Through Rate applicable to REMIC II Regular
Interest LTII-ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-ZZ minus the
REMIC II Overcollateralization Amount, in each case for such Distribution Date,
over (ii) Uncertificated Accrued Interest on REMIC II Regular Interest LTII-A1,
REMIC II Regular Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II
Regular Interest LTII-A4A, REMIC II Regular Interest LTII-A4B, REMIC II Regular
Interest LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II Regular Interest
LTII-M1, REMIC II Regular Interest LTII-M2 and REMIC II Regular Interest LTII-M3
for such Distribution Date, with the rate on each such REMIC II Regular Interest
subject to a cap equal to the related Pass-Through Rate.

         REMIC III: The pool of assets consisting of the REMIC II Regular
Interests and all payments of principal or interest on or with respect to the
REMIC II Regular Interests after the Cut Off Date.

         REMIC PROVISIONS: Provisions of the United States 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: A REMIC I Regular Interest, REMIC II Regular
Interest or a Regular Interest Certificate.

         REMITTANCE REPORT: A report by the Securities Administrator pursuant to
Section 4.3.

         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 Scheduled Principal Balance
of such REO Property (or, in the case of the first such calendar month, of the
related Loan, if appropriate) as of the close of business on the Distribution
Date in such calendar month.

         REO PROPERTY: A Mortgaged Property, title to which has been acquired by
a Servicer on behalf of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise.

         REQUIRED OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution
Date (a) if such Distribution Date is prior to the Stepdown Date, 0.60% of the
aggregate Scheduled Principal Balance of the Loans as of the Cut-Off Date, or
(b) if such Distribution Date is on or after the Stepdown Date, the greater of
(i) 1.20% of the aggregate Scheduled Principal Balance

                                      -37-

<PAGE>

of the Loans as of the last day of the related Due Period (after giving effect
to the principal portion of Monthly Payments 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 Loans incurred during the related Prepayment Period) and (ii)
0.35% of the aggregate Scheduled Principal Balance of the Loans as of the
Cut-Off Date.

         REQUIRED OVERCOLLATERALIZATION PERCENTAGE: For any Distribution Date, a
percentage equal to (a) the Required Overcollateralization Amount divided by (b)
the aggregate Principal Balance of the 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
after reduction for Realized Losses incurred during the related Prepayment
Period).

         RESIDUAL CERTIFICATE: The Class R Certificate, which is being issued in
a single class. Components R-1, R-2 and R-3 of the Class R Certificate are
hereby each designated the sole Class of "residual interests" in REMIC I, REMIC
II and REMIC III, respectively, for purposes of Section 860G(a)(2) of the Code.

         RESERVE FUND: Shall mean the separate trust account created and
maintained by the Securities Administrator pursuant to Section 3.25 hereof.

         RESERVE INTEREST RATE: The rate per annum that the Securities
Administrator determines to be either (i) the arithmetic mean of the one-month
U.S. dollar lending rates which New York City banks selected by the Securities
Administrator are quoting on the relevant LIBOR Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that 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.

         RESPONSIBLE OFFICER: When used with respect to the Trustee, any officer
in the corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject. When used with respect to the Master Servicer or the Securities
Administrator, the Chairman or Vice-Chairman of the Board of Directors or
Trustees, the Chairman or Vice-Chairman of the Executive or Standing Committee
of the Board of Directors or Trustees, the President, the Chairman of the
Committee on Trust Matters, any Vice-President, any Assistant Vice-President,
the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust
Officer, the Controller, any Assistant Controller or any other officer
customarily performing functions similar to those performed by any of the
above-designated officers and in each case having direct responsibility for the
administration of this Agreement, and also, with respect to 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. When used with respect
to the Depositor or any other Person, the Chairman or Vice-Chairman of the Board
of Directors, the Chairman or

                                      -38-

<PAGE>

Vice-Chairman of any executive committee of the Board of Directors, the
President, any Vice-President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, or any other officer of the Depositor
customarily performing functions similar to those performed by any of the
above-designated officers and also, with respect to 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.

         S&P: Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc. provided, that at any time it is a Rating Agency.

         SCHEDULED PRINCIPAL BALANCE: With respect to any Loan and a Due Date,
the unpaid principal balance of such Loan as specified in the amortization
schedule (before any adjustment to such schedule by reason of bankruptcy or
similar proceeding or any moratorium or similar waiver or grace period) for such
Due Date, after giving effect to any previously applied Curtailments, the
payment of principal on such Due Date and any reduction of the principal balance
of such Loan by a bankruptcy court, irrespective of any delinquency in payment
by the related Mortgagor.

         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 who meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person.

         SELLER: DB Structured Products, Inc., or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement and in its
capacity as assignor under the Assignment Agreements.

         SENIOR CERTIFICATES: The Class A Certificates.

         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.

         SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect, the Principal Distribution Amount or (ii) on or
after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:

         (a) the Principal Distribution Amount for that Distribution Date; and

         (b) the excess (if any) of (A) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to that Distribution Date
over (B) the positive difference between (i) the aggregate Principal Balance of
the Loans as of the last day of the related Due Period (after reduction for
Realized Losses incurred during the related Prepayment Period) and (ii) the
product of (x) the aggregate Principal Balance of the Loans as of the last day
of the

                                      -39-

<PAGE>

related Due Period (after reduction for Realized Losses incurred during the
related Prepayment Period) and (y) the sum of 11.30% and the Required
Overcollateralization Percentage.

         SERVICER: GMAC, M&T or GreenPoint, as applicable, or any successor
appointed under the applicable Servicing Agreement.

         SERVICER REMITTANCE DATE: With respect to each Distribution Date shall
mean (i) with respect to GMAC and M&T, the 18th day of the calendar month in
which such Distribution Date occurs or, if such 18th day is not a Business Day,
the Business Day immediately preceding such 18th day and (ii) with respect to
GreenPoint, the 10th day of the calendar month in which such Distribution Date
occurs or, if such 10th day is not a Business Day, the Business Day immediately
preceding such 10th day.

         SERVICING ADVANCES: The customary reasonable and necessary
"out-of-pocket" costs and expenses incurred by the applicable Servicer in
connection with a default, delinquency or other unanticipated event by the
applicable Servicer in the performance of its servicing obligations, including,
but not limited to, the cost of (i) the preservation, restoration and protection
of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, in respect of a particular Loan and (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property. No Servicer shall be required to make any Servicing Advance in respect
of a Loan or REO Property that, in the good faith business judgment of such
Servicer, would not be ultimately recoverable from related Insurance Proceeds or
Liquidation Proceeds on such Loan or REO Property as provided herein.

         SERVICING AGREEMENT: The GMAC Servicing Agreement, the M&T Servicing
Agreement, or the GreenPoint Servicing Agreement.

         SERVICING FEE: With respect to each Loan and for any Distribution Date,
an amount equal to one twelfth of the product of the related Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Loan as of the Due Date in
the month preceding the month of such Distribution Date. The Servicing Fee is
payable solely from collections of interest on the Loans or as otherwise
provided in the related Servicing Agreement.

         SERVICING FEE RATE: 0.25% per annum.

         SERVICING OFFICER: Any individual involved in, or responsible for, the
administration and servicing of the Loans whose name and specimen signature
appear on a list of servicing officers furnished to the Trustee, the Depositor
and the Securities Administrator on the Closing Date by each Servicer and the
Master Servicer, as such lists may from time to time be amended.

         STARTUP DAY: With respect to each REMIC, the day designated as such
pursuant to Section 10.1(b) hereof.

         STEPDOWN DATE: The earlier to occur of (i) the later to occur of (a)
the Distribution Date occurring in September 2007 and (b) the first Distribution
Date on which the Credit Enhancement Percentage of the Class A Certificates
(calculated for this purpose only after taking into account distributions of
principal on the Loans but prior to any distribution of the Principal

                                      -40-

<PAGE>

Distribution Amount to the Certificateholders then entitled to distributions of
principal on such Distribution Date) is equal to or greater than 12.50% and (ii)
the first Distribution Date on which the aggregate Certificate Principal Balance
of the Senior Certificates has been reduced to zero.

         SUBSEQUENT RECOVERIES: With respect to any Distribution Date, all
amounts received during the related Prepayment Period by the related Servicer
specifically related to a defaulted 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 Loan.

         SUBSTITUTE LOAN: A mortgage loan substituted for a Deleted 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 Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Interest Rate not less than (and not
more than one percentage point in excess of) the Mortgage Interest Rate of the
Deleted Loan, (iii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Loan, (iv) have the same Due
Date as the Due Date on the Deleted Loan, (v) 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 Loan as of such date, (vi) have a risk grading at least equal to the
risk grading assigned on the Deleted Loan, (vii) is a "qualified mortgage" as
defined in the REMIC Provisions and (viii) conform to each representation and
warranty set forth in Section 6 of the Mortgage Loan Purchase Agreement
applicable to the Deleted Loan. In the event that one or more mortgage loans are
substituted for one or more Deleted Loans, the amounts described in clause (i)
hereof shall be determined on the basis of aggregate principal balances, the
Mortgage Interest Rates described in clause (ii) hereof shall be determined on
the basis of weighted average Mortgage Interest Rates, the terms described in
clause (iii) hereof shall be determined on the basis of weighted average
remaining term to maturity, the Loan-to-Value Ratios described in clause (v)
hereof shall be satisfied as to each such mortgage loan, the risk gradings
described in clause (vi) 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 (viii) hereof must be
satisfied as to each Substitute Loan or in the aggregate, as the case may be.

         TAX MATTERS PERSON: The Holder of the Class R Certificates issued
hereunder or any Permitted Transferee of such Class R Certificateholder shall be
the initial "tax matters person" for REMIC I, REMIC II and REMIC III within the
meaning of Section 6231(a)(7) of the Code. For tax years commencing after any
transfer of the Class R Certificate, the holder of the greatest Percentage
Interest in the Class R Certificate at year end shall be designated as the Tax
Matters Person with respect to that year. If the Tax Matters Person becomes a
Disqualified Organization, the last preceding Holder of such Authorized
Denomination of the Class R Certificate that is not a Disqualified Organization
shall be Tax Matters Person pursuant to Section 5.3(e). If any Person is
appointed as tax matters person by the Internal Revenue Service pursuant to the
Code, such Person shall be Tax Matters Person.

         TERMINATION PRICE: As defined in Section 9.1.

         TERMINATOR: As defined in Section 9.1.

                                      -41-

<PAGE>

         TRANSFER: Any direct or indirect transfer, sale, pledge or other
disposition of, or directly or indirectly transferring, selling or pledging, any
Ownership Interest in a Class CE Certificate, Class P Certificate or Residual
Certificate.

         TRANSFEREE: Any Person who is acquiring by Transfer any Ownership
Interest in a Class CE Certificate, Class P Certificate or Residual Certificate.

         TRIGGER EVENT: A Trigger Event has occurred with respect to a
Distribution Date if (x) the Delinquency Percentage exceeds 50% of the Credit
Enhancement Percentage of the Class A Certificates for the prior Distribution
Date or (y) the aggregate amount of Realized Losses incurred on the Loans since
the Cut-Off Date through the last day of the related Due Period divided by the
aggregate Principal Balance of the Loans as of the Cut-Off Date exceeds the
applicable percentage set forth below with respect to such Distribution Date:

               Distribution Date                               Percentage
         September 2007 and thereafter                           1.00%

         TRUST FUND: Collectively, all of the assets of REMIC I, REMIC II and
REMIC III, and the Reserve Fund and any amounts on deposit therein and any
proceeds thereof, the Prepayment Charges and the Cap Contract.

         TRUSTEE: HSBC Bank USA, National Association, a national banking
association, or its successor in interest, or any successor trustee appointed as
herein provided.

         UNCERTIFICATED ACCRUED INTEREST: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the Uncertificated REMIC I Pass-Through Rate or Uncertificated REMIC
II Pass-Through Rate, as applicable, on the Uncertificated Principal Balance or
Uncertificated Notional Amount, as applicable, of such Uncertificated REMIC
Regular Interest. In each case, Uncertificated Accrued Interest will be reduced
by any Prepayment Interest Shortfalls and shortfalls resulting from application
of the Relief Act (allocated to such Uncertificated REMIC Regular Interests as
set forth in Sections 1.2 and 4.5).

         UNCERTIFICATED NOTIONAL AMOUNT: With respect to REMIC II Regular
Interest LTII-IO-A and (i) each Distribution Date from and including the
Distribution Date in September 2004 to and including the Distribution Date in
February 2005, the aggregate Uncertificated Principal Balances of REMIC I
Regular Interest LTI-IO-1 through REMIC I Regular Interest LTI-IO-4, (ii) each
Distribution Date from and including the Distribution Date in March 2005 to and
including the Distribution Date in August 2005, the aggregate Uncertificated
Principal Balances of REMIC I Regular Interest LTI-IO-2 through REMIC I Regular
Interest LTI-IO-4, (iii) each Distribution Date from and including the
Distribution Date in September 2005 to and including the Distribution Date in
February 2006, the aggregate Uncertificated Principal Balances of REMIC I
Regular Interest LTI-IO-3 and REMIC I Regular Interest LTI-IO-4, (iv) each
Distribution Date from and including the Distribution Date in March 2006 to and
including the Distribution Date in August 2006, the aggregate Uncertificated
Principal Balance of REMIC I Regular Interest LTI-IO-4 and (vi) each
Distribution Date thereafter, $0.

                                      -42-

<PAGE>

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to each Uncertificated
REMIC Regular Interest (other than REMIC II Regular Interest LTII-IO-A and REMIC
II Regular Interest LTII-IO-B, the principal amount of such REMIC Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Principal Balance of each Uncertificated REMIC Regular
Interest (other than REMIC II Regular Interest LTII-IO-A and REMIC II Regular
Interest LTII-IO-B) shall equal the amount set forth in the Preliminary
Statement hereto as its initial Uncertificated Principal Balance. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC Regular
Interest shall be reduced by all distributions of principal made on such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.5 and, if and
to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.2. The
Uncertificated Principal Balance of each REMIC Regular Interest shall never be
less than zero. REMIC II Regular Interest LTII-IO-A and REMIC II Regular
Interest LTII-IO-B will not have Uncertificated Principal Balances.

         UNCERTIFICATED REMIC I PASS-THROUGH RATE: A per annum rate equal to the
average of the Net Mortgage Rates of the Loans as of the first day of the
related Due Period, weighted on the basis of the Scheduled Principal Balances as
of the first day of the related Due Period.

         UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to REMIC II
Regular Interest LTII-AA, REMIC II Regular Interest LTII-A1, REMIC II Regular
Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II Regular Interest
LTII-A4A, REMIC II Regular Interest LTII-A4B, REMIC II Regular Interest
LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II Regular Interest LTII-M1,
REMIC II Regular Interest LTII-M2, REMIC II Regular Interest LTII-M3 and REMIC
II Regular Interest LTII-ZZ, a per annum rate (but not less than zero) equal to
the weighted average of: (x) with respect to REMIC I Regular Interest LTI-1 and
REMIC I Regular Interest LTI-P, the Uncertificated REMIC I Pass-Through Rate for
such REMIC I Regular Interest for each such Distribution Date, and (y) with
respect to REMIC I Regular Interest LTI-IO-1 through REMIC I Regular Interest
LTI-IO-4 for each Distribution Date listed below, the weighted average of the
rates listed below for each such REMIC I Regular Interest listed below, weighted
on the basis of the Uncertificated Principal Balance of each such REMIC I
Regular Interest:

                                      -43-

<PAGE>

<TABLE>
<CAPTION>

------------------- ------------------------------------- -------------------------------------------------------
DISTRIBUTION DATE        REMIC I REGULAR INTERESTS                                 RATE
------------------- ------------------------------------- -------------------------------------------------------
<S>                <C>                                   <C>
        1           LTI-IO-1 through LTI-IO-4             (a)  Uncertificated  REMIC IAN Pass-Through  Rate over
                                                          (b) 4.50%
------------------- ------------------------------------- -------------------------------------------------------
        2           LTI-IO-1 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
        3           LTI-IO-1 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
        4           LTI-IO-1 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
        5           LTI-IO-1 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
        6           LTI-IO-1 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
        7           LTI-IO-2 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1                              Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        8           LTI-IO-2 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1                              Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        9           LTI-IO-2 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1                              Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        10          LTI-IO-2 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1                              Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        11          LTI-IO-2 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1                              Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        12          LTI-IO-2 through LTI-IO-4             (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          4.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1                              Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        13          LTI-IO-3 and LTI-IO-4                 (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1 and LTI-IO-2                 Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        14          LTI-IO-3 and LTI-IO-4                 (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1 and LTI-IO-2                 Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        15          LTI-IO-3 and  LTI-IO-4                (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1 and LTI-IO-2                 Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        16          LTI-IO-3 and LTI-IO-4                 (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1 and LTI-IO-2                 Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        17          LTI-IO-3 and LTI-IO-4                 (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1 and LTI-IO-2                 Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        18          LTI-IO-3 and LTI-IO-4                 (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1 and LTI-IO-2                 Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        19          LTI-IO-4                              (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1, LTI-IO-2 and LTI-IO-3       Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        20          LTI-IO-4                              (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1, LTI-IO-2 and LTI-IO-3       Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        21          LTI-IO-4                              (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1, LTI-IO-2 and LTI-IO-3       Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        22          LTI-IO-4                              (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1, LTI-IO-2 and LTI-IO-3       Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        23          LTI-IO-4                              (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1, LTI-IO-2 and LTI-IO-3       Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
        24          LTI-IO-4                              (a) Uncertificated  REMIC I Pass-Through Rate over (b)
                                                          3.50%
------------------- ------------------------------------- -------------------------------------------------------
                    LTI-IO-1, LTI-IO-2, and LTI-IO-3      Uncertificated REMIC I Pass-Through Rate
------------------- ------------------------------------- -------------------------------------------------------
25 and thereafter   LTI-IO-1,   LTI-IO-2,  LTI-IO-3  and  Uncertificated REMIC I Pass-Through Rate
                    LTI-IO-4
------------------- ------------------------------------- -------------------------------------------------------
</TABLE>

         With respect to REMIC II Regular Interest LTII-IO-A, (i) for the first
twelve distribution dates, 1.00% and (ii) thereafter, 0.00%. With respect to
REMIC II Regular Interest LTII-IO-B, (i) for the first twenty-four distribution
dates, 3.50% and (ii) thereafter, 0.00%.

         UNCERTIFICATED REMIC REGULAR INTEREST: The REMIC I Regular Interests
and the REMIC II Regular Interests.

         UNCOLLECTED INTEREST: With respect to any Distribution Date, the sum of
(i) the aggregate Prepayment Interest Shortfalls with respect to the Loans for
such Distribution Date and (ii) the aggregate Curtailment Shortfalls with
respect to the Loans for such Distribution Date.

                                      -44-

<PAGE>

         UNCOMPENSATED INTEREST SHORTFALL: For any Distribution Date, the
excess, if any, of (i) the sum of (a) the related Uncollected Interest for such
Distribution Date, and (b) any shortfall in interest collections for the Loans
in the calendar month immediately preceding such Distribution Date resulting
from a Relief Act Interest Shortfall over (ii) the aggregate Compensating
Interest paid by the Servicers and the Master Servicer with respect to the Loans
for such Distribution Date, which excess shall be allocated to each Class of
Certificates, pro rata, according to the amount of interest accrued thereon in
reduction thereof.

         UNDERWRITER: Deutsche Bank Securities Inc.

         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 3.9.

         U.S. PERSON: A citizen or resident of the United States, a corporation
or partnership (including an entity treated as a corporation or partnership for
United States federal income tax purposes) created or organized in, or under the
laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) 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 such U.S. Persons have the authority to control all substantial decisions
of the trust. To the extent prescribed in regulations by the Secretary of the
Treasury, which have not yet been issued, 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 1 of subchapter J of chapter 1 of the Code), and which was
treated as a U.S. Person on August 20, 1996 may elect to continue to be treated
as a U.S. Person notwithstanding the previous sentence.

         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 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-4A, Class A-5A and Class A-5B Certificates shall be
deemed to refer to the Certificate Insurer.

         WELLS FARGO: Wells Fargo Bank, N.A., or any successor thereto.

         Section 1.2 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

                                      -45-

<PAGE>

         For purposes of calculating the Interest Distribution Amount for the
Class A Certificates, the Mezzanine Certificates and the Class CE Certificates
for any Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls and Curtailment Interest Shortfalls to the extent not covered by
payment by the related Servicer pursuant to the related Servicing Agreement or
the Master Servicer pursuant to Section 3.20 shall first reduce the Net Monthly
Excess Cashflow for such Distribution Date, second, reduce the Interest
Distribution Amount payable to the Class CE Certificates, third, reduce the
Interest Distribution Amount payable to the Class M-3 Certificates, fourth,
reduce the Interest Distribution Amount payable to the Class M-2 Certificates,
fifth, reduce the Interest Distribution Amount payable to the Class M-1
Certificates and sixth, reduce the Interest Distribution Amount payable to the
Class A Certificates (on a PRO RATA basis based on their respective Senior
Interest Distribution Amounts before such reduction), (2) any Relief Act
Interest Shortfalls on the Loans shall be allocated to the Certificates on a pro
rata basis based on their respective Interest Distribution Amounts before such
reduction, and (3) the aggregate amount of the interest portion of Realized
Losses allocated to the Mezzanine Certificates and Net WAC Rate Carryover
Amounts paid to the Class A Certificates (other than the Class A-IO
Certificates) and the Mezzanine Certificates on any Distribution Date shall be
allocated to the Class CE Certificates to the extent of one month's interest at
the then applicable Pass-Through Rate on the Certificate Principal Balance or
Notional Amount thereof, as applicable.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Uncompensated Interest Shortfalls incurred in respect of
the Loans for any Distribution Date shall be allocated first, to REMIC I Regular
Interest LTI-1 and REMIC I Regular Interest LTI-P, to the extent of one month's
interest at the then applicable respective Uncertificated REMIC I Pass-Through
Rate on the Uncertificated Principal Balance of each such REMIC I Regular
Interest; and then, to REMIC I Regular Interest LTI-IO-1, REMIC I Regular
Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3 and REMIC I Regular
Interest LTI-IO-4, in each case to the extent of one month's interest at the
then applicable respective Uncertificated REMIC I Pass-Through Rate on the
respective Uncertificated Principal Balance of each such REMIC I Regular
Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date, the
aggregate amount of any Uncompensated Interest Shortfalls incurred in respect of
the Loans for any Distribution Date shall be allocated among REMIC II Regular
Interest LTII-A1, REMIC II Regular Interest LTII-A2, REMIC II Regular Interest
LTII-A3, REMIC II Regular Interest LTII-A4A, REMIC II Regular Interest LTII-A4B,
REMIC II Regular Interest LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II
Regular Interest LTII-M1, REMIC II Regular Interest LTII-M2, REMIC II Regular
Interest LTII-M3 and REMIC II Regular Interest LTII-ZZ, pro rata based on, and
to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC II Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC II Regular Interest.

                                      -46-

<PAGE>

                                   ARTICLE II
                            CONVEYANCE OF TRUST FUND;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.1 CONVEYANCE OF TRUST FUND. 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 Loans identified on the Loan
Schedule, the rights of the Depositor under the Mortgage Loan Purchase Agreement
and the Assignment Agreements (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 or the applicable Servicer on
or with respect to the Loans (other than payments of principal and interest due
on such Loans on or before the Cut-Off Date). The Depositor herewith delivers to
the Trustee executed copies of the Mortgage Loan Purchase Agreement, the
Servicing Agreements and the Assignment Agreements.

         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 Loan as described under Section 2
of the Custodial Agreement (the "Loan Documents"). In connection with such
delivery and as further described in the Custodial Agreement, the Custodian will
be required to review such Loan Documents and deliver to the Trustee, the
Depositor, the Master Servicer and the Seller certifications (in the forms
attached to the Custodial Agreement) with respect to such review with exceptions
noted thereon. In addition, the Depositor under the Custodial Agreement will
have to cure certain defects with respect to the Loan Documents for the related
Loans after the delivery thereof by the Depositor to the Custodian as more
particularly set forth therein.

         Section 2.2 ACCEPTANCE BY TRUSTEE.

         The Trustee acknowledges receipt, subject to the provisions of Section
2.1 hereof and Section 2 of the Custodial Agreement, of the 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
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 and the Certificate Insurer.

         Section 2.3 REPURCHASE OR SUBSTITUTION OF 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 Loan that materially and adversely
affects the value of such Loan or the interest therein of

                                      -47-

<PAGE>

the Certificateholders or the Certificate Insurer, the Trustee shall promptly
notify the Seller 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 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 Loan
shall be deposited in the Distribution Account and the Trustee, upon receipt of
written certification from the Securities Administrator of such deposit and
receipt by the Custodian of a properly completed request for release for such
Loan in the form of EXHIBIT 3 to the Custodial Agreement, shall release or cause
the Custodian 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 Loan released pursuant
hereto, and the Trustee shall not have any further responsibility with regard to
such Mortgage File. In lieu of repurchasing any such Loan as provided above, if
so provided in the Mortgage Loan Purchase Agreement, the Seller may cause such
Loan to be removed from REMIC I (in which case it shall become a Deleted Loan)
and substitute one or more Substitute Loans in the manner and subject to the
limitations set forth in Section 2.3(b). It is understood and agreed that the
obligation of the Seller to cure or to repurchase (or to substitute for) any
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, the Certificateholders and the Certificate Insurer.
Notwithstanding the foregoing, if the representation made by the Seller in
Section 6(xxiv) of the Mortgage Loan Purchase Agreement is breached, the Trustee
shall enforce the obligation of the Seller to repurchase such Loan at the
Purchase Price, or to provide a Substitute Loan (plus any costs and damages
incurred by the Trust Fund in connection with any violation by any such Loan of
any predatory or abusive lending law) within 90 days after the date on which the
Seller was notified of such breach.

         In addition, should the Master Servicer become aware of or in the event
of its receipt of notice by a Responsible Officer of the Master Servicer of the
breach of the representation or covenant of the Seller set forth in Section 5(x)
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, the Master 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 Substitute Loans for Deleted Loans made
pursuant to Section 2.3(a) must be effected prior to the date which is two years
after the Startup Day for the REMIC I.

                                      -48-

<PAGE>

         As to any Deleted Loan for which the Seller, substitutes a Substitute
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 Substitute 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 Substitute 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 Substitute Loan or Loans
and, within ten Business Days thereafter, review such documents and deliver to
the Depositor, the Trustee and the Master Servicer, with respect to such
Substitute 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 Master Servicer a final certification
pursuant to the Custodial Agreement with respect to such Substitute Loan or
Loans, with any applicable exceptions noted thereon. Monthly Payments due with
respect to Substitute Loans in the month of substitution are not part of REMIC I
and shall be retained by the Seller. For the month of substitution,
distributions to Certificateholders shall reflect the Monthly Payment due on
such Deleted 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 Loan. The Depositor shall give or cause to
be given written notice to the Certificateholders that such substitution has
taken place, shall amend the Loan Schedule to reflect the removal of such
Deleted Loan from the terms of this Agreement and the substitution of the
Substitute Loan or Loans and shall deliver a copy of such amended Loan Schedule
to the Trustee and the Master Servicer. Upon such substitution, such Substitute
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 Substitute
Loans for one or more Deleted Loans, the Master Servicer shall determine the
amount (the "Substitution Shortfall Amount"), if any, by which the aggregate
Purchase Price of all such Deleted Loans exceeds the aggregate of, as to each
such Substitute Loan, the Scheduled Principal Balance thereof as of the Due Date
in the month of substitution, together with one month's interest on such
Scheduled Principal Balance at the applicable Net Mortgage Rate, plus all
outstanding Advances and Servicing Advances (including Nonrecoverable Advances)
related thereto. On the date of such substitution, the Seller shall deliver or
cause to be delivered to the Securities Administrator for deposit in the
Distribution 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 Substitute Loan or Loans and certification by the Securities
Administrator of such deposit and receipt by the Custodian of a properly
completed request for release for such Loan in the form of EXHIBIT 3 to the
Custodial Agreement, 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
Loan released pursuant hereto.

                                      -49-

<PAGE>

         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 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 REMIC to fail to qualify as a REMIC
at any time that any Certificate is outstanding.

         (c) Upon discovery by the Depositor, the Seller, the Master Servicer or
the Trustee that any 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
Substitute Loans for the affected Loan within 90 days of the earlier of
discovery or receipt of such notice with respect to such affected Loan. Such
repurchase or substitution shall be made by (i) the Seller, if the affected
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 Loan's status as a
non-qualified mortgage does not result from a breach of representation or
warranty. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.3(a). The Trustee shall reconvey to the Seller or the
Depositor the Loan to be released pursuant hereto in the same manner, and on the
same terms and conditions, as it would a Loan repurchased for breach of a
representation or warranty.

         (d) Within 90 days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.5 which
materially and adversely affects the interests of the Certificateholders or the
Certificate Insurer in any Loan or Prepayment Charge, the Master Servicer shall
cure such breach in all material respects.

         Section 2.4 AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF
CERTIFICATES AS REMIC REGULAR AND RESIDUAL INTERESTS.

         (a) The Trustee acknowledges the transfer to the extent provided herein
and assignment to it of the Trust Fund and, concurrently with such transfer and
assignment, has caused the Securities Administrator to execute and authenticate
and has delivered to or upon the order of the Depositor, in exchange for the
Trust Fund, Certificates evidencing the entire ownership of the Trust Fund.

         (b) This Agreement shall be construed so as to carry out the intention
of the parties that each of REMIC I, REMIC II, and REMIC III be treated as a
REMIC at all times prior to the date on which the Trust Fund is terminated. The
"regular interests" (within the meaning of Section 860G(a)(1) of the Code) in
REMIC III shall consist of the Class A Certificates, the Mezzanine Certificates,
the Class CE Certificates and the Class P Certificate. The "residual interest"
(within the meaning of Section 860G(a)(2) of the Code) in REMIC III shall
consist of Component R-1. The "regular interests" (within the meaning of Section
860G(a)(1) of the Code) of REMIC II shall consist of the REMIC II Regular
Interests. The "residual interest" (within the meaning of Section 860(G)(a)(2)
of the Code) of REMIC II shall consist of Component R-2. The "regular interests"
(within the meaning of Section 860G(a)(1) of the Code) of REMIC I shall

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<PAGE>

consist the REMIC I Regular Interests. The "residual interest" (within the
meaning of Section 860(G)(a)(2) of the Code) of REMIC I shall consist of
Component R-1.

         Section 2.5 REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER.

         The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee, the Certificateholders, the
Certificate Insurer and the Depositor 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 Depositor and the Trustee, constitutes a legal, valid
     and binding obligation of the Master Servicer, enforceable against it in
     accordance with its terms except as the enforceability thereof may be
     limited by bankruptcy, insolvency, reorganization or similar laws affecting
     the enforcement of creditors' rights generally and by general principles of
     equity;

          (iii) The execution and delivery of this Agreement by the Master
     Servicer, the 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;

          (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;

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<PAGE>

          (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 2.5 shall inure to the benefit of the
Trustee, the Depositor, the Certificate Insurer and the Certificateholders.

         Section 2.6 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 "Deutsche Mortgage Securities, Inc., Mortgage Loan
Trust, Series 2004-5" and does hereby appoint HSBC Bank USA, National
Association as Trustee in accordance with the provisions of this Agreement.

                                      -52-

<PAGE>

                                  ARTICLE III
               ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS

         Section 3.1 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Loans in accordance with the terms of the applicable Servicing
Agreement 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 each Servicer 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 each Servicer and shall cause each
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the applicable Servicing Agreement.
The Master Servicer shall independently and separately monitor each Servicer's
servicing activities with respect to each related 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' and Master
Servicer's records, and based on such reconciled and corrected information,
prepare the statements specified in Section 4.3 and any other information and
statements required to be provided by the Master Servicer hereunder. The Master
Servicer shall reconcile the results of its Loan monitoring with the actual
remittances of the Servicers to the Distribution Account pursuant to the
applicable Servicing Agreements.

         Notwithstanding anything in this Agreement or any Servicing Agreement
to the contrary, the Master Servicer shall not have any duty or obligation to
enforce any Credit Risk Management Agreement that a Servicer is a party to (a
"Servicer Credit Risk Management Agreement") or to supervise, monitor or oversee
the activities of the Credit Risk Manager under any such Servicer Credit Risk
Management Agreement with respect to any action taken or not taken by the
applicable Servicer pursuant to a recommendation of the Credit Risk Manager.

         The Trustee shall furnish the Servicers 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 Servicers and the Master Servicer to
service or master service and administer the related Loans and REO Property. The
Trustee shall have no responsibility for any action of the Master Servicer or
any Servicer pursuant to any such limited power of attorney and shall be
indemnified by the Master Servicer or such Servicer for any cost, liability or
expense arising from the misuse thereof by the Master Servicer or such Servicer.

         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 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, however, that, unless otherwise required by law, none of the Trustee,
the Custodian or the Securities

                                      -53-

<PAGE>

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 or the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable and, in each case, provided to the
Trustee by such Servicer or Master Servicer 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 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
Loan Document or otherwise available at law or equity.

         Section 3.2 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall treat such REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Seller, the related Servicer 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 Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Loans pursuant to this Agreement or the Trustee has received an Opinion of
Counsel stating that such sale will not result in an Adverse REMIC Event as
defined in Section 10.1(f) hereof prepared at the expense of the Trust Fund; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement, the Assignment Agreements or Section 2.3 of this Agreement,
as applicable, accept any contribution to any REMIC after the Startup Day
without receipt of an Opinion of Counsel stating that such contribution will not
result in an Adverse REMIC Event as defined in Section 10.1(f) hereof.

         Section 3.3 MONITORING OF SERVICERS.

         (a) The Master Servicer shall be responsible for monitoring the
compliance by each Servicer with its duties under the related Servicing
Agreement. In the review of each Servicer's activities, the Master Servicer may
rely upon an officer's certificate of any Servicer with regard to such
Servicer's compliance with the terms of its Servicing Agreement. In the event
that the Master Servicer, in its judgment, determines that a Servicer should be
terminated in accordance with its Servicing Agreement, or that a notice should
be sent pursuant to such Servicing Agreement with respect to the occurrence of
an event that, unless cured, would constitute grounds for such termination, the
Master Servicer shall notify 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, the
Certificateholders and the Certificate Insurer, shall enforce the obligations of
each Servicer under the related Servicing Agreement, and shall, in the event
that a Servicer fails to perform its obligations in accordance with the related
Servicing Agreement, subject to the preceding paragraph, terminate the rights
and obligations of such Servicer thereunder and act as servicer of the related
Loans or

                                      -54-

<PAGE>

to cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related 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 indemnity reasonably acceptable to it for its costs and expenses in
pursuing such action.

         (c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (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 Servicer as a result of an event of default
by such Servicer and (ii) all costs and expenses associated with the complete
transfer of 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 servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor servicer to service the
Loans in accordance with the related Servicing Agreement) are not fully and
timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.

         (d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.

         (e) If the Master Servicer acts as Servicer, it shall not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.

         Section 3.4 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy that would meet the requirements of Fannie Mae or Freddie Mac, 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. Any such errors and omissions policy and fidelity bond may not be
cancelable without thirty (30) days' prior written notice to the Trustee.

         Section 3.5 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Loans and shall have full power and authority, subject to the REMIC
Provisions and the provisions of Article X hereof, to do any and all things that
it may deem necessary or desirable in connection with the master servicing and
administration of the Loans, including but not limited to the power and
authority (i) to execute and deliver, on behalf of the Certificateholders, the
Trustee and the Certificate Insurer, customary consents or waivers and other
instruments and

                                      -55-

<PAGE>

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
Loan, in each case, in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable; provided, however, that the Master
Servicer shall not (and, consistent with its responsibilities under Section 3.3,
shall not permit any Servicer 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, REMIC II or REMIC III 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, the Securities Administrator has received an Opinion of Counsel
(but not at the expense of the Master Servicer, the Securities Administrator) to
the effect that the contemplated action will not cause REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC or result in the imposition of a tax
upon REMIC I, REMIC II or REMIC III, as the case may be. The Trustee shall
furnish the Master Servicer, upon written request from a Servicing Officer, with
any powers of attorney empowering the Master Servicer or any Servicer 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
Loans or the Mortgaged Property, in accordance with the applicable Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer or applicable Servicer may request, to
enable the Master Servicer to master service and administer the 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 the misuse of
any such powers of attorney by the Master Servicer or any Servicer and shall be
indemnified by the Master Servicer or such Servicer for any costs, liabilities
or expenses incurred by the Trustee in connection with such misuse). 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 8.10 hereof. 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 authorized pursuant to this
Agreement to be taken by it in the name of the Trustee, be deemed to be the
agent of the Trustee.

         Section 3.6 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the applicable Servicing Agreement and to the extent Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicers
to enforce such clauses in accordance with the applicable Servicing Agreement.
If applicable law prohibits the enforcement of a due-on-sale clause or such
clause is otherwise not enforced in accordance with the applicable Servicing
Agreement, and, as a consequence, a Loan is assumed, the original Mortgagor may
be released from liability in accordance with the applicable Servicing
Agreement.

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         Section 3.7 RELEASE OF MORTGAGE FILES.

         (a) Upon becoming aware of a Payoff with respect to any Loan, or the
receipt by any Servicer of a notification that a Payoff has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the next
Distribution Date, the applicable Servicer will (or if the Servicer does not,
the Master Servicer may), if required under the applicable Servicing Agreement,
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, and signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a 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 Protected Account maintained by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the applicable Servicer and the Trustee and Custodian
shall have no further responsibility with regard to such Mortgage File. Upon any
such Payoff, each Servicer is authorized to give, as agent for the Trustee, as
the mortgagee under the Mortgage that secured the 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
Distribution Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master 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 a Servicer or the Master 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 the related Mortgage
File held in its possession or control to the Servicer or the Master Servicer,
as applicable. Such request for release shall obligate the Servicer or the
Master Servicer to return the Mortgage File to the Custodian on behalf of the
Trustee, when the need therefor by the Servicer or the Master Servicer no longer
exists unless the 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 Servicer or the Master Servicer.

         Section 3.8 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE.

         (a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such

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<PAGE>

documents and instruments coming into the possession of the Master Servicer or
such Servicer from time to time as are required by the terms hereof, or in the
case of the Servicers, the applicable Servicing Agreement, to be delivered to
the Trustee or Custodian. Any funds received by the Master Servicer or by a
Servicer in respect of any Loan or which otherwise are collected by the Master
Servicer or by a Servicer as Liquidation Proceeds, Insurance Proceeds or
Subsequent Recoveries in respect of any Loan shall be held for the benefit of
the Trustee, the Certificateholders and the Certificate Insurer subject to the
Master Servicer's right to retain or withdraw from the Distribution Account the
Master Servicing Compensation and other amounts provided in this Agreement, and
to the right of each Servicer to retain its Servicing Fee and other amounts as
provided in the applicable Servicing Agreement. The Master Servicer shall, and
(to the extent provided in the applicable Servicing Agreement) shall cause each
Servicer to, provide access to information and documentation regarding the 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 OTS, 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 OTS 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 Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee, the Certificateholders and the Certificate Insurer and shall be and
remain the sole and exclusive property of the Trustee; provided, however, that
the Master Servicer and each Servicer shall be entitled to setoff against, and
deduct from, any such funds any amounts that are properly due and payable to the
Master Servicer or such Servicer under this Agreement or the applicable
Servicing Agreement.

         Section 3.9 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

         (a) For each Loan, the Master Servicer shall enforce any obligation of
the Servicers under the related Servicing Agreements to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of the related Servicing
Agreements. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in the applicable
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.

         (b) Pursuant to Section 3.23, any amounts collected by the Master
Servicer, or by any Servicer, under any insurance policies (other than amounts
to be applied to the restoration or repair of the property subject to the
related Mortgage or released to the Mortgagor in accordance with the applicable
Servicing Agreement) shall be deposited into the Distribution

                                      -58-

<PAGE>

Account, subject to withdrawal pursuant to Section 3.24. Any cost incurred by
the Master Servicer or any Servicer in maintaining any such insurance if the
Mortgagor defaults in its obligation to do so shall be added to the amount owing
under the Loan where the terms of the Loan so permit; provided, however, that
the addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer or such Servicer pursuant to Section 3.24.

         Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee, the Certificateholders and the Certificate Insurer all claims under any
insurance policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited 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 Loan to the
insurer under any applicable insurance policy need not be so deposited (or
remitted).

         Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

         (a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any primary mortgage
insurance policy or any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause each Servicer (to the extent required under
the related Servicing Agreement) to keep in force and effect (to the extent that
the Loan requires the Mortgagor to maintain such insurance), primary mortgage
insurance applicable to each Loan in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) 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 and the related Servicing
Agreement, as applicable.

         (b) The Master Servicer agrees to cause each Servicer (to the extent
required under the related Servicing Agreement) to present, on behalf of the
Trustee, the Certificateholders and the Certificate Insurer, 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 Loans. Pursuant to
Section 3.22 and 3.23, any amounts collected by the Master Servicer or any
Servicer under any primary mortgage insurance policies shall be deposited by the
related Servicer in its Protected Account or by the Master Servicer in the
Distribution Account, subject to withdrawal pursuant to Sections 3.22 or 3.24,
as applicable.

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<PAGE>

         Section 3.12 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 otherwise
has fulfilled its obligations under this Agreement, 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 Loan Documents
that come into the possession of the Master Servicer from time to time.

         Section 3.13 REALIZATION UPON DEFAULTED LOANS. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the 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 the applicable
Servicing Agreement.

         Section 3.14 COMPENSATION FOR THE MASTER SERVICER.

         (a) In addition to the Master Servicer's right to receive its Master
Servicing Fee, all income and gain realized from any investment of funds in the
Distribution Account shall be for the benefit of the Master Servicer as
compensation. Servicing compensation in the form of assumption fees, if any,
late payment charges, as collected, if any, or otherwise (but not including any
Prepayment Charges) shall be retained by the applicable Servicer and shall not
be deposited in the Protected Account. 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.

         (b) The amount of the aggregate compensation payable as set forth in
Section 3.14(a) (the "Master Servicing Compensation") to the Master Servicer in
respect of any Distribution Date shall be reduced in accordance with Section
3.20.

         Section 3.15 REO PROPERTY.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Loan, the deed or certificate of sale shall be issued
to the Trustee, or to its nominee, on behalf of the Certificateholders and the
Certificate Insurer. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Further, the
Master Servicer shall, to the extent provided in the related Servicing
Agreement, cause the applicable Servicer to

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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 and the Securities
Administrator shall have been supplied 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 applicable Servicer 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 applicable Servicer (to the extent provided in
the related Servicing Agreement) to protect and conserve, such REO Property in
the manner and to the extent required by the applicable 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, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.

         (c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid Servicing Fees may be reimbursed or paid, as the
case may be, prior to final disposition, out of any net rental income or other
net amounts derived from such REO Property.

         (d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the
Distribution Account on the next succeeding Remittance Date.

         Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

         (a) The Master Servicer shall deliver to the Trustee, the Certificate
Insurer and the Rating Agencies on or before March 15 of each year, commencing
on March 15, 2005, an Officer's Certificate signed by a Servicing Officer,
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

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<PAGE>

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 any Servicer
has failed to perform any of its duties, responsibilities and obligations under
its Servicing 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 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the 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 Certificate Insurer, 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 shall take
prompt action to do so.

         Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.

         (a) Within 15 days after each Distribution Date, the Master Servicer
shall, in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("EDGAR"), a Form 8-K (or any
comparable form containing the same or comparable information or other
information mutually agreed upon) with a copy of the statement to be furnished
by the Securities Administrator to the Certificateholders for such Distribution

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Date as an exhibit thereto. Prior to January 30, 2005, the Master Servicer
shall, in accordance with industry standards, file a Form 15 Suspension Notice
with respect to the Trust Fund, if applicable. Prior to March 30, 2005 and
annually thereafter (if required), the Master Servicer shall file a Form 10-K,
in substance conforming to industry standards, with respect to the Trust Fund.
Such Form 10-K shall include, to the extent available, as exhibits (i) each
applicable Servicer's annual statement of compliance described under the related
Servicing Agreement, (ii) each applicable Servicer's accountant's report
described under the related Servicing Agreement, (iii) the Master Servicer's
accountant's report described in Section 3.17, if applicable, in each case to
the extent timely delivered, if applicable, to the Master Servicer, and (iv) a
written certification signed by an officer of the Master Servicer that complies
with the Sarbanes-Oxley Act of 2002 as in effect on the date of this Agreement
and the February 3, 2003, Statement by the Staff of the Division of Corporation
Finance of the Commission Regarding Compliance by Asset-Backed Issuers with
Exchange Act Rules 13a-14 and 15d-14 as in effect as of the date of this
Agreement. The Depositor hereby grants to the Master Servicer a limited power of
attorney to execute and file each Form 8-K and Form 10-K on behalf of the
Depositor. Such power of attorney shall continue until either the earlier of (i)
receipt by the Master Servicer from the Depositor of written termination of such
power of attorney and (ii) the termination of the Trust Fund. The Depositor and
the Trustee each agree to promptly furnish to the Master Servicer, from time to
time upon request, such further information, reports and financial statements
within its control related to this Agreement and the Loans as the Master
Servicer reasonably deems appropriate to prepare and file all necessary reports
with the Commission. The Master Servicer shall cooperate with the Depositor in
connection with any additional filings with respect to the Trust Fund as the
Depositor deems necessary under the Exchange Act. Copies of all reports filed by
the Master Servicer under the Exchange Act shall be sent to the Depositor.

         (b) The Master Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Master Servicer's
obligations under this Section 3.18 or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith. Fees and expenses incurred
by the Master Servicer in connection with this Section 3.18 shall not be
reimbursable from the Trust Fund.

         Section 3.19 UCC. The Depositor shall file any financing statements or
amendments thereto required by any change in the Uniform Commercial Code. The
Depositor agrees to file continuation statements for any such Uniform Commercial
Code financing statements which the Seller or the Depositor filed in connection
with the Trust Fund.

         Section 3.20 OBLIGATION OF THE MASTER SERVICER IN RESPECT OF
COMPENSATING INTEREST. The Master Servicer shall deposit in the Distribution
Account not later than each Distribution Account Deposit Date an amount equal to
the lesser of (i) the aggregate amounts required to be paid by the Servicers
under the Servicing Agreements with respect to Compensating Interest on the
related Loans for the related Distribution Date, and not so paid by the related
Servicers and (ii) the Master Servicing Compensation for such Distribution Date
without reimbursement therefor.

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         Section 3.21 RESERVED.

         Section 3.22 PROTECTED ACCOUNTS.

         (a) The Master Servicer shall enforce the obligation of each Servicer
to establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Loan by
Loan basis, into which accounts shall be deposited within 48 hours (or as of
such other time specified in the related Servicing Agreement) of receipt all
collections of principal and interest on any Loan and with respect to any REO
Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries and advances made from the
Servicer's own funds (less servicing compensation as permitted by the applicable
Servicing Agreement in the case of any Servicer) and all other amounts to be
deposited in the Protected Account. Each Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by the related Servicing Agreement. To the extent provided
in the related Servicing Agreement, the Protected Account shall be held in a
depository institution and segregated on the books of such institution in the
name of the Trustee for the benefit of Certificateholders and the Certificate
Insurer.

         (b) To the extent provided in the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Eligible Investments in the
name of the Trustee for the benefit of Certificateholders and the Certificate
Insurer and, except as provided in the preceding paragraph, not commingled with
any other funds, such Eligible Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Distribution Account, and shall be
held until required for such deposit. The income earned from Eligible
Investments made pursuant to this Section 3.22 shall be paid to the related
Servicer under the applicable Servicing Agreement, and the amounts required to
be distributed to the Certificateholders resulting from the loss of monies on
such investments shall be borne by and be the risk of the related Servicer. The
related Servicer (to the extent provided in the Servicing Agreement) shall
deposit the amount of any such loss in the Protected Account within two Business
Days of receipt of notification of such loss but not later than the second
Business Day prior to the Distribution Date on which the moneys so invested are
required to be remitted to the Master Servicer or the Securities Administrator.

         (c) To the extent provided in the related Servicing Agreement and
subject to this Article III, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited in the
Distribution Account amounts representing the following collections and payments
(other than with respect to principal of or interest on the Loans due on or
before the Cut-Off Date):

          (i) Monthly Payments on the Loans received or any related portion
     thereof advanced by the Servicers pursuant to the Servicing Agreements
     which were due on or before the related Due Date, net of the amount thereof
     comprising the Servicing Fees;

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<PAGE>

          (ii) Principal Prepayments, Liquidation Proceeds, Insurance Proceeds
     and Subsequent Recoveries received by the Servicers with respect to such
     Loans in the related Prepayment Period, Compensating Interest and the
     amount of any related Prepayment Charges; and

          (iii) Any amount to be used as an Advance.

         (d) Withdrawals may be made from an Account only to make remittances as
provided in Section 3.22(c), 3.23 and 3.24 or as otherwise provided in the
Servicing Agreements; to reimburse the Master Servicer or a Servicer for
Advances which have been recovered by subsequent collection from the related
Mortgagor; to remove amounts deposited in error; to remove fees, charges or
other such amounts deposited on a temporary basis; or to clear and terminate the
account at the termination of this Agreement in accordance with Section 9.1. As
provided in Sections 3.22(c) and 3.23(b) or as otherwise provided in the
Servicing Agreements certain amounts otherwise due to the Servicers may be
retained by them and need not be deposited in the Distribution Account.

         Section 3.23 DISTRIBUTION ACCOUNT.

         (a) The Securities Administrator shall establish and maintain, for the
benefit of the Certificateholders and the Certificate Insurer, the Distribution
Account as a segregated trust account or accounts. The Master Servicer shall
deposit in the Distribution Account as identified by the Master Servicer and as
received by the Master Servicer, the following amounts:

          (i) Any amounts withdrawn from a Protected Account;

          (ii) Any Advance and any amounts in respect of Prepayment Interest
     Shortfalls or Curtailment Shortfalls;

          (iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
     Recoveries received by or on behalf of the Master Servicer;

          (iv) The Purchase Price with respect to any Loans purchased by the
     Seller pursuant to Section 2.3 and all proceeds of any Loans or property
     acquired with respect thereto purchased by the Terminator pursuant to
     Section 9.1;

          (v) Any amounts required to be deposited by the Master Servicer or any
     Servicer with respect to losses on investments of deposits in an Account;
     and

          (vi) Any other amounts received by or on behalf of the Master Servicer
     and required to be deposited in the Distribution Account pursuant to this
     Agreement.

         (b) All amounts deposited to the Distribution Account shall be held by
the Securities Administrator in trust for the benefit of the Certificateholders
and the Certificate Insurer in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution 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

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or assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges, need not be credited by
the Master Servicer or the related Servicer to the Distribution Account. In the
event that the Master Servicer shall deposit or cause to be deposited to the
Distribution Account any amount not required to be credited thereto, the
Securities Administrator, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.

         (c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Securities Administrator and held by
the Securities Administrator in trust in its Corporate Trust Office, and the
Distribution Account and the funds deposited therein shall not be subject to,
and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Securities Administrator (whether made directly,
or indirectly through a liquidator or receiver of the Securities Administrator).
The amount at any time credited to the Distribution Account shall be invested in
the name of the Master Servicer, in such Eligible Investments selected by the
Master Servicer or deposited in demand deposits with such depository
institutions as selected by the Master Servicer, provided that time deposits of
such depository institutions would be an Eligible Investment. All Eligible
Investments shall mature or be subject to redemption or withdrawal on or before,
and shall be held until, the Distribution Date following the date of the
investment of such funds (the "Investment Withdrawal Distribution Date") if the
obligor for such Eligible Investment is the Securities Administrator or, if such
obligor is any other Person, the Business Day preceding such Investment
Withdrawal Distribution Date. All investment earnings on amounts on deposit in
the Distribution Account from time to time shall be for the account of the
Master Servicer. The Master Servicer shall be permitted to receive distribution
of any and all investment earnings from the Distribution Account on each
Distribution Date. If there is any loss on an Eligible Investment or demand
deposit, the Master Servicer shall deposit such amount in the Distribution
Account. With respect to the Distribution Account and the funds deposited
therein, the Securities Administrator shall take such action as may be necessary
to ensure that the Certificateholders shall be entitled to the priorities
afforded to such a trust account (in addition to a claim against the estate of
the Securities Administrator) as provided by 12 U.S.C. ss. 92a(e), and
applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.

         Section 3.24 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.

         (a) The Securities Administrator shall, from time to time on demand of
the Master Servicer make or cause to be made such withdrawals or transfers from
the Distribution Account as the Master Servicer has designated for such transfer
or withdrawal pursuant to the Servicing Agreements for the following purposes,
not in any order of priority:

          (i) to reimburse the Master Servicer or any Servicer for any Advance
     of its own funds, the right of the Master Servicer or a Servicer to
     reimbursement pursuant to this subclause (i) being limited to amounts
     received on a particular Loan (including, for this purpose, the Purchase
     Price therefor, Insurance Proceeds and Liquidation

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     Proceeds) which represent late payments or recoveries of the principal of
     or interest on such Loan respecting which such Advance was made;

          (ii) to reimburse the Master Servicer or any Servicer from Insurance
     Proceeds or Liquidation Proceeds relating to a particular Loan for amounts
     expended by the Master Servicer or such Servicer in good faith in
     connection with the restoration of the related Mortgaged Property which was
     damaged by an Uninsured Cause or in connection with the liquidation of such
     Loan;

          (iii) to reimburse the Master Servicer or any Servicer from Insurance
     Proceeds relating to a particular Loan for insured expenses incurred with
     respect to such Loan and to reimburse the Master Servicer or such Servicer
     from Liquidation Proceeds from a particular Loan for Liquidation Expenses
     incurred with respect to such Loan;

          (iv) to pay the Master Servicer or any Servicer, as appropriate, from
     Liquidation Proceeds or Insurance Proceeds received in connection with the
     liquidation of any Loan, the amount which it or such Servicer would have
     been entitled to receive under subclause (vii) of this Subsection (a) as
     servicing compensation on account of each defaulted scheduled payment on
     such Loan if paid in a timely manner by the related Mortgagor;

          (v) to pay the Master Servicer or any Servicer from the Purchase Price
     for any Loan, the amount which it or such Servicer would have been entitled
     to receive under subclause (vii) of this Subsection (a) as servicing
     compensation;

          (vi) to reimburse the Master Servicer or any Servicer for any
     Nonrecoverable Advance, after a Realized Loss has been allocated with
     respect to the related Loan if the Advance or Servicing Advance has not
     been reimbursed pursuant to clause (i);

          (vii) to pay the Master Servicing Fee to the Master Servicer, the
     Servicing Fee to the Servicers (to the extent such Servicing Fee was not
     retained by the Servicer pursuant to the related Servicing Agreement), the
     Credit Risk Management Fee to the Credit Risk Manager for such Distribution
     Date and the amount of any income or gain realized from investments of
     funds on deposit in the Distribution Account pursuant to Section 3.14
     hereof and to reimburse the Master Servicer for expenses, costs and
     liabilities incurred by and reimbursable to it pursuant to Sections 3.3,
     6.3; 8.5 and 10.01.

          (viii) to reimburse or pay any Servicer any such amounts as are due
     thereto under the applicable Servicing Agreement and have not been retained
     by or paid to the Servicer, to the extent provided in the related Servicing
     Agreement;

          (ix) to reimburse the Trustee, the Custodian and the Securities
     Administrator for expenses, costs and liabilities, if any, incurred by or
     reimbursable to such parties pursuant to this Agreement;

          (x) to remove amounts deposited in error; and

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          (xi) to clear and terminate the Distribution Account pursuant to
     Section 9.1.

         (b) The Master Servicer shall keep and maintain separate accounting, on
a Loan by Loan basis, for the purpose of accounting for any reimbursement from
the Distribution Account pursuant to subclauses (i) through (v), inclusive, or
with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 3.23(b).

         (c) On each Distribution Date, the Securities Administrator shall
distribute the Available Distribution Amount to the Holders of the Certificates
and to the Certificate Insurer in accordance with Section 4.1.

         Section 3.25 RESERVE FUND.

         (a) No later than the Closing Date, the Securities Administrator shall
establish and maintain a separate, segregated trust account titled, "Reserve
Fund, Wells Fargo Bank, N.A., in trust for the registered holders of Deutsche
Mortgage Securities, Inc. Mortgage Loan Trust, Series 2004-5, Mortgage
Pass-Through Certificates." Any payments received by the Securities
Administrator under the Cap Contract will be deposited into the Reserve Fund for
the benefit of the Class A-1 Certificates.

         (b) On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class A Certificates or the Class M
Certificates, the Securities Administrator will deposit into the Reserve Fund
the amounts described in Section 4.1(a)(iii)(E), rather than distributing such
amounts to the Class CE Certificateholders. On each such Distribution Date, the
Securities Administrator shall hold all such amounts for the benefit of the
Holders of the Class A Certificates, other than the Class A-IO Certificates, and
the Class M Certificates, and will distribute such amounts to the Holders of the
Class A Certificates, other than the Class A-IO Certificates, and the Class M
Certificates in the amounts and priorities set forth in the last paragraph of
Section 4.1(a)(iii).

         (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 shall be treated as amounts distributed
by REMIC III 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 and the
Class M Certificates, all amounts 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 or the
Class M 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

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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) 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).

         (f) For federal tax return and information reporting, the right of the
Class A-1 Certificateholders to receive payments from the Reserve Fund in
respect of any Net WAC Rate Carryover Amount shall be assigned a value of
$3,250,000.00. For federal tax return and information reporting, the right of
the Class A Certificateholders (other than the Class A-1 Certificateholders and
Class A-IO Certificateholders) and the Class M Certificateholders to receive
payments from the Reserve Fund in respect of any Net WAC Rate Carryover Amount
shall be assigned a value of zero.

         Section 3.26 PREPAYMENT PENALTY VERIFICATION.

         On or prior to each Servicer Remittance Date, each Servicer shall, to
the extent provided in the respective Servicing Agreement, provide in an
electronic format acceptable to the Master Servicer the data necessary for the
Master Servicer to perform its verification duties agreed to by the Master
Servicer and the Depositor. 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 the respective Servicer and shall notify such Servicer if the Master Servicer
has determined that such Servicer did not deliver the appropriate Prepayment
Charges to the Master Servicer in accordance with the respective Servicing
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 Loan
for which there is a discrepancy. If the respective Servicer agrees with the
verified amounts, such Servicer shall adjust the immediately succeeding
Remittance Report and the amount remitted to the Master Servicer with respect to
prepayments accordingly. If the respective Servicer disagrees with the
determination

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of the Master Servicer, such Servicer 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 such Servicer's position. The respective Servicer and the Master
Servicer shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Servicer Remittance Date, and such Servicer will indicate
the effect of such resolution on the related Remittance Report and shall adjust
the amount remitted with respect to prepayments on such Servicer Remittance Date
accordingly.

         During such time as the respective Servicer 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 Distribution
Account and the Master Servicer shall not be obligated to remit such payments,
unless otherwise required pursuant to Section 7.1 hereof. In connection with
such duties, the Master Servicer shall be able to rely solely on the information
provided to it (if any) by the respective Servicer 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 respective Servicer.

                                      -70-
<PAGE>

                                   ARTICLE IV
                    PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
                             STATEMENTS AND REPORTS

         Section 4.1 DISTRIBUTIONS TO CERTIFICATEHOLDERS.

         (a) On each Distribution Date, the Securities Administrator, to the
extent on deposit therein and based solely upon the Remittance Report for such
Distribution Date, shall withdraw from the Distribution Account the Available
Distribution Amount for such Distribution Date and distribute to each
Certificateholder and to the Certificate Insurer, as applicable, by wire
transfer in immediately available funds for the account of the Certificateholder
and the Certificate Insurer, as applicable, or by any other means of payment
acceptable to each Certificateholder of record on the immediately preceding
Record Date (other than as provided in Section 9.1 respecting the final
distribution) or the Certificate Insurer, as applicable, as specified by each
such Certificateholder or the Certificate Insurer, as applicable, and at the
address of such Holder appearing in the Certificate Register, with respect to
such Certificateholder, and to the Certificate Insurer Account, with respect to
the Certificate Insurer, from the amount so withdrawn and to the extent of such
Available Distribution Amount, such Certificateholder's Percentage Interest of
the following amounts and in the following order and priority:

          (i) On each Distribution Date, the Securities Administrator shall
     distribute the Interest Remittance Amount for such Distribution Date in the
     following order of priority:

               (A) first, to the Certificate Insurer, the Certificate Insurer
          Premium;

               (B) second, to the holders of each Class of Senior Certificates,
          the related Senior Interest Distribution Amount for such Distribution
          Date and such Class to the extent of the Interest Remittance Amount
          for such Distribution Date remaining after payment of the Certificate
          Insurer Premium to the Certificate Insurer on a pro rata basis based
          on the entitlement of each such Class;

               (C) third, to the Certificate Insurer, any unpaid Reimbursement
          Amounts related to interest draws on the Policy;

               (D) fourth, to the holders of the Class M-1 Certificates, the
          Interest Distribution Amount allocable to the Class M-1 Certificates
          to the extent of the Interest Remittance Amount for such Distribution
          Date remaining after payment of the Certificate Insurer Premium and
          any Reimbursement Amounts to the Certificate Insurer and the
          distribution of the Senior Interest Distribution Amount to the Senior
          Certificates;

               (E) fifth, to the holders of the Class M-2 Certificates, the
          Interest Distribution Amount allocable to the Class M-2 Certificates
          to the

                                      -71-

<PAGE>

          extent of the Interest Remittance Amount for such Distribution Date
          remaining after payment of the Certificate Insurer Premium and any
          Reimbursement Amounts to the Certificate Insurer, distribution of the
          Senior Interest Distribution Amount to the Senior Certificates and
          distribution of the Interest Distribution Amount to the Class M-1
          Certificates;

               (F) sixth, to the holders of the Class M-3 Certificates, the
          Interest Distribution Amount allocable to the Class M-3 Certificates
          to the extent of the Interest Remittance Amount for such Distribution
          Date remaining after payment of the Certificate Insurer Premium and
          any Reimbursement Amounts to the Certificate Insurer, distribution of
          the Senior Interest Distribution Amount to the Senior Certificates,
          and distribution of the Interest Distribution Amount to the Class M-1
          Certificates and Class M-2 Certificates;

          (ii) On each Distribution Date, the Securities Administrator shall
     distribute the Principal Distribution Amount to the holders of the
     Certificates, other than the Class A-IO, Class CE, Class P and Class R
     Certificates, in the following order of priority:

               (A) The Senior Principal Distribution Amount will be distributed
          as follows:

                    (1) first, sequentially, to the Class A-5A Certificates and
               Class A-5B Certificates, in that order, an amount up to the Class
               A-5 Lockout Distribution Amount for that Distribution Date, until
               the Certificate Principal Balance of each such Class has been
               reduced to zero; and

                    (2) second, any remaining Senior Principal Distribution
               Amount after the distributions described above, sequentially:

                         (a) to the Class A-1 Certificates, until the
                    Certificate Principal Balance thereof has been reduced to
                    zero;

                         (b) to the Class A-2 Certificates, until the
                    Certificate Principal Balance thereof has been reduced to
                    zero;

                         (c) to the Class A-3 Certificates, until the
                    Certificate Principal Balance thereof has been reduced to
                    zero;

                         (d) to the Class A-4A Certificates and Class A-4B
                    Certificates, concurrently, 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;

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<PAGE>

                         (e) to the Class A-5A Certificates, until the
                    Certificate Principal Balance thereof has been reduced to
                    zero; and

                         (f) to the Class A-5B Certificates, until the
                    Certificate Principal Balance thereof has been reduced to
                    zero.

               (B) The Certificate Insurer will be entitled to receive on each
          Distribution Date, to the extent of the portion of the Principal
          Distribution Amount remaining after the Senior Principal Distribution
          Amount has been distributed, any Reimbursement Amounts not repaid from
          the Interest Remittance Amount pursuant to Section 4.1(a)(i)(C) above.

               (C) Holders of the Class M-1 Certificates will be entitled to
          receive on each Distribution Date, to the extent of the portion of the
          Principal Distribution Amount remaining after the sum of the Senior
          Principal Distribution Amount and any Reimbursement Amount has been
          distributed, the Class M-1 Principal Distribution Amount in reduction
          of the Certificate Principal Balance thereof, until the Certificate
          Principal Balance of the Class M-1 Certificates has been reduced to
          zero.

               (D) Holders of the Class M-2 Certificates will be entitled to
          receive on each Distribution Date, to the extent of the portion of the
          Principal Distribution Amount remaining after the sum of the Senior
          Principal Distribution Amount, any Reimbursement Amount and the Class
          M-1 Principal Distribution Amount has been distributed, the Class M-2
          Principal Distribution Amount in reduction of the Certificate
          Principal Balance thereof, until the Certificate Principal Balance of
          the Class M-2 Certificates has been reduced to zero.

               (E) Holders of the Class M-3 Certificates will be entitled to
          receive on each Distribution Date, to the extent of the portion of the
          Principal Distribution Amount remaining after the sum of the Senior
          Principal Distribution Amount, any Reimbursement Amount, the Class M-1
          Principal Distribution Amount and the Class M-2 Principal Distribution
          Amount has been distributed, the Class M-3 Principal Distribution
          Amount in reduction of the Certificate Principal Balance thereof,
          until the Certificate Principal Balance of the Class M-3 Certificates
          has been reduced to zero.

          (iii) On each Distribution Date, the Securities Administrator shall
     distribute any Net Monthly Excess Cashflow for such Distribution Date in
     the following order of priority:

               (A) to the holders of the Class A Certificates (other than the
          Class A-IO Certificates) and Class M Certificates, an amount equal to
          the

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<PAGE>

          Extra Principal Distribution Amount for such Distribution Date in
          accordance with clause (iv) below;

               (B) to the Holders of the Class M-1 Certificates, an amount equal
          to the Interest Carry Forward Amount allocable to such Class of
          Certificates for such Distribution Date;

               (C) to the Holders of the Class M-2 Certificates, an amount equal
          to the Interest Carry Forward Amount allocable to such Class of
          Certificates for such Distribution Date;

               (D) to the Holders of the Class M-3 Certificates, an amount equal
          to the Interest Carry Forward Amount allocable to such Class of
          Certificates for such Distribution Date;

               (E) to the Reserve Fund, an amount equal to (a) with respect to
          the Class A Certificates, (other than the Class A-1 Certificates and
          the Class A-IO Certificates) and the Class M Certificates, the sum of
          the related Net WAC Rate Carryover Amounts, if any, and (b) with
          respect to the Class A-1 Certificates, the amount by which the sum of
          the Net WAC Rate Carryover Amounts with respect to the Class A-1
          Certificates exceeds the sum of any amounts received by the Securities
          Administrator with respect to the Cap Contract since the prior
          Distribution Date;

               (F) to the Holders of the Class M-1, Class M-2 and Class M-3
          Certificates, in that order, the Allocated Realized Loss Amount
          allocable to each such Class for such Distribution Date;

               (G) to the Holders of the Class CE Certificates, the Interest
          Distribution Amount and any Overcollateralization Reduction Amount for
          such Distribution Date; and

               (H) to the Holders of the Class R Certificates, in respect of
          Component R-3, 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
          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.

         On each Distribution Date, the Securities Administrator, after making
the required distributions of interest and principal to the Certificates as
described in Section 4.1(a)(i) and (ii) above, and after the distribution of the
Net Monthly Excess Cashflow as described in Section 4.1(a)(iii), the Securities
Administrator will withdraw from the Reserve Fund the amounts on

                                      -74-

<PAGE>

deposit therein and distribute such amounts to the Class A Certificates (other
than the Class A-IO Certificates) and the Class M Certificates in respect of any
Net WAC Rate Carryover Amounts due to each such Class in the following manner
and order of priority: FIRST, concurrently to the Class A Certificates, other
than the Class A-IO Certificates, on a pro rata basis, the related Net WAC Rate
Carryover Amount remaining unpaid for such Distribution Date for each such
Class; SECOND, to the Class M-1 Certificates, the related Net WAC Rate Carryover
Amount remaining unpaid for such Distribution Date for such Class; THIRD, to the
Class M-2 Certificates, the related Net WAC Rate Carryover Amount remaining
unpaid for such Distribution Date for such Class; and FOURTH, to the Class M-3
Certificates, the related Net WAC Rate Carryover Amount remaining unpaid for
such Distribution Date for such Class.

               (iv) (A) 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:

                    (1) first, sequentially, to the Holders of the Class A-5A
               Certificates and Class A-5B Certificates, in that order, up to
               the Class A-5 Lockout Distribution Amount, and then sequentially
               to the Holders of the Class A-1, Class A-2, Class A-3, Class A-4,
               Class A-5A and Class A-5B Certificates, in that order, until the
               Certificate Principal Balance of each such Class has been reduced
               to zero; provided that any distribution of the Extra Principal
               Distribution Amount to the Class A-4 Certificates pursuant to
               this clause (1) shall be made to the Class A-4A Certificates and
               Class A-4B Certificates concurrently, on a pro rata basis, based
               on the Certificate Principal Balance of each such Class;

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

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

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

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

                    (1) first, the lesser of (x) the Extra Principal
               Distribution Amount and (y) the Class A-5 Lockout Distribution
               Amount, shall be distributed sequentially to the Class A-5A
               Certificates and Class A-5B

                                      -75-

<PAGE>

               Certificates, in that order, until the Certificate Principal
               Balance of each such Class has been reduced to zero;

                    (2) second, the lesser of (x) the Extra Principal
               Distribution Amount and (y) the Senior Principal Distribution
               Amount, shall be distributed sequentially to the Holders of the
               Class A-1, Class A-2, Class A-3, Class A-4, Class A-5A and Class
               A-5B Certificates, in that order, until the Certificate Principal
               Balance of each such Class has been reduced to zero; provided
               that any distribution to the Class A-4 Certificates pursuant to
               this clause shall be made to the Class A-4A Certificates and
               Class A-4B Certificates concurrently, on a pro rata basis, based
               on the Certificate Principal Balance of each such class;

                    (3) third, the lesser of (x) the excess of (i) the Extra
               Principal Distribution Amount over (ii) the amount distributed to
               the Holders of the Class A Certificates pursuant to clauses (1)
               and (2) above, 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 thereof has
               been reduced to zero;

                    (4) fourth, the lesser of (x) the excess of (i) the Extra
               Principal Distribution Amount over (ii) the sum of the amounts
               distributed to the Holders of the Class A Certificates pursuant
               to clauses (1) and (2) above and to the Holders of the Class M-1
               Certificates pursuant to clause (3) above, 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 thereof has been reduced to zero; and

                    (5) fifth, the lesser of (x) the excess of (i) the Extra
               Principal Distribution Amount over (ii) the sum of the amounts
               distributed to the Holders of the Class A Certificates pursuant
               to clauses (1) and (2) above, to the Holders of the Class M-1
               Certificates pursuant to clause (3) above and to the Holders of
               the Class M-2 Certificates pursuant to clause (4) above, 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 thereof has been reduced to zero.

         (b) 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.

         (c) The final distribution of principal of each Certificate (and the
final distribution with respect to the Class R Certificate upon termination of
the Trust Fund) shall be payable in the manner provided in Section 4.1 only upon
presentation and surrender thereof on or after the Distribution Date therefor at
the office or agency of the Securities Administrator specified in the notice
delivered pursuant to the next succeeding paragraph or Section 9.1.

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<PAGE>

         Whenever, on the basis of Curtailments, Payoffs and Monthly Payments on
the Loans and Insurance Proceeds and Liquidation Proceeds received and expected
to be received during the applicable Prepayment Period, the Securities
Administrator believes that the entire remaining unpaid Certificate Principal
Balance of any Class of Certificates shall become distributable on the next
Distribution Date, the Securities Administrator shall, as early as practicable
prior to the Determination Date of the month of such Distribution Date, mail or
cause to be mailed to each Person in whose name a Certificate to be so retired
is registered at the close of business on the Record Date, to the Underwriter,
the Certificate Insurer and to each Rating Agency a notice to the effect that:

          (i) it is expected that funds sufficient to make such final
     distribution shall be available in the Distribution Account on such
     Distribution Date, and

          (ii) if such funds are available, (A) such final distribution shall be
     payable on such Distribution Date, but only upon presentation and surrender
     of such Certificate at the office or agency of the Securities Administrator
     maintained for such purpose (the address of which shall be set forth in
     such notice), and (B) no interest shall accrue on such Certificate after
     such Distribution Date.

         (d) Each Holder of an Insured Certificate, by its acceptance of such
Insured Certificate, hereby agrees that, in the event any distribution is made
to any Holder of such Insured Certificate from amounts paid under the Policy,
(i) the Certificate Insurer shall be subrogated in the manner herein provided to
the rights of the Holder of such Insured Certificate to receive, from amounts on
deposit in the Distribution Account, the distributions allocable to principal
and interest that would have been distributable to such Holder if no
distribution had been made under the Policy; and (ii) in addition to the rights
of the Holders of the Insured Certificates that the Certificate Insurer may
exercise in accordance with the provisions of Section 12.1, the Certificate
Insurer may exercise any option, vote, right, or power with respect to each
Insured Certificate for which amounts paid under the Policy (plus interest at
the Late Payment Rate thereon from the date such payment was made) are
outstanding.

         Section 4.2 ALLOCATION OF REALIZED LOSSES.

         Prior to each Distribution Date, the Master Servicer, based solely on
the information provided by the related Servicer, shall determine the amount of
Realized Losses, if any, with respect to each Loan.

         Realized Losses on the Loans for any Distribution Date will first,
cause a reduction in Net Monthly Excess Cash Flow for that Distribution Date and
second, cause a reduction in the Certificate Principal Balance of the Class CE
Certificates for that Distribution Date, until the Certificate Principal Balance
thereof has been reduced to zero. To the extent that Realized Losses on a
Distribution Date cause the aggregate Certificate Principal Balance of the Class
A Certificates (other than the Class A-IO Certificates), Class M and Class P
Certificates, after taking into account all distributions on such Distribution
Date to exceed the aggregate Principal Balance of the Loans as of the last day
of the related Due Period, such excess will be allocated first, to the Class M-3
Certificates; second, to the Class M-2 Certificates; and third, to the Class M-1
Certificates in each case to reduce the Certificate Principal Balance thereof
until it has been

                                      -77-

<PAGE>

reduced to zero. In addition, to the extent the related Servicer receives
Subsequent Recoveries with respect to any defaulted Loan, the amount of the
Realized Loss with respect to that defaulted Loan will be reduced to the extent
such Subsequent Recoveries are applied to reduce the Certificate Principal
Balance of any Class of Class M Certificates on any Distribution Date.

         Any allocation of Realized Losses to a Class M Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated as of such Distribution Date after all
distributions on such Distribution Date have been made. 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 4.1(a)(iii)(G). No
allocations of Realized Losses shall be made to the Senior Certificates or the
Class P Certificates. Notwithstanding anything to the contrary in this
Agreement, in no event will the Certificate Principal Balance of any Class M
Certificate be reduced more than once in respect of any particular amount both
(i) allocable to the Class M Certificate in respect of Realized Losses and (ii)
payable as principal to the Holder of the Certificate from Net Monthly Excess
Cashflow.

         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.

         Any Subsequent Recoveries collected by the Servicers will be
distributed as part of the Available Distribution Amount in accordance with the
priorities described under Section 4.1. In addition, the Certificate Principal
Balance of each Class of Mezzanine Certificates that has been reduced by the
allocation of a Realized Loss to such Certificate will be increased, in order of
seniority, by the amount of such Subsequent Recoveries, but only to the extent
that such Certificate has not been reimbursed for the amount of such Realized
Loss (or a portion thereof) allocated to such Certificate from Net Monthly
Excess Cashflow. 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.

         All reductions in the Certificate Principal Balance of a Certificate
effected by distributions of principal or allocations of Realized Losses with
respect to Loans made on any Distribution Date shall be binding upon all Holders
of such Certificate and of any Certificate issued upon the registration of
transfer or exchange therefor or in lieu thereof, whether or not such
distribution is noted on such Certificate.

         The principal portion of all Realized Losses on the Loans shall be
allocated on each Distribution Date first, to REMIC I Regular Interest LTI-1 and
REMIC I Regular Interest LTI-P, until the Uncertificated Principal Balances have
been reduced to zero and then to REMIC I Regular Interest LTI-IO-1, REMIC I
Regular Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3 and REMIC I Regular
Interest LTI-IO-4, until the Uncertificated Principal Balances have been reduced
to zero.

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<PAGE>

         All Realized Losses on the REMIC I Regular Interests shall be allocated
on each Distribution Date to the following REMIC II Regular Interests in the
specified percentages, as follows: first, to Uncertificated Accrued Interest
payable to the REMIC II Regular Interest LTII-AA and REMIC II Regular Interest
LTII-ZZ up to an aggregate amount equal to the REMIC II Interest Loss Allocation
Amount, 98% and 2%, respectively; second, to the Uncertificated Principal
Balances of the REMIC II Regular Interest LTII-AA and REMIC II Regular Interest
LTII-ZZ up to an aggregate amount equal to the REMIC II Principal Loss
Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-AA, REMIC II Regular
Interest LTII-M3 and REMIC II Regular Interest LTII-ZZ, 98% 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-M3 has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-AA, REMIC II Regular
Interest LTII-M2 and REMIC II Regular Interest LTII-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-M2 has been reduced to zero; and fifth, to the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-AA, REMIC II Regular
Interest LTII-M1 and REMIC II Regular Interest LTII-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-M1 has been reduced to zero.

         Section 4.3 STATEMENTS TO CERTIFICATEHOLDERS.

         On each Distribution Date, the Securities Administrator shall provide
or make available to each Certificateholder, the Certificate Insurer and the
Credit Risk Manager, a statement (each, a "Remittance Report") 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 each Servicer and Master
     Servicing Fee received by the Master Servicer during the related Due
     Period;

          (iv) the number and aggregate Principal Balance of the Loans
     delinquent one, two and three months or more;

          (v) the (A) number and aggregate Principal Balance of Loans with
     respect to which foreclosure proceedings have been initiated, and (B) the
     number and aggregate Principal Balance of Mortgaged Properties acquired
     through foreclosure, deed in lieu of foreclosure or other exercise of
     rights respecting the Trustee's security interest in the Loans;

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<PAGE>

          (vi) the aggregate Principal Balance of the Loans as of the close of
     business on the last day of the related Prepayment Period;

          (vii) the aggregate amount of Principal Prepayments made during the
     related Prepayment Period and the aggregate amount of any Prepayment
     Charges received in respect thereof;

          (viii) the amount of Realized Losses with respect to the Loans
     allocable to the Certificates on the related Distribution Date and the
     cumulative amount of Realized Losses incurred and allocated to the
     Certificates since the Cut-Off Date;

          (ix) the amount of interest accrued but not paid to each Class of
     Certificates entitled to interest since (a) the prior Distribution Date and
     (b) the Closing Date;

          (x) the amount of funds advanced by each Servicer and the Master
     Servicer for such Distribution Date;

          (xi) the total amount of Payoffs and Curtailments received during the
     related Prepayment Period;

          (xii) With respect to any Loan that became an REO Property during the
     preceding calendar month, the loan number of such Loan, the unpaid
     principal balance and the Scheduled Principal Balance of such Loan;

          (xiii) to the extent provided by the Servicer, 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;

          (xiv) the aggregate amount of extraordinary Trust Fund expenses
     withdrawn from the Distribution Account for such Distribution Date;

          (xv) the 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;

          (xvi) the aggregate amount of any Prepayment Interest Shortfalls for
     such Distribution Date, to the extent not covered by payments by the Master
     Servicer pursuant to Section 3.20;

          (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;

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          (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;

          (xxii) the Net WAC Rate Carryover Amount, if any, outstanding after
     reimbursements therefor on such Distribution Date and any amounts received
     under the Cap Contract;

          (xxiii) the respective Pass-Through Rates applicable to the Class A
     Certificates, the Class M Certificates and the Class CE Certificates for
     such Distribution Date;

          (xxiv) the amount of any deposit to the Reserve Fund contemplated by
     Section 3.25;

          (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 withdrawal from the Reserve Fund pursuant to
     the last paragraph of Section 4.1(a)(iii);

          (xxvii) the balance of the Reserve Fund after all deposits and
     withdrawals on such Distribution Date; and

          (xxviii) the amount of any Guaranteed Distribution paid on such
     Distribution Date, the amount of any Reimbursement Amount paid to the
     Certificate Insurer on such Distribution Date pursuant to Section
     4.1(a)(i)(C) and 4.1(a)(ii)(B) and the amount of any Reimbursement Amount
     remaining after giving effect to any such payments to the Certificate
     Insurer.

         The Securities Administrator shall 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 Trustee, 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 option 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.

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<PAGE>

         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.

         Within a reasonable period of time after the end of each calendar year,
the Securities Administrator shall furnish to the Certificate Insurer and to
each Person who at any time during the calendar year was a Holder of a Regular
Interest Certificate a statement containing the information set forth in
subclauses (i) and (ii) 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 to the Certificate Insurer and 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 the
Certificate Insurer and 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 Certificate
Insurer and the Certificateholder, or otherwise with respect to the purposes of
this Agreement, all such reports or information to be provided at the expense of
the Certificate Insurer or the Certificateholder, as applicable, 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 4.4 ADVANCES.

         If the Monthly Payment on a Loan or a portion thereof is delinquent as
of its Due Date, other than as a result of interest shortfalls due to bankruptcy
proceedings or application of the Relief Act, and the related Servicer fails to
make an advance of the delinquent amount pursuant to the related Servicing
Agreement, the Master Servicer shall deposit in the Distribution Account, from
its own funds or from amounts on deposit in the Distribution Account that are
held for future distribution, not later than the Distribution Account Deposit
Date immediately preceding the related Distribution Date an amount equal to such
delinquency, net of the Servicing Fee and Master Servicing Fee for such Loan
except to the extent the Master Servicer determines any such Advance to be
nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments
on the Loan for which such Advance was made. Any amounts held for future
distribution and so used shall be appropriately reflected in the Master
Servicer's records and replaced by the Master Servicer by deposit in the
Distribution Account on or before any future Distribution Account Deposit Date
to the extent that the Available Distribution

                                      -82-

<PAGE>

Amount for the related Distribution Date (determined without regard to Advances
to be made on the Distribution Account Deposit Date) shall be less than the
total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.1 on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances. Subject to the
foregoing, the Master Servicer shall continue to make such Advances through the
date that the related Servicer is required to do so under its Servicing
Agreement. In the event the Master Servicer elects not to make an Advance
because the Master Servicer deems such Advance nonrecoverable pursuant to this
Section 4.4, on the Distribution Account Deposit Date, the Master Servicer shall
present an Officer's Certificate to the Trustee and the Certificate Insurer (i)
stating that the Master Servicer elects not to make an Advance in a stated
amount and (ii) detailing the reason it deems the advance to be nonrecoverable.

         Section 4.5 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 and the Securities Administrator reasonably
believe 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 4.6 REMIC DISTRIBUTIONS.

         (a) On each Distribution Date, the following amounts, in the following
order of priority and in accordance with the Remittance Report to the extent of
funds available therefor, 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, as the case may be:

          (i) first, to the Holders of REMIC I Regular Interest LTI-IO-1, REMIC
     I Regular Interest LTI-IO-2, REMIC I Regular Interest LTI-IO-3 and REMIC I
     Regular Interest LTI-IO-4, in an amount equal to (A) the Uncertificated
     Accrued Interest for such Distribution Date, plus (B) any amounts in
     respect thereof remaining unpaid from previous Distribution Dates and
     second, to the Holders of REMIC I Regular Interest LTI-1 and REMIC I
     Regular Interest LTI-P, in an amount equal to (A) the Uncertificated
     Accrued Interest for such Distribution Date, plus (B) any amounts in
     respect thereof remaining unpaid from previous Distribution Dates;

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

          (iii) on each Distribution Date, the remainder of the Available
     Distribution Amount for such Distribution Date after the distributions made
     pursuant to clause (i)

                                      -83-

<PAGE>

     and clause (ii) above, first, to the Holders of REMIC I Regular Interest
     LTI-1 until the Uncertificated Principal Balance of such REMIC I Regular
     Interest is reduced to zero, and second, to the Holders of REMIC I Regular
     Interest LTI-IO-1, REMIC I Regular Interest LTI-IO-2, REMIC I Regular
     Interest LTI-IO-3 and REMIC I Regular Interest LTI-IO-4, until the
     Uncertificated Principal Balance of each such REMIC I Regular Interest is
     reduced to zero; and

          (iv) to the Holders of the Class R Certificates (in respect of
     Component R-1), any amounts remaining after the distributions pursuant to
     clauses (i) through (iii) above.

         On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Loans received during the related Prepayment Period will be
distributed by REMIC I to the Holders of REMIC I Regular Interest LTI-P. The
payment of the foregoing amounts to the Holders of REMIC I Regular Interest
LTI-P shall not reduce the Uncertificated Principal Balance thereof.

         (b) On each Distribution Date, the following amounts, in the following
order of priority and in accordance with the Remittance Report to the extent of
funds available therefor, shall be distributed by REMIC II to REMIC III on
account of the REMIC II Regular Interests or withdrawn from the Distribution
Account and distributed to the Holders of the Class R Certificates, as the case
may be:

          (i) first, to the Holders of REMIC II Regular Interest LTII-IO-A and
     REMIC Regular Interest LTII-IO-B, in an amount equal to (A) the
     Uncertificated Accrued Interest for such REMIC II Regular Interest for such
     Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
     from previous Distribution Dates and then to Holders of REMIC II Regular
     Interest LTII-AA, REMIC II Regular Interest LTII-A1, REMIC II Regular
     Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II Regular
     Interest LTII-A4A, REMIC II Regular Interest LTII-A4B, REMIC II Regular
     Interest LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II Regular
     Interest LTII-M1, REMIC II Regular Interest LTII-M2, REMIC II Regular
     Interest LTII-M3, REMIC II Regular Interest LTII-ZZ and REMIC II Regular
     Interest LTII-P, pro rata, in an amount equal to (A) the Uncertificated
     Accrued Interest for each such REMIC II Regular Interest for such
     Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
     from previous Distribution Dates. Amounts payable as Uncertificated Accrued
     Interest in respect of REMIC II Regular Interest LTII-ZZ shall be reduced
     and deferred when the REMIC II Overcollateralization Amount is less than
     the REMIC II Overcollateralization Target Amount, by the lesser of (x) the
     amount of such difference and (y) the REMIC II Regular Interest LTII-ZZ
     Maximum Interest Deferral Amount and such amount will be payable to the
     Holders of REMIC II Regular Interest LTII-A1, REMIC II Regular Interest
     LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II Regular Interest
     LTII-A4A, REMIC II Regular Interest LTII-A4B, REMIC II Regular Interest
     LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II Regular Interest
     LTII-M1, REMIC II Regular Interest LTII-M2, REMIC II Regular Interest
     LTII-M3 in the same proportion as the Overcollateralization Increase Amount

                                      -84-

<PAGE>

     is allocated to the Corresponding Certificates, provided, however, that the
     Uncertificated Principal Balance of REMIC II Regular Interest LTII-ZZ is
     increased by such amount;

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

         (A) 98.00% of such remainder (other than amounts payable under clause
(C) below), to the Holders of REMIC II Regular Interest LTII-AA and REMIC II
Regular Interest LTII-P, until the Uncertificated Principal Balance of such
REMIC II Regular Interest is reduced to zero, provided, however, that the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-P shall not
be reduced until the Distribution Date in September 2009 or any Distribution
Date thereafter, at which point such amount shall be distributed to REMIC II
Regular Interest LTII-P, until $100 has been distributed pursuant to this
clause;

         (B) 2.00% of such remainder (other than amounts payable under clause
(C) below) first, to the Holders of REMIC II Regular Interest LTII-A1, REMIC II
Regular Interest LTII-A2, REMIC II Regular Interest LTII-A3, REMIC II Regular
Interest LTII-A4A, REMIC II Regular Interest LTII-A4B, REMIC II Regular Interest
LTII-A5A, REMIC II Regular Interest LTII-A5B, REMIC II Regular Interest LTII-M1,
REMIC II Regular Interest LTII-M2 and REMIC II Regular Interest LTII-M3, 1.00%
of and in the same proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated Principal Balances of such
REMIC II Regular Interests are reduced to zero; to the Holders of REMIC II
Regular Interest LTII-ZZ, until the Uncertificated Principal Balance of such
REMIC II Regular Interest is reduced to zero; then

         (C) any remaining amount to the Holders of the Class R Certificates (in
respect of Component R-2); and

          (iii) third, to REMIC II Regular Interest LTII-P, 100% of the amount
     paid in respect of REMIC I Regular Interest LTI-P;

         provided, however, that (i) 98.00% and (ii) 2.00% of any principal
payments that are attributable to an Overcollateralization Reduction Amount
shall be allocated to Holders of (i) REMIC II Regular Interest LTII-AA and REMIC
II Regular Interest LTII-P, in that order and (ii) REMIC II Regular Interest
LTII-ZZ, respectively; provided that REMIC II Regular Interest LTII-P shall not
be reduced until the Distribution Date in September 2009, at which point such
amount shall be distributed to REMIC II Regular Interest LTII-P, until $100 has
been distributed pursuant to this clause.

                                      -85-

<PAGE>

                                   ARTICLE V
                                THE CERTIFICATES

         Section 5.1 THE CERTIFICATES.

         (a) Each of the Certificates shall be substantially in the forms
annexed hereto as exhibits, and shall, on original issue, be executed and
authenticated by the Securities Administrator and delivered by the Trustee to or
upon the receipt of a written order to authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund. The
Certificates shall be issuable in Authorized Denominations.

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trust Fund by a Responsible Officer of the Securities
Administrator. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Securities Administrator shall bind the Trust Fund,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificate. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
such Certificate shall have been manually authenticated by the Securities
Administrator substantially in the form provided for herein, and such
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Subject to Section 5.3, the Class A Certificates and Class M Certificates shall
be Book-Entry Certificates. On the Closing Date, the Class CE, Class P and Class
R Certificates shall not be Book-Entry Certificates but shall be issued in fully
registered certificate form.

         (b) Neither the Trustee nor the Securities Administrator shall have any
liability to the Trust Fund and shall be indemnified by the Trust Fund for, any
cost, liability or expense incurred by them arising from a registration of a
Certificate or transfer, pledge sale or other disposition of a Certificate in
reliance upon a certification, Officer's Certificate, affidavit, ruling or
Opinion of Counsel described in this Article V.

         Section 5.2 CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF
PRINCIPAL AND INTEREST; AUTHORIZED DENOMINATIONS. The aggregate principal amount
of Certificates that may be authenticated and delivered under this Agreement is
limited to the aggregate Principal Balance of the Loans as of the Cut-Off Date,
as specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 5.3. Such
aggregate principal amount shall be allocated among one or more Classes having
designations, types of interests, initial per annum Pass-Through Rates, initial
Certificate Principal Balances and Last Scheduled Distribution Dates as
specified in the Preliminary Statement to this Agreement. The aggregate
Percentage Interest of each Class of Certificates of which the Certificate
Principal Balance equals zero as of the Cut-Off Date that may be authenticated
and delivered under this Agreement is limited to 100%. Certificates shall be
issued in Authorized Denominations.

                                      -86-

<PAGE>

         Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
The Securities Administrator shall cause to be kept at its Corporate Trust
Office a Certificate Register 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.

         Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office of the Securities Administrator maintained for such
purpose pursuant to the foregoing paragraph for certificate transfer and
surrender purposes, and, in the case of the Class CE Certificates, the Class P
Certificates or the Class R Certificates, upon satisfaction of the conditions
set forth in Sections 5.3(d), (e) and (f) below, as applicable, the Securities
Administrator on behalf of the Trust shall execute, authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same aggregate Percentage Interest.

         At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in Authorized Denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. 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 registration of transfer
or exchange shall (if so required by the Trustee or the Securities
Administrator) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Securities Administrator duly
executed by, the Holder thereof or his attorney duly authorized in writing.

         (b) Except as provided herein, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of such Certificates may not be transferred by the
Trustee or the Securities Administrator except to another Depository; (ii) the
Depository shall maintain book-entry records with respect to the Certificate
Owners and with respect to ownership and transfers of such Certificates; (iii)
ownership and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee and the Securities
Administrator shall for all purposes deal with the Depository as representative
of the Certificate Owners of the Certificates for purposes of exercising the
rights of Holders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; (vi) the Trustee and the
Securities Administrator may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and Persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners; and (vii) the
direct participants of the Depository shall have no rights under this Agreement
under or with respect to any of the Certificates held on their behalf by the
Depository, and the Depository may be treated by the Trustee, the Securities
Administrator and either the Trustee's or the Securities Administrator's agents,
employees, officers and directors as the absolute owner of the Certificates for
all purposes whatsoever.

                                      -87-

<PAGE>

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.

         (c) If (i)(x) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
discharge properly its responsibilities as Depository and (y) the Securities
Administrator or the Depositor is unable to locate a qualified successor, (ii)
the Depositor, at its sole option, with the consent of the Securities
Administrator, elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, the
Certificate Owners of the Book-Entry Certificates representing Percentage
Interests of such Classes aggregating not less than 66% advise the Securities
Administrator and Depository through the Depository Participants in writing that
the continuation of a book-entry system through the Depository is no longer in
the best interests of the Certificate Owners, the Securities Administrator shall
notify all Holders of Book-Entry Certificates of the occurrence of any such
event and of the availability of definitive, fully registered Certificates
("DEFINITIVE CERTIFICATES") to Certificate Owners requesting the same. Upon
surrender to the Securities Administrator of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Securities Administrator shall, at the Depositor's expense, in
the case of (i) and (ii) above, or the Master Servicer's expense, in the case of
(iii) above, execute on behalf of the Trust and authenticate the Definitive
Certificates. None of the Depositor, the Master Servicer, the Trustee or the
Securities Administrator shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee,
the Securities Administrator, the Master Servicer and the Depositor shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.

         (d) No Transfer of a Class CE Certificate, Class P Certificate or Class
R Certificate shall be made unless such Transfer is made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "1933 ACT") and any applicable state securities laws or is exempt from the
registration requirements under the 1933 Act and such state securities laws. In
the event of any such transfer in reliance upon an exemption from the 1933 Act
and such state securities laws, in order to assure compliance with the 1933 Act
and such state securities laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective Transferee shall each certify
to the Trustee and the Securities Administrator in writing the facts surrounding
the Transfer in substantially the forms set forth in EXHIBIT D (the "TRANSFEROR
CERTIFICATE") and (x) deliver a letter in substantially the form of either
EXHIBIT E (the "INVESTMENT LETTER") or EXHIBIT F (the "RULE 144A LETTER") or (y)
there shall be delivered to the Trustee, the Depositor and the Securities
Administrator an Opinion of Counsel acceptable to and in form reasonably
satisfactory to the Trustee, the Depositor and the Securities

                                      -88-

<PAGE>

Administrator that such Transfer may be made pursuant to an exemption from the
Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Seller, the Master Servicer, the Securities Administrator or the
Trustee. Each Holder of a Class CE Certificate, Class P Certificate or Class R
Certificate desiring to effect such Transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor, the Seller, the Securities Administrator
and the Master Servicer against any liability that may result if the Transfer is
not so exempt or is not made in accordance with such federal and state laws.

         (e) No transfer of a Class CE Certificate, Class P Certificate or Class
R Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code (each, a "PLAN"), any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates
with "Plan Assets" of a Plan within the meaning of the Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("PLAN ASSETS"), as certified
by each such Transferee in the form of EXHIBIT G, unless the Securities
Administrator is provided with an Opinion of Counsel for the benefit of the
Depositor, the Master Servicer, the Trustee, the Securities Administrator and
the Master Servicer and on which they may rely which establishes to the
satisfaction of each of them 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 Master Servicer, the Trustee, the Securities
Administrator, any Servicer or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the Trustee, the
Securities Administrator or the Trust Fund. Neither a certification nor an
Opinion of Counsel will be required in connection with the initial transfer of
any such Certificate by the Depositor to an affiliate of the Depositor (in which
case, the Depositor or any affiliate thereof shall have deemed to have
represented that such affiliate is not a Plan or a Person investing Plan Assets)
and the Trustee and the Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee
or 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 Class M 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) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 94-84 or FAN
97-03, 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 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 U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (iii) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied.

                                      -89-
<PAGE>

         If any Class M, Class CE, Class P or Class R Certificate or any
interest therein is acquired or held in violation of the provisions of this
Section 5.3(e), the next preceding permitted beneficial owner will be treated as
the beneficial owner of that Certificate retroactive to the date of transfer to
the purported beneficial owner. Any purported beneficial owner whose acquisition
or holding of any such Certificate or interest therein was effected in violation
of the provisions of the two preceding paragraphs shall indemnify and hold
harmless the Depositor, the Master Servicer, the Trustee, the Securities
Administrator and the Trust from and against any and all liabilities, claims,
costs or expenses incurred by those parties as a result of that acquisition or
holding.

         (f) Each Transferee of a Class R Certificate shall be deemed by the
acceptance or acquisition of the related Ownership Interest to have agreed to be
bound by the following provisions and to have irrevocably appointed the
Depositor or its designee as its attorney-in-fact to negotiate the terms of any
mandatory sale under clause (v) below and to execute all instruments of transfer
and to do all other things necessary in connection with any such sale, and the
rights of each Transferee of a Class R Certificate are expressly subject to the
following provisions:

          (i) Each such Transferee 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.

          (ii) No Person shall acquire an Ownership Interest in a Class R
     Certificate unless such Ownership Interest is a PRO RATA undivided
     interest.

          (iii) In connection with any proposed transfer of any Ownership
     Interest in a Class R Certificate, the Securities Administrator shall as a
     condition to registration of the transfer, require delivery to it, in form
     and substance satisfactory to it, of each of the following:

               (A) an affidavit in the form of EXHIBIT C hereto from the
          proposed Transferee to the effect that such Transferee is a Permitted
          Transferee and that it is not acquiring its Ownership Interest in the
          Class R Certificate that is the subject of the proposed transfer as a
          nominee, trustee or agent for any Person who is not a Permitted
          Transferee; and

               (B) a covenant of the proposed Transferee to the effect that the
          proposed Transferee agrees to be bound by and to abide by the transfer
          restrictions applicable to the Class R Certificates.

          (iv) Any attempted or purported transfer of any Ownership Interest in
     a Class R Certificate in violation of the provisions of this Section shall
     be absolutely null and void and shall vest no rights in the purported
     Transferee. If any purported Transferee shall, in violation of the
     provisions of this Section, become a Holder of a Class R Certificate, then
     the prior Holder of such Class R Certificate that is a Permitted Transferee
     shall, upon discovery that the registration of transfer of such Class R
     Certificate was not in fact permitted by this Section, be restored to all
     rights as Holder

                                      -90-

<PAGE>

     thereof retroactive to the date of registration of transfer of such Class R
     Certificate. The Securities Administrator shall be under no liability to
     any Person for any registration of transfer of a Class R Certificate that
     is in fact not permitted by this Section or for making any distributions
     due on such Class R Certificate to the Holder thereof or taking any other
     action with respect to such Holder under the provisions of this Agreement
     so long as the Securities Administrator received the documents specified in
     clause (iii). The Securities Administrator shall be entitled to recover
     from any Holder of a Class R Certificate that was in fact not a Permitted
     Transferee at the time such distributions were made all distributions made
     on such Class R Certificate. Any such distributions so recovered by the
     Securities Administrator shall be distributed and delivered by the
     Securities Administrator to the prior Holder of such Class R Certificate
     that is a Permitted Transferee.

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

          (vi) If any Person other than a Permitted Transferee acquires any
     Ownership Interest in a Class R Certificate in violation of the
     restrictions in this Section, then the Securities Administrator upon
     receipt of reasonable compensation will provide to the Internal Revenue
     Service, and to the persons specified in Sections 860E(e)(3) and (6) of the
     Code, information needed to compute the tax imposed under Section
     860E(e)(5) of the Code on transfers of Class R interests to Disqualified
     Organizations.

         The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Securities Administrator, in form and substance satisfactory to
the Securities Administrator, (i) written notification from each Rating Agency
that the removal of the restrictions on transfer set forth in this Section will
not cause such Rating Agency to downgrade its rating of the Certificates and
(ii) an Opinion of Counsel to the effect that such removal will not cause any
REMIC created hereunder to fail to qualify as a REMIC. The Holder of the Class R
Certificate issued hereunder, while not a Disqualified Organization, is the Tax
Matters Person.

                                      -91-

<PAGE>

         (g) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, 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.

         All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Securities Administrator and disposed of pursuant to
its standard procedures.

         Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (i) any mutilated Certificate is surrendered to the Trustee or the
Securities Administrator, or (ii) the Trustee or the Securities Administrator
receives evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee and the Securities
Administrator such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to 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 like Percentage Interest. Upon the issuance of any new
Certificate under this Section 5.4, the Trustee or 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 connected therewith. Any replacement Certificate issued pursuant to
this Section 5.4 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost or
stolen Certificate shall be found at any time.

         Section 5.5 PERSONS DEEMED OWNERS.

         The Depositor, the Securities Administrator, the Master Servicer, the
Trustee, the Certificate Insurer 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 4.1
and for all other purposes whatsoever, and none of the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, the Certificate Insurer or any
agent of the Depositor, the Securities Administrator, the Master Servicer, the
Trustee or the Certificate Insurer shall be affected by notice to the contrary.

                                      -92-
<PAGE>

                                   ARTICLE VI
           THE DEPOSITOR, MASTER SERVICER AND THE CREDIT RISK MANAGER

         Section 6.1 LIABILITY OF THE DEPOSITOR AND THE MASTER SERVICER.

         The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor and
Master Servicer and undertaken hereunder by the Depositor and the Master
Servicer herein.

         Section 6.2 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER
SERVICER.

         Subject to the following paragraph, the Depositor shall keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer shall keep in full effect its existence, rights and franchises
as a corporation under the laws of the jurisdiction of its formation. The
Depositor and the Master Servicer each shall 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 Loans and to
perform its respective duties under this Agreement.

         The Depositor or the Master Servicer may be merged or consolidated with
or into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that the Rating Agencies' ratings of the Certificates
in effect immediately prior to such merger or consolidation will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to
such effect from the Rating Agencies).

         Section 6.3 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER, THE SERVICERS, THE SECURITIES ADMINISTRATOR AND OTHERS.

         None of the Depositor, the Master Servicer, the Securities
Administrator, the Servicers or any of the directors, officers, employees or
agents of the Depositor, the Master Servicer, the Securities Administrator or
the Servicers 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 the Servicing Agreements, or
for errors in judgment; provided, however, that this provision shall not protect
the Depositor, the Master Servicer, the Securities Administrator or any such
person against any breach of warranties, representations or covenants made
herein or in the Servicing Agreements, or against any specific liability imposed
on the Master Servicer, the Securities Administrator or the Servicers pursuant
hereto or pursuant to the Servicing Agreements, 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

                                      -93-

<PAGE>

reason of reckless disregard of obligations and duties hereunder or under the
Servicing Agreements. The Depositor, the Master Servicer, the Securities
Administrator, the Servicers and any director, officer, employee or agent of the
Depositor, the Master Servicer, the Securities Administrator or the Servicers
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 or under the Servicing Agreements. The Depositor, the Master Servicer,
the Servicers, the Securities Administrator, the Custodian and any director,
officer, employee or agent of the Depositor, the Master Servicer, the Servicers,
the Custodian or the Securities Administrator 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 Servicing Agreement, or any loss, liability or expense incurred by any of
such Persons other than by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder or by
reason of reckless disregard of its obligations and duties hereunder. None of
the Depositor, the Master Servicer, the Securities Administrator, the Custodian
or any 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, the Custodial Agreement or the applicable Servicing Agreement
and, in its opinion, does not involve it in any expense or liability; provided,
however, that each of the Depositor, the Master Servicer, the Custodian and the
Securities Administrator 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, the Master Servicer, the Custodian, the Servicers and the Securities
Administrator shall be entitled to be reimbursed therefor from the Distribution
Account as and to the extent provided in Article III, any such right of
reimbursement being prior to the rights of the Certificateholders and the
Certificate Insurer to receive any amount in the Distribution Account.

         Section 6.4 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, the Certificate Insurer and the
Rating Agencies. No resignation of the Master Servicer shall become effective
until the Trustee or a successor Master Servicer 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.

         Section 6.5 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

                                      -94-

<PAGE>

or transferee accepting such assignment and delegation (a) shall be a Person
which shall be qualified to service mortgage loans for Fannie Mae or Freddie
Mac; (b) shall have a net worth of not less than $15,000,000 (unless otherwise
approved by each Rating Agency pursuant to clause (ii) below); (c) shall be
reasonably satisfactory to the Trustee (as evidenced in a writing signed by the
Trustee); and (d) 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 prior to the effective date thereof.

         Section 6.6 RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER.

         The Master Servicer shall afford the Depositor and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer in respect of the Master Servicer's rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish to the
Depositor and the Trustee the most recent financial statements of its parent and
such other information relating to the Master Servicer's capacity to perform its
obligations under this Agreement as it possesses. To the extent such information
is not otherwise available to the public, the Depositor and the Trustee shall
not disseminate any information obtained pursuant to the preceding two sentences
without the Master Servicer's written consent, except as required pursuant to
this Agreement or to the extent that it is appropriate to do so (i) in working
with legal counsel, auditors, taxing authorities or other governmental agencies
or (ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee or the Trust Fund, and in any case, the Depositor or the
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

                                      -95-

<PAGE>

         Section 6.7 DUTIES OF THE CREDIT RISK MANAGER.

         For and on behalf of the Depositor, pursuant to the Credit Risk
Management Agreements the Credit Risk Manager will provide reports and
recommendations concerning certain delinquent and defaulted Loans, and as to the
collection of any Prepayment Charges with respect to the Loans. Such reports and
recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the related Credit Risk Management Agreement, and the Credit
Risk Manager shall look solely to the related Servicer for all information and
data (including loss and delinquency information and data) relating to the
servicing of the related 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 Trustee , the
Certificate Insurer 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 6.8 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, the Certificate Insurer 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 a Servicer
under a 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 by any Person respecting any matters arising hereunder,
and may rely in good faith upon the accuracy of information furnished by a
Servicer pursuant to a Credit Risk Management Agreement in the performance of
its duties thereunder and hereunder.

         Section 6.9 REMOVAL OF THE CREDIT RISK MANAGER.

         The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders evidencing, in aggregate, not less than 66 2/3% of the
aggregate Percentage Interests of all Classes of Certificates, 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.

                                      -96-
<PAGE>

                                  ARTICLE VII
                                     DEFAULT

         Section 7.1 MASTER SERVICER EVENTS OF DEFAULT.

         (a) "Master Servicer Event of Default," wherever used herein, means any
one of the following events:

          (i) [Reserved];

          (ii) any failure on the part of the Master Servicer duly to observe or
     perform in any material respect any other of the covenants or agreements on
     the part of the Master Servicer contained in this Agreement, or the breach
     by the Master Servicer of any representation and warranty contained in
     Section 2.5, 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 evidencing, in aggregate, not less than 25% of the
     Voting Rights; or

          (iii) a decree or order of a court or agency or supervisory authority
     having jurisdiction in the premises in an involuntary case under any
     present or future federal or state bankruptcy, insolvency or similar law or
     the appointment of a conservator or receiver or liquidator in any
     insolvency, readjustment of debt, marshalling of assets and liabilities or
     similar proceeding, or for the winding-up or liquidation of its affairs,
     shall have been entered against the Master Servicer and such decree or
     order shall have remained in force undischarged or unstayed for a period of
     90 days; or

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

          (v) the Master Servicer shall admit in writing its inability to pay
     its debts generally as they become due, file a petition to take advantage
     of any applicable insolvency or reorganization statute, make an assignment
     for the benefit of its creditors, or voluntarily suspend payment of its
     obligations; or

          (vi) any failure of the Master Servicer to make any Advance on any
     Distribution Account Deposit Date required to be made from its own funds
     pursuant to Section 4.4 which continues unremedied until 3:00 p.m. New York
     time on the Business Day immediately following the Distribution Account
     Deposit Date.

         If a Master Servicer Event of Default described in clauses (ii) through
(v) of this Section 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

                                      -97-

<PAGE>

direction of the Holders of Certificates evidencing, in aggregate, not less than
51% of the aggregate Certificate Principal Balance of the Certificates, 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 copy
to each Rating Agency, terminate all of the rights and obligations of the Master
Servicer (and the Securities Administrator if the Master Servicer and the
Securities Administrator are the same entity) in its capacity as Master Servicer
(and in its capacity as Securities Administrator if the Master Servicer and the
Securities Administrator are the same entity) under this Agreement, to the
extent permitted by law, and in and to the Loans and the proceeds thereof.
Except as otherwise provided in Section 7.4, if a Master Servicer Event of
Default described in clause (vi) hereof shall occur, the Trustee shall, by
notice in writing to the Master Servicer and the Depositor, terminate all of the
rights and obligations of the Master Servicer (and the Securities Administrator
if the Master Servicer and the Securities Administrator are the same entity) in
its capacity as Master Servicer under this Agreement (and in its capacity as
Securities Administrator if the Master Servicer and the Securities Administrator
are the same entity) and in and to the 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 (and, if applicable, the Securities
Administrator) under this Agreement, whether with respect to the Certificates
(other than as a Holder of any Certificate) or the Loans or otherwise, shall
pass to and be vested in the Trustee pursuant to and under this Section, and,
without limitation, the Trustee is hereby authorized and empowered, as
attorney~in~fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Master Servicer, (and, if applicable, the Securities
Administrator) 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 Loans and related documents, or otherwise. The
Master Servicer (and, if applicable, the Securities Administrator) 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 (and, if applicable, the Securities
Administrator's) functions under this Agreement, and to cooperate with the
Trustee in effecting the termination of the Master Servicer's (and, if
applicable, the Securities Administrator'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, whether in respect of Advances or
otherwise, and shall continue to be entitled to the benefits of Section 6.3,
notwithstanding any such termination, with respect to events occurring prior to
such termination). For purposes of this Section 7.1, 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.

         Section 7.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

         On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer (and, if applicable, the Securities

                                      -98-

<PAGE>

Administrator) in its capacity as Master Servicer (and, if applicable, the
Securities Administrator) under this Agreement and the transactions set forth or
provided for herein, and all the responsibilities, duties and liabilities
relating thereto and arising thereafter shall be assumed by the Trustee (except
for any representations or warranties of the Master Servicer under this
Agreement, the responsibilities, duties and liabilities contained in Section 2.3
and the obligation to deposit amounts in respect of losses pursuant to Section
3.23(c)) by the terms and provisions hereof including, without limitation, the
Master Servicer's obligations to make Advances no later than each Distribution
Date pursuant to Section 4.4; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make Advances pursuant to Section 4.4; and provided further, that any failure to
perform such duties or responsibilities caused by the Master Servicer's failure
to provide information required by Section 7.1 shall not be considered a default
by the Trustee as successor to the Master Servicer hereunder. As compensation
therefor, the Trustee shall be entitled to the Master Servicing Fee and all
funds relating to the Loans, investment earnings on the Distribution Account and
all other remuneration to which the Master Servicer would have been entitled if
it had continued to act hereunder. Notwithstanding the above and subject to the
immediately following paragraph, the Trustee may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans or if the Holders of
Certificates evidencing, in aggregate, not less than 51% of the Certificate
Principal Balance of the Certificates so request in writing promptly appoint or
petition a court of competent jurisdiction to appoint, an established mortgage
loan servicing institution acceptable to each Rating Agency and having a net
worth of not less than $15,000,000, as the successor to the Master Servicer
under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement.

         No appointment of a successor to the Master Servicer (and, if
applicable, the Securities Administrator) under this Agreement shall be
effective until the assumption by the successor of all of the Master Servicer's
(and, if applicable, the Securities Administrator'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 Loans as it and such successor shall agree;
PROVIDED, HOWEVER, that no such compensation shall be in excess of that
permitted the Master Servicer (and, if applicable, the Securities Administrator)
as such hereunder. The Depositor, the Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Pending appointment of a successor to the Master Servicer (and,
if applicable, the Securities Administrator) under this Agreement, the Trustee
shall act in such capacity as hereinabove provided. The transition costs and
expenses incurred by the Trustee in connection with the replacement of the
Master Servicer (and, if applicable, the Securities Administrator) shall be
reimbursed out of the Trust.

         Section 7.3 NOTIFICATION TO CERTIFICATEHOLDERS.

         (a) Upon any termination of the Master Servicer pursuant to Section 7.1
above or any appointment of a successor to the Master Servicer pursuant to
Section 7.2 above,

                                      -99-

<PAGE>

the Trustee shall give prompt written notice thereof to the Certificate Insurer
and the Certificateholders at their respective addresses appearing in the
Certificate Register.

         (b) Not later than the later of 60 days after the occurrence of any
event, which constitutes or which, with notice or lapse of time or both, would
constitute a Master Servicer Event of Default or five days after a Responsible
Officer of the Trustee becomes aware of the occurrence of such an event, the
Trustee shall transmit by mail to the Certificate Insurer and all Holders of
Certificates notice of each such occurrence, unless such default or Master
Servicer Event of Default shall have been cured or waived.

         Section 7.4 WAIVER OF MASTER SERVICER EVENTS OF DEFAULT.

         The Holders evidencing, in aggregate, not less than 66 2/3% of the
aggregate Percentage Interests of all Classes of Certificates affected by any
default or Master Servicer Event of Default hereunder may waive such default or
Master Servicer Event of Default; PROVIDED, HOWEVER, that a default or Master
Servicer Event of Default under clause (vi) of Section 7.1 may be waived only by
all of the Holders of the Regular Interest Certificates. Upon any such waiver of
a default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.

                                     -100-

<PAGE>

                                  ARTICLE VIII
             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

         Section 8.1 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 on their face to the requirements of this
Agreement. If any such instrument is found not to conform on its face to the
requirements of this Agreement, 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 shall provide notice to the Trustee
thereof and the Trustee shall provide notice to the Certificateholders and the
Certificate Insurer.

         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 and the Securities Administrator 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 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,

                                     -101-

<PAGE>

     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 evidencing, in aggregate, not less than 25% (or such other
     percentage set forth in this Agreement) of the aggregate Certificate
     Principal Balance of the Certificates 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 8.2 CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES
ADMINISTRATOR.

         (a) Except as otherwise provided in Section 8.1:

          (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 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;

                                     -102-

<PAGE>

          (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 evidencing, in aggregate, not less than 25% of
     the Trust Fund; 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 Securities Administrator shall not be liable for any loss
     resulting from the investment of funds held in the Distribution Account at
     the direction of the Master Servicer pursuant to Section 3.23(c);

          (viii) Neither the Trustee nor the Securities Administrator shall be
     liable for any action taken, suffered, or omitted to be taken by it in good
     faith and reasonably believed by it to be authorized or within the
     discretion or rights or powers conferred upon it by this Agreement;

          (ix) The Trustee shall not be deemed to have notice of any default or
     Master 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 the Trustee at the Corporate
     Trust Office of the Trustee, and such notice references the Certificates
     and this Agreement; and

          (x) 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) The Trustee is hereby directed by the Depositor to execute the Cap
Contract 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 Contract,
including, without limitation, the representations and warranties contained
therein. Any funds payable by the Trustee under the Cap Contract at closing
shall be paid by the Depositor. Notwithstanding anything to the contrary

                                     -103-

<PAGE>

contained herein or in the Cap Contract, the Trustee shall not be required to
make any payments to the counterparty under the Cap Contract.

         (c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

         Section 8.3 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR 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
8.12) 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, and has no liability with respect to, the
validity or sufficiency of this Agreement (other than as specifically set forth
in Section 8.12) or of the Certificates (other than the signature of the
Securities Administrator and authentication of the Securities Administrator on
the Certificates), the Policy, or of any Loan or related document. The Trustee
shall not be accountable for the use or application by the Depositor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Loans or deposited in or withdrawn from the Distribution Account.

         Section 8.4 TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR MAY
OWN CERTIFICATES.

         Each of the Trustee, the Master Servicer 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
the Trustee, the Master Servicer or the Securities Administrator.

         Section 8.5 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 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 or the Securities
Administrator in connection with any default administration to be performed by
the Trustee or the Securities Administrator pursuant to this Agreement or other
agreements related hereto and 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 or the Cap Contract,

                                     -104-

<PAGE>

including other agreements related hereto, other than any loss, liability or
expense (i) for which the Trustee is indemnified by the Master Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator pursuant to Section 10.1(g) or (iii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
by the Trustee, or Securities Administrator, respectively, in the performance of
its duties hereunder or by reason of reckless disregard of its obligations and
duties hereunder. 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. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of the Trustee. Any payment hereunder
made by the Master Servicer to the Trustee shall be from the Master Servicer's
own funds, without reimbursement from REMIC I therefor.

         Section 8.6 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 8.7.

         Section 8.7 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.

         The Trustee and the Securities Administrator may at any time resign
(including, in the case of the Securities Administrator, in connection with the
resignation or termination of the Master Servicer) 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), to the Certificateholders and to the
Certificate Insurer. 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 Certificate Insurer, 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

                                      -105-

<PAGE>

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 8.6 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.

         The Holders of Certificates evidencing, in aggregate, not less than 51%
of the Certificate Principal Balance of the Certificates 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 Certificate Insurer, 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. All costs and expenses incurred by the Trustee in
connection with its removal without cause hereunder shall be reimbursed to it by
the Trust Fund.

         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 8.8.

         Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.

         Section 8.8 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.

         Any successor trustee or successor securities administrator appointed
as provided in Section 8.7 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

                                     -106-

<PAGE>

predecessor securities administrator shall deliver to the successor trustee or
successor securities administrator all 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 8.6 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 the Certificate Insurer
and 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 8.9 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 8.6, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

         Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of REMIC I or property securing the same may at the time be located, the 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 8.10,
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
8.6 hereunder and no

                                     -107-

<PAGE>

notice to Holders of Certificates of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 8.8 hereof.

         In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to 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 VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee, or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.

         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 8.11 APPOINTMENT OF OFFICE OR AGENCY.

         The Securities Administrator shall appoint an office or agency in the
City of Minneapolis located at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, where the Certificates may be surrendered for registration of
transfer or exchange, and presented for final distribution and where notices and
demands to or upon the Securities Administrator in respect of the Certificates
and this Agreement may be served.

         Section 8.12 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.

         The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator, the Depositor and the Certificate Insurer 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.

                                      -108-

<PAGE>

          (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 incorporation 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.

                                     -109-

<PAGE>

                                   ARTICLE IX
                                   TERMINATION

         Section 9.1 TERMINATION UPON PURCHASE OR LIQUIDATION OF ALL LOANS.

         (a) Subject to Section 9.2, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator and the Trustee (other than the obligations of the
Master Servicer to the Securities Administrator pursuant to Section 8.5 and of
the Master Servicer to pay Compensating Interest to the Securities Administrator
and the Securities Administrator to make payments in respect of 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 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 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 Loans and each REO Property
remaining in REMIC I shall be at a price (the "Termination Price") equal to the
sum of (i) the aggregate Purchase Price of all the Loans included in REMIC I,
plus the fair market value of each REO Property, if any, included in REMIC I,
such valuation to be conducted by an appraiser mutually agreed upon by the
Terminator and the Securities Administrator in their reasonable discretion plus
(ii) any amounts due the Servicers and the Master Servicer in respect of unpaid
Servicing Fees, Master Servicing Fees and outstanding Advances and Servicing
Advances plus (iii) any amounts due to the Certificate Insurer in respect of
unpaid Certificate Insurer Premiums and unpaid Reimbursement Amounts.

         (b) The Master Servicer shall have the right (the party exercising such
right, the "Terminator"), to purchase all of the 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 Loans and each REO Property
remaining in REMIC I pursuant to clause (i) above only if (A) the aggregate
Scheduled Principal Balance of the 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 Scheduled Principal Balance of the Loans as of the Cut-Off Date and
(B) in the event termination would cause a draw on the Policy, the Certificate
Insurer provides written consent to such termination to the Terminator, the
Trustee and the Securities Administrator.

         (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 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

                                     -110-

<PAGE>

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 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 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 Loans and
each REO Property remaining in the REMIC I by the Terminator, the Terminator
shall deliver to the Securities Administrator for deposit in the Distribution
Account not later than the last Business Day of the month next preceding the
month of the final distribution on the Certificates an amount in immediately
available funds equal to the above-described Termination Price. The Securities
Administrator shall remit (a) to the Master Servicer from such funds deposited
in the Distribution Account (i) any amounts which the Master Servicer notifies
it in writing that the Master Servicer would be permitted to withdraw and retain
from the Distribution Account pursuant to Section 3.24 and (ii) any other
amounts otherwise payable by the Securities Administrator to the Master Servicer
from amounts on deposit in the Distribution Account pursuant to the terms of
this Agreement and notified by the Master Servicer in writing and (b) to the
Servicers, any amounts reimbursable to the Servicers pursuant to the Servicing
Agreements, in each case prior to making any final distributions pursuant to
Section 9.1(d) below. Upon certification to the Trustee and the Securities
Administrator by a Servicing Officer of the making of such final deposit, the
Trustee shall promptly release to the Terminator the Mortgage Files for the
remaining Loans, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate such transfer in each case without
recourse, representation or warranty.

         (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 4.1 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired 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
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
9.1 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

                                     -111-

<PAGE>

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) for final payment thereof in accordance with
this Section 9.1. Any such amounts held in trust by the Securities Administrator
shall be held in an Eligible Account and the Securities Administrator may direct
any depository institution maintaining such account to invest the funds in one
or more Eligible Investments. All income and gain realized from the investment
of funds deposited in such accounts held in trust by the Securities
Administrator shall be for the benefit of the Securities Administrator;
PROVIDED, HOWEVER, that the Securities Administrator shall deposit in such
account the amount of any loss of principal incurred in respect of any such
Eligible Investment made with funds in such accounts immediately upon the
realization of such loss.

         Immediately following the deposit of funds in trust hereunder in
respect of the Certificates, the Trust Fund shall terminate.

         Section 9.2 ADDITIONAL TERMINATION REQUIREMENTS.

         (a) In the event that the Terminator purchases all the Loans and each
REO Property or the final payment on or other liquidation of the last Loan or
REO Property remaining in REMIC I pursuant to Section 9.1, the Trust Fund shall
be terminated in accordance with the following additional requirements:

          (i) The Securities Administrator shall specify the first day in the
     90-day liquidation period in a statement attached to each 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 Securities
     Administrator 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 requesting Terminator (or, if the Trust Fund
is being terminated as a result of the occurrence of the event described in
clause (ii) of the first paragraph of Section 9.1, 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 REMIC
pursuant to this Section 9.2.

         (c) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Securities Administrator to specify the 90-day
liquidation period for each REMIC, which authorization shall be binding upon all
successor Certificateholders.

                                     -112-

<PAGE>

                                   ARTICLE X
                                REMIC PROVISIONS

         Section 10.1 REMIC ADMINISTRATION.

         (a) The Trustee shall elect to treat each REMIC under the Code and, if
necessary, under applicable state law and as instructed by the Securities
Administrator. Each such election shall 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 Component R-1 shall be
designated as the Residual Interest in REMIC I. The REMIC II Regular Interest
shall be designated as the Regular Interests in REMIC II and Component R-2 shall
be designated as the Residual Interest in REMIC II. The Certificates (other than
the Class R Certificates) shall be designated as the Regular Interests in REMIC
III and Component R-3 shall be designated as the Residual Interest in REMIC III.
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, REMIC II Regular Interests and the interests represented by the
Certificates.

         (b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC created hereunder 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 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 REMIC's tax matters person shall (i) act on behalf of the Trust Fund in
relation to any tax matter or controversy involving any 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 REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the

                                     -113-

<PAGE>

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 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 shall serve as the representative of each
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 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 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 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 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 REMIC or the respective
assets of each, or causing any REMIC to take any action, which is not
contemplated under the terms of this Agreement, the Securities Administrator
shall 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 REMIC, and the Securities Administrator shall not take any such action or
cause any 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 borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee.

                                     -114-

<PAGE>

         (g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.3 hereof, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Securities Administrator pursuant
to Section 10.3 hereof, if such tax arises out of or results from a breach by
the Securities Administrator of any of its obligations under this Article X,
(iii) to the Master Servicer pursuant to Section 10.3 hereof, if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under Article III or under this Article X, or (iv) against amounts on deposit in
the Distribution Account and shall be paid by withdrawal therefrom.

         (h) The Trustee and the Securities Administrator shall, for federal
income tax purposes, maintain books and records with respect to each REMIC on a
calendar year and on an accrual basis.

         (i) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any REMIC other than in connection with any
Substitute Loan delivered in accordance with Section 2.3 unless it shall have
received an Opinion of Counsel addressed to it 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 REMIC will receive a fee or
other compensation for services nor permit any 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 10.2 PROHIBITED TRANSACTIONS AND ACTIVITIES.

         None of the Depositor, the Securities Administrator, the Master
Servicer or the Trustee shall sell, dispose of or substitute for any of the
Loans (except in connection with (i) the foreclosure of a Loan, including but
not limited to, the acquisition or sale of a Mortgaged Property acquired by deed
in lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Loans pursuant to Article
II of this Agreement), nor acquire any assets for any REMIC (other than REO
Property acquired in respect of a

                                     -115-

<PAGE>

defaulted Loan), nor sell or dispose of any investments in the Distribution
Account for gain, nor accept any contributions to any REMIC after the Closing
Date (other than a Substitute Loan delivered in accordance with Section 2.3),
unless it has received an Opinion of Counsel, addressed to the Trustee (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee) that
such sale, disposition, substitution, acquisition or contribution will not (a)
affect adversely the status of any REMIC as a REMIC or (b) cause any REMIC to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.

         Section 10.3 INDEMNIFICATION.

         (a) The Trustee agrees to be liable for any taxes and costs incurred by
the Trust Fund, the Depositor, the Securities Administrator or the Master
Servicer including, without limitation, any reasonable attorneys fees imposed on
or incurred by the Trust Fund, the Depositor, the Securities Administrator or
the Master Servicer as a result of the Trustee's failure to perform its
covenants set forth in this Article X in accordance with the standard of care of
the Trustee set forth in this Agreement.

         (b) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor and the Trustee for any taxes and costs including, without limitation,
any reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Trustee, as a result of the Master Servicer's failure to
perform its covenants set forth in Article III in accordance with the standard
of care of the Master Servicer set forth in this Agreement.

         (c) The Securities Administrator agrees to be liable for any taxes and
costs incurred by the Trust Fund, the Depositor or the Trustee including,
without limitation, any reasonable attorneys fees imposed on or incurred by the
Trust Fund, the Depositor or the Trustee as a result of the Securities
Administrator's failure to perform its covenants set forth in this Article X in
accordance with the standard of care of the Securities Administrator set forth
in this Agreement.

                                     -116-

<PAGE>

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

         Section 11.1 AMENDMENT. This Agreement may be amended from time to
time, by the Depositor, the Master Servicer, the Securities Administrator and
the Trustee, without the consent of any of the Certificateholders, (a) to cure
any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Agreement, (b) to
modify, eliminate or add to any provisions to such extent as shall be necessary
to maintain the qualification of the Trust Fund as three REMICs at all times
that any Class A, Class M , Class CE or Class P Certificates are outstanding,
provided, that such action shall not, as evidenced by an Opinion of Counsel
addressed to the Trustee and delivered to the Trustee, adversely affect in any
material respect the interests of any Certificateholder. 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,
the Master Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to at least 66-2/3% of the
Voting Rights for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; PROVIDED, HOWEVER, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received on 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 in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66-2/3%
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 the 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 Counsel addressed to it to the effect that such amendment
will not cause either REMIC I, REMIC II or REMIC III of the Trust Fund to fail
to qualify as a REMIC at any time that REMIC I Regular Interests, REMIC II
Regular Interests or Regular Interest Certificates are outstanding.

                                     -117-

<PAGE>

         As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and Rating Agency.

         It shall not be necessary for the consent of the Certificateholders
under this Section 11.1 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.

         Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel addressed to it
stating that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.

         Section 11.2 RECORDATION OF AGREEMENT; COUNTERPARTS. To the extent
permitted by applicable law, this Agreement (or an abstract hereof, if
acceptable by the applicable recording office) 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 after the Depositor has delivered to the
Trustee 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 11.3 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 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.

         Except as otherwise expressly provided herein no Certificateholder,
solely by virtue of its status as Certificateholder, shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.

         No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing 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

                                     -118-

<PAGE>

holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless all of the
Holders of Certificates evidencing, in aggregate, not less than 25% of the Trust
Fund shall have made written request upon the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
60 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more holders of Certificates shall have any right in any manner whatever
by virtue or by availing 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 benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.

         Section 11.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES OTHER THAN 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

         Section 11.5 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to 60 Wall Street, New York, New York 10005,
Attention: Deutsche Mortgage Securities, Inc., Mortgage Loan Trust, Series
2004-5, telecopy number: (212) 250-2500, or such other address or telecopy
number as may hereafter be furnished to the Master Servicer and the Trustee in
writing by the Depositor, (b) in the case of the Master Servicer and the
Securities Administrator, P.O. Box 98, Columbia, Maryland 21046 and for
overnight delivery to 9062 Old Annapolis Road, Columbia, Maryland 21045,
Attention: Deutsche Mortgage Securities, Inc., 2004-5 (telecopy number: (410)
715-2380), or such other address or telecopy number as may hereafter be
furnished to the Trustee and the Depositor in writing by the Master Servicer or
the Securities Administrator, in the case of the Trustee, at the Corporate Trust
Office or such other address or telecopy number as the Trustee may hereafter
furnish to the Master Servicer, the Depositor and the Certificate Insurer in
writing by the Trustee and (d) in the case of the Certificate Insurer, 125 Park
Avenue, New York, New York 10017, Attention: Research and Risk Management. 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.

                                     -119-

<PAGE>

         Section 11.6 SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 11.7 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 it has actual
knowledge:

     1.   Any material change or amendment to this Agreement;

     2.   The occurrence of any Master Servicer Event of Default that has not
          been cured or waived;

     3.   The resignation or termination of the Master Servicer or the Trustee;

     4.   The repurchase or substitution of Loans pursuant to or as contemplated
          by Section 2.3;

     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 to make
          advances regarding delinquent Loans pursuant to Section 7.2.

         The Master Servicer shall make available to each Rating Agency copies
of the following:

     1.   Each annual statement as to compliance described in Section 3.16; and

     2.   Each annual independent public accountants' servicing report described
          in Section 3.17.

         Any such notice pursuant to this Section 11.7 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 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.

                                     -120-

<PAGE>

         Section 11.8 ARTICLE AND SECTION REFERENCES.

         All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

         Section 11.9 GRANT OF SECURITY INTEREST.

         It is the express intent of the parties hereto that the conveyance of
the Loans by the Depositor to the Trustee, on behalf of the Trust Fund and for
the benefit of the Certificateholders, be, and be construed as, a sale of the
Loans by the Depositor and not a pledge of the Loans to secure a debt or other
obligation of the Depositor. However, in the event that, notwithstanding the
aforementioned intent of the parties, the 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 Loans by the Depositor to the Trustee, on
behalf of the Trust Fund 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 2.1 hereof shall be
deemed to be a grant by the Depositor to the Trustee, on behalf of the Trust
Fund 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 Loans and all
amounts payable to the holders of the 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 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 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
Fund and for the benefit of the Certificateholders, a security interest in the
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 2.1 to be a true, absolute and unconditional sale of the Loans and
assets constituting the Trust Fund by the Depositor to the Trustee, on behalf of
the Trust Fund and for the benefit of the Certificateholders.

                                  ARTICLE XII
                CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER

         Section 12.1 EXERCISE OF RIGHTS OF HOLDER OF THE INSURED CERTIFICATES.

         Each of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, and, by accepting its Insured Certificate, each
Holder of an Insured Certificate, agrees that unless

                                     -121-

<PAGE>

a Certificate Insurer Default has occurred and is continuing, the Certificate
Insurer shall have the right to exercise all rights of the Holders of the
Insured Certificates under this Agreement (except as provided in clause (i) of
the second paragraph of Section 11.1) without any further consent of the Holders
of the Insured Certificates, including, without limitation: (i) the right to
direct foreclosures upon Loans upon failure of the Servicer to do so; (ii) the
right to require the Seller to repurchase or substitute for Loans pursuant to
Section 2.3; (iii) the right to give notices of breach or to terminate the
rights and obligations of the Master Servicer pursuant to Section 7.1; (iv) the
right to direct the actions of the Trustee during the continuance of a Master
Servicer Event of Default pursuant to Section 7.1; (v) the right to consent to
or direct any waivers of Master Servicer Events of Default pursuant to Section
7.4; (vi) the right to direct the Trustee to investigate certain matters
pursuant to Section 8.2(a)(v); and (vii) the right to remove the Trustee and the
Securities Administrator pursuant to Section 8.7 hereof.

         In addition, each Holder of an Insured Certificate agrees that, unless
a Certificate Insurer Default has occurred and is continuing, the rights
specifically set forth above may be exercised by the Holder of an Insured
Certificate only with the prior written consent of the Certificate Insurer.

         Section 12.2 TRUSTEE AND SECURITIES ADMINISTRATOR TO ACT SOLELY WITH
CONSENT OF CERTIFICATE INSURER.

         Unless a Certificate Insurer Default has occurred and is continuing,
neither the Trustee nor the Securities Administrator shall: (i) agree to any
amendment pursuant to Section 11.1 which requires the consent of the
Certificateholders; or (ii) undertake any litigation pursuant to Section
8.2(a)(iii) at the request or direction of the Certificateholders, without the
prior written consent of the Certificate Insurer which consent shall not be
unreasonably withheld or delay; provided, however, nothing contained herein
shall prohibit or prevent the Trustee and the Securities Administrator from
defending itself or the Trust Fund or taking any action related thereto.

         Section 12.3 TRUST FUND AND ACCOUNTS HELD FOR BENEFIT OF CERTIFICATE
INSURER.

         The Trustee shall hold the Trust Fund and the Mortgage Files for the
benefit of the Certificateholders and the Certificate Insurer and all references
in this Agreement (including, without limitation, in Sections 2.1 and 2.2) and
in the Certificates to the benefit of Holders of the Certificates shall be
deemed to include the Certificate Insurer.

         The Master Servicer hereby acknowledges and agrees that it shall master
service and administer the related Loans and any REO Properties, and the
Securities Administrator hereby acknowledges and agrees that it shall maintain
the Distribution Account, for the benefit of the Certificateholders and for the
benefit of the Certificate Insurer, and all references in this Agreement
(including, without limitation, in Section 3.1) to the benefit of or actions on
behalf of the Certificateholders shall be deemed to include the Certificate
Insurer. Unless a Certificate Insurer Default has occurred and is continuing,
neither the Master Servicer nor the Depositor shall undertake any litigation
pursuant to Section 6.3 (other than litigation to enforce their respective
rights hereunder or defend themselves against claims made against them) without
the

                                     -122-

<PAGE>

prior consent of the Certificate Insurer (which consent shall not be
unreasonably withheld or delayed).

         Section 12.4 CLAIMS UPON THE POLICY; POLICY PAYMENTS ACCOUNT.

         (a) If, at or before 2:00 p.m., New York time, on the second Business
Day prior to a Distribution Date, the Securities Administrator determines that a
Guaranteed Distributions Shortfall for such Distribution Date is greater than
zero, then the Securities Administrator shall give notice to the Certificate
Insurer by telephone or telecopy of the amount of such Guaranteed Distributions
Shortfall. Such notice of such Guaranteed Distributions Shortfall shall be
confirmed in writing in the form set forth as Exhibit A to the Endorsement to
the Policy, to the Certificate Insurer at or before 2:00 p.m. New York time on
the second Business Day prior to such Distribution Date. Following Receipt (as
defined in the Policy) by the Certificate Insurer of such notice in such form,
the Certificate Insurer will pay any amount payable under the Policy on the
later to occur of (i) 12:00 noon New York time on the second Business Day
following such receipt and (ii) 12:00 noon New York time on the Distribution
Date to which such Guaranteed Distributions Shortfall relates, as provided in
the Endorsement to the Policy.

         (b) 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 Policy and the providing of any
notices required to be provided thereunder. The Securities Administrator shall
establish a segregated non-interest bearing trust account for the benefit of
Holders of the Insured Certificates and the Certificate Insurer referred to
herein as the "Policy Payments Account" over which the Securities Administrator
shall have exclusive control and sole right of withdrawal. The Securities
Administrator shall deposit any amount paid under the Policy in the Policy
Payments Account and distribute such amount only for purposes of payment to
Holders of Insured Certificates of the Guaranteed Distributions Shortfall or any
amount in respect of a Preference Claim (as defined in the Policy) for which a
claim under the Policy was made, and such amount may not be applied to satisfy
any costs, expenses or liabilities of the Master Servicer, the Securities
Administrator, the Trustee or the Trust Fund. Amounts paid under the Policy
shall be transferred to the Distribution Account in accordance with the next
succeeding paragraph and disbursed by the Securities Administrator to Holders of
Insured Certificates in accordance with Section 4.1(c) (or, in the case of an
amount in respect of a Preference Claim, to the related Holders of Insured
Certificates as contemplated in Section 12.4(d)). 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 the other distributions to be made to such Holders
pursuant to Section 4.1. However, the amount of any payment of principal of or
interest on the Insured Certificates to be paid from funds transferred from the
Policy Payments Account shall be noted as provided in paragraph (c) below in the
Certificate Register and in the statement to be furnished to Holders of the
Insured Certificates pursuant to Section 4.3. Funds held in the Policy Payments
Account shall not be invested.

         (c) On any Distribution Date with respect to which a claim has been
made under the Policy, the amount of any funds received by the Securities
Administrator as a result of any claim under the Policy, to the extent required
to pay the Guaranteed Distributions Shortfall

                                     -123-

<PAGE>

on such Distribution Date, shall be withdrawn from the Policy Payments Account
and deposited in the Distribution Account and applied by the Securities
Administrator, directly to the payment in full of the Guaranteed Distributions
Shortfall due on the Insured Certificates. Funds received by the Securities
Administrator as a result of any claim under the Policy shall be deposited by
the Securities Administrator in the Policy Payments Account and used solely for
payment to the Holders of the Insured Certificates and may not be applied to
satisfy any costs, expenses or liabilities of the Master Servicer, the
Securities Administrator, the Trustee or the Trust Fund. Any funds remaining in
the Policy Payments Account on the first Business Day following a Distribution
Date shall be remitted to the Certificate Insurer, pursuant (and subject to
receipt of) to the instructions of the Certificate Insurer, by the end of such
Business Day.

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

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

         Section 12.5 EFFECT OF PAYMENTS BY CERTIFICATE INSURER; SUBROGATION.

         Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on any Insured Certificate which is made
with moneys received pursuant to the terms of the Policy shall not be considered
payment of such Insured Certificate from the Trust Fund and shall not result in
the payment of or the provision for the payment of the principal of or interest
on such Insured Certificate within the meaning of Section 4.1. The Depositor,
the Master Servicer, Securities Administrator and the Trustee each acknowledge,
and each Holder of an Insured Certificate by its acceptance of a such
Certificate agrees, that without the need for any further action on the part of
the Certificate Insurer, the Depositor, the Master Servicer, Securities
Administrator or the Trustee (i) to the extent the Certificate Insurer makes
payments, directly or indirectly, on account of principal of or interest on any
Insured Certificate to the Holder of such

                                     -124-

<PAGE>

Certificate, the Certificate Insurer will be fully subrogated to the rights of
such Holder to receive such principal and interest from the Trust Fund and (ii)
the Certificate Insurer shall be paid such principal and interest but only from
the sources and in the manner provided herein for the payment of such principal
and interest.

         The Trustee, the Securities Administrator and the Master Servicer shall
cooperate in all respects with any reasonable request by the Certificate Insurer
for action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Holders as otherwise set forth herein; provided, however, that neither the
Trustee nor the Securities Administrator shall be under any obligation to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, direction or order of the Certificate Insurer pursuant to the
provisions of this Agreement, unless the Certificate Insurer shall have offered
to the Trustee or the Securities Administrator, as applicable, reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby.

         Section 12.6 NOTICES TO CERTIFICATE INSURER.

         All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to the Certificateholders shall also be sent to the
Certificate Insurer.

         Section 12.7 THIRD PARTY BENEFICIARY.

         The Certificate Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.

Section 12.8      TRUSTEE TO HOLD THE POLICY.

         The Trustee shall hold the Policy in trust as agent for the Holders of
the Insured Certificates for the purpose of making claims thereon and
distributing the proceeds thereof. Upon the later of (i) the date upon which the
Certificate Principal Balance of the Insured Certificates has been reduced to
zero and all Guaranteed Distributions (as defined in the Policy) have been made
and (ii) the date the Term of This Policy (as defined in the Policy) ends, the
Trustee shall surrender the Policy to the Certificate Insurer for cancellation.
Neither the Policy nor the amounts paid on the Policy will constitute part of
the Trust Fund or assets of any Trust REMIC created by this Agreement. Each
Holder of an Insured Certificate, by accepting its Insured Certificate, appoints
the Trustee as attorney-in-fact for the purpose of making claims on the Policy.

         Section 12.9 TERMINATION OF CERTAIN OF CERTIFICATE INSURER'S RIGHTS.

         Notwithstanding anything to the contrary anywhere in this Agreement,
all rights of the Certificate Insurer, except in the case of any right to
indemnification hereunder, shall permanently cease to be operable upon the
latest to occur of (A) the date upon which the Certificate Principal Balance of
each Insured Certificate has been reduced to zero and all Guaranteed
Distributions (as defined in the Policy) have been made, (B) the date the Term
of

                                     -125-

<PAGE>

This Policy (as defined in the Policy) ends and (C) the payment in full to the
Certificate Insurer of all amounts paid under the Policy plus interest at the
Late Payment Rate thereon from the date such payment was made, and any other
amounts owing to the Certificate Insurer under the Insurance Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     -126-

<PAGE>

         IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Securities
Administrator and the 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.

                                 DEUTSCHE MORTGAGE SECURITIES, INC.,
                                 as Depositor

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

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

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

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

                                 HSBC  BANK USA,  NATIONAL  ASSOCIATION
                                 not in its  individual capacity but solely
                                 as Trustee

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

<PAGE>

With Respect to Sections 6.7, 6.8 and 6.9:

THE MURRAYHILL COMPANY

By:____________________________________
Name:

<PAGE>

STATE OF                   )
                           ) ss.:
COUNTY OF                  )

         On the ___ day of August 2004, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of Deutsche Mortgage Securities, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                     Notary Public

[Notarial Seal]

<PAGE>

STATE OF                   )
                           ) ss.:
COUNTY OF                  )

         On the ___ day of August 2004, before me, a notary public in and for
said State, personally appeared _____________________ known to me to be a
_____________________ of Deutsche Mortgage Securities, Inc ., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                      Notary Public

[Notarial Seal]

<PAGE>

STATE OF                    )
                            ) ss.:
COUNTY OF                   )

         On the __ day of August 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]

<PAGE>

STATE OF                   )
                           ) ss.:
COUNTY OF                  )

         On the ___ day of August 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]

<PAGE>

                                   EXHIBIT A-1

              FORM OF CLASS A-[1][2][3][4A][4B][5A][5B] 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").

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND CERTAIN 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 MAY 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.

         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>

Certificate No.1                                 Pass-Through Rate:       %

Class A-[1][2][3][4A][4B][5A][5B] Senior         Percentage Interest: _____

Date of Pooling and Servicing Agreement          Aggregate Initial Certificate
and Cut-Off Date:                                Principal Balance of this
August 1, 2004                                   Certificate as of the
                                                 Cut-Off Date:
                                                 $

First Distribution Date:                         Initial Certificate Principal
September 27, 2004                               Balance of this Certificate as
                                                 of the Cut-Off Date:
                                                 $________

Master Servicer:                                 CUSIP: ___________
Wells Fargo Bank, N.A.

Assumed Final Distribution Date:
July, 2034

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class A-[1][2][3][4A][4B][5A][5B] Certificates with
         respect to a Trust Fund consisting primarily of a pool of conventional
         one- to four-family fixed interest rate mortgage loans sold by DEUTSCHE
         MORTGAGE SECURITIES, INC.

         This Certificate is payable solely from the assets of the Trust Fund as
described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans (as defined below) are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Deutsche Mortgage Securities, Inc. ("DMSI"). The Mortgage Loans were sold by DB
Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-Off
Date specified above (the "Agreement"), among DMSI, as depositor (the

<PAGE>

"Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") 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,
capitalized terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such
Holder is bound.

         [Class A-1 Certificates] Interest on this Certificate will accrue (a)
as to the Distribution Date in September 2004, during the period commencing on
the Closing Date and ending on the day preceding the Distribution Date and (b)
as to any Distribution Date thereafter, the period commencing on the
Distribution Date in the month immediately preceding the month in which that
Distribution Date occurs and ending on the day preceding that Distribution Date.
The Pass-Through Rate applicable to the calculation of interest payable with
respect to this Certificate on any Distribution Date (as hereinafter defined)
shall be a per annum rate equal to the lesser of (i) One-Month LIBOR plus ____%
and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date The
Securities Administrator will distribute on the 25th day of each month, or, if
such 25th day is not a Business Day, the immediately following Business Day
(each, 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"), an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to the Holders of Certificates
of the same Class as this Certificate. Any such distributions will be made by
wire transfer in immediately available funds to the account of such Person or by
any other means of payment acceptable to such Person. The last scheduled
Distribution Date is the Distribution Date in the month specified above as the
Assumed Final Distribution Date.

         [Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Securities Administrator will distribute
on the 25th day of each month, or, if such 25th day is not a Business Day, the
immediately following Business Day (each, 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 last Business Day of
the calendar month immediately preceding the month of such Distribution Date
(the "Record Date"), an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to the Holders of Certificates of the same Class as
this Certificate. The last scheduled Distribution Date is the Distribution Date
in the month specified above as the Assumed Final Distribution Date.]

         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 and designated in such notice. The initial Certificate Principal Balance
of this Certificate is set forth above. The Certificate Principal Balance hereof

<PAGE>

will be reduced to the extent of distributions allocable to principal hereon and
any losses allocable hereto as described in the Agreement.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder, and that
neither the Depositor, the Trustee, the Master Servicer nor the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

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

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated transferee.

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

         No service charge will be made to the Certificateholders for any such
registration of transfer, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Securities
Administrator, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,

<PAGE>

and none of Depositor, the Master Servicer, the Securities Administrator, the
Trustee or any such agent shall be affected by notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the remittance
of all funds due under the Agreement, coinciding with or following the earlier
to occur of (i) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans is less than the percentage of the
aggregate Scheduled Principal Balance specified in the Agreement of the Mortgage
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.

<PAGE>

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

Dated: August 30, 2004

                                         WELLS FARGO BANK, N.A.
                                         as Securities Administrator

                                          By:________________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Class A-[1][2][3][4A][4B][5A][5B] 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 and address including postal zip code 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-2

                         FORM OF CLASS A-IO 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>

Certificate No.1                                 Pass-Through Rate:       %

Class A-IO                                       Percentage Interest: _____

Date of Pooling and Servicing Agreement          Aggregate Initial Notional
and Cut-Off Date:                                Amount of this Certificate
August 1, 2004                                   as of the Cut-Off Date:
                                                 $

First Distribution Date:                         Initial Notional Amount of this
September 27, 2004                               Certificate as of the Cut-Off
                                                 Date:
                                                 $________

Master Servicer:
Wells Fargo Bank, N.A.

Assumed Final Distribution Date:                 CUSIP: ___________
July, 2034

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class A-IO Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by DEUTSCHE MORTGAGE
         SECURITIES, INC.

         This Certificate is payable solely from the assets of the Trust Fund as
described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans (as defined below) are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Deutsche Mortgage Securities, Inc. ("DMSI"). The Mortgage Loans were sold by DB
Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-Off
Date specified above (the "Agreement"), among DMSI, as depositor (the

<PAGE>

"Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") 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,
capitalized terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such
Holder is bound.

         Interest on this Certificate will accrue during the month prior to the
month in which a Distribution Date (as hereinafter defined) occurs on the
Notional Amount thereof at a per annum rate equal to the Pass-Through Rate set
forth above. The Securities Administrator will distribute on the 25th day of
each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, 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 last Business Day of the calendar
month preceding the month of such Distribution Date (the "Record Date"), an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount of interest required to be distributed to the Holders
of Certificates of the same Class as this Certificate. The last scheduled
Distribution Date is the Distribution Date in the month specified above as the
Assumed Final Distribution Date.

         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 and designated in such notice. The Class A-IO Certificates have no
Certificate Principal Balance. The initial Notional Balance of this Certificate
is set forth above.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder, and that
neither the Depositor, the Securities Administrator, the Master Servicer nor the
Trustee is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.

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

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% of the Voting Rights and the
consent of the Certificate Insurer. 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 lieu hereof whether or not

<PAGE>

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 or the Certificate Insurer.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated transferee.

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

         No service charge will be made to the Certificateholders for any such
registration of transfer, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Securities
Administrator, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of Depositor, the Master Servicer, the Securities Administrator, the
Trustee or any such agent shall be affected by notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the remittance
of all funds due under the Agreement, coinciding with or following the earlier
to occur of (i) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans is less than the percentage of the
aggregate Scheduled Principal Balance specified in the Agreement of the Mortgage
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.

<PAGE>

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

Dated: August 30, 2004

                                      WELLS FARGO BANK, N.A.
                                      as Securities Administrator

                                      By:_______________________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Class A-IO 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 and address including postal zip code 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-3

                      FORM OF CLASS M-[1][2][3] CERTIFICATE

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND][,][ THE CLASS M-1 CERTIFICATES, [AND] THE CLASS M-2
CERTIFICATES], AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND CERTAIN 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.

         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.

         ANY TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO MAKE THE
REPRESENTATIONS SET FORTH IN SECTION 5.3(E) OF THE AGREEMENT REFERRED TO HEREIN.

<PAGE>

Certificate No.1                                 Pass-Through Rate:       %

Class M-[1][2][3]                                Percentage Interest: _____

Date of Pooling and Servicing Agreement          Aggregate Initial Certificate
and Cut-Off Date:                                Principal Balance of this
August 1, 2004                                   Certificate as of the
                                                 Cut-Off Date:
                                                 $

First Distribution Date:                         Initial Certificate Principal
September 27, 2004                               Balance of this Certificate as
                                                 of the Cut-Off Date:
                                                 $________

Master Servicer:                                 CUSIP: ___________
Wells Fargo Bank, N.A.

Assumed Final Distribution Date:
July, 2034

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class [M]-[1][2][3] Certificates with respect to a
         Trust Fund consisting primarily of a pool of conventional one- to
         four-family fixed interest rate mortgage loans sold by DEUTSCHE
         MORTGAGE SECURITIES, INC.

         This Certificate is payable solely from the assets of the Trust Fund as
described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans (as defined below) are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced hereby in the beneficial ownership interest of
Certificates of the same Class as this Certificate in a trust (the "Trust Fund")
generally consisting of conventional first lien, fixed rate mortgage loans
secured by one- to four- family residences, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Deutsche Mortgage Securities, Inc. ("DMSI"). The Mortgage Loans were sold by DB
Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will act as master
servicer of the Mortgage Loans (the "Master Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-Off
Date specified above (the "Agreement"), among DMSI, as depositor (the
"Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined

<PAGE>

herein, capitalized terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such
Holder is bound.

         Interest on this Certificate will accrue during the month prior to the
month in which the related Distribution Date occurs. The Pass-Through Rate
applicable to the calculation of interest payable with respect to this
Certificate on any Distribution Date (as hereinafter defined) shall be a rate
per annum equal to the lesser of (i) ______% and (ii) the applicable Net WAC
Pass-Through Rate for such Distribution Date. The Securities Administrator will
distribute on the 25th day of each month, or, if such 25th day is not a Business
Day, the immediately following Business Day (each, 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 last
Business Day of the calendar month preceding the month of such Distribution
Date, an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount (of interest and principal, if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. Any such distributions will be made by wire transfer in immediately
available funds to the account of such Person or by any other means of payment
acceptable to such Person. The last scheduled Distribution Date is the
Distribution Date in the month specified above as the Assumed Final Distribution
Date.

         Distributions on this Certificate will be made by the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person in whose name the Certificate is registered at the close of business
on the related Record Date or by any other means of payment acceptable to such
Certificateholder. 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 and designated in such notice. The initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto as
described in the Agreement.

         Any transferee of this certificate shall be deemed to make the
representations set forth in section 5.3(e) of the Agreement.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Depositor, the Trustee, the Master Servicer nor the Securities
Administrator is liable to the Certificateholders for any amount payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

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

<PAGE>

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated transferee.

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

         No service charge will be made to the Certificateholders for any such
registration of transfer, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Trustee, the
Securities Administrator and any agent of any of them 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 or any such agent shall be affected by notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the remittance
of all funds due under the Agreement, coinciding with or following the earlier
to occur of (i) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans is less than the percentage of the
aggregate Scheduled Principal Balance specified in the Agreement of the Mortgage
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

<PAGE>

         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.

<PAGE>

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

Dated: August 30, 2004

                                       WELLS FARGO BANK, N.A.
                                       as Securities Administrator

                                       By:______________________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Class M-[1][2][3] 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 and address including postal zip code 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 CERTIFICATE

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES, AS DESCRIBED IN THE AGREEMENT (AS
DEFINED HEREIN).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         DISTRIBUTIONS ON 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 AS THE DENOMINATION OF THIS CERTIFICATE.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.3(D) OF THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(E) OF THE
AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(E) OF THE AGREEMENT THAT
THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE TRUST
FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.

<PAGE>

Certificate No.1                                 Pass-Through Rate:       %

Class CE                                         Percentage Interest: _____

Date of Pooling and Servicing Agreement          Aggregate Initial Certificate
and Cut-Off Date:                                Principal Balance of this
August 1, 2004                                   Certificate as of the
                                                 Cut-Off Date:
                                                 $

First Distribution Date:                         Initial Certificate Principal
September 27, 2004                               Balance of this Certificate as
                                                 of the Cut-Off Date:
                                                 $________

Master Servicer:                                 CUSIP:
Wells Fargo Bank, N.A.

Assumed Final Distribution Date:
July, 2034

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class CE Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by DEUTSCHE MORTGAGE
         SECURITIES, INC.

         This Certificate is payable solely from the assets of the Trust Fund as
described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans (as defined below) are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that Deutsche Bank Securities Inc. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences, units in planned unit
developments and individual condominium units (collectively, the "Mortgage
Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Mortgage Loans
were sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-Off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") 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,
capitalized terms used herein shall have the meaning

<PAGE>

ascribed to them 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 its acceptance hereof
assents and by which such Holder is bound.

         The Securities Administrator will distribute on the 25th day of each
month, or, if such 25th day is not a Business Day, the immediately following
Business Day (each, 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 last Business Day of the calendar month
preceding the month of such Distribution Date (the "Record Date"), an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount (of interest and principal, if any) required to be distributed to
the Holders of Certificates of the same Class as this Certificate. The last
scheduled Distribution Date is the Distribution Date in the month specified
above as the Assumed Final Distribution Date.

         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 and designated in such notice. The initial Certificate Principal Balance
of this Certificate is set forth above. The Certificate Principal Balance hereof
will be reduced to the extent of distributions allocable to principal hereon and
certain losses allocable hereto as described in the Agreement.

         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 D
and either Exhibit E or Exhibit F, as applicable, and (ii) in all other cases,
an Opinion of Counsel reasonably satisfactory to the Trustee, the Depositor and
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 Securities
Administrator, the Master Servicer, any Servicer or the Trust Fund 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 Securities Administrator or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Securities Administrator, the Depositor, the Seller and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

         No transfer of this Class CE Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(e) of the Agreement stating, among other
things, that the transferee's acquisition of a Class CE Certificate is
permissible under applicable law, will not constitute or result in a non-

<PAGE>

exempt prohibited transaction under Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the
Internal Revenue Code (the "Code") and will not subject the Depositor, the
Trustee, the Securities Administrator, the Master Servicer, any Servicer or the
Trust Fund to any obligation or liability in addition to those undertaken in the
Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating that the transferee is not an employee benefit or other plan
subject to the prohibited transaction provisions of ERISA or Section 4975 of the
Code (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.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Securities Administrator is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

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

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated transferee.

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

<PAGE>

         No service charge will be made to the Certificateholders for any such
registration of transfer, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Trustee, the
Securities Administrator and any agent of any of them 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 or any such agent shall be affected by notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the remittance
of all funds due under the Agreement, coinciding with or following the earlier
to occur of (i) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans is less than the percentage of the
aggregate Scheduled Principal Balance specified in the Agreement of the Mortgage
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.

<PAGE>

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

Dated: August 30, 2004

                                       WELLS FARGO BANK, N.A.
                                       as Securities Administrator

                                       By:______________________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Class CE 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 and address including postal zip code 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-5

                           FORM OF CLASS P CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 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 5.3 OF THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(E) OF THE
AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(E) OF THE AGREEMENT THAT
THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE TRUST
FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.

<PAGE>

Certificate No.1                                 Pass-Through Rate:       %

Class P                                          Percentage Interest: _____

Date of Pooling and Servicing Agreement          Aggregate Initial Certificate
and Cut-Off Date:                                Principal Balance of this
August 1, 2004                                   Certificate as of the
                                                 Cut-Off Date:
                                                 $100.00

First Distribution Date:                         Initial Certificate Principal
September 27, 2004                               Balance of this Certificate as
                                                 of the Cut-Off Date:
                                                 $100.00

Master Servicer:                                 CUSIP:
Wells Fargo Bank, N.A.

Assumed Final Distribution Date:
July, 2034

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class P Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by DEUTSCHE MORTGAGE
         SECURITIES, INC.

         This Certificate is payable solely from the assets of the Trust Fund as
described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans (as defined below) are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that Deutsche Bank Securities Inc. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences, units in planned unit
developments and individual condominium units (collectively, the "Mortgage
Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Mortgage Loans
were sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-Off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") and HSBC Bank USA, National
Association as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth

<PAGE>

hereafter. To the extent not defined herein, capitalized terms used herein shall
have the meaning ascribed to them 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 its 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 the Class P Certificates on such Distribution Date
pursuant to the Agreement. Any such distributions will be made by wire transfer
in immediately available funds to the account of such Person or by any other
means of payment acceptable to such Person.

         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 the distributions to Certificateholders, such purposes
including the reimbursement of advances made, or certain expenses incurred, with
respect to the Mortgage Loans.

         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 and designated in such notice. The initial Certificate Principal Balance
of this Certificate is set forth above.

         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 D
and either Exhibit E or Exhibit F, as applicable, and (ii) in all other cases,
an Opinion of Counsel reasonably satisfactory to the Trustee, the Depositor and
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 Securities
Administrator, the Master Servicer, any Servicer or the Trust Fund 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 Securities Administrator or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Securities Administrator, the Depositor, the Seller and the Master
Servicer against any

<PAGE>

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 Class P Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(e) of the Agreement stating, among other
things, that the transferee's acquisition of a Class P Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code (the "Code") and will not subject the Depositor, the Trustee, the
Securities Administrator, the Master Servicer, any Servicer or the Trust Fund to
any obligation or liability in addition to those undertaken in the Agreement or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (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.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Trustee nor the Securities Administrator is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

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

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated transferee.

<PAGE>

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

         No service charge will be made to the Certificateholders for any such
registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Master Servicer, the Securities Administrator, the
Trustee and any agent of any of them 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 Securities Administrator, the Trustee or any
such agent shall be affected by notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the remittance
of all funds due under the Agreement, coinciding with or following the earlier
to occur of (i) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans is less than the percentage of the
aggregate Scheduled Principal Balance specified in the Agreement of the Mortgage
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.

<PAGE>

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

Dated: August 30, 2004

                                       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 Signatory

<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________ (Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Asset-Backed 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 Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Dated:                                 -----------------------------------------
                                       Signature by or on behalf of assignor

                                       -----------------------------------------
                                       Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________ for the account
of _________________________ account number _____________, or, if mailed by
check, to ______________________________. Applicable statements should be mailed
to _____________________________________________.

         This information is provided by __________________, the assignee named
above, or ________________________, as its agent.

<PAGE>

                                   EXHIBIT A-6

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE AGREEMENT
REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.3(E) OF THE
AGREEMENT OR AN OPINION OF COUNSEL UNDER SECTION 5.3(E) OF THE AGREEMENT THAT
THE PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE,
THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR THE TRUST FUND TO
ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

         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 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

<PAGE>

THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND
THE PROVISIONS OF SECTION 5.3(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON
THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.3(C) AND 5.3(E) OF THE AGREEMENT.

<PAGE>

Certificate No.1                                 Pass-Through Rate:   100%

Class R                                          Percentage Interest: _____

Date of Pooling and Servicing Agreement          Fiirst Distribution Date:
and Cut-Off Date:                                September 27, 2004
August 1, 2004

Master Servicer:                                 CUSIP:
Wells Fargo Bank, N.A.

Assumed Final Distribution Date:
July, 2034

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-5

         evidencing a fractional undivided interest in the distributions
         allocable to the Class R Certificates with respect to a Trust Fund
         consisting primarily of a pool of conventional one- to four-family
         fixed interest rate mortgage loans sold by DEUTSCHE MORTGAGE
         SECURITIES, INC.

         This Certificate is payable solely from the assets of the Trust Fund as
described in the Agreement (as defined below), and does not represent an
obligation of or interest in Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator referred to below or any
of their affiliates or any other person. Neither this Certificate nor the
underlying Mortgage Loans (as defined below) are guaranteed or insured by any
governmental entity or by Deutsche Mortgage Securities, Inc., the Master
Servicer, the Trustee or the Securities Administrator or any of their affiliates
or any other person. None of Deutsche Mortgage Securities, Inc., the Master
Servicer or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

         This certifies that Deutsche Bank Securities Inc. is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of conventional first lien, fixed rate
mortgage loans secured by one- to four- family residences, units in planned unit
developments and individual condominium units (collectively, the "Mortgage
Loans") sold by Deutsche Mortgage Securities, Inc. ("DMSI"). The Mortgage Loans
were sold by DB Structured Products, Inc. to DMSI. Wells Fargo Bank, N.A. will
act as master servicer of the Mortgage Loans (the "Master Servicer," which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-Off Date specified above (the "Agreement"), among DMSI, as depositor
(the "Depositor"), Wells Fargo Bank, N.A., as Master Servicer and securities
administrator (the "Securities Administrator") 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,
capitalized terms used herein shall have the meaning ascribed to them 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 its acceptance hereof assents and by which such
Holder is bound.

<PAGE>

         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Securities Administrator of, among other things, an affidavit to the effect
that it is a United States Person and Permitted Transferee, (iii) any attempted
or purported transfer of any Ownership Interest in this Certificate in violation
of such restrictions will be absolutely null and void and will vest no rights in
the purported transferee, and (iv) if any person other than a United States
Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions, then the Depositor will have the
right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Depositor,
which purchaser may be the Depositor, or any affiliate of the Depositor, on such
terms and conditions as the Depositor may choose.

         The Securities Administrator will distribute on the 25th day of each
month, or, if such 25th day is not a Business Day, the immediately following
Business Day (each, 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 last Business Day of the calendar month
immediately preceding the month in which such Distribution Date occurs (the
"Record Date"), an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amounts required to be distributed to the
Holders of Certificates of the same Class as this Certificate. The last
scheduled Distribution Date is the Distribution Date in the month specified
above as the Assumed Final Distribution Date.

         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 and designated in such notice.

         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 D
and either Exhibit E or Exhibit F, as applicable, 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 Securities
Administrator or the Master Servicer in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Securities Administrator or the Trustee is obligated to register or qualify
the Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Securities Administrator, the
Depositor, the Seller and the Master Servicer against any

<PAGE>

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 Class R Certificate will be made unless the
Depositor, the Trustee and the Securities Administrator have received either (i)
an opinion of counsel under Section 5.3(e) of the Agreement stating, among other
things, that the transferee's acquisition of a Class R Certificate is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal
Revenue Code (the "Code") and will not subject the Depositor, the Trustee, the
Securities Administrator, the Master Servicer, any Servicer or the Trust Fund to
any obligation or liability in addition to those undertaken in the Agreement or
(ii) a representation letter, in the form as described by the Agreement, stating
that the transferee is not an employee benefit or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (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.

         This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that
neither the Securities Administrator nor the Trustee is liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

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

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from time
to time by the parties thereto with the consent of the Holders of Certificates
affected thereby evidencing not less than 66-2/3% 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 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 with the Securities
Administrator upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Securities Administrator for such
purposes, duly endorsed by, or accompanied by a 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 in authorized denominations representing a like
aggregate Percentage Interest will be issued to the designated transferee.

<PAGE>

         The Certificates are issuable only as registered Certificates without
coupons in the Classes and denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the same
Class and in the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.

         No service charge will be made to the Certificateholders for any such
registration of transfer, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Master Servicer, the Securities
Administrator, the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of Depositor, the Master Servicer, the Securities Administrator, the
Trustee or any such agent shall be affected by notice to the contrary.

         The obligations created by the Agreement and the Trust Fund created
thereby (other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the remittance
of all funds due under the Agreement, coinciding with or following the earlier
to occur of (i) the maturity or other liquidation (or Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan or (ii) the optional repurchase by the party named in the
Agreement of all the Mortgage Loans and other assets of the Trust Fund in
accordance with the terms of the Agreement. Such optional repurchase may be made
only on or after the Distribution Date on which the aggregate Scheduled
Principal Balance of the Mortgage Loans is less than the percentage of the
aggregate Scheduled Principal Balance specified in the Agreement of the Mortgage
Loans at the Cut-Off Date. The exercise of such right will effect the early
retirement of the Certificates. In no event, however, will the Trust Fund
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.

         Unless this Certificate has been countersigned by an authorized
signatory of the Securities Administrator by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.

<PAGE>

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

Dated: August 30, 2004

                                       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>

                                   ASSIGNMENT

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

                                   [RESERVED]

<PAGE>

                                                                      EXHIBIT C

                           FORM OF TRANSFER AFFIDAVIT

                                                    Affidavit  pursuant to
                                                    Section 860E(e)(4) of the
                                                    Internal Revenue Code of
                                                    1986, as amended, and for
                                                    other purposes

  STATE OF                 )
                           )ss:
  COUNTY OF                )

         [NAME OF OFFICER], being first duly sworn, deposes and says:

         1. That he/she is [Title of Officer] of [Name of Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of _____] [the United States], on behalf of which
he makes this affidavit.

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Deutsche Mortgage Securities,
Inc. Mortgage Loan Trust, Series 2004-5 Mortgage Pass-Through Certificates,
Class R Certificates (the "Residual Certificates") for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by Deutsche Mortgage
Securities, Inc. (upon advice of counsel) to constitute a reasonable arrangement
to ensure that the Residual Certificates will not be owned directly or
indirectly by a disqualified organization; and (iv) it will not transfer such
Residual Certificates unless (a) it has received from the transferee an
affidavit in substantially the same form as this affidavit containing these same
four representations and (b) as of the time of the transfer, it does not have
actual knowledge that such affidavit is false.

         3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that 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 United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

         4. That the Investor's taxpayer identification number is
______________________.

         5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.

<PAGE>

         6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.

         7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.

         IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _________, 20__.

                                           [NAME OF INVESTOR]

                                            By:
                                                --------------------------------
                                                  [Name of Officer]
                                                  [Title of Officer]
                                                  [Address of Investor for
                                                  receipt of distributions]

                                                  Address of Investor for
                                                  receipt of tax information:

<PAGE>

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Investor, 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
Investor.

         Subscribed and sworn before me this ___ day of _________, 20___.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

<PAGE>

                                                                       EXHIBIT D

                         FORM OF TRANSFEROR CERTIFICATE

                              ______________,200___

  HSBC Bank USA, National Association
  452 Fifth Avenue
  New York, New York 10018
  Attention: Deutsche Mortgage Securities Trust 2004-5

  Wells Fargo Bank, N.A.
  Sixth Street & Marquette Avenue
  Minneapolis, Minnesota 55479
  Attention:    Deutsche Mortgage Securities, Inc., 2004-5

  Deutsche Mortgage Securities, Inc.
  60 Wall Street
  New York, New York 10005
  Attention:    Deutsche Mortgage Securities, Inc.
                Alternative Loan Trust, Series 2004-5

                   Re:  Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
                        SERIES 2004-5, CLASS [CE][P][R]MORTGAGE PASS-THROUGH
                        CERTIFICATES

  Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of Series
2004-5 Mortgage Pass-Through Certificates, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of August 1, 2004 among Deutsche Mortgage
Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank, N.A., as
master servicer and securities administrator, and HSBC Bank USA, National
Association, as trustee (the "Trustee"). The Seller hereby certifies, represents
and warrants to, a covenants with, the Depositor, the Trustee and the Securities
Administrator that:

         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

<PAGE>

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,

                                       (Seller)

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

<PAGE>

                                                                       EXHIBIT E

             FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)

                                ___________,200__

  HSBC Bank USA, National Association
  452 Fifth Avenue
  New York, New York 10018
  Attention: Deutsche Mortgage Securities Trust 2004-5

  Wells Fargo Bank, N.A.
  Sixth Street & Marquette Avenue
  Minneapolis, Minnesota 55479
  Attention:   Deutsche Mortgage Securities, Inc., 2004-5

  Deutsche Mortgage Securities, Inc.
  60 Wall Street
  New York, New York 10005
  Attention:   Deutsche Mortgage Securities, Inc.
               Alternative Loan Trust, Series 2004-5

                   Re:  Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
                        SERIES 2004-5, CLASS [CE][P][R] MORTGAGE PASS-THROUGH
                        CERTIFICATES

  Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Series 2004-5 Mortgage Pass-Through Certificates, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of August 1, 2004 among Deutsche
Mortgage Securities, Inc., as depositor (the "Depositor"), Wells Fargo Bank,
N.A., as master servicer and securities administrator, and HSBC Bank USA,
National Association, as trustee (the "Trustee"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Securities Administrator and the Trustee
that:

          1. The Purchaser 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.

<PAGE>

          2. The Purchaser 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 Purchaser 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 Purchaser has been furnished with, and has had an opportunity
     to review (a) [a copy of the Private Placement Memorandum, dated ______,
     2004, relating to the Certificates (b)] a copy of the Pooling and Servicing
     Agreement and [(b)] [(c)] such other information concerning the
     Certificates, the Mortgage Loans and the Depositor as has been requested by
     the Purchaser from the Depositor or the Seller and is relevant to the
     Purchaser's decision to purchase the Certificates. The Purchaser has had
     any questions arising from such review answered by the Depositor or the
     Seller to the satisfaction of the Purchaser. [If the Purchaser did not
     purchase the Certificates from the Seller in connection with the initial
     distribution of the Certificates and was provided with a copy of the
     Private Placement Memorandum (the "Memorandum") relating to the original
     sale (the "Original Sale") of the Certificates by the Depositor, the
     Purchaser acknowledges that such Memorandum was provided to it by the
     Seller, that the Memorandum was prepared by the Depositor solely for use in
     connection with the Original Sale and the Depositor did not participate in
     or facilitate in any way the purchase of the Certificates by the Purchaser
     from the Seller, and the Purchaser agrees that it will look solely to the
     Seller and not to the Depositor with respect to any damage, liability,
     claim or expense arising out of, resulting from or in connection with (a)
     error or omission, or alleged error or omission, contained in the
     Memorandum, or (b) any information, development or event arising after the
     date of the Memorandum.]

          5. The Purchaser 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 Act or any
     state securities law, or that would require registration or qualification
     pursuant thereto. The Purchaser will not sell or otherwise transfer any of
     the Certificates, except in compliance with the provisions of the Pooling
     and Servicing Agreement.

<PAGE>

                                       Very truly yours,

                                       (Purchaser)

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

<PAGE>

                                                                       EXHIBIT F

                       FORM OF RULE 144A INVESTMENT LETTER

          [Date]

  HSBC Bank USA, National Association
  452 Fifth Avenue
  New York, New York 10018
  Attention: Deutsche Mortgage Securities Trust 2004-5

  Wells Fargo Bank, N.A.
  Sixth Street & Marquette Avenue
  Minneapolis, Minnesota 55479
  Attention:       Deutsche Mortgage Securities, Inc., 2004-5

  Deutsche Mortgage Securities, Inc.
  60 Wall Street
  New York, New York 10005
  Attention:       Deutsche Mortgage Securities, Inc.
                   Alternative Loan Trust, Series 2004-5

          Re:      Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
                   Series 2004-5 Mortgage Pass-Through Certificates, (the
                   "Certificates"), INCLUDING THE CLASS CE, P AND R CERTIFICATES
                  (THE "PRIVATELY OFFERED CERTIFICATES")

  Dear Ladies and Gentlemen:

         In connection with our purchase of Privately Offered Certificates, we
confirm that:

     (i)  we understand that the Privately Offered Certificates are not being
          registered under the Securities Act of 1933, as amended (the "Act") or
          any applicable state securities or "Blue Sky" laws, and are being sold
          to us in a transaction that is exempt from the registration
          requirements of such laws;

     (ii) any information we desired concerning the Certificates, including the
          Privately Offered Certificates, the trust in which the Certificates
          represent the entire beneficial ownership interest (the "Trust") or
          any other matter we deemed relevant to our decision to purchase
          Privately Offered Certificates has been made available to us;

     (iii) we are able to bear the economic risk of investment in Privately
          Offered Certificates; we are an institutional "accredited investor" as
          defined in Section 501(a) of Regulation D promulgated under the Act
          and a sophisticated institutional investor;

     (iv) we are acquiring Privately Offered Certificates for our own account,
          not as nominee for any other person, and not with a present view to
          any distribution or other disposition of the Privately Offered
          Certificates;

<PAGE>

     (v)  we agree the Privately Offered Certificates must be held indefinitely
          by us (and may not be sold, pledged, hypothecated or in any way
          disposed of) unless subsequently registered under the Act and any
          applicable state securities or "Blue Sky" laws or an exemption from
          the registration requirements of the Act and any applicable state
          securities or "Blue Sky" laws is available;

     (vi) we agree that in the event that at some future time we wish to dispose
          of or exchange any of the Privately Offered Certificates (such
          disposition or exchange not being currently foreseen or contemplated),
          we will not transfer or exchange any of the Privately Offered
          Certificates unless:

               (A) (1) the sale is to an Eligible Purchaser (as defined below),
          (2) if required by the Pooling and Servicing Agreement (as defined
          below) a letter to substantially the same effect as either this letter
          or, if the Eligible Purchaser is a Qualified Institutional Buyer as
          defined under Rule 144A of the Act, the Rule 144A and Related Matters
          Certificate in the form attached to the Pooling and Servicing
          Agreement (as defined below) (or such other documentation as may be
          acceptable to the Securities Administrator) is executed promptly by
          the purchaser and delivered to the addressees hereof and (3) all
          offers or solicitations in connection with the sale, whether directly
          or through any agent acting on our behalf, are limited only to
          Eligible Purchasers and are not made by means of any form of general
          solicitation or general advertising whatsoever; and

               (B) if the Privately Offered Certificate is not registered under
          the Act (as to which we acknowledge you have no obligation), the
          Privately Offered Certificate is sold in a transaction that does not
          require registration under the Act and any applicable state securities
          or "blue sky" laws and, if Wells Fargo Bank, N.A. (the "Securities
          Administrator") so requests, a satisfactory Opinion of Counsel is
          furnished to such effect, which Opinion of Counsel shall be an expense
          of the transferor or the transferee;

     (vii) we agree to be bound by all of the terms (including those relating to
          restrictions on transfer) of the Pooling and Servicing, pursuant to
          which the Trust was formed; we have reviewed carefully and understand
          the terms of the Pooling and Servicing Agreement;

     (viii) we either: (i) are not acquiring the Privately Offered Certificate
          directly or indirectly by, or on behalf of, an employee benefit plan
          or other retirement arrangement which is subject to Title I of the
          Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
          and/or section 4975 of the Internal Revenue Code of 1986, as amended
          (the "Code"), or (ii) are providing an opinion of counsel to the
          effect that the proposed transfer and holding of a Privately Offered
          Certificate: (I) is permissible under applicable law, (II) will not
          result in any non-exempt prohibited transaction under Section 406 of
          ERISA or Section 4975 of the Code and (III) will not subject the
          Depositor, the Trustee, the Master Servicer, the

<PAGE>

          Securities Administrator, any Servicer or the Trust Fund to any
          obligation or liability in addition to those undertaken in the
          Agreement.

     (ix) We understand that each of the Class CE, P and R Certificates bears,
          and will continue to bear, a legend to substantiate the following
          effect: "THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
          NON-UNITED STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED
          BELOW). SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
          IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
          CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
          AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"). ANY
          RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
          ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE AGREEMENT
          REFERRED TO HEREIN. NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY
          PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT
          TO SECTION 5.3(e) OF THE AGREEMENT OR AN OPINION OF COUNSEL UNDER
          SECTION 5.3(e) OF THE AGREEMENT THAT THE PURCHASE OF THIS CERTIFICATE
          IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN
          A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
          RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
          SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE
          TRUSTEE, THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, ANY SERVICER OR
          THE TRUST FUND TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
          UNDERTAKEN IN THE AGREEMENT. ANY RESALE, TRANSFER OR OTHER DISPOSITION
          OF THIS CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE
          PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS
          NOT (1) THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
          POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
          INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF
          THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE
          DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX
          IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT
          TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION
          DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
          DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER
          BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A
          DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO
          IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE
          SATISFIES CERTAIN

<PAGE>

          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 5.3(d) OF THE AGREEMENT REFERRED TO HEREIN. ANY
          PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
          ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE. THIS CERTIFICATE
          HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
          RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
          LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
          REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
          TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.3 OF THE
          AGREEMENT."

         "ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of August 1, 2004, between
Deutsche Mortgage Securities, Inc., as depositor, Wells Fargo Bank, N.A., as
master servicer and securities administrator, and HSBC Bank USA, National
Association, as Trustee (the "Agreement").

         If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.

Name of Nominee (if any):

<PAGE>

         IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ___ day of ________, 20___.

                                       Very truly yours,

                                       [PURCHASER]

                                       By:
                                            ------------------------------------
                                                (Authorized Officer)

                                       [By:
                                            ------------------------------------
                                                Attorney-in-fact]

<PAGE>

                             Nominee Acknowledgment

         The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.

                                       [NAME OF NOMINEE]

                                       By:
                                            ------------------------------------
                                                (Authorized Officer)

                                       [By:
                                            ------------------------------------
                                                Attorney-in-fact]

<PAGE>

                                                                       EXHIBIT G

                         FORM OF BENEFIT PLAN AFFIDAVIT
  [Date]

HSBC Bank USA, National Association
452 Fifth Avenue
New York, New York 10018
Attention: Deutsche Mortgage Securities Trust 2004-5

Wells Fargo Bank, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
Attention:       Deutsche Mortgage Securities, Inc., 2004-5

Deutsche Mortgage Securities, Inc.
60 Wall Street
New York, New York 10005
Attention:       Deutsche Mortgage Securities, Inc.
                   Mortgage Loan Trust, Series 2004-5

          Re:   Deutsche Mortgage Securities, Inc. Mortgage Loan Trust,
                Series 2004-5 Mortgage Pass-through Certificates, (the "Trust")
                CLASS CE, P, AND R CERTIFICATES (THE "PURCHASED CERTIFICATES")

Under penalties of perjury, I, ___________________, declare that, to the best of
my knowledge and belief, the following representations are true, correct and
complete; and

         1. That I am the _________ of _________________ (the "Purchaser"),
whose taxpayer identification number is ___________, and on behalf of which I
have the authority to make this affidavit.

         2. That the Purchaser is acquiring a Purchased Certificate representing
an interest in the Trust.

         3. The Purchaser either (a) is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or a
"plan" described in Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") or any entity deemed to hold plan assets of any of the
foregoing by reason of a plan's investment in such entity (a "Plan") or (b) has
provided the opinion of counsel required by Section 5.3(d) of the Agreement.]

<PAGE>

IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly executed
on its behalf, by its duly authorized officer this day of _____________, 20 .

                                       [Purchaser]
                                       By:_______________________________
                                       Its:

<PAGE>

                                                                    SCHEDULE ONE

                                  LOAN SCHEDULE

                 [TO BE PROVIDED BY THE DEPOSITOR UPON REQUEST]

<PAGE>

                                                                    SCHEDULE TWO

                           PREPAYMENT CHARGE SCHEDULE

<PAGE>

1 The Distribution date in the month after the maturity date for the latest
maturing Loan.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]